The state of Wisconsin could face a $2.2 billion budget shortfall by mid-2017, according to a report released by the state Thursday.
An estimate released by the Department of Administration shows state department requests and projected revenues for the next two years.
“These numbers are just a snapshot of Wisconsin’s economic situation,” Senate Majority Leader Scott Fitzgerald, R-Juneau, said in a statement. “With the holiday season fast approaching and bringing with it a high level of economic activity, we should have a more complete picture of the state’s finances in the post-December collection figures.”
Before the state Legislature approves a budget, each agency submits a request for funds for review. The DOA report aggregated these requests to estimate the total cost of the budget.
Funding requests do not necessarily reflect what agencies will realistically receive. Rather, Gov. Scott Walker will consider the numbers as he prepares to release his biennial budget proposal early next year. From there, the Legislature will review the budget before passing it some time in early June.
Agencies have requested to spend $37.2 billion in the first year of the biennium, an increase of 6.1 percent, and $38.4 billion in the second year, an increase of 3.3 percent.
“The numbers put out today show what it would cost to fund everyone’s wish list,” said Assembly Speaker Robin Vos, R-Rochester, in a statement. “The reality is that’s not going to happen. We will continue to manage the state’s finances by making prudent decisions and doing what’s best for Wisconsin and its taxpayers.”
While Republicans seem optimistic for the state of Wisconsin’s economy, the estimated $2.2 billion shortfall does not account for Walker’s promise to cut taxes.
The numbers show income taxes gradually increasing from actual 2014 revenues.
Senate Minority Leader-elect Jennifer Shilling, D-La Crosse, said Wisconsin families have reason to be concerned “about our state’s shrinking revenue base and the lack of economic growth.”
“Rather than digging a deeper budget hole, we need to invest in education, worker training and economic infrastructure to create jobs and build toward a brighter future,” Shilling said in a release. “Advancing pro-growth policies will expand opportunities for all residents, create greater prosperity and strengthen our communities.”
Despite the divide about what the current figures mean for Wisconsin, a bond credit rating service released an analysis today that changed the state’s outlook from stable to positive.
Moody’s Investors Service assigned the Aa2 general rating to the state’s bonds, which reflects the best ability to repay short-term debt.
“The independent analysis released today by Moody’s shows that our strong fiscal management has put Wisconsin on a positive path,” Walker said in a statement. “The tough decisions we made in the past have allowed us to look forward at new, innovative ways to cut taxes, grow our economy, and help the private sector create jobs.”
