State Tax Revenue Grows 5.5 Percent in First Quarter
The Wisconsin Department of Revenue issued preliminary figures on Friday for tax collections in the first quarter of the current fiscal year, July through September. Tax revenue was up 5.5 percent in that 3-month period, compared to the same period a year earlier.
The largest percentage increases were in corporate income taxes (21%) and excise taxes (19.5%), reflecting the provisions in the biennial budget bill closing corporate tax loopholes and increasing tobacco taxes. Individual income tax collections grew 3.3% in the first quarter, and sales tax revenue grew by 4.4%.
The net increase of $126 million in the first quarter is encouraging, but it’s no cause for celebration. The revised revenue projection that was made in January 2010 estimated a 5.5 percent increase over the course of the 2010-11 year. The state seems to be on pace to meet that growth rate, but the new first quarter comparison is to a weak portion of the previous fiscal year. With that in mind, I believe that continuing to achieve similar growth each quarter could require an acceleration of economic growth, because the future quarterly comparisons will be to less anemic portions of the 2009-10 fiscal year.
Despite that “glass half empty” caveat, I’m heartened that the initial quarter of the new fiscal year, like the second half of 2009-10, is in line with the January 2010 estimate.
Jon Peacock, project director
Wisconsin Budget Project