Madison – Wisconsin tax collections narrowly missed projections for the year that ended June 30, delaying the possibility of further cuts in state spending and services a month after the governor signed a bill to fix a $3.2 billion shortfall, officials said Tuesday.
Tax collections were $23.8 million short of projections, just 0.2 percent off estimates, according to a report released by the Department of Revenue.
Rep. Dean Kaufert, co-chairman of the Legislature’s powerful budget committee, said the report suggests Wisconsin’s economy is turning around. He also called it good news, considering lawmakers have had to approve plans to fix two deficits in the past 14 months.
"I’m quite frankly somewhat relieved," said Kaufert, R-Neenah. "I’m optimistic that we may be seeing the light at the end of the tunnel here. We’re right on the verge of hopefully heading back in the right direction."
Gov. Jim Doyle in July signed a two-year budget for the period that began July 1. The budget fixed a $3.2 billion shortfall brought on by falling revenues that did not cover requested expenses.
The tax-collection numbers were included a Department of Revenue report on the state’s economic outlook. Though state revenues are on target, the job market is expected to remain sluggish.
Revenue officials project total employment will fall by 0.1 percent between July and September with manufacturing jobs dropping by 3.7 percent.
Manufacturing still sluggish
Jason Helgerson, Department of Revenue executive assistant, said that’s a sign the state is still waiting for the manufacturing sector to turn around.
"As the world economy begins to grow at the end of this year and into next year, that will really help our manufacturing sector," he said.
The unemployment rate is expected to remain at 5.4 percent for the period.
Still, Bob Lang, director of the nonpartisan Legislative Fiscal Bureau, said nothing in the report suggests the state should revise its revenue projections for the two-year budget.
The state is expected to have more than $140 million surplus in the first year of the budget, more than enough money to cover the $23.8 million the state fell short of projections, Lang said.
He said officials will have a more complete picture of the state’s finances in mid-October after reports on expenditures come in.
The report released Tuesday showed:
- Total tax collections were $10.2 billion, a 1.8 percent increase over the previous year.
- Individual income-tax collections increased $72 million over the previous year, up 1.5 percent. That was still $68 million below what officials had predicted.
- Collections from sales tax grew 1.1 percent.
- Corporate tax collections were up 4.7 percent to $527 million. That was $37 million above the estimate for the fiscal year.