Wisconsin Revenue Projections Jump By $1.2 Billion
Wisconsin state government's financial future brightened Tuesday after analysts released projections that show the state should collect $1.2 billion more in tax revenue by mid-2023 than estimated in November.
The good news comes just two weeks before Gov. Tony Evers was to submit his two-year state budget proposal to the Legislature.
The Legislative Fiscal Bureau report said the state's general fund should finish the current fiscal year, which ends June 30, with nearly $1.8 billion, about $630 million more than anticipated in November. State tax revenue is expected to grow 1% in fiscal year 2021-22 and 4.6% in fiscal year 2022-23.
The bureau attributed the rosy predictions to an array of factors.
Forecasts from international fiscal analysis firm IHS Markit show the national gross domestic product is expected to rebound in 2021 and 2022 bolstered in part by federal COVID-19 stimulus dollars. Vaccinations should lead to more jobs, personal income should grow in 2021 thanks to stimulus checks and business investments should grow over the three-year period, with a recovery in energy prices driving higher investments in mining and petroleum in each year. Corporate profits also are expected to rebound slightly in each year after a 7.2% dip in 2020.
State tax revenue is expected to grow 1% in the first fiscal year of the next state budget and 4.6% in the fiscal year that ends in June 2023.
Republican co-chairs of the Legislature’s budget-writing committee heralded the new, rosier forecast saying the state was “in a strong fiscal position.” Still, Rep. Mark Born, of Beaver Dam, and Sen. Howard Marklein, of Spring Green, said they were aware the good news comes as many families are struggling during the pandemic.
“That is why it is imperative that the next state budget ensures we spend within our means while also funding our priorities, something Wisconsin businesses and families have to do every single day,” they said in a joint statement.
Evers is slated to deliver his two-year budget to the Legislature on Feb. 16. Lawmakers will then spend the next several months revising it before they pass their version likely sometime in the summer. The new budget begins on July 1.
Evers' spokeswoman, Britt Cudaback, didn't immediately respond to an email seeking comment on the new projections.
The fiscal bureau noted that IHS Markit has calculated a more pessimistic scenario where much of the country returns to lockdown status to combat the current COVID-19 surge. Consumer spending would not grow as much as projected, the unemployment rate would not decline as sharply and the national gross domestic product would not grow as much. The analysis firm said there's a 30% chance of that scenario playing out.