Revised Spending and Revenue Projections Improve Budget Outlook

Wednesday, January 25, 2017 at 6:38 PM by

Mediocre Revenue Projections Beat the Low Expectations

A modest upturn in the state revenue projections and a significant reduction in state spending estimates have created a much better outlook for the state budget.

Before elaborating on the latest numbers, which were released by the Legislative Fiscal Bureau (LFB) last week, I have to admit that the new state tax collection numbers are considerably better than I expected when I wrote a very cautionary blog post about the next state budget a week or so ago. This is one of two recent occasions (along with my prediction that the Packers would lose to Dallas) when I am very happy to have been wrong.

Although the new revenue forecasts are also significantly better than the Department of Revenue projected two months ago, they are nothing to brag about. In fact, the latest tax collection estimate for the current fiscal year is $281 million less than the estimate that the biennial budget bill was based on. Read more

Warning Signs for Next Week’s Budget Numbers

Tuesday, January 17, 2017 at 9:11 PM by

January 18th UPDATE:  Sometimes it feels good to be wrong — like when the Packers outperform my pessimistic predictions and when new state revenue forecasts are stronger than I anticipated. So I’m very happy that the revised revenue projections released this afternoon by the Legislative Fiscal Bureau (LFB) are considerably better than I expected when I wrote our Jan. 17th blog post.  (Read more here.)

The new LFB numbers indicate that a combination of lower-than-expected spending and higher-than-expected tax revenue will be enough to maintain a comfortable budget balance in the current fiscal year, and also enough to fund the amounts requested by state agencies in the next biennium. That’s a huge relief after the very slow revenue growth from July through November, which suggested that the next estimate of revenue collections was likely to be down, rather than up. This year’s revised revenue collections are still below the level forecasted a year ago, but are now expected to be considerably stronger in the next biennium than the Department of Administration estimated in November. Read more

State Tax Collections Fall Further Below Expectations

Tuesday, December 27, 2016 at 2:15 PM by

Very Slow Tax Growth Suggests Budget Difficulties Ahead

New tax collection numbers that were released late on December 23 do not bode well for the Wisconsin budget. The November tax figures released by the Department of Revenue (DOR) late last Friday – a week after negative job numbers – suggest significant challenges ahead for state budget writers.

I’m not sure whether DOR released the tax collection data just a couple of hours before the Christmas break in order to avoid public notice, but if that was their plan it worked very well. There doesn’t seem to have been any media coverage of the new numbers. Read more

Categories: 2015-17 biennial budget, 2017-19 biennial budget, Blog, corporate tax, STATE TAXES, taxes | Comments Off on State Tax Collections Fall Further Below Expectations

Revenue Shortfall Means another Difficult Budget

Tuesday, November 22, 2016 at 7:54 PM by

This Year’s Tax Collections Are Expected to be $351 Million below Original Estimate

A new state report about projected state revenue and the agency budget requests reinforces concerns that the upcoming 2017-19 Wisconsin budget will be another difficult one to balance. The primary problem is that tax revenue growth is well below the level anticipated when the budget bill was enacted in July 2015.

I’ll get to the specific numbers in a moment, but the bottom line is that the state’s large tax cuts, coupled with lower-than-anticipated job gains and revenue growth, mean that as state policymakers develop the next state budget they are going to have to either continue to squeeze spending or close some tax loopholes. Read more

Categories: 2015-17 biennial budget, 2017-19 biennial budget, Blog, taxes | Comments Off on Revenue Shortfall Means another Difficult Budget

State Tax Growth Lags Well Behind Anticipated Level

Friday, October 21, 2016 at 8:00 AM by

The Combined Effects of Two New Budget Reports Create Significant Fiscal Challenges

New tax collection numbers released yesterday are the second dose of worrisome budget news in Wisconsin this week. Right on the heels of a report showing that the budget balance was well below the anticipated level after the close of the 2015-16 fiscal year, new tax collection figures reveal that revenue fell well short of the projected level during the first quarter of the current fiscal year.

Taken together, the two documents released this week indicate that it could be very challenging to finish the 2016-17 fiscal year in the black. Read more

Mixed News on State Budget: Increased Balance Falls Short of Budgeted Level

Tuesday, October 18, 2016 at 12:47 PM by

Despite Delay in Debt Payments, Budget Remains Very Tight

An annual budget report issued yesterday has a little bit of good news for the state, but also disappointing news. The bottom line is that the state’s budget balance grew this year, but by less than the budget bill was counting on. As a result, it could be difficult to keep this year’s budget in the black if tax revenue continues to fall short of the expected level. [See the update below about the new tax collection figures.]

The new Annual Fiscal Report shows that Wisconsin finished the 2015-16 fiscal year with a balance of almost $314 million.  Although that’s pretty good news, it’s also a bit disappointing because even though the balance grew by $87 million this year, the budget bill had assumed the state would have about $77 million more in its balance at the end of the 2015-16 fiscal year. Read more

State Tax Collections Come up Short

Friday, September 2, 2016 at 5:44 PM by

Disappointing Tax Collections Could Cut into the State’s Small Reserves

State policymakers got some disappointing budget news this week, when the Department of Revenue (DOR) released state tax collection figures late Thursday. The revenue shortfall doesn’t pose imminent budget problems, and I’m somewhat relieved that the shortfall wasn’t larger, but the drop in the 2015-16 tax revenue might pose a problem in the second half of our biennial budget, particularly if the drop is repeated this year.

The new DOR figures show that revenue growth for the last fiscal year (ending on June 30) was $85 million (0.6%) short of the amount projected by the Legislative Fiscal Bureau (LFB) back in January. That January estimate had already been lowered by $29 million below the amount anticipated when the 2015-17 budget bill was enacted a little over a year ago. Read more

Categories: 2015-17 biennial budget, Blog, STATE BUDGET, taxes | Comments Off on State Tax Collections Come up Short

Lower-than-Expected Medicaid Spending Offers Relief and Opportunity

Tuesday, July 5, 2016 at 7:44 PM by

Reduced Participation Provides Opportunity and Reason to Streamline Enrollment Procedures

Members of the legislature’s Joint Finance Committee got some very good news last Friday in the form of a quarterly report on the state Medicaid budget from the Wisconsin Department of Health Services (DHS).  The letter from the interim Secretary of DHS indicates that the agency now estimates that Medicaid spending during the 2015-17 biennium will be $418.6 million below the amount lawmakers anticipated when they passed the budget bill a year ago.

The portion of Medicaid spending specifically from state General Purpose Revenue (GPR) is projected to be almost $176 million (3.1%) less than the budget bill set aside. That’s an improvement of $90.6 million GPR since the last projection was made three months ago.

These numbers from DHS are very good news at a time when state revenue projections haven’t been very good. The reduced growth in Medicaid spending improves the prospects for keeping the total state budget in the black – without resorting to additional remedial measures (beyond the delay in debt payments that the Governor already implemented). Read more

Categories: 2015-17 biennial budget, BadgerCare Plus, Blog, Medicaid, spending | Comments Off on Lower-than-Expected Medicaid Spending Offers Relief and Opportunity

Despite Jobs Growth, State Revenue Falls in May

Monday, June 20, 2016 at 7:08 PM by

Wisconsin got a very positive jobs report last week, but the apparent good news from the preliminary May data did not carry over to last month’s tax collections. As a result, the state may finish the current fiscal year well below the revenue target included in the budget bill – creating a more precarious situation in the second half of the 2015-17 biennial budget.

The Department of Revenue released the May tax collections figures at about 4:00 on Friday, June 17. As is often the case when those numbers are released late on a Friday, the news wasn’t good.  The new DOR figures show the following:

  • Tax collections fell by $17.5 million (1.5%) in May, relative to the amount in May 2015.
  • Although sales tax collections increased by $25 million compared to the same month of 2015, individual income tax revenue dropped by 6.3% ($31.5 million) last month, and corporate income tax revenue was off by $8.5 million (almost 35%).
Read more
Categories: 2015-17 biennial budget, Blog, corporate tax, income taxes, taxes | Comments Off on Despite Jobs Growth, State Revenue Falls in May

Wisconsin Made Second Largest Cut this Year in Support for Higher Education

Friday, May 27, 2016 at 12:35 PM by

Tech. College Funding Shift Masks 25 Percent Cut in Higher Ed Support Since 2008

Wisconsin cut state support for higher education by 8.3 percent this year, or $603 per student. As the following graph illustrates, only Arizona cut state funding for higher education by a larger percentage. 

In contrast to Wisconsin, most states have been taking advantage of the national economic recovery to increase support for higher education and restore some of the funding cut during the recession. The bar graph from a new report by the Center on Budget and Policy Priorities (CBPP) shows that Wisconsin was one of just 11 states that cut its support for higher education in the current fiscal year, relative to fiscal year 2015, and almost all of the other cuts were far smaller. Read more

Categories: 2015-17 biennial budget, Blog, EDUCATION | Comments Off on Wisconsin Made Second Largest Cut this Year in Support for Higher Education