The Department of Administration reports Wisconsin ended its fiscal year June 30 with a record $4.3 billion budget surplus. The state’s rainy day fund also has a record setting balance of $1.73 billion.
Legislators elected in November will likely place significant tax reform at the top of their agenda when the Legislature convenes in January.
When the Governor will submit his budget proposal in February, it will kick-off the debate over taxes, spending, and all available options to reduce the budget surplus.
Since the reductions enacted last session reduced overall revenue by less than 1 percent, taxpayers can look forward to further reductions, along with significant ax reforms during next year’s session of the Legislature.
Jason Stein, Research Director for the Wisconsin Policy Forum said higher than expected tax revenues grew by 5%, driven largely by increases in sales tax revenues.
The rapid increase in consumer prices helped drive up sales tax collections, according to Stein, but he cautioned, rapid rises in consumer prices will drive up the surplus somewhat artificially.
Kathy Blumenfeld, Secretary of the Department of Administration, said, “the State of Wisconsin is in the best financial shape we’ve ever been in.”
Tax reform minded elected officials are already beginning the conversation about reducing individual income tax rates, enacting a flat individual tax rate, or even eliminating the individual income tax altogether.
The elimination of the personal property tax, a top tax reform priority of NFIB, will also be on the menu of tax reductions.
