Wednesday, May 15, 2019

A big upside in revenues likely to change what can be done in this Wisconsin budget

It slipped out yesterday, without a lot of fanfare, but Tuesday's release of a surprising April revenue report for Wisconsin will likely reset the decisions that are made in the state budget in the next 2 months.

The reason why is that both income taxes and corporate taxes came in very strong after the tax season, indicating that a lot of people were paying their taxes in April (likely because they owed vs getting refunds). As a result, those two areas are coming in well above what the Legislative Fiscal Bureau estimated in January.

Year over year change thru April, vs LFB Jan estimates
Income Tax
Actual +5.7%
LFB Projection +1.9%

Corporate tax
Actual +63.6%
LFB Projection +10.75%

If those increases hold for the next 2 months, that would mean income taxes would come in around $322 million above the LFB projections, and corporate taxes would exceed the LFB by a whopping $472 million. That's nearly $800 million combined,

Now everything isn't great in the revenue picture, as sales taxes are only up 3.9% for the fiscal year, which is behind the LFB projection of 4.9% growth. But that only would be a shortfall of about $55 million, which still means an upside of nearly $750 million, and would also likely increase the amounts for the 2 years of the 2019-21 budget, due to a higher base.

The LFB is expected to give updated revenue projections for the biennial budget this week. In addition to the higher numbers, perhaps we will see an explanation as to why the figures jumped so much in April, and whether they should be expected to continue as a fallout of the new tax law that raised federal income tax payments for so many Wisconsinites.

It also will mean there is a whole lot more money available to pay for provisions in Governor Evers' state budget. Remember that there is currently a $1.4 billion hole in the budget after the GOPs on the Joint Finance Committee submarined Medicaid expansion nd refused to reverse tax cuts on the rich and corporate last week. But if there's $800 million more to carry over, now Evers' request for $1.6 billion in addition K-12 and special education funding is attainable. There also could be an opportunity to transfer a lot of money into the Transportation Fund to start filling all of the Scottholes that have appeared in Wisconsin.

In addition, the $15 million that was taken away from state shared revenue payments by the GOPs on the Joint Finance Committee becomes quite available now, and could be an opportunity to cut property taxes in a more healthier and sustainable way than the shell games that are currently going on. Given that it isn't worthwhile for many Wisconsinites to write off property taxes to the IRS any more, it seems some adjustment to our property tax-based local finance system needs to be adjusted anyway.

It's time to pay attention to what the GOPs in the gerrymandered Legislature choose to do with this likely one-time revenue bump. If they refuse to use this as a chance to make up for the negligence they've imposed on the state over the last 8 years, they deserve to be roasted and removed for refusing to keep Wisconsin economically competitive through investments in infrastructure, communities and quality of life that are clearly able to be paid for.

6 comments:

  1. More gifts to this sadly mediocre new Governor from our outstanding outgoing Governor... One-Term Tony will screw it up in record time, no doubt in my mind.

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    Replies
    1. Just one question: If Walker was so outstanding, why is he out, standing in the unemployment line?

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    2. Because we found out today that the one-time revenue bump wasn't due to job or wage growth, but instead due to a one-time manipulation of the GOP's Tax Scam at the federal level by the rich and corporate.

      The "tell" is that the LFB did not project much more revenue in 2020 or 2021. But at least Evers is using some of the added money to take care of a "gift" Walker left him with - added debt.

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  2. Ooooh, lookee! The troll popped his head out from his burrow under the bridge to gurgle and drool! Poke it! Poke it! If Walker was so outstanding, why are Wisconsin's roads in such bad shape? If Walker was so outstanding, why are manufacturing wages lower here that in any other state in the Midwest? If Walker was so outstanding, how did his WEDC manage to lose millions of dollars of taxpayer money, and squander still more on undeserving Walker cronies? If Walker was so outstanding, why can't the pathetic dolt find a real job, instead of having his handlers manufacture one for him?

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    1. Ah yes, the writer of the world-changing "Laborforce" blog, last updated in 2011. There's that union work ethic I know and love! Doing your 'brothers' and 'sisters' proud.

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  3. Oooooh, lookeee! Troll picked up its itty-bitty troll spade and dug himself a hole! Now troll is standing in a hole and can't see over the top! Tee hee! Tee hee!
    Tell us about Kestrel Aviation, troll, the fiasco Walker enabled. Tell us all. Oh, do. I'll spell it out for you. "K-E-S-T-R-E-L." We're on the edges of our seats, waiting to hear your spin about that monumental waste of taxpayer money that Walker and the state GOP get to put in their "achievement" column.
    And we notice you have no replies, no spin, no rationalizations to explain the list of Walker's failures. Huh, troll suddenly silent. Troll's brain cell is overheating. Troll, look out! The walls of your hole are collapsing! Troll is buried! Nothing but the fingers of one tiny paw showing! Troll busy inhaling dirt...
    Tee hee! Tee hee! Always fun to watch a troll-fail!

    ReplyDelete