« School District Fund Balance Info/Talking Points | Home | State Law Waivers and Requests Available in Light of School Closures »
LFB: Tax Collections Down Significantly in April
By Wisconsin School Administrators Alliance staff | May 6, 2020
From WisPolitics.com …
State tax collections dropped significantly in April as Wisconsin felt the impact of COVID-19, which will “undoubtedly decrease’’ previous projections the general fund would finish the fiscal year with a surplus of nearly $1.1 billion, according to a new LFB memo.
Still, Legislative Fiscal Bureau Director Bob Lang wrote to lawmakers today it is difficult to get a true handle on the state’s fiscal picture because the tax filing deadline has been pushed back to July. What’s more, several factors may soften the blow on the state’s bottom line.
The state took in more than $1.1 billion in tax collections last month, $870 million less than it collected for April 2019. For the first 10 months of the fiscal year, tax collections are $313 million less than the same period for 2018-19.
Along with the impact of COVID-19 on the economy, the filing extension impacted the April collections. The month is typically one of the state’s highest for tax collections with the usual April 15 filing deadline.
In January, LFB had projected the state to finish the fiscal year on June 30 with nearly $1.1 billion in the general fund. In today’s memo, Lang wrote “that balance will undoubtedly decrease” due to the drop in April collections, along with an expected dip in May and June as well. Still, the full extent won’t be known until after the July 15 filing deadline.
He also laid out several factors that could mitigate the expected drop:
*in January, LFB projected a surplus in state revenues would result in a $189 million transfer to the budget stabilization fund from the general fund. That is unlikely to happen now.
*the Evers administration last week announced a 5 percent cut to the GPR operations budgets of state agencies, a move expected to save about $70 million.
*the nearly $2 billion the state is expected to receive under the federal CARES Act is designated for expenditures incurred due to the pandemic and can’t be used to replace drops in state revenue. Still, Lang noted there are “ongoing discussions that the guidelines may be modified or that additional federal funds will be made available under subsequent legislation to allow for the replacement of revenue shortfalls.”
*the rainy day fund will have a balance of $655 million at the end of the 2019-20 fiscal year. That could be tapped with legislation allowing the money to be accessed.
Read the memo here.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update | No Comments »
Comments are closed.