Improved revenue numbers could help state budget

Madison — In a warming front for Wisconsin's wintry budget, tax collections are now projected to come in better than expected and spending to come in lower than previously expected, swinging the state from a modest shortfall to a modest surplus.

Over the next two and a half years, tax collections are projected to come in $455 million better than previously expected, the Legislature's nonpartisan budget office reported Wednesday. The Legislative Fiscal Bureau figures are just forecasts, not cash in hand, but they provide a more hopeful picture for the state as lawmakers and Gov. Scott Walker seek to craft the next state budget this spring.

The report also projected the state will end the current fiscal year on June 30 with $427 million in its main account, or $322 million more than the Walker administration projected in November. That's due in large part to lower than expected spending on health care for the needy.

"These growing revenue numbers are a sign that what we're doing in Wisconsin is working. While this is certainly good news, our budget priorities will remain the same. We will increase funding to public education at all levels, continue tax relief, and reward work," Walker said in a statement.

The higher tax projections and lower spending estimates total $714 million in net budget improvements through June 2019. That's more than enough to eliminate the $693 million gap that the Walker administration projected in November between what state agencies want to spend over the next two-year budget and what the state then expected to take in from taxes.

The budget could be even somewhat better than that, since the lower than expected spending on Medicaid health programs this year could carry forward at least in part into future years.

Democrats have pointed out that some other Midwestern states are adding jobs more quickly than Wisconsin and argued that the state ought to be doing even better than it is. Rep. Gordon Hintz (D-Oshkosh) Wednesday noted that the Walker administration has put off more than $100 million in debt payments to improve the current budget numbers.

"I wouldn't be pounding my chest like things were great," Hintz said.

Also Wednesday, the Assembly's top GOP leader said he would prefer to use the money from Walker's proposed University of Wisconsin tuition cut to increase financial aid.

Speaker Robin Vos (R-Rochester) said he's skeptical of the GOP governor's plan to make an unspecified cut to UW System tuition on top of four years of tuition freezes already approved for in-state students. That's because a tuition cut will help both families who can easily afford college as well as those who can't, Vos said.

"You're giving the same amount to someone who can write a check without any problem," Vos said at a luncheon sponsored by the website WisPolitics.

Walker spokesman Tom Evenson said college tuition had risen sharply in the years prior to the current tuition freeze and that need-based financial aid is already at high levels.

"The best way to lower the cost of college is to actually lower the cost of college," Evenson said.

Also Wednesday, Vos acknowledged he is unlikely to win his dispute with Walker over whether to raise gas taxes or other revenue sources to help cover a nearly $1 billion transportation fund shortfall

"It's not impossible, but I wouldn't bet on me," Vos said.

The Assembly speaker said he would be unlikely to vote for a budget that doesn't eventually finish the portion of I-94 south of Milwaukee that's important to his district.