DOR Expects Wisconsin to Fall Far Short of Governor’s Job Goal
Last week, with little fanfare, the Department of Revenue (DOR) finally issued a new installment in the series of documents Formerly Known as the Quarterly Economic Outlook Reports. The new report reinforces the conclusion that Wisconsin has experienced lackluster growth over the last 18 months, and regrettably the forecast for the next few years isn’t much better. The anemic economic progress is illustrated by the following numbers from the report:
- From Nov. 2009 through May 2012, Wisconsin recovered only 10.6% of the 172,000 jobs lost in the past recession.
- DOR expects private nonfarm employment to grow by 138,500 jobs from 2010 to 2014, which is less than 55% of the 250,000 private sector jobs that the Governor pledged would be created during his first term.
- The preliminary figures on state Gross Domestic Product (GDP) show real (inflation-adjusted) growth of just 1.1% in Wisconsin in 2011, compared to 1.4% in the Great Lakes region and 1.5% growth nationally (and 4.0% in Wisconsin in 2010).
- DOR expects Wisconsin employment to grow 1.0% in 2012, compared to 1.5% nationally.
However, some of the new data and forecasts are a little bit more encouraging:
- Wisconsin personal income grew by 5.2% in 2011, compared to 5.1% nationally.
- Unemployment is expected to continue to decline – from 6.8% in Wisconsin now (and 9.1% at the peak in mid-2009) to an average of 6.1% in 2013 and 5.5% in 2014.
- Manufacturing employment grew by about 12,000 jobs (2.8%) in Wisconsin in 2011, and is expected to grow by about that much more in each of the next four fiscal years (2012 through 2015).
The June Economic Outlook Report is the first issued since October 2011, which is surprising since this used to be a quarterly series of reports. I don’t know whether the decrease in their frequency has something to do with staffing reductions, an effort to save trees and/or Internet bandwidth, or reluctance in the department to issue reports that call the Governor’s job promises into question.
The apparent DOR reticence to share the economic data on a regular basis is in contrast to the effort made by the Department of Workforce development back in May, when it released some preliminary job numbers a month or two before they had gone through the usual process of being checked by federal officials. DWD insisted that the early release had nothing to do with the recall election and was intended instead to give businesses a better picture of the state of the Wisconsin economy.
Whatever the reason for the decreased frequency of the DOR Economic Outlook Reports, I find it frustrating because these documents shed light on the prospects for the state to hit its tax collection targets. The current report says General Fund revenues “are on pace to meet or exceed the forecasted fiscal year 2012 (FY 2012) total … as expected by the Legislative Fiscal Bureau in February of 2012.” What the June report doesn’t say is whether DOR still thinks the state will hit the higher FY 2012 and 2013 estimates announced by the Department of Administration in a May 10 memo to the Governor. Since those upward revisions weren’t tied to specific assumptions in an Economic Outlook Report, it wasn’t possible then to judge their accuracy, and it’s equally impractical now to determine if the unspoken economic assumptions made in May are holding up.