Economic Good News or Reason for Concern?

The non-partisan and highly respected Legislative Fiscal Bureau released a review of the status of the state’s general fund on January 19th. The good news: They projected that Wisconsin would have a gross general fund balance at the end of the biennium of $106.7 million, up $93 million from what was originally projected.

That is good news.

One of the reasons stated for the increase was an increase of corporate income and franchise taxes. That means the economy is growing, right?

Well, yes and no. Yes, tax revenues for corporations are up. But check out one of the major reasons given, from the report:

Businesses have been able to control labor costs by scaling back benefits, primarily health care, and continuing productivity gains through investment in computers and equipment.

That sounds to me like profits are up because employees are getting fewer benefits, less health care and are being replaced by computers. And that’s good?

To corroborate my concerns, the report also shows no increase in sales tax revenues from additional spending created by a stronger economy. And, individual income tax returns are lower than previously projected.

A good economy is a nonpartisan issue in Wisconsin. But when the economy is only good for a few people and bad for more, that’s worth looking at twice. Throw in the fact that the corporate share of taxes in general is way down from thirty years ago due to the legislature never meeting a big business tax break it didn’t like, and suddenly fewer benefits and more jobs being replaced by technology are the result.

I want to know more about this trend, don’t you?