New figures from the Department of Revenue (D0R) may raise more questions about the upcoming 2017-19 state budget.
Tax collections from July to November 2016 grew just 1.2% over the same period in 2015. That figure is lower than the 2.3% growth recently projected for the entire fiscal year. If the trend continues with no offsetting actions, the state would risk running a budget deficit for the current fiscal year, which ends in July.
Estimates of state revenues have been moving steadily downward. Initially, the state budget called for collections of $15.21 billion in fiscal 2016 and $15.79 billion in 2017.
In January 2016, the nonpartisan Legislative Fiscal Bureau lowered those estimates to $15.17 billion and $15.65 billion, respectively. DOR reported in November that collections for fiscal 2016 were actually $15.09 billion. Revenues of $15.44 billion were projected for fiscal 2017.
Wisconsin isn’t the only state facing potential budget strains. The National Association of State Budget Officers (NASBO) reported in December that revenues came in under-budget in 25 states in fiscal 2016 – the most since the Great Recession – and many expect the declines to continue into fiscal 2017.
As of December, 24 states reported that general fund revenues were coming in below forecast for 2017, the highest number since fiscal 2010.
Unlike Wisconsin, however, 29 other states reported continuing contributions to their “rainy day” funds. Wisconsin has made no contribution to its Budget Stabilization Fund since 2013. The state is projecting to end the 2017 fiscal year with a balance of about $104 million – or roughly enough funds to operate for two days.
Gov. Scott Walker (R) is expected to release his budget in February, setting the stage for nearly four months of budget deliberations by the Legislature.