Money by Tracy O. (CC BY-SA 2.0) CC BY-SA 2.0
Wisconsin tax collections are more than $300 million ahead of a June forecast, and Republicans and Democrats in the Capitol are each claiming credit for the added windfall.
The state Department of Revenue reported this week that it now expects total tax collections for Fiscal Year 2021 — which ended June 30 — to clock in at $19.57 billion.
That is $1.9 billion more than the estimate that was included with the previous state budget, enacted in 2019. By state law, half of that additional money — $967.4 million — will go to the state’s budget stabilization fund, nicknamed the “rainy day fund.”
The new revenue report is also $319 million ahead of the $19.25 billion that the nonpartisan Legislative Fiscal Bureau projected in June — which already represented a substantial gain from the 2019 estimate.
The largest gain over the June forecast was for corporate income and franchise tax revenues. Those are now expected to reach $2.56 billion — an additional $230 million. The new estimates for personal income tax and sales tax revenues also exceeded the June projections, although by much smaller amounts.
At the time of the June projection, the fiscal bureau’s director, Bob Lang, told legislators that the American Rescue Plan Act (ARPA) was “the primary factor in the increased estimates” leading to unprecedented tax collection and a much better-than-expected economic forecast. The $1.9 trillion federal COVID relief legislation, which was enacted in March, sent $1,400 in stimulus funds to individuals, extended enhanced federal unemployment benefits, funded additional pandemic small business loans and sent $2.5 billion to the state.
Rep. Gordon Hintz (D-Oshkosh), the Assembly minority leader, credited the state’s renewed economic growth to ARPA and to fellow Democrats, President Joe Biden and Gov. Tony Evers. Hintz criticized the Legislature’s Republican majority for not adding new funds to public education in the 2021-2023 state budget despite the June increased revenue projections, warning that local school districts could be “forced to make cuts or ask voters to raise property taxes.”
Meanwhile, the GOP co-chairs of the Legislature’s Joint Finance Committee, Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam), issued a statement asserting that the newest tax revenue estimates justified the $2 billion income tax cut that Republicans added to the new budget when they rewrote Evers’ original budget proposal.
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