The Legislative Fiscal Bureau (LFB) released updated tax collection numbers and a report on the status of the state’s general fund heading into the 2025-27 state budget debate. The fund still contains a healthy balance primarily because the governor and legislature have not been able to come to an agreement on how to spend it.
From Wispolitics.com: State tax collections through the month of April are up 0.9% over the year before, slightly ahead of the 0.4% growth that the Legislative Fiscal Bureau had projected for 2023-24.
LFB Director Bob Lang told WisPolitics the numbers are “tracking well compared to our estimate.” April is a major month for state tax collections with individual returns due.
“We’re comfortable on where they are,” Lang said.
Wednesday’s Department of Revenue release shows income and sales tax collections are up compared to the same period a year earlier, while corporate and excise are down. Income and sales — by far — the biggest sources of state revenue. They accounted for $13.1 billion of the $16 billion the state has taken in between July 1 and April 30.
Separately, LFB released an updated look at the state’s general fund, taking into account all the legislation signed into law this session and actions taken by the Joint Finance Committee. There were minor changes compared to the updated revenue numbers the agency released in January.
LFB projects the state will end the 2023-25 biennium with a more than $3.1 billion surplus. That’s down slightly from the $3.25 billion ending balance from the January revenue estimates.
The LFB memo also provides an updated look at the 2025-27 biennium. The agency found the state’s projected surplus — combined with current revenues — are enough to cover all committed spending in the next biennium and still leave nearly $2.1 billion in the general fund on June 30, 2027.
That structural balance provides a starting point for what Dem Gov. Tony Evers and lawmakers will have to work with in the next budget for spending, tax cuts or both.
LFB, though, noted the exercise doesn’t include any assumptions on revenues changes in 2025-27 or spending that could be impacted by caseloads, population estimates, enrollments, inflation or other factors.
The agency regularly provides lawmakers an update on the structural balance for a look ahead to the next biennium. Over the past 20 years, the state’s structural balance has ranged from just more than $1 billion to a deficit of $2.5 billion. In eight of the past 10 biennia, the exercise found a negative balance.
Yesterday’s memo also noted Wisconsin’s budget stabilization fund will have an estimated balance of $2 billion at the end of the 2023-25 budget. In January, the fund was about $1.8 billion.
Lang noted the state is earning about $8 million a month in interest off the balance, and the state has another 13 months before the 2023-25 biennium concludes. The ending balance on June 30, 2025, will depend on interest rates over the next year and other factors, Lang said.
