Despite record taxing, the state will still not have enough to cover it’s projected spending. It’s the spending, stupid.
Wisconsin had the highest budget reserves in 40 years this June largely due to a spike in corporate tax revenues, according to a report from the nonpartisan Wisconsin Policy Forum. However, the report says the state’s reserves are still slightly below the national average and the current state budget will spend $800 million more than the state is projected to take in by 2021.
The analysis looked at Wisconsin’s Annual Fiscal Report that provides data on state taxes, spending and reserves. It shows the state had $1.7 billion in budget reserves after taking in more than $17 billion in tax revenues during the prior fiscal year, which ended June 30. That was a year-over-year increase of 7.4 percent and the largest annual percentage increase since 2000, according to the report.
Jason Stein, a researcher for Wisconsin Policy Forum, said the overall increase in the state’s tax revenues was driven largely by a spike in the amount of Wisconsin corporate tax revenues. He said the state collected more than $442 million in corporate taxes.
“Corporate taxes, especially, rose almost 50 percent,” said Stein. “So, that was the most they have risen, the fastest rate since 1964. So, that’s really an exceptional change. And it was due to a couple things and one of them was due to that federal tax law.”