NewsPoliticalElections Local

Actions

Rising tax revenues continue to push the state's estimated surplus even higher

State surplus surge: 'We still expect to have over a $5 billion dollar surplus'
Money.jpg
Posted at 5:58 PM, Jul 24, 2022
and last updated 2022-07-24 18:58:08-04

WISCONSIN — According to the Wisconsin Department of Revenue, rising tax revenues continue to push the state's estimated surplus even higher.

"We still expect to have over a $5 billion dollar surplus at the end of July of 2023 to start the new fiscal year, so we expect we're going to continue to be in strong fiscal shape here in Wisconsin," said Revenue Secretary Peter Barca.

In January, the non-partisan Legislative Fiscal Bureau (LFB) estimated Wisconsin would have a $3.81 billion surplus at the end of fiscal year 2023.

The Department of Revenue (DOR) now estimates that the number will be $5.4 billion or an additional $1.6 billion. The one caveat - the number is based on NO changes to expenditures or revenues in 2022 and 23.

The state is still waiting for June's final numbers to close out the 2022 fiscal year.

"Our corporate taxes have been a big surprise, they continue to grow," said Sec. Barca. "Sales tax numbers have been strong throughout and my economist when I meet with them weekly you tell me that sales taxes is generally the best barometer of where the economy is going."

Sales tax collections are up 9.9% fiscal year-to-date, according to DOR, and Corporate taxes are up 16.2%.

Barca, who spent as 18 years as a Democratic lawmaker in the Assembly, knows the state's two-year budget process is a lot easier than starting with a large shortfall.

"We had structural deficits as far as the eye can see. Now, we have structural surpluses, as far as the eye can see," said Barca. "Why is that the case? For a number of reasons."

One reason is billions in federal relief money that the state could use to help small businesses hit hard by the pandemic.

"Our economy is going strong, and I think part of it was just a very wise, strategic investments, to take our federal funds and reinvest them in our economy," Barca said.

But there are storm clouds on the horizon with red hot inflation numbers and talk of a possible recession, but Barca says his team of economist remain positive for now.

Wisconsin also has a stabilization or "rainy day" fund that ended last year with a record $1.7 billion.

Report a typo or error // Submit a news tip