Wisconsin tax collections come in $281 million below estimates last year

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MADISON, Wisconsin — Wisconsin tax collections for the past year came in 2 percent short of estimates, the state Department of Revenue reported Thursday, news that won't require immediate emergency action by the Legislature but that puts the state's budget on track to be out of balance next year.

The figures show the state collected $281.2 million less for the fiscal year that ended in June than was anticipated by the nonpartisan Legislative Fiscal Bureau.

Gov. Scott Walker and the Republican-controlled Legislature have cut taxes by nearly $2 billion since Walker took office in 2011, including $500 million in March, a fact they've trumpeted on the campaign trail but that Democrats say has put the state's budget in jeopardy.

On Thursday, Walker and Republicans went into damage control, saying the economy is still heading in the right direction but ignoring the fact that the news means the budget will not be balanced next year. The figures come just over two months before the election in a race for governor that's focused heavily on which candidate is better for the state's economy.

Democrats said the news is evidence that the Republican agenda isn't working and it's time for a change.

"Scott Walker has no one to blame but himself and the Republican lawmakers who have driven Wisconsin's economy right into the ditch," said Democratic state Sen. Bob Jauch, a former member of the Legislature's budget committee.

Walker faces Democrat Mary Burke on Nov. 4. Polls show the race is a dead heat. All 99 seats in the Assembly and 17 of 33 state Senate seats also will be determined in the election.

Burke said in a statement the numbers show Walker's policies aren't working and "exposes once again how fiscally irresponsible Gov. Walker has been."

Walker campaign spokeswoman Alleigh Marre pointed to the $3.6 billion budget shortfall Walker inherited from Democratic Gov. Jim Doyle in 2011. Burke served as Doyle's Commerce Department secretary for nearly three years.

"Wisconsin can't afford to go back to the same policies that failed us in the past with Mary Burke," Marre said.

The two-year budget passed by the Republican-controlled Legislature and signed by Walker in 2013 ended the first year with a $724 million surplus. But with Thursday's shortfall, than cushion is now just $443 million.

The budget was slated to end with just a $165 million cushion. But as it stands now, the state would be $115 million in the red as of June 30.

A lot can change between now and then, for better and worse, making it difficult to project whether the Legislature will have to take steps to ensure the budget balances. For one thing, exact expenses for the fiscal year that just ended won't be known until mid-October. Tax collections next year would have to exceed projections to make up the loss this year.

Still, Walker's spokeswoman Laurel Patrick said the state will end the two-year budget in mid-2015 with a surplus — as required by the state constitution — but she didn't address whether it will take emergency action to get there.

"As we have done in the last several years, we will continue to manage the Wisconsin taxpayers' money well and keep the state's fiscal house in order," Patrick said.

Republican Assembly Speaker Robin Vos ignored the looming shortfall as well, instead focusing on the fact that the first year of the budget ended with a surplus — albeit a smaller one than expected.

"We will continue to be good stewards of taxpayer dollars and manage the state finances with a conservative approach," Vos said.

Republican leaders pointed to other more positive figures like the unemployment rate that at its lowest level since 2008.

"Our reforms are returning more money to the residents of Wisconsin through property tax relief and decreased income tax brackets," said the co-chairs of the budget committee Rep. John Nygren, R-Marinette, and Sen. Alberta Darling, R-River Hills.

But budget committee member Sen. Jennifer Shilling, D-La Crosse, said the tax collection news shows the state is headed in the wrong direction.

"This massive deficit is terrible news for Wisconsin families, small businesses and local communities," she said.

An even bigger problem looms for the next two-year budget that begins in mid-2015 and that the Legislature will pass next year. Not counting the lower tax collections reported Thursday, the next budget was already projected to begin $642 million in the hole.


Follow Scott Bauer on Twitter at https://twitter.com/sbauerAP

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