If current spending estimates hold, the state of Wisconsin is headed for an unexpected budget surplus of about $274 million for the current 2011-13 budget cycle.
A new Department of Revenue report released this week shows that the state collected $126.6 million more in general-purpose tax revenue during the 2011-12 fiscal year than was projected last May. The May number itself had reported a better revenue collection estimate than the one before it.
Because half of any budget surplus must be deposited in the state’s Budget Stabilization Fund, otherwise known as the Rainy Day Fund, that account could be in for a record haul as well, according to Department of Administration secretary Mike Huebsch, who cautioned that final expenditure numbers still have to be considered.
“These positive revenue numbers are very encouraging, but expenditures must also be counted,” Huebsch said. “DOA is reconciling the spending numbers, and I fully expect to report the largest transfer to the Budget Stabilization Fund in the state’s history. After years of record budget deficits, we are clearly headed in the right direction.”
Huebsch said his agency would still watch state spending closely and not allow additional revenues to lead to unnecessary spending.
“As state agencies prepare their biennial budget requests, we will ensure that agencies continue to be fiscally responsible, while providing the best possible services to our citizens,” he said.
The data is preliminary.
In a memo to Rep. Robin Vos and Sen. Lena Taylor, the co-chairs of the Joint Committee on Finance, Legislative Fiscal Bureau director Bob Lang spelled out some of the details of the revenue report.
According to the DOR, Lang wrote, collections totaled $13,514.6 million in 2011-12. That represents an increase of 4.7 percent from the previous year.
“The final estimate of tax collections for 2011-12 was $13,388,000,000, which is the number that will appear in the next version of the statutes,” Lang wrote. “Actual collections were $126.6 million, or 0.9 percent, above the estimate.”
Specifically, individual income tax collections rose from $6.7 billion to $7 billion, while corporate taxes rose from $852.9 million to $906.6 million. Excise taxes declined slightly.
Assembly speaker Jeff Fitzgerald (R-Horicon) lauded the numbers and said they proved the policies of the Walker administration and of the then GOP-controlled Legislature had worked.
“Once again the reforms passed by the Republican Legislature and enacted by Gov. Walker are working,” Fitzgerald said. “Fiscal discipline combined with common-sense regulatory reform is helping Wisconsin’s employers buck the national trend with growing revenues and expanded payrolls. We made the tough decisions required to balance our budget with the next generation in mind, but it’s heartening to see our actions having an immediate positive impact on Wisconsin’s economy.”
Vos pointed to the projected budget surplus of $274.1 million for the end of the 2011-13 budget cycle, as well as to the expected record balance in the budget stabilization fund. Of the $126.6 million additional revenue, the Rainy Day Fund will receive $63.3 million, taking its balance to $125.4 million.
“Our budget reforms have paid off for the state,” Vos said. “We held the line on taxes and curbed government spending. Wisconsin is now in better financial shape because of it.”
Rep. Pat Strachota (R-West Bend) said the state managed to produce the surplus without compromising future budgets or hurting workers.
“This is great news, and it shows the positive fiscal results of the tough reforms we made this legislative session,” Strachota said. “We fixed the budget without raising taxes, mass layoffs of public employees, or accounting tricks. We also began work to eliminate waste, fraud, and abuse. Gone are the days of unsustainable multi-billion dollar budget deficits and an unfriendly job creation environment.”
The state’s annual fiscal report will be released by Oct. 15. That document gives an official statement of spending and of revenue collections for the fiscal year that ended June 30.
The revenue collection data comes on the heels of a series of good economic reports for the state.
According to the Department of Workforce Development, actual jobs data for the first three months of 2012, based on reports from 96 percent of Wisconsin businesses, show that Wisconsin added 37,464 private-sector jobs from March 2011 to March 2012.
The net job gain from March 2011 to March 2012 included an increase of 12,088 manufacturing jobs, DWD stated, while wages by covered employers grew by 7.2 percent year over year.
“Under Gov. Walker’s leadership, Wisconsin added 37,464 private sector jobs from March 2011 to March 2012,” DWD secretary Reggie Newson said. “Manufacturing is leading the recovery in Wisconsin, adding more than 12,000 jobs over this 12-month period.”
What’s more, according to DATCP, in the first half of 2012, Wisconsin exported $1.5 billion worth of agricultural products to more than 132 countries, an increase of 5 percent over the first six months of 2011. The Wisconsin Economic Development Corporation also reports that the state’s total exports grew by 7.9 percent during the first six months of 2012, with increases in exports of industrial machinery, agricultural products, vehicles, and medical and scientific instruments.
Wisconsin exports totaled $11.7 billion during the six-month period.
Richard Moore may be reached at email@example.com.