CAPITOL CONNECTION

State financial future brightens
Joe Leibham • 9th Senatorial District

Last week, the non-partisan Legislative Fiscal Bureau (LFB) announced that Wisconsin is currently projected to end the 2013- 15 biennium with a $1.04 billion surplus. This is $911.9 million more than was previously anticipated. Without a doubt, this is great news for Wisconsin! Gone are the days of the multi-billion dollar budget deficits that Wisconsin experienced over the past decade. Our economy is growing and the responsible budget practices we instituted over the past three years are paying off.

The biggest factor behind the expanded surplus projection is increased projected state tax revenues. Again, our economy is growing and more Wisconsinites are working. Of the $911.9 million, $892.7 is due to increased estimated tax collections over the biennium. Specifically, we now anticipate that the state will take in $15.2 billion in individual income taxes over the biennium, which is $265 million more than previously thought. Additionally, sales and use tax revenue is anticipated to exceed previous estimates by $350 million over the biennium. Finally, corporate income and franchise taxes are expected to exceed previous estimates by $214 over the biennium.

The changes in these three areas of tax collections are the primary reasons behind the significantly increased revenue projections. However, other tax categories that are projected to exceed initial estimates include: excise taxes (cigarettes, tobacco products, liquor, and beer), insurance premium taxes, and other miscellaneous taxes.

In addition to these revised tax estimates, the LFB estimates that appropriation expenditures over the biennium will be $21.6 million less than initially thought, contributing to the overall surplus. Our state government is working hard to spend less and to make our government more efficient from a cost perspective.

It is important to note that this projected surplus is in addition to the $279.3 million that is currently in Wisconsin’s Budget Stabilization (rainy day) fund, the largest balance ever. By law, the money in the fund may only be used in periods of below-normal economic activity when actual state revenues are lower than estimated revenues.

Since the announcement of this significant surplus, discussions in the state capitol and across the state have already turned to what should be done with the anticipated extra tax revenue. Governor Scott Walker will unveil his plan this week.


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