State Budget Estimate Shows Nearly $700M Gap Between Income, Spending

Wisconsin faces a roughly $690 million gap between revenue estimates and agency budget requests in the next biennium, according to numbers released Monday by the state Department of Administration.

The disparity is common at this stage in the state budget-writing process. The gap in 2014, at the beginning of the 2015-17 biennial budget, was $2.2 billion.

“Historically, state agencies outside of my supervision drive budget requests for spending that exceeds revenue,” Gov. Scott Walker tweeted Monday. “Just as we’ve done since I’ve been Governor, WI will have a balanced budget and will end with a budget surplus.”

The state ended the last fiscal year in June 2016 with a general fund balance of $331 million, according to state Department of Administration figures.

The department’s estimates, which are based on current tax policies, show agency budget requests exceeding revenues by $250.2 million in the 2017-18 fiscal year and $442.8 million in 2018-19, totaling $693 million over the biennium.

In July, Walker requested most state agencies submit 2017-19 budget requests that cut or held spending steady.

The state Department of Health Services and state Department of Public Instruction requested the largest increases for the 2017-19 biennium.

The state DHS is seeking a $450 million increase, mostly to cover growing Medicaid costs. The state DPI asked for more than $508 million in additional general revenue funds as part of a $700 million overall requested increase for general school aid and programs focusing on mental health and rural schools.

Todd Berry, president of the Wisconsin Taxpayers Alliance, reiterated Walker’s point that a sizable gap between income and spending is expected at this point in the budget cycle.

“Of course, the requests are not going to be granted,” Berry said. “If one agency asked for a trillion dollars, pumping it through this exercise, the headline would read, ‘State to run $1 trillion deficit,’ and, of course, that’s not going to happen.”

The department of administration also estimated the state will end this fiscal year with about $105 million in the bank. Berry said that number is probably a little smaller than lawmakers would like.

“We’re always dancing on the edge of being balanced or unbalanced, and here we are again,” he said.

Walker will present his budget proposal to the state Legislature in mid-February.