May Was Better Than April, But Wisconsin’s Budget Is Hemorrhaging

Unemployment ran 1,099% above same period in 2019

First-time claims for unemployment in Wisconsin during the first nine weeks of the coronavirus pandemic rose 1,099 percent over the same period in 2019, according to new figures compiled by the Legislative Fiscal Bureau. The memo also outlines how a once-forecast state budget surplus looks increasingly unlikely as tax collections go down with many businesses closed as a safeguard against further spread of the virus.

From mid-March through June 6, 636,998 people in Wisconsin filed first-time unemployment claims, a more than 1,000 percent increase over the 53,131 who filed initial claims for the same period a year ago, the LFB said. The April unemployment rate in Wisconsin was 14.1 percent, a historic increase from 3.1 percent in March. No larger jump has been seen since the state began collecting this type of data in 1976.

The back-and-forth of layoffs and hiring is better measured through “continuing claims” rather than initial claims. By that measure, Wisconsin’s week of highest unemployment was April 12-18, when 321,063 were collecting benefits. The weekly figure has gone down ever since with 269,055 receiving benefits for the week of May 17-23. 

With laid off workers not contributing payroll taxes and businesses not collecting sales taxes, the state’s coffers have taken a substantial hit because of the pandemic. Back on Jan. 23, the LFB was projecting a surplus of $657 million by the end of the current budget period on June 30, 2021. It was the focus of intense debate between proposals from Gov. Tony Evers and Republicans who control the Legislature. 

In April, however, not only was tax collection failing to exceed the pace of 2019, it fell behind; the state collected a whopping $870 million less than during April of last year. The newly-released figure for May shows taxes collected were $66 million less than last year. 

The final status, 13 months from now, of any state budget surplus or deficit is even more difficult to calculate right now because the deadline to file state and local income taxes was moved from April 15 to July 15, so that amount of revenue does not yet figure into LFB calculations.