Updated state revenue projections released

From WisPolitics.com

“– The Legislative Fiscal Bureau projected state revenues through mid-2021 will come in slightly below what the Department of Administration had expected two months ago.

“Still, the state is looking at an additional $2.4 billion in new money through the end of the next budget thanks to a series of factors. That includes a drop in projected appropriations in the current fiscal year that help offset the revised revenue projection.

“Even with the anticipated $142.1 million drop in revenues through June 30, the state is still looking at ending the fiscal year with $69 million more in the general fund than what DOA projected in its Nov. 20 report, LFB said today.”

Read More: Legislative Fiscal Bureau Report

Q: Where do these numbers come from?

A:  The math is a bit complicated, but according to WisPolitics, the non-partisan” LFB projects state tax revenues will come in about $280 million less through the end of the 2019-21 budget than what the Department of Administration had projected in its Nov. 20 report.  However, while the LFB revised revenue projections  downward, it also projected that the state will still have more to spend — roughly an additional $300 million — over the next two years than what DOA had projected earlier due to a combination of factors, including the following:

  • a boost in departmental revenues of $17.4 million and
  • a reduction of net appropriations of $193.7 million.

The reduction in anticipated appropriations is due to the following factors:  The DOA had projected in November that the state would make an $82.6 million transfer from the state’s general fund to the state’s rainy day fund.  LFB now projects that transfer won’t occur. State law has automatic triggers requiring transfers to the budget stabilization fund when revenues come in higher than expected.  However, legislation Republican lawmakers pushed through in the recent extraordinary session held in December specified that any revenue from new tax collections from online sales under a U.S. Supreme Court decision is to be excluded from those calculations.   So, lower projected revenues combined with the change made by the extraordinary session legislation means no automatic transfer to the rainy day fund will be triggered.

Q: Why are there two sets of revenue projections?

A:  The Secretary of the state Department of Administration (DOA) is required, by statute (s. 16.43, Wis. Stats.), to provide to the Governor or Governor-Elect and to each member of the next Legislature, by November 20 of each even-numbered year, a compilation of the total amount of each state agency’s biennial budget request. In addition, the statutes require that the report include information on the actual and estimated revenues for the current and forthcoming biennium. These revenue estimates are prepared by the Department of Revenue and are used by the Governor or Governor-Elect as the basis on which total general fund biennial budget spending levels are recommended.

Subsequent to the release of the November 20 report, the non-partisan Legislative Fiscal Bureau (LFB) publishes a summary of the major items included in state agencies’ budget requests and distributes this document to each member of the Legislature. This summary is distributed in December of each even-numbered year. The Fiscal Bureau also prepares an independent estimate of general fund revenues. This is provided annually, in January, to the Legislature. Traditionally, the LFB’s revenue estimates issued in January of the odd-numbered year are incorporated into the Governor’s budget submittal and are used throughout legislative budget deliberations.