Fiscal Bureau Projects $535 Million Structural Surplus with Historical Economic Growth

MacIver News Service | September 18, 2014

[Madison, Wisc…] Wisconsin is projected to finish the 2015-17 biennium with a $535 million surplus according to a new report from the non-partisan Legislative Fiscal Bureau (LFB).

Rep. John Nygren (R-Marinette), Co-Chair of the Joint Committee on Finance, requested the report to show that Wisconsin does not, in fact, have a looming fiscal crisis.

In early September, Sen. Jennifer Shilling (D-La Crosse) requested a similar report that showed Wisconsin would face a $1.8 billion structural deficit. The report has been widely used by Democrats to show Wisconsin’s finances are not in order.

LFB’s report, based on Shilling’s request, did not take into account growth in tax collections or any changes in spending. It was also based on data released from the state’s Department of Revenue that showed actual tax collections were lower than expected for fiscal year 2014 (FY14).

Even with tax collections down, Wisconsin still finished FY 14 with a $443 million surplus.

Shortly after LFB’s first release, DOR released new data to show that state tax collections are up for FY15. Wisconsin collected nearly $50 million more than projected in July and August of this year, the first two months of FY15.

Based on this new data, that the 2013-15 budget will finish in balance and assuming tax collections continue to grow at 2.9% annually – the average over the past five years – the Fiscal Bureau projects a more than $500 million structural surplus for Wisconsin.

Nygren and his JFC Co-Chair Sen. Alberta Darling (R-River Hills) called out Shilling for trying to mislead taxpayers.

“Democrats are deliberately trying to muddy and confuse the issue,” Nygren and Darling said in a statement. “They claim that the state is facing massive deficits and that the sky is falling. Nothing could be further from the truth. The numbers don’t lie.”

They said Shilling asked LFB an unrealistic question with incorrect assumptions. Nygren and Darling argued that the new LFB report is more accurate.

“According to the LFB if we consider growth in our tax collections, which we know an average annual growth for the last five year period has been 2.9%,” the JFC Co-Chairs added. “Our budget will be in balance at the end of this fiscal year and if we factor in a possible reduction in appropriations, we will end 2017 with a structural surplus of $535 million.”