FY 2019 balance, Wisconsin
FY 2018 ending balance $588.5 million
Projected 2019 ending balance in July $1,003.7 million
Actual ending balance $1,086.9 million
So we ended up nearly at $1.1 billion, and $83 million above where we thought we'd be 3 months ago. How come? Most of it we knew, like when tax revenues came in $75.5 million above the previous forecasts. And the other factors in the budget didn't change much.
Change vs budget projection
Tax revenues +$75.5 million
Other revenues +$20.8 million
Spending +$13.0 million
But even that increase in spending is for a good reason, as Governor Evers used $56 million in May to retire some debt, and save taxpayers nearly $69 million in costs for later years.
The added money helps to give a little more breathing room at the end of this budget. Both Evers and the GOP Legislature signed off on tax cuts and added spending in numerous areas over the next 2 years that'll get rid of more than 3/4 of this $1 billion the state has in its bank account.
That doesn't leave too much in case the economy does fall into recession over the next 2 years, but fortunately, the one-time bump in revenues from this Spring allowed for the state's Rainy Day Fund to get another $321 million, nearly doubling the total amount to $649 million.
But these good budget figures aren't necessarily a positive reflection on Scott Walker and the GOP. The first reason is that a lot of the added revenues in Wisconsin were due to the GOP's Tax Scam in DC encouraging a lot of businesses to change their classification, and move money around between years. This resulted in a major windfall for these companies at the federal level, but ironically raised their taxes at the state level.
The major source of corporate collections, estimated payments, increased by 51.1 percent from $811.1 million in FY 2018 to $1,225.6 million in FY 2019.And the trillion-dollar deficits that result from the Tax Scam are going to mean a state that ranks 45th in federal revenue isn't going to get much more help in the future.
The increase in corporate tax collections was due to federal tax law changes which incentivized the shifting of revenue between tax years and the passage of legislation at the state level permitting income from pass-through entities (partnerships and tax option (S) corporations) to be taxed at the entity level instead of the individual level.
The other item worth noting is that all of this added money in the state's bank didn't do much for state residents. Wisconsin ended up 39th in the US for job growth for 2018, and it's been even more stagnant in 2019. In addition, incomes lagged the US rate in every year Scott Walker and the Wisconsin GOP was in charge.
So Scotty, was it worth it to deinvest from our state's services all to say you had a better bottom line? The fact that you got the boot last November indicates that a lot of people think it wasn't.
Now, we at least have enough flexibility to try to repair some of the damage that's been done. But it's a long road back that'll likely mean no more $1 billion bank accounts, especially as the sugar high from the Tax Scam wears off and the reality sets in.