LFB Releases Updated General Fund Tax Collections, UI Information

On July 9, the Legislative Fiscal Bureau (LFB) released updated numbers on Wisconsin’s general fund and the state’s unemployment insurance system.

General Fund Collections

 Due to the coronavirus pandemic, tax collections for June 2020 were $370 million below collections in June 2020. The drop in collections reflects a continued decline over the past three months. The state is $1,306 million behind in collections for April-June 2020 compared to April-June 2019. Overall, Wisconsin collections for Fiscal Year (FY) 2019-20 are currently 4.7 percent below the collections in the previous fiscal year.

Reduced income taxes account for 96 percent of the reduction in collections. Sales and use tax collections have also reduced but are improving from severe declines when Wisconsin’s economy shut down under the state’s Safer-at-Home order in March. June 2020 sales and use tax collections are 1.7 percent below June 2019 numbers. Year-over-year sales tax collections had declined 10 percent in both May and April. The memo attributes sales tax collection growth in June to the end of the Safer at Home order and federal stimulus funding for consumers. Overall, sales tax collections year-to-date have actually grown 1.8 percent.

The LFB memo notes that the collections numbers are partially incomplete due to the tax filing deadline extension to July 15.

 The LFB report again estimates that the balance of Wisconsin’s 2019-20 general fund will “undoubtedly decrease” due to the reduced tax collections. However, the memo notes that several factors could mitigate the decline, including Wisconsin’s “rainy day” fund and state agencies’ efforts to reduce spending.

 Unemployment Claims

 Continuing claims for unemployment insurance in Wisconsin have declined by 32 percent since peaking in April. Claims are down to 219,797 as of June 27.