New revenue projections from the Legislative Fiscal Bureau show the state will take in $575 million more than expected over the next two years.
A memo from the LFB says the general fund tax revenues are estimated to be higher by $215 million in 2012-13, $180 million in 2013-14, and $180 million in 2014-15. The three-year increase is $575 million, or 1.4%. The LFB memo notes that the increase comes mostly from higher than projected individual income tax collections. Higher business tax estimates also played a role.
Where the extra money will now go is a hot topic around the capitol. Gov. Walker and several legislators have remarked on where they hope the money will be spent.
The projected $560 million surplus is good news for the people of Wisconsin. Our sound fiscal management means we can continue to invest in our priorities while protecting taxpayers.
The surplus and increased revenue projections should be invested in aid for our schools, lowering income taxes for middle-class families, holding the line on property taxes, and building our rainy day fund.
Wisconsin’s economy is growing, and our tough, but prudent, decisions mean we are better off than we were two years ago.
Senate Majority Leader Scott Fitzgerald (R-Juneau):
These latest projections from the LFB, especially the income tax collection numbers, are proof our reforms are working and people are going back to work in Wisconsin. We’ve kept our promise to not raise taxes and cut spending and now we are reaping the benefits.
We are looking at options for the extra revenue and will consult with the Joint Finance Committee on areas that could use additional resources. Our priorities will remain the same to make sure Wisconsin continues to move forward towards economic growth and prosperity by keeping taxes low, promoting job growth throughout the state, and educating the next generation.
Senate Democratic Leader Chris Larson (D–Milwaukee):
Today’s revenue estimate increase must be used to restore a portion of the $1.6 billion cut from our neighborhood, public schools in the last budget. While the additional $500 million only covers a portion of the largest cut to our public schools in Wisconsin’s history, it’s a significant improvement over the $0 increase per student that Governor Walker’s budget proposed.
We must put the $500 million back in to our neighborhood, public schools to provide future generations with the best education possible to compete in a 21st century economy.
Assembly Speaker Robin Vos (R-Rochester):
Our budget reforms have paid off for the state. This will allow us to invest more in our top priorities: reducing taxes and reforming education. I look forward to working with my colleagues to expand our tax cuts and provide additional resources for K-12 education, as was recommended by a committed group of Assembly Republicans.
Wisconsin has made sound budgetary reforms resulting in the surplus. We want taxpayers to know that we’ll stay true to our promise to them. We’ll continue to put them first when balancing the budget while holding the line on taxes.
Assembly Democratic Leader Peter Barca (D-Kenosha):
With new revenue projections, there can be no more excuses for the Republicans’ continued lack of funding for the education of our public school children and job training for our workers. Last budget Republicans cut public schools by $1.6 billion. With new revenue projections they can undo some of the damage they did to our public school classrooms and job training for our workers at our technical colleges and other vital training programs.
Sen. Alberta Darling (R-River Hills), Co-Chair of Joint Finance Committee (JFC):
The much improved revenue numbers show our reforms are working and the state’s economy is improving. However, a good portion of the increased revenue is from one-time funding sources. We must continue to be good stewards of the taxpayer’s money and continue to carefully and responsibly craft the state budget. It is my hope that we can look for ways to improve educational opportunities for our children, lower the tax burden on our citizens and businesses, and prevent a structural deficit.
Sen. Jennifer Shilling (D-La Crosse), the ranking Senate Democrat on JFC:
The new revenue projections show that our state will be able to start restoring the $1.6 billion in cuts that were made to our public schools in the last budget. By providing a $275 per pupil funding increase to our local schools, we can make needed investments in our children’s future and hold the line on property taxes.
Investing in worker training and improving accountability in our job creation programs must also be a top priority. Given our current ranking of 44th in job creation, we need to invest in worker training programs to close the skills gap and address the high rates of unemployment in our state.
Assembly Republicans on JFC:
“We would like to increase funding by $100 per pupil,” states Co-Chair Nygren (R-Marinette). “We have listened to the citizens that spoke out during public hearings throughout Wisconsin and to our colleagues.”
“Education is vitally important to the state of Wisconsin,” said Rep. Pat Strachota (R-West Bend). “We want to assure our urban and rural communities that their schools will have the funding necessary to carry out their most critical job of educating our future leaders. We also remain committed to expansion of choice programs as they are a necessary component of improving our education system as they offer parents options to ensure their children succeed.”
“Our promise is to give Wisconsin taxpayers the largest possible income tax cut that we can afford,” comments Rep. Dale Kooyenga (R-Brookfield), “the revenue numbers released today put us one step closer to accomplishing that goal.”
Some of the money is already spoken for. According to the LFB memo:
Under s. 16.518 of the statutes, half of any excess of actual general fund revenues in a fiscal year over the amount estimated at the time the biennial budget was enacted must be deposited into the budget stabilization fund after the close of that fiscal year. Therefore, the estimated deposit to the budget stabilization fund for 2012-13 will increase by $107.5 million (50% of $215 million). The other $107.5 million of additional tax collections will be available for expenditure during the remainder of this year or increase the estimated 2013-14 beginning general fund balance. The total deposit to the stabilization fund for 2012-13 is now estimated at $117.5 million. With the 2012-13 deposit to the stabilization fund identified above, it is estimated that the fund will have a balance of $243.1 million at the end of the current fiscal year.