Wisconsin’s ‘unprecedented’ tax revenues continue to exceed expectations
Wisconsin ended the last fiscal year with even more money in the bank than predicted in the huge and record estimates earlier this summer, according to a new analysis released Thursday by the non-partisan budget office in the Legislature.
According to the memo of the Legislative Fiscal Bureau, the state generated approximately $ 19.6 billion in tax revenue in the 2020-2021 fiscal year, approximately 12% more than the previous year and 319 million more than estimated most recent expected.
The collections leave the state in the strongest fiscal form it has seen in any budget cycle in recent memory. This is a sharp departure from the expectations many had of declining collections and a dire budget situation during the COVID-19 pandemic.
In a prepared statement, the Republican co-chairs of the legislature’s budget committee attributed the influx to the GOP leadership.
“The latest state tax collections show that because of the strong reforms Republicans have put in place in recent years, sending more money back to taxpayers in the last state budget was the right thing to do, ”said Rep. Mark Born, R-Beaver Dam, and Sen. Howard Marklein, R-Spring Green.
Gov. Tony Evers criticized the GOP-backed state budget, even though he enacted it. Evers argued that the state’s strong financial position meant it should have invested more in things like education and health care. In a statement prepared Thursday, the Evers spokesperson credited the governor’s leadership during the pandemic with the good revenue figures.
“From unemployment that has almost returned to pre-pandemic levels to ‘unprecedented’ income projections earlier this year and now to today’s news, Governor Evers’ leadership – getting gunshots and support to those in need – has helped ensure our state’s continued economic recovery after this pandemic, ”Evers spokeswoman Britt Cudaback said in an email.
A June estimate from the state budget office had already shattered previous forecasts of tax collection during the fiscal year, claiming the state is expected to bring in $ 4.4 billion more in the year than expected.
At the time, the head of the Finance Bureau, Bob Lang, called the fundraising “unprecedented”. He attributed the increase primarily to the American Rescue Plan Act, the $ 1.9 billion stimulus package approved by Congress in March that included $ 1,400 stimulus checks, a weekly supplement of $ 300 for unemployment benefits and a second round of paycheck protection program loans.
Under state law, if tax revenue exceeds forecast, half of the excess amount must be deposited into the state’s so-called “rainy day fund”. As a result of this law, the note predicts that approximately $ 967 million will be deposited into the fund.
According to the budget office, the rainy day fund has a current balance of around $ 762 million. The deposit will bring that total to approximately $ 1.7 billion.
The increase in income comes as the state continues to receive billions of federal coronavirus relief dollars. Evers has about $ 2.5 billion of the latest round of aid to head around the state over the next few years.
The figures released Thursday are based on preliminary data released by the state Revenue Department. The finalized data will be made public in October.