State Budget Well Short of Projections
2015-16 budget balance falls short, and tax growth this fiscal year puts biennial budget further behind.
Wisconsin State Capitol. Photo by Rosina Peixoto.
New tax collection numbers are the second dose of worrisome budget news in Wisconsin recently. 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 indicate that it could be very challenging to finish the 2016-17 fiscal year in the black.
If you are a glass half-full person, you might be happy to know that the new tax collection figures from the Department of Revenue (DOR) show that revenue grew by 1.4% during the first three months of the current fiscal year, compared to the same period in 2015-16. But that growth rate is very disappointing when you consider the following:
- The state needs a 3.7% increase over the full course of 2016-17 to reach the revenue level projected by the Legislative Fiscal Bureau (LFB) early this year.
- With 1.4% growth, tax collections in the first quarter fell $64.6 million short of the amount needed to be on track to reach the total projected for the year by the LFB.
On the positive side, income tax collections grew by 3.6% compared to the same quarter of the previous fiscal year; however, sales tax growth was an anemic 0.9%, and corporate income taxes fell by 11.9%.
Fortunately, spending has been less than expected in a few areas, particularly Medicaid, and that could help the state’s budget situation; however, it still appears that keeping the budget in the black will be difficult. We should get a much better sense of the extent of Wisconsin’s fiscal challenges in about a month, when the state releases new tax revenue projections.
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I actually find it kind of impressive… this is probably the closest I’ve seen budget projections vs actual.
Incorrect, AG. That’s $64 million short IN 3 MONTHS. Even worse is that 4/5 of revenues comes over the last 9 months, so if we stay at 1.4% growth vs 3.7% growth, that’s a miss of over $350 million.
Sure, there’s time to catch up. But does anyone see it happening with Wisconsin bleeding jobs right now?
Dare we hope that our governor and legislature will finally give up on trickle-down economics and austerity? Or do actual results really not matter at all?
Jake formerly of the LP, make sure you understand what you’re claiming is incorrect. I was referring to the overall budget projections, not tax collections. Although tax collections grew by 1.4% in the first quarter, spending was also lower than expected. Overall, when I did a quick peek at the numbers we’re off a fraction of a percent. Not bad in my mind, considering how bad it’s been in the past.
What are you talking about AG? There are no new budget projections on spending, and in fact, the 2016-17 budget was projected to spend $151 million than it took in….before Q1’s revenue shortfall.
Are you talking about the year-end balance of $313 mil, which “only” missed the budgeted amount by $77 million? A miss that still happened despite the Walker Admin skipping a debt payment of $101 mil and kicking the payments down the road for another 8 years?
Look, you wouldn’t be Republican if you were fiscally ir economically literate, but do you even know what you’re being wrong about?
“…with Wisconsin bleeding jobs right now…”
Jake should get out of his Dane County bubble once in awhile! Over here in the WOW counties, I’ve never seen so many businesses (including many in industrial parks) with “WE’RE HIRING!” or “APPLY TODAY” signs.
I’ll give you the shortcut to save some time, though:
-Lots of help wanted signs mean everyone is leaving Wisconsin, so there are no workers because of Republicans and Walker.
-No help wanted signs means that there are no jobs because of Republicans and Walker.
Holy Donald Trump logic. You see signs and that is proof of a thriving state economy. Sweet Jesus.
Jake formerly of the LP, you’re unnecessarily parsing my words while looking for an argument. I wasn’t looking to get into a deep debate about this, which is why my comment was purposefully broad. Last year we ended within a fraction of a percent within the budget projection (when you include the delayed debt payment), and this year within .6% of revenue projections with the vast majority of the year to go and I’m hoping we continue the below estimates trend on expenditures. That will leave us pretty spot on for projects for year end. There’s a whole lot of detail in there to worry about, but back to my original point, this is the closest I’ve seen projections to actuals that I can remember.
These stooges just wish they lived in Illinois. Some how they would praise Speaker Michael Madigan and his deficit budgets. We don’t have to give poor people insulin.
No AG, NO. You are saying things that are misleading to downright false, and you don’t get to let that hang in the air to confuse readers.
You aren’t mentioning that those revenues were short of revenues THAT HAD ALREADY BEEN REVISED DOWN in January. Likewise, we are already well below the 3.7% growth we need just to reach a 2016-17 figure that was already more than $100 million below what was in the budget. That’s a bigtime shortfall, and you need to understand/admit this.
I am not parsing your words. I am holding you publicly accountable for what you chose to say. And by the way, let’s not forget the cuts to the UW System and defunding of local governments that “balanced” this budget. Moves like that help explain why we have been dead LAST in the US for start-up activity, and how we have lost 13,000 jobs in the last 6 months.
Stop making excuses. Own the GOP failure
Last week it was reported that there was a few million dollars short of predictions in the budget and the budget came in the black by $15,000,000. The way things are reported by the media makes it look like we are not on track for much good. When an actual analysis is done, we have more money in our coffers, plain and simple. Compare this to the Doyle years of never ending debt, failed plans to meet the budget and stealing from doctors to fund the budget, something Doyle should have been jailed for. WE ARE IN THE BLACK BIG TIME. STOP TRYING TO SAY WE ARE NOT, JUST BECAUSE YOU ARE A WALKER HATER. STOP HATING AND GET A LIFE.
Walker haters will turn this budget into a loss for the mere fact they are haters. We have money in the bank, a surplus, and they refuse to admit it. If you can’t see the good here, move to Illinois and share their wealth. See how that works for you.
What in the world are you Baggers talking about with your “real-life numbers”. You seem to not know (or have thought about) the following.
State debt in the General Fund grew by $450 million between the end of FY 2014 and FY 2016, and was at $7.716 billion on June 30.
Hundreds of millions in additional dollars borrowed in the Transportation Fund to make the numbers “balance”, and $340 million required to pay off DOT debt last year- $25 million over the previous year, and a number that will continue to grow.
Over $200 million in debt payments have been skipped in the last 2 years, which is the only reason you can claim the General Fund is in the “black.” That money also has to be repaid with interest in current and future years.
We are in a worse situation than we were under Doyle, who had things pretty much in check until Bush’s Great Recession decimated every state. We are somehow still spending more than we’re taking in for both the General Fund and the Transportation Fund despite the cuts to K-12, the UW, and local governments, and debt in both Transportation and the General Fund keeps growing despite an economic recovery under Obama that is now in its 7th year. The foundation is already shaky, and we haven’t even fallen into a recession yet (which history shows is likely to happen within the next 2-3 years).
Those are the numbers, and those are the facts. Don’t insult my intelligence by arguing otherwise.
Jake, are you complaining about the borrowing that they did that would largely not have been necessary if Doyle hadn’t used the transportation fund to balance the budget?
Hit post too soon…
When you say, “Moves like that help explain why we have been dead LAST in the US for start-up activity, and how we have lost 13,000 jobs in the last 6 months.” are you trying to tell us that it’s the state that funds start ups? I know you’r enot, but I think that’s a real stretch to try to tie start ups to our state budget. I’m pretty sure we’ve been a low performer in start up activity for a lot longer than any cuts to the UW system… nor have I seen a direct correlation show.
Regarding being below projections for tax revenues… do you think we magically hit 3.7 percent growth as soon as the FY calendar turns over? It’s progressive growth that gets us there… I’m willing to bet they didn’t estimate the growth based on a linear figure. Again, I haven’t seen anyone show me that we’re actually off on what they predicted so far… just some cheap chop job on the annual budget projections.
No AG- It’s 3.7% year-over-year growth, that would be the benchmark no matter what time of year it is.
2. PUT THE “DOYLE RAIDED DOT” TALKING POINT DOWN. The LFB has released this document time and again which shows that hundreds of millions of dollars more have gone from the General Fund for DOT purposes since 2003 than the other way around.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://docs.legis.wisconsin.gov/misc/lfb/misc/100_net_loss_gain_to_transportation_programs_due_to_general_fund_transfers_since_2003_05_10_13_14.pdf&ved=0ahUKEwi0y_2qgfrPAhUI0iYKHSkbBbUQFgghMAI&usg=AFQjCNFbYQ7iDzlNhWiXhkdnY22ooJ7NaQ&sig2=e8AL4AcWvijkN3myw-kBhA
I really don’t know why you righties cling to that BS, or ignore the fact that a GOP Legislature signed off on those moves.
1. it’s not rightie BS unless you can’t see the truth. 2. The lefty Journal/Sentinel printed an article last week which talked about this years budget. The way they put it we lost money. I wasn’t until the 3rd paragraph that they put the numbers in the article that proved there was a budget SURPLUS. It wasn’t as much as was projected, but then who’s good at guessing. BUT IT WAS A SURPLUS, never the less. Lefties will never admit this and see that we are in the Black. Hope you can live with this, too. WALKER IS STILL GOVERNOR. So suck it.
Hey, if I didn’t pay some of my bills in a certain month, I’d have a bit more money in my checking account too. Doesn’t mean I’m in better shape financially, esoecialky when those bills are coming due and I don’t have more money coming in.
That’s where Wisconsin stands today under Walker and WisGOP. It’s funny to hear the righties yap and say “Well, do you want to be like Illinois?” Because we ARE acting just like Illinois, with the “pay it later” fiscal planning and pay-to-play corruption. But we don’t have a world-class city like Chicago to encourage talent and money to go to.
Jake, you’re interpreting that report wrong for this conversation because you need to account for the fact that they are counting the bonds as “repayment” or a transfer in to the transportation fund. In addition, it ignores the time value of money… inflation on those totals is nearly equal, by itself, to the level at which they show the positive transfers to the transportation fund.
One point 1, if I take out a cash advance on my credit card and deposit it into my checking, you can’t really call that a net positive to my personal budget. On point 2, ignoring inflation and the effects of the cost to hold the debt is an important factor you must take into account.
Your points on holding off on debt payments are accurate, and the bill will come due, but other other points you’re showing your own bias.
We need a referee to say who is right here, or if people from different ends of the political spectrum are just seeing what they want to see.
It’s all kind of right. These numbers are pretty easy to use accurately while making opposite points. That’s what makes budget debates so much fun!