Experts weigh in on Wisconsin’s proposed budget surplus
MADISON, Wis. (WMTV) - Governor Tony Evers proposed his nearly $104 billion state budget Wednesday. Evers believes his “breakthrough budget” can help Wisconsin address its longstanding problems through its record-high surplus.
The proposed budget would give Wisconsin a surplus of $7.1 billion.
“This is clearly the largest surplus I’ve had in all of the years I’ve been here and probably in the history of the state,” Director of Wisconsin Fiscal Bureau Bob Lang said.
Experts say there are many reasons why we ended up with so much extra cash, citing pandemic-era funding as one of the biggest reasons.
“The federal government basically was trying to help state and local governments remain whole during the Covid shutdown,” Community Economic Development Specialist and Division of Extension UW Economist Steven Deller said.
The federal government helped pay for things like the state’s health care programs. Vice President and Research Director of Wisconsin Policy Forum Jason Stein said the aid was “like a parent who paid your medical bills, and as a result, your bank account is healthier than it otherwise would’ve been.”
That aid — beyond relieving some state costs — also pumped money into individuals and businesses that boosted state tax revenue.
“The effects of inflation…and lastly state officials…particularly lawmakers made a policy decision to not use all this revenue to make really big spending increases in school and government,” Stein said.
Experts warn this surplus should be seen as a saving account, not a stream of income. Officials believe that the surplus is considered “one-time money.”
“If the state uses that for one-time expenses like retiring debt or building state roads or giving a one-time tax rebate, that works,” Stein said.
Stein warns that if the state takes on a significant increase in spending or large permanent tax cuts, then it could put the state in a difficult financial situation down the road.
“This is a historic opportunity for the state. People should not expect even in the next generation that this will necessarily come again. So it behooves us to really think carefully and wisely about how we can use this money to really make the lives of everyone in the state better,” Stein said.
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