The state’s budget surplus is projected to reach $6.5 billion dollars by the end of this fiscal year – that is, by the end of June, 2023.
The projected surplus only includes figures from the state’s general funding pool, and does not include an additional $1.7 billion in “rainy day” funds.
That’s according to a report issued yesterday from the Department of Administration, or DOA, as part of a required fall report on the budget. In that report, Kathy Blumenfeld, DOA Secretary Designee, attributed the surplus to prudent and outstanding fiscal stewardship by Governor Evers.
Wisconsin found itself with such a large budget surplus by, essentially, underestimating how much they would take in in taxes, says Democratic Senate Minority Leader Melissa Agard . When the state gets their biennial budget together, experts can estimate the state’s costs and revenues, but those estimates are not always perfect.
“Some things will affect the state’s budget,” Agard says, “whether that’s people continuing to spend money, which will bring money into the state, or costs going up, which would cause us to go into the red.”
This year, Wisconsin took in more taxes than expected , and state spending cost less than anticipated.
According to the report , Wisconsin’s financial condition is at its strongest point in state history, with not only a record surplus of funds, but a steady rise in tax revenue even after tax cuts.
But just what to do with that $6.5 billion dollars is up for debate, as Democratic Governor Tony Evers and the powerful Republican-led legislature offer up different ideas for the money.
Evers has called on a variety of different uses for the surplus funds, including a one-time tax cut, or even sending a $150 tax rebate to all Wisconsin taxpayers.
But Republicans have vocally objected to those plans – and are taking credit for the surplus themselves. In a statement released yesterday, the Senator Howard Marklein of Spring Green and Representative Mark Born of Beaver Dam, Republican co-chairs of the Joint Finance Committee, said the surplus is due to reformed and responsible budgets crafted by the GOP over the past twelve years.
They added that the GOP would “fund the programs and agencies necessary for prosperity,” but would also make cutting taxes a priority.
Senator Kelda Roys, a Democrat representing Madison, is the newest member of the Joint Finance Committee, appointed to the role by Senator Agard yesterday. She has her own ideas on how to help the state with the budget surplus.
“I think that one of the most important things that we have to do is to make sure that our public schools are funded adequately,” Roys says. “We have seen decades of under-investment in public education and we finally have the opportunity to remedy that. Likewise, our local governments across Wisconsin are really struggling with really tight budgets. A lot of them have to pass referenda to exceed their levy limits. They are under really tight fiscal constraints, and that puts a real constraint on the services they can provide.”
The current rift between Republicans who control the legislature, as well as the state’s finance committee, and a Democratic executive branch headed by Governor Evers opens a window to the future as the legislature prepares to meet to write the biennial budget next year.
Democrats hold just four of the 16 seats on the Joint Finance Committee. While the budget will first be written by Governor Evers, that committee will then have control to change, remove, or add what they see fit.
While this seems to show that Republicans can make any changes to the budget they desire, Senator Roys says that she has hope that they will still be able to collaborate with each other to address the state’s needs.
“It doesn’t matter if you’re in a red part of the state or a blue part of the state, our public schools and our local governments are really struggling to meet the basic needs of Wisconsinites,” Roys says. “That’s something that we should all be concerned about. Every legislature, regardless of what party label we wear, should do our duty and provide the funds that are necessary so that we can have good public services and great schools.”
Republicans on the state finance committee, including the two co-chairs, were not available for comment.
The Joint Finance Committee will convene in January to set their schedule for the 2023 legislative session.
Photo courtesy: WORT Flickr