New FY 2010 Tax Totals Are Right on the Money, Thanks to Corporate Profits
The Department of Revenue (DOR) has posted new estimates of General Fund tax collections in fiscal year 2010, which ended on June 30. Amazingly, the latest figure is within less than one one-hundredth of a percent of the January 2010 projection by the Legislative Fiscal Bureau (trailing that estimate by just $411,000). On the other hand, the amounts generated by particular types of taxes vary greatly from the January projections.
The specific tax figures reinforce other evidence that corporate profits are rebounding faster than expected, but businesses haven’t been plowing those profits into hiring and payroll. As a result, individual income taxes and sales tax collections trailed the projected amounts, while corporate income taxes were much higher than expected.
Here are the changes (in millions) between the actual tax revenue and the January projections:
Individual income tax – $65.8 M (-1.1%)
General sales and use tax -70.8 M (-1.8%)
Corporate income tax +134.5 M (+19.2%)
Public utility tax -2.8 M (-0.9%)
Excise taxes -3.0 M (-0.4%)
TOTAL -0.4 M (-0.004%)
The total FY 2010 taxes are only $18.5 million (or 0.15%) above the General Fund tax revenue in FY 2009 – notwithstanding the tax increases contained in the 2009-11 budget bill.
The DOR figures (which are unaudited and could change slightly) are positive news in the sense that they improve the chances that the state didn’t have a large deficit at the close of FY 2010. However, the DOR numbers don’t take into account other non-tax sources of revenue or differences in spending from what was projected.
The same recessionary forces that depress individual income and spending tend to increase enrollment in public benefit programs, thereby increasing state spending for things like BadgerCare Plus, W-2 and the Earned Income Tax Credit. New Medicaid and BadgerCare Plus spending estimates are expected in the next couple of weeks and will provide a better sense of the state’s fiscal picture in both FY 2009 and FY 2010.
Budget Project Director