Saturday, September 3, 2011
Wisconsin Budget Project On National Jobs Numbers and State Revenue Collections
New National Jobs Numbers Have Worrisome Implications for State Economy and State Budget. (Wisconsin Budget Project, 9/2/2011)
Excerpt: The downward revisions in the latest national economic forecasts will no doubt affect the next state forecast, and that could eventually lead to a reestimate of state tax revenue. Coming on top of the slightly negative tax collection figures released by DOR (screenshot at top) today, more pessimistic assumptions about economic growth nationally and in Wisconsin could have significant fiscal implications.
The May 2011 Economic Outlook was used by the Legislative Fiscal Bureau in estimating taxes and spending in the 2011-13 budget bill. It assumed a Wisconsin unemployment rate falling steadily from 7.2% this year to 5.5% in 2014, as the U.S. rate fell to 8.2% next year and 7.1% in 2014. It assumed national GDP growth averaging 4.5% over a 3-year period (2011 through 2013), or 2.8% in “real” terms (after adjusting for inflation) and personal income growth averaging 4.5% per year over that same period.