MADISON (AP) - Wisconsin's budget surplus is shrinking due largely to slower-than-anticipated economic growth, according to projections state financial analysts released Thursday.
The Legislative Fiscal Bureau's forecasts show the state will finish the 2015-2017 biennium with $70.2 million - dramatically less than January 2015 projections that showed the state would finish with $164.5 million. Fiscal Bureau Director Bob Lang said the surplus will shrink again after Gov. Scott Walker signs a bill overhauling the state's civil service system, which carries a $6 million price tag.
The fiscal bureau attributed the reduction largely to dwindling tax revenue, with about $160 million less in net taxes expected to come in over the biennium than previously expected. The largest decrease is expected in income taxes, which are expected to come in about $236 million under previous projections for the biennium. Taxes on insurance premiums are now expected to come in about $28 million lower than anticipated.
The bureau also noted that Wisconsin has conformed to a 2015 federal law making tax deductions for small business expenses permanent, a change expected to translate to a $75 million loss over the biennium.
The new projections also said state spending likely will drop by about $57.6 million dollars and debt service will come in about $19 million lower than previously forecast.
The bureau said January 2015 projections were based on IHS Global Insight Inc.'s outlook for the U.S. economy. But actual economic growth was slower than anticipated due to a slowdown in the gross domestic product, oil prices that declined faster than expected, consumers choosing to not to spend money saved on gas and the Federal Reserve's decision to hold off on raising interest rates until December.
Walker issued a news release Thursday saying the fiscal bureau's new projections show the surplus will stand at $135 million at the end of the biennium, but his figure doesn't take into account provisions in state law that mandate a minimum $65 million surplus that can't be spent. He played up the forecasts showing that state government is expected to spend less.
"We will continue to prudently manage taxpayers' dollars while ensuring state government is more efficient, more effective, and more accountable to the public," the governor said.
Assembly Speaker Robin Vos, R-Rochester, also tabbed the surplus as $135 million, saying in a news release that lawmakers have been good stewards of state tax dollars.
But Senate Minority Leader Jennifer Shilling, D-La Crosse, argued the shrinking surplus is one more sign of Wisconsin's underperforming economy under Republican control.
The Legislative Fiscal Bureau's forecasts show the state will finish the 2015-2017 biennium with $70.2 million - dramatically less than January 2015 projections that showed the state would finish with $164.5 million. Fiscal Bureau Director Bob Lang said the surplus will shrink again after Gov. Scott Walker signs a bill overhauling the state's civil service system, which carries a $6 million price tag.
The fiscal bureau attributed the reduction largely to dwindling tax revenue, with about $160 million less in net taxes expected to come in over the biennium than previously expected. The largest decrease is expected in income taxes, which are expected to come in about $236 million under previous projections for the biennium. Taxes on insurance premiums are now expected to come in about $28 million lower than anticipated.
The bureau also noted that Wisconsin has conformed to a 2015 federal law making tax deductions for small business expenses permanent, a change expected to translate to a $75 million loss over the biennium.
The new projections also said state spending likely will drop by about $57.6 million dollars and debt service will come in about $19 million lower than previously forecast.
The bureau said January 2015 projections were based on IHS Global Insight Inc.'s outlook for the U.S. economy. But actual economic growth was slower than anticipated due to a slowdown in the gross domestic product, oil prices that declined faster than expected, consumers choosing to not to spend money saved on gas and the Federal Reserve's decision to hold off on raising interest rates until December.
Walker issued a news release Thursday saying the fiscal bureau's new projections show the surplus will stand at $135 million at the end of the biennium, but his figure doesn't take into account provisions in state law that mandate a minimum $65 million surplus that can't be spent. He played up the forecasts showing that state government is expected to spend less.
"We will continue to prudently manage taxpayers' dollars while ensuring state government is more efficient, more effective, and more accountable to the public," the governor said.
Assembly Speaker Robin Vos, R-Rochester, also tabbed the surplus as $135 million, saying in a news release that lawmakers have been good stewards of state tax dollars.
But Senate Minority Leader Jennifer Shilling, D-La Crosse, argued the shrinking surplus is one more sign of Wisconsin's underperforming economy under Republican control.