Fiscal Bureau Projects WI Is Facing a $208 Million Deficit

The Legislative Fiscal Bureau (LFB) released new revenue and spending estimates today, and the news isn’t good. Although the new figures in the LFB report (http://thewheelerreport.com/releases/February12/0209/0209lfb.pdf) could have been worse, and they don’t come as a complete surprise, it’s nonetheless very disappointing to learn that downward revisions to revenue projections are expected to create a $208 million deficit by the end of the 2011-13 biennium.

The actual amount of red ink is projected to be $143 million, but the new figures translate into a $208 million shortfall after one takes into account the statutory requirement to maintain a $65 million balance (as a small cushion against further bad news). The culprit is a $273 million drop in revenue projections for the current biennium.

State statutes require the Governor to submit a bill to take corrective fiscal action if the Department of Administration determines that the difference between General Fund revenue and spending projections amounts to more than 0.5% of the estimated revenue in the second year of the biennium. Although the LFB report indicates that the projected deficit is now about twice that threshold, the Governor said there doesn’t need to be a budget repair bill. I presume that’s because he plans to use his authority to lapse additional funding from agencies to get the budget back into balance.

A new Wisconsin Budget Project blog post takes a closer look at the new LFB numbers. We’ll follow up as we learn more about the Governor’s plans for addressing the projected shortfall.
http://wisconsinbudgetproject.blogspot.com/2012/02/legislative-fiscal-bureau-projects-wi.html

The Wisconsin Budget Project is an initiative of the Wisconsin Council on Children and Families.
Wisconsin Budget Project, 608-284-0580, www.wisconsinbudgetproject.org, wisconsinbudgetproject.blogspot.com.