The Department of Revenue (DOR) issued its December revenue report today. The new DOR figures show that revenue collections were up 5.0 percent in December, compared to one year earlier. For the first half of the current fiscal year, tax collections are up by 4.7 percent. That growth rate is well ahead of the assumption in the biennial budget bill that General Fund tax collections would increase by 3.0 percent for the full fiscal year.
Sometime next week we expect the Legislative Fiscal Bureau (LFB) to issue new budget estimates for the 2011-13 biennium. Today’s revenue numbers, coupled with the reduced estimate earlier this month of the state’s Medicaid deficit (which improved by $127 million GPR), make me more optimistic about next week’s report by the LFB.
Over the first six months of the fiscal year, the fastest growth among the major categories of Wisconsin taxes has been the 5.5% increase in individual income tax collections. The next largest increase has been 4.0% growth in corporate income tax revenue. Sales tax revenue has been growing at a somewhat slower pace – 3.7 percent. Excise taxes, which comprise only about 5 percent of total state revenue, have declined slightly (0.9%) over the first half of the fiscal year.
Next week we’ll examine the new LFB numbers after their report comes out, and we’ll look at the question of whether Governor Walker is right in saying the Wisconsin budget is balanced, or whether the state Department of Health Services is right when they argue to federal officials that the state has a large deficit in the current fiscal year.