I had mentioned previously that the April 2014 Wisconsin revenue report was important, as April includes all late filings of tax returns and would tell us if the shortfalls we'd been seeing at the start of 2014 were going to continue. And they didn't just continue, they got worse.
The monthly release was dumped on a pre-holiday weekend Friday afternoon, and one look at the numbers shows why the Walker Administration wouldn't want you to know about it.
Year-over-year change in Wisconsin revenues, April 2013 vs. April 2014
Income tax -31.2%
Sales tax +3.6%
Corporate tax -13.2%
Excise tax -0.2%
A 31.2% drop in income taxes and 13.2% drop in corporate taxes is no small thing. Yes, I understand that a number of items came together to reduce April's tax haul for the state- including updated withholding tables, a new round of tax cuts, and additional 2013 tax refunds from the first round of (Koo-Koo) tax cuts. But the first round of tax cuts were already accounted for in the Legislative Fiscal Bureau's revenue estimates from January that led to the one-time state surplus which was promptly wasted on a second-round of election-year tax cuts. And since the LFB has also quantified the second round of tax cuts, we can take a look at how we're shaping up compared to where we should be.
The newly-adjusted withholding tables (you know, the ones that allow you to take home an extra $10 or so each paycheck) and second round of tax cuts was expected to cost $156.5 million in revenue for the three months they were in effect for the 2013-14 fiscal year, so let's be generous and say 1/3 of that hit in April, so it'd be a $52.2 million drop. In addition, another $11.3 million for the fiscal year was expected to be written off due to another business tax cut, and $2.1 million in additional moves, so let's assume it all hit in April, to give the Walker folks the benefit of the doubt, and our extra April 2014 reduction comes to $65.6 million.
So let's add $65.6 million back into the April 2014 income tax revenue numbers, and compare the January-to-April numbers for both 2013 and 2014.
Adjusted tax revenues, Jan-Apr 2013 vs. Jan-Apr 2014
Income tax - DOWN 14.99% (-$361 million)
Sales tax- UP 2.98% (+41.7 million)
Corporate tax- DOWN 15.25% (-$52.2 million)
Excise- UP 1.05% (+2.2 million)
As you can see, the drops in Income tax and Corporate tax are larger than any increases in sales and excise taxes. And if you go back to the January revenue estimates, you see that Sales and Excise taxes were already projected to go up in this fiscal year, and corporate taxes were supposed to be up 11.22%, not down 15.25%.
So let's plug in the following numbers for the next 2 months. We'll assume may income taxes are the same as they were in May-June 2013 (even though they're running behind those figures so far), and we'll use the LFB's January-June projections of a 11.22% increase in corporate collections, a 3.34% increase in sales taxes, and assume excise taxes to come in on target at an increase around 1%.
2013-14 revenues with above assumptions vs. LFB projections
Income tax- DOWN $112.8 million
Sales tax- DOWN $9.2 million
Corporate tax- DOWN $89.5 million
Other taxes/ excise- UP $10 million
TOTAL SHORTFALL $201.5 million
So put this $201.5 million revenue alongside the failing record of tax cuts in other Koch/ALEC/GOP-run states, such Kansas ($94 million revenue shortfall in April alone), and North Carolina (which has a projected shortfall of $445 million). All of these states used a 2013 one-time bump in revenues (due to moves at the end of 2012 in fear of impending "fiscal cliff" changes which increased incomes. Instead of banking the money in a rainy-day fund, or using it to preserve or improve the level of services in their states, the ALEC govs and legislatures used it as an excuse to cut taxes.
As a recent Rockefeller report on state revenues showed,
many states saw a revenue slowdown at the end of 2013 to make up for that one-time bump at the end of 2012, and the polar vortex winter helped delay any rebound that might be coming in 2014. Barring record hiring and tourists visiting the Dells in the next two months, Wisconsin will start off fiscal year 2014-15 in the hole, as we only had a $100 million cushion before this shortfall showed up. There needs to be hard questions asked of Gov Walker and the GOP Legislature how they plan to make up for their Dubya-like fiscal stupidity, as hoping for "economic growth" to dig us out of that hole doesn't seem to be working out, just like it hasn't for the last 30 years of trickle-down stupidity in this country.
Or we could elect Dems this November, and have them be the adults in the room to take on our fiscal issues- as they've had to have been for at least a generation now.