CHICAGO, May 11 (Reuters) - A Wisconsin legislative agency on Wednesday boosted its forecast for state revenue for the current fiscal year and upcoming biennium by $636 million.
The Legislative Fiscal Bureau said a major factor driving the higher forecast was unexpected strength in individual income tax collections so far in 2011.
The new revenue projection comes as the the state wrestles with a $3.6 billion hole in its upcoming two-year budget.
Since January, revenue from the individual income tax has jumped about 28 percent versus the same period in 2010, the agency said in a report to the legislature’s Joint Committee on Finance.
The agency projected that fiscal 2011 general fund tax revenue will be $233 million greater than the previous estimate, while the forecast for the fiscal 2012-2013 biennium, which begins on July 1, was boosted by $403 million.
“The updated tax projections from the nonpartisan Legislative Fiscal Bureau provide us with a real opportunity to balance our budget and help put Wisconsin’s fiscal house back in order,” said Assembly Majority Leader Scott Suder, a Republican, in a statement.
“These numbers lend proof to what we’ve been saying all along, which is that we can grow our way out of this deficit instead of trying hopelessly to tax and spend our way to prosperity,” he added.
The Fiscal Bureau warned, however, that a controversial law aimed at curbing collective bargaining by public workers and increasing their contributions to pension funds could erode some growth in income taxes if local governments in Wisconsin allow their workers to make pension contributions on a pre-tax basis.
That law is currently on hold due to a court challenge. (Reporting by Karen Pierog; Editing by Leslie Adler)