If you are a glass half-full person, you might be happy to know that the new tax collection figures from the Department of Revenue (DOR) show that revenue grew by 1.4% during the first three months of the current fiscal year, compared to the same period in 2015-16. But that growth rate is very disappointing when you consider the following:That “$64.6 million short” measures the difference between 1.4% and 3.7% growth for the first three months of the year, and even worse is that it requires better than 3.7% growth in the future months to “catch up”.
•The state needs a 3.7% increase over the full course of 2016-17 to reach the revenue level projected by the Legislative Fiscal Bureau (LFB) early this year.
•With 1.4% growth, tax collections in the first quarter fell $64.6 million short of the amount needed to be on track to reach the total projected for the year by the LFB.
On the positive side, income tax collections grew by 3.6% compared to the same quarter of the previous fiscal year; however, sales tax growth was an anemic 0.9%, and corporate income taxes fell by 11.9%.
As the Budget Project notes, this is very early in the game, and not worthy to hit the panic button yet- in FY 2016, less than 19% of the overall yearly revenues came in for the first 25% of the fiscal year. But the flip side of that is if the trend of 1.4% year-over-year growth maintains itself throughout the Fiscal Year, then it means a shortfall of nearly $350 million, which would likely trigger a budget repair bill and/or more skipped debt payments by the Walker Administration.
So the state will need to pick up the pace, and with the state losing more jobs than any other state in the country last month, that would be quite a reversal going forward. Keep these figures in the back of your head, as the Department of Revenue will release its own revenue projections and tally of budget requests, and that was the document which showed a $2.2 billion budget deficit in November 2014 (numbers which came out after Walker and WisGOP had been re-elected, of course).
It’s interesting to me how the state’s media didn’t report much on the disappointing revenue and jobs numbers that came out on Thursday, which was probably the intelligence of the Walker Administration’s design for doing both within a few hours yesterday. But as the election nears, we have to hold Walker and WisGOP responsible for the fiscal and economic lagging that continues to plague Wisconsin, and understand that this will never change until those people are changed out of power.