Jessica Iverson, Communications Officer, 608-261-2271
Gains in state revenue collections and personal income are expected in 2005
MADISON —Wisconsin’s economy continues to show strong signs of growth, according to the Department of Revenue’s latest Wisconsin Economic Outlook report (available at www.dor.state.wi.us). Wisconsin total personal income is expected to grow at an impressive 5.7% in FY05, outpacing the growth in U.S. incomes. Wisconsin’s Fiscal Year 2005 general purpose revenue collections also reveal positive trends, with collections to date showing significant gains over the same period in 2004, announced Wisconsin Department of Revenue Secretary Michael L. Morgan.
“Governor Doyle recognized that the best way to grow our economy was by creating a better climate for business and encouraging good-paying jobs, as outlined in his Grow Wisconsin Plan. That foresight is paying off for Wisconsin workers and for the State’s overall fiscal outlook as well as enabling the Governor to invest in education and property tax relief in his 2005-07 budget,” Morgan said about the report’s findings.
The report illustrates Wisconsin’s continued growth over the last half of 2004, and projects that the outlook for 2005 remains positive. Preliminary data indicate that total personal income grew by 5.2% in 2004, much better than the 3.1% growth experienced in 2003. Wisconsin total personal income is expected to advance by 5.7% in 2005 (4.1% after adjustment for inflation), outpacing the 5.1% expected growth in U.S. incomes.
“This is great news for Wisconsin. Personal income in our state is growing faster than the national average. These numbers show that my Grow Wisconsin initiatives are working,” remarked Governor Jim Doyle.
State General Purpose Revenue taxes collected by the Department of Revenue during the first seven months of fiscal year 2005 increased 7.7% over the comparable period of fiscal year 2004, from $5.791 billion to $6.240 billion. Even after adjusting for a delayed posting of payments in 2004, collections are still up an impressive 6.4%.
The Wisconsin outlook is based on a national economic forecast calling for GDP growth of 3.5% in 2005, which is somewhat slower than in 2004 but still a solid pace. U.S. consumers and, increasingly, businesses are spending aggressively, but only part of that spending is translating into U.S. output and jobs. Some of that spending is going abroad in imports while on the other side of the trade ledger, export growth has stalled.
A further decline in the dollar should help reaccelerate export growth. Strong future export gains (in excess of 10% annually for 2006 through 2008) remain contingent upon a further decline in the dollar, since economic growth in Europe and Japan remains disappointing and world trade growth is slowing.
High oil prices and the federal “twin deficits” – the U.S. budget deficit and trade deficit – continue to be potential threats to economic expansion, as was previously noted in Wisconsin’s November forecast.