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Another proposal for new state revenues

| January 21, 2014 | 0 Comments
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By: Bob Hague-Wisconsin Radio Network

What’s behind the state’s projected growth in tax revenue collections? Dale Knapp, Research Director with the Wisconsin Taxpayers Alliance, said there are a couple of factors behind the latest revenue figures, which are some $911 million than earlier projected.

“Clearly, the economy is doing a little bit better than we thought. That’s playing into this,” said Knapp. “One of the things that happens with revenue estimates as we go through a budget process is that’s it’s really hard to forecast turns in the economy. We tend to over-project revenues before a recession, because we don’t see it coming, and we tend to under-project revenues coming out of a recession.”

That under-projection appears to be the case here, although Knapp noted the economic turnaround and tax revenue growth remains modest. “We’re only seeing tax revenue growth of around four percent. While it’s better than we’ve seen during the recession, it’s still not fabulous growth.”

Knapp points out that not all of the new revenues will be available for tax relief or other ideas being floated at the Capitol. He said half will go into the state’s rainy day fund, leaving four or five hundred million.

Knapp argues for using the new-found cash to “buy back” or “undo” past accounting gimmicks. “One of the things that we could do with some of this money is reverse some of those gimmicks that we did during 2000 – 2006. There was a lot of games with payments, moving payments from local governments from one fiscal year to the next.”

“Wisconsin has one of the largest gaap (generally accepted accounting principles) deficits in the country,” he explained. “It’s really a reflection of all the budget gimmicks that went over the past 10-15 years.”

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