State tax revenues are lagging expectations, according to new numbers released by the state Department of Revenue.
According to numbers that run through the first weekend in June, tax revenues for this fiscal year are about 0.4 percent lower than they were at the same time last fiscal year.
While that’s not a huge drop, the non-partisan Legislative Fiscal Bureau was actually expecting revenues to grow by 1 percent. If the current trend continues, officials with the Fiscal Bureau said the state could end this fiscal year with about $200 million less in the bank than previously projected.
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The state will have a large enough balance to weather that drop this year, but Dale Knapp, of the Wisconsin Taxpayers Alliance, said next year, it could get tricky.
“You know, the spending plan for next year was going to essentially spend down most of the rest of that surplus, so there’s not much of a cushion left,” he said.
Knapp said the drop is large enough that the next governor and Legislature could have to pass a budget repair bill to fill it.
“Unless the economy picks up and the revenues begin to pick up, we’re going to set ourselves up for a hole come next year,” he said. “(That’s) something we dealt with in the 2000s. We thought we were over that, but maybe not.”
Knapp said newly enacted tax cuts and withholding changes make this year’s revenues a little harder to track, although those changes were considered when the Fiscal Bureau projected revenues would go up instead of down.
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