(The Center Square) – Wisconsin is not going to lose money heading into the state’s next budget, but there will not be enough money to cover the new spending Gov. Tony Evers’ agencies are requesting.
The Department of Administration last week released revenue estimates for the next state budget. The Department of Administration is anticipating a $999 million in state tax-revenue increase for Wisconsin’s two-year state budget.
“Though the steps taken to date have made the road ahead somewhat less daunting, we are living through the most serious challenge our nation has faced in a century – the COVID-19 pandemic,” DOA Secretary Joel Brennan said in a statement.
Wisconsin is in the last year of the current state budget. Lawmakers will craft a new spending plan when they return to Madison in the spring.
That will be tough.
While the new revenue estimate suggests Wisconsin will not be in a revenue hole, Rep. John Nygren, R-Marinette, said the state is staring at a $1 billion spending hole.
“Gov. Evers’ administration has already indicated that the revenue growth is not enough to cover all state agency requests. Even though Evers directed agencies to not request more funding, agencies requested over $2 billion in new funding,” Nygren told The Center Square.
Nygren is the Assembly’s top man on the powerful Joint Finance Committee, which writes Wisconsin’s state budget.
“While the initial revenue estimates are positive, there is still a lot of uncertainty about the impact of the pandemic on state tax collections,” Nygren said. “While state agencies have taken some action to reduce spending, these reductions are one-time and will do little to improve the outlook for the next state budget.”
Brennan seemed to suggest that the Evers’ administration is holding out hope for a federal bailout.
“We will continue to take the steps necessary toward economic recovery in Wisconsin, but the federal government must get back to work now to pass another relief bill to help Wisconsin businesses, farmers, families, and communities,” Brennan said.
Nygren said it’s more likely that Evers will propose some sort of tax increase.
“In the last state budget, during strong economic conditions, Gov. Evers proposed increasing taxes by over $1 billion and increased spending so much that he would have left the state with a $2 billion GAAP [generally accepted accounting principles] deficit,” Nygren said. “Fortunately, he signed a more responsible budget that the Legislature passed. I fully expect Gov. Evers will again try to raise taxes to pay for out-of-control spending.”
Benjamin Yount reports on Illinois and Wisconsin statewide issues for The Center Square. Reposted with permission.