Evers administration projects state surplus to hit $6.5B by next June

Report hints at budget priorities; GOP leaders vow to cut taxes

By: - November 22, 2022 6:30 am
Gov. Tony Evers signs the 2021-23 biennial budget at Cumberland Elementary School in Whitefish Bay, after making 50 partial vetoes (screenshot | Gov. Evers Facebook video)

Gov. Tony Evers signs the 2021-23 budget at Cumberland Elementary School in Whitefish Bay on July 8, 2021, after making 50 partial vetoes. An Evers administration report Monday forecasts a $6.5 billion state surplus by the end of the current budget. (Screenshot | Gov. Evers Facebook video)

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. 

The state’s current surplus for the fiscal year, ended June 30, 2022, is nearly $4.3 billion. It is projected to grow to more than $6.5 billion by the end of the current fiscal year, June 30, 2023. 

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 Blumenfled 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. 

“Our continued success in the years ahead will be heavily based on our ability to work together to advance our shared values of improving Wisconsinites’ quality of life and making our state an even better place to live, work, learn, raise a family and recreate,” Blumenfeld wrote. “As leaders we must continue our steady fiscal stewardship but also invest in our people and especially in those areas we know require it such as education, healthcare, public safety, our infrastructure, our environment, and economy.”

Joint Finance co-chairs Sen. Howard Marklein and Rep. Mark Born in front of microphones at news conference
Joint Finance Committee co-chairs Sen. Howard Marklein and Rep. Mark Born at a news conference April 6, 2021. (Screenshot | Wisconsin Eye)

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.

Among the largest state agencies, the Department of Public Instruction (DPI) is seeking just under a 10% increase, about $816 million, in the first fiscal year, 2024, and another 10%, about $921 million, in the second, 2025. 

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.

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.

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