State Surplus Projected to Hit $6.5 Billion!
Wisconsin's fiscal condition the 'strongest in state history,' says DOA report.
The projected surplus that has been growing steadily since the current state budget was enacted nearly a year and a half ago has grown some more to a forecast of more than $6.5 billion, Gov. Tony Evers’ administration reported Monday.
“The fiscal condition of the State of Wisconsin is in its strongest position in state history,” stated Kathy Blumenfeld, secretary-designee of the Department of Administration, in a report submitted Monday to Evers and to the state Legislature.
For the next two fiscal years, the report projects a surplus of $8.3 billion by June 30, 2024, and more than $9.6 billion by June 30, 2025 — projections that Blumenfeld called “a reflection of the prudent and outstanding fiscal stewardship by the Governor in recent years.”
The report on revenue estimates and other budget information for the coming two years is required in November of every even-numbered year under Wisconsin law.
The report projects tax revenues to rise in the July 2023-June 2024 fiscal year by $323.8 million, or about 1.5%, to $21.6 billion, and by another $855.1 million, or 4%, to nearly $22.5 billion in the 2024-25 fiscal year.
Blumenfeld highlighted the $1.7 billion balance in the state’s Budget Stabilization Fund — the so-called rainy-day fund — at the end of June, calling it “the largest in state history and more than five times the balance at the end of the 2017-18 fiscal year.”
The state has sought to reduce its debt load as a percentage of overall tax revenues, Blumenfeld noted. At the end of the July 2017-June 2018 fiscal year, debt service was 3.4% of tax revenues. For the 2021-22 fiscal year just ended, debt service amounted to 2.24% of tax revenues, she wrote.
The report also includes the preliminary budget requests from state agencies for the coming two-year budget period, July 1, 2023-June 30, 2025.
While there are no recommendations from the governor yet, the requests offer a first glimpse of what Evers’ next budget might look like, and Blumenfeld’s letter foreshadows where the administration is likely to place its emphasis.
In a joint statement, Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam), the co-chairs of the Legislature’s budget committee, said the credit for the projected surplus belongs to the GOP “because Republicans have steadily reformed and written responsible state budgets for the last 12 years.”
They took a skeptical tone toward Evers’ coming proposals and signaled that they would make cutting taxes a priority when the Joint Finance Committee takes up the new budget next year.
“While we have a record-setting projected general fund balance, we must be mindful that the surplus is due, in part, to a massive increase in tax collections. This is not good news for taxpayers,” Marklein and Born stated.
“The projected balance does not give the Governor a blank check as he puts together his budget proposal,” the statement concluded. “Instead, it gives us flexibility to fund the programs and agencies that are necessary for prosperity in Wisconsin while cutting taxes to benefit all Wisconsin taxpayers.”
Monday’s report displays budget requests two ways: One shows how much an agency is seeking through the state’s general purpose revenue, which primarily consists of state sales and income tax revenues. The other shows how much the agency is seeking when all state revenue sources are counted — including federal funds, segregated revenues (such as the gas tax, which is dedicated to road building and maintenance), and fees for service or for regulatory compliance.
The list of requests shows totals for each agency or department without any details or narrative and offers no information about proposed new programs or initiatives.
The University of Wisconsin System is asking for a 2.3% increase, or $155 million, in 2024 and another 1.8%, or $125 million, in 2025. The state technical college system seeks a 4.5% increase, or $28 million, in 2024 and another 4.1%, or nearly $27 million, in 2025.
Several agencies involved in the criminal justice system are seeking sharp increases.
The Department of Corrections has proposed a 7% increase, $105 million, in the first year and 1.2%, or $19 million, in the second. The offices of district attorneys, who are elected at the local level but are part of the state criminal justice system, are seeking a nearly 28% increase in the first year and 4.2% in the second. The Justice Department has put in for a 54% hike in the first year followed by less than 1% in the second.
Evers administration projects state surplus to hit $6.5B by next June was originally published by Wisconsin Examiner