The state’s annual fiscal report shows Wisconsin’s general fund balance has surpassed $1 billion for the first time in state history.
As of June 30, the general fund sat at nearly $1.09 billion, according to the state’s latest annual fiscal report.
However, Wisconsin Policy Forum research director Jason Stein said several items in the 2019-21 biennial budget, including an income tax cut and increased education funding, likely will result in a drawdown in state reserves by more than $800 million over the biennium.
“We’re sort of at a high water mark for the balance in the general fund, but it will go down significantly in the budget as passed,” Stein said. “If revenues turn out to continue to beat expectations, those numbers would look somewhat better.”
General fund revenue is largely generated from taxes. General purpose revenue taxes were $17.3 billion last fiscal year, compared to $16.1 billion the previous year, marking a 7.4% increase.
An August report by the Legislative Fiscal Bureau found that the $17.3 billion collected in taxes last fiscal year was $75.5 million, or 0.4%, more than anticipated in May when the state was finalizing its 2019-21 budget.
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About $31 million of the unanticipated money was deposited in the Budget Stabilization Fund, a rainy day fund to be tapped in times of recession or fiscal emergency. The remaining $45 million went into the general fund, which covers the majority of state expenditures.
The annual fiscal report notes that the state’s rainy day fund has doubled to $649.1 million, which would be the fund’s largest balance in state history.
“Obviously, at a time where there is concern nationally of an economic slowdown, that could put pressure on the state budget,” Stein said. “If that were to happen, having healthier reserves could prove useful.”
The majority, nearly 52%, of the state’s general purpose revenue expenses last fiscal year was devoted to local assistance for school districts, municipalities and counties.