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Nov. 6 elections will set the tone for coming budget talks

With Nov. 6 less than two weeks away, many Wisconsinites have their attention firmly fixed on the general election.

State-budget watchers, though, are already looking ahead to the months afterward.

The reason? Work on the state’s next two-year budget will begin in earnest once the next governor is elected. If voters choose Gov. Scott Walker, and Republicans maintain control of the Legislature, state policies will proceed more or less as they have since 2011. But if state schools Superintendent Tony Evers wins, and Democrats wrest control of the state Senate, the next state budget could end up looking a lot different from its immediate predecessors.

The Walker administration has spent recent weeks calling attention to figures showing the state’s books to be in good shape. Some have begun to question, though, how much longer they can remain that way.

Out on the campaign trail, governor has made various promises that even some of his fellow Republicans wonder if he’ll be able to keep in the next budget. Senate Majority Leader Scott Fitzgerald, for instance, is casting doubt on Walker’s proposal to have the state cover two-thirds of state schools’ budgets. The state’s nonpartisan Legislative Fiscal Bureau has estimated such a policy, which Evers has also said he supports, would increase spending on schools by $130 million in the 2018-19 fiscal year, a period in which the state covered 65.8 percent of those budgets.

“Now you’re talking a big chunk of change, so I think you’re going to have to get some fresh fiscal numbers to see whether or not you could pull that off,” Fitzgerald said during a WisPolitics.com luncheon on Oct. 16.

At the same time, Fitzgerald said he could see the state finding enough money to fulfill Walker’s pledge to give counties and towns more aid for transportation projects. Walker’s proposal would cost the state about $110 million a year.

“That’s actually where there’s a lot of pressure for legislators back home in the district,” Fitzgerald said. “I think that is a commitment you can live up to.”

As far as the state’s current financial standing, the Walker administration reports:

  • It finished the 2017-18 fiscal year with $579 million in its general fund, showing a slight improvement from what had been previously projected, the Department of Administration announced recently. The final accounting for the fiscal year found the state had $41.2 million more in the bank than what had been projected when the 2017-19 legislative session ended this spring. Still, that $41.2 million is less than 0.3 percent of the taxes that were collected for the state’s general fund over the course of the year.
  • The DOA also reported the state saw its tax collections for its general fund increase by 4 percent, a result that was in line with previous projections from the Legislative Fiscal Bureau. Collections for the year were up by $18.4 million from what was previously estimated, climbing to more than $16.1 billion.
  • And state deposited $33.1 million into its budget-stabilization fund, which now has a historically large balance of $320.1 million.

Separately, the Department of Revenue reports tax collections for the first three months of fiscal year 2018-19 were 9.2 percent above what they were in the same period a year ago. The increase was driven by individual income taxes coming in 6.8 percent higher than what they were in the same period of 2017-18. Sales taxes were similarly up 8.9 percent and corporate taxes by 33.1 percent.

For the full fiscal year, the Legislative Fiscal Bureau projected the state’s collection of income taxes would be up by 4 percent and sales taxes by 4.8 percent but that corporate taxes would be down by 1.9 percent.

The Capitol Report is provided by staff writers at WisPolitics.com, a nonpartisan, Madison-based news service that specializes in covering government and politics, and is distributed for publication by members of the Wisconsin Newspaper Association.

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