Wisconsin’s income tax collections are lagging behind January predictions, but the state budget deficit is not expected to grow beyond the predicted $1.1 billion.

The Department of Revenue announced Tuesday that reported income-tax collections in the first eight months of the fiscal year are down 4.5 percent compared to the same time period last year.

Income, sales and use and corporate income taxes are all behind predictions but are expected to recover by the end of the fiscal year. Despite insufficient collections, officials are not predicting an increase in the state’s budget deficit.

The Legislative Fiscal Bureau, a nonpartisan state government advisory group, predicted in January that income tax collections for this fiscal year — running July 1 through June 30 — would grow 1.2 percent. The estimate was made in light of the state’s budget deficit projection.

Dave Blaska, Department of Revenue spokesman, said the state also sent $389 million in income-tax refunds back to taxpayers. Last year the state returned $310 million in refunds.

Income, sales and corporate income taxes make up 92 percent of the general-purpose taxes collected.

Revenue Secretary Richard Chandler said despite the shortfall, the revenue collections are not expected to be amiss.

“Overall, we expect fiscal year 2002 revenue collections will closely match the Legislative Fiscal Bureau’s January estimates for fiscal years 2002 and 2003,” Chandler said.

Revenue expects the numbers to match more closely those of other years because taxpayers have been paid earlier this year, employment is expected to increase and wages and salaries are also likely to increase.

Eighteen percent of taxpayers are filing electronically this year, up from past years. With more state taxpayers filing online and receiving their income-tax refunds quickly, this is cutting into the state’s income-tax revenue.

Although employment is predicted to improve less than one percent, Revenue expects wages and salaries to increase 2.5 percent.

A spokesman for Gov. Scott McCallum said the state is expected to make up much of the money that has been lost in the last four months of the fiscal year — including April, which has traditionally been the biggest month for income-tax collections.

Bob Lang, director of the Fiscal Bureau, told the Journal Sentinel the Revenue’s report was not a cause for concern and there are no plans to revise predictions for the state’s budget deficit.

The Revenue’s report also showed that sales and use tax collections are up 4.5 percent for the first 8 months of the fiscal year.

“Basically, the economy is tracking the way we thought it was when we did the January projections,” Lang said.