On Thursday Winnebago County executive Mark Harris wrote an op-ed shedding some light on Wisconsin’s budget projections for the next biennium. Here’s an excerpt.
The Walker administration has, to a large extent, returned to the fiscal difficulties of four years ago, a forecast by the state Department of Administration suggests.
The DOA in November made projections of state revenue, spending and general fund balances. The Wisconsin Legislative Fiscal Bureau will issue its projections later this month.
The projections are not so much an indication of where state finances will actually end up. They are an illustration of the magnitude of adjustments needed to comply with Wisconsin’s budget rules and to keep a positive balance in the state’s general fund. The adjustments are generally changes in tax policy and spending, or changes that push spending from one fiscal year into a subsequent year.
The press has significantly covered the DOA’s projection of a $2.2 billion deficit for the next two-year state budget. The more immediate problem, however, is the DOA projection for the general fund balance at the end of the current fiscal year, which is June 30. The projection is for the state’s general fund gross balance to be negative $132 million on that date.
This shortfall is not a large amount, compared to total projected revenue or projected appropriations for the fiscal year. But other factors should raise serious concerns. The fiscal year started last July 1 with a $516 million general fund balance. This means spending is projected to exceed fiscal-year revenues by $648 million, consuming all of the beginning balance and $132 million more.
Wisconsin budget rules do not allow spending to exceed revenue in the second year of a biennium, so the current fiscal year was specifically exempted from the budget rules.
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