Friday, April 12, 2013

Very odd Wisconsin revenue numbers

I was interested in seeing the Census Bureau's release on state tax collections, which indicated that revenues had increased by nearly $800 billion in states during Fiscal Year 2012. This is a rebound from the revenue losses that resulted from the Great Recession, which put major pressure on state budgets throughout the country, including Wisconsin.

I also wanted to see how Wisconsin fared compared to the rest of the nation, and those numbers in the Census Bureau report shocked me. Page 8 of that report shows Wisconsin was the only state in the nation that had drops in both sales and income tax revenues in Fiscal Year 2012 - the first year of Scott Walker's budget.

This is especially odd, because the Walker Administration claimed revenue INCREASES in both of these statistics for FY2012, both in September's Department of Revenue report, and in the state's CAFR that was released in October. These higher revenues are a basis for the Administration's alleged "surplus" that the upcoming budget builds many of its assumptions on, but the numbers from the Census Bureau are a whole lot different than what the Walker DOR is saying...and it wasn't nearly that different in 2011.

Census Bureau vs. Wisconsin DOR, revenue figures 2011-2012
2011 Income taxes- Census $6.43 billion, DOR- $6.70 billion ($270 mil difference)
2012 Income taxes- Census $6.26 billion, DOR- $7.04 billion ($780 mil difference)

2011 Sales taxes- Census $4.11 billion, DOR $4.11 billion (same)
2012 Sales taxes- Census $3.87 billion, DOR $4.29 billion ($420 mil difference)

Now I don't know if the Census Bureau or the DOR is wrong about the numbers, and it does seem that some revenues are categorized differently between the 2 agencies. But the gaps are extremely different in FY2012 vs. FY2011, and that is extremely odd.

There's definitely a story here, because those numbers should not be that different. Stay tuned for the next revenue numbers from the LFB, and with the Journal-Sentinel reporting the Census numbers today, there should be some follow-up on this.

P.S. Now it looks like the Walker Administration is saying that DOA didn't send over the right numbers to the Census Bureau. Could be true, but if so, someone in DOA doesn't have a clue on how to find data. But given who this administration hires, I can't be shocked by that. Maybe that'll be Cullen Werwie's new job.


  1. The Census Bureau breaks out tax and fee revenue by quarter at

    It's pretty obvious that 2012Q2 is out of line with prior years while the other quarters of FY2012 are not so much. QCEW job gains in that quarter aren't wildly different to those in 2011 or 2010 and total wages were up 3.9% between 2011Q2 and 2012Q2.

    So it seems that a bureaucratic boo-boo is the most likely explanation for the drop in the Census-reported FY11 and FY12 income tax figures.

    That would not account for the discrepancy between Census Bureau and DoR reports of income tax revenue. However, these have a history of discrepancy of this magnitude ($248m in FY09, $297m in FY10

  2. Thanks Geoff. So in other words, you think the DOA people gave the wrong numbers to the Census folks. Could well be true, but with these guys, I don't trust anything.

    Even so, the Census report indicates we'd still have some of the worst revenue growth in the Midwest, and Walker and WisGOP are doing a big gamble in banking on growth for balancing the 2013-2015 budget

    1. Correction to what I wrote before: QCEW reports calendar 2012Q2 total wages as having grown by 2.7% year-on-year (I had been looking at private sector only).

      I just think that a numeric fubar is more likely than an economic one (at least when it comes to calendar 2012Q2) because the growing number from the DoR lines up with QCEW data while the Census report (which brings data from the DoR) does not.

      Calendar 2012Q3, on the other hand, gives me some pause for thought now that I look at it. DoR reports say that personal income tax revenue was up by 4.9% (, also saying it was up by 4.4% (its source being the DoR of course). However - as you are of course well aware - QCEW reported 2012Q3 total wages as being *down* by 1.8%.

      Both stories could be true I suppose, if for instance 2012Q3 saw an amazing leap in income inequality such that even with less total income, more of it was shifted from the low tax brackets of lower-income folk to the higher tax brackets of higher-income folk. It's also possible that there are significant lurches in non-wage income sufficient to overcome the effect of the drop in total wages.

      What I'm looking for but haven't found yet is Federal individual income tax revenue by quarter in Wisconsin. That should be able to provide a relatively independent confirmation or denial of the DoR's story.

  3. Walker and the GOP LOVE to gamble with other people's money, seems to me. I have absolutely no faith in revenue estimates emanating from a Walker-administration DOA or DOR.