CHICAGO – Wisconsin finished off the previous fiscal year in the black with a narrow ending balance of $135.6 million, according to a new fiscal report from the Department of Administration.
The state had previously projected a nearly $300 million deficit.
To close the gap, lawmakers shifted and withheld some planned spending and the state left some short-term debt in place that was previously slated to be paid off. The state also collected $70 million more in revenue than previously projected and spent $19 million less on debt service and $58 million in other areas.
General sales and use tax revenue rose 5.7% to $4.9 billion, $12 million more than projected. Such sales taxes account for 33.7% of state general revenues. Individual income tax collections increased 3.7% from the prior fiscal year to $7.3 billion, $24.2 million less than projected. Those taxes account for 50% of general program revenues, according to the report released Oct. 15.
The Republican co-chairs of the legislature’s Joint Committee on Finance, State Senator Alberta Darling and Assembly member John Nygren, said in a joint statement “careful budgeting and tax cuts are creating an environment where revenues are growing better than predicted.”
The report offers a look at the state’s fiscal condition on a budgetary basis. It has long operated on a deficit based on generally accepted accounting principles. The report will be used to help craft the comprehensive annual financial report based on GAAP. It is published in December.
Wisconsin’s move earlier this year to leave $108 million of low-interest commercial paper in place instead of paying off it off in the current fiscal year as originally planned was labeled by the non-partisan Legislative Fiscal Bureau as a debt restructuring. It put Gov. Scott Walker’s administration on the defensive.
The state's capital finance team defended the move, calling it a "debt management tool" that would allow the state avoid the more costly issuance of long-term debt to replenish its capital fund for projects in addition to providing budget relief.
The state's general obligation bonds are rated AA by Fitch Ratings, AA by Standard & Poor's and AA by Kroll Bond Rating Agency. They all assign stable outlooks. Moody's Investors Service assigns a positive outlook to Wisconsin’s Aa2 rating.
Over the summer, Walker signed a two-year $72.7 billion state budget into law before formally launching his bid for the Republican nod in the 2016 presidential contest, which he recently dropped.
