On August 30, the Legislative Fiscal Bureau (LFB) released the preliminary 2019-20 general fund tax collections. While many budget-watchers anticipated very bad news for state revenues, the LFB report actually showed tax collections up slightly (1.1 percent) over the previous year.
Based on the preliminary information, collections totaled $17.5 billion in 2019-20, which is $112.6 million or.6 percent below the final projected revenue estimate of $17.6 billion.
Under current law, half of any excess of actual general fund tax collections over the estimated amount ($17.3 billion) at the time of the enacted budget must be deposited into the budget stabilization fund. Therefore, LFB estimates that of the $211.8 million left-over positive balance from 2019-20, $105.9 million will be deposited in the state’s budget stabilization fund, for a total balance of $761.8 million.
State agencies earlier this summer cut expenditures by $70 million to help address anticipated revenue shortfalls, with the University of Wisconsin System accounting for $41 million of the $70 million in cuts. In July, Gov. Evers subsequently directed agencies to cut another $250 million from state agencies, though many details regarding these cuts have not yet been released.
In response to the better-than-predicted revenue numbers, Joint Committee on Finance chairs Rep. Nygren and Sen. Darling issued a cautionary press release stating, “while state tax collections are down compared to previous estimates, the full impact of COVID-19 has not yet been felt by our state finances.” The final 2019-20 revenue numbers will be available in October.