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LFB: State Tax Collections $319 Million Higher Than June Estimate

By John Forester | September 7, 2021

In case you missed the announcement late last week, state tax revenues continue to outpace expectations.  Check out the WisPolitics.com reporting on the issue below.  Also, check out this news story from the Wisconsin State Journal.  State tax collections $319 million higher than previously estimated, 11.6% more than last fiscal year | Local Government | madison.com

From WisPolitics.com …

The GOP co-chairs of the Joint Finance Committee touted better-than-expected revenue numbers as a continued sign of Republican leadership over the past decade.

Meanwhile, Tony Evers’ spokeswoman said today’s news shows “Gov. Evers’ leadership — getting shots in arms and support to folks who need it — has helped ensure our state’s continued economic recovery from this pandemic.”

The Legislative Fiscal Bureau today said its preliminary look at tax collections for the 2020-21 fiscal year show the state took in $319 million more than what the agency had projected in early June.

Then, LFB had anticipated $19.25 billion in general fund tax collections in the second year of the budget. Instead, tax collections came in at nearly $19.6 billion.

LFB Director Bob Lang said the bump was due to two factors. One factor was corporate tax collections came in higher than expected after businesses made their estimated payments at the end of June before the fiscal year closed. The second was the agency had a better handle on sales tax collections for the fiscal year after additional reports from retailers.

It continued a run of higher-than-expected revenues for the fiscal year despite the COVID-19 pandemic. When the budget was signed in July 2019, LFB projected the state would take in more than $17.6 billion during 2020-21. Instead, LFB’s preliminary tally of tax collections came in at nearly $19.6 billion.

Half of the additional $1.9 billion in revenue will go to the rainy day fund. LFB said that will push the fund’s balance to more than $1.7 billion.

State law includes an automatic trigger sending half of all excess revenue growth to the fund until its balance reaches 5 percent of general fund expenditures. The balance will hit nearly 9 percent of the $19.3 billion the state is budgeted to spend from the general fund in 2021-22.

At the end of the 2009-10 fiscal year, the rainy day fund had a balance of $1.7 million.

JFC Co-chair Howard Marklein, R-Spring Green, noted the rainy day fund balance has grown “all while investing in our strategic priorities.”

Fellow Co-chair Mark Born, R-Beaver Dam, said the latest numbers “show that due to the strong reforms Republicans have put into place over the past several years, sending more money back to the taxpayers in the most recent state budget was the right thing to do.”

The additional revenue means the state is also looking at an extra $159.5 million toward its finishing balance for the 2020-21 fiscal year. In June, LFB expected the state to finish the year with a gross balance of $2.6 billion.

Assembly Minority Leader Gordon Hintz, D-Oshkosh, said the collections make it even more difficult to understand why GOP lawmakers didn’t put more state money into education during deliberations on the 2021-23 budget.

“Today’s news should serve as another opportunity to invest in our future at a time of increased need so local school districts are not forced to make cuts or ask voters to raise property taxes,” Hintz said.

See the memo here.

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