(The Center Square) – Wisconsin will have far less surplus in the next two years than it did in the last two, according to a new analysis from Wisconsin Policy Forum.
The analysis ignores department budget requests, stating the governor and legislators rarely approve those requests, and instead looked at base spending and cost increases.
Using that approach, Wisconsin Policy Forum projected the state will have $838 million in surplus above base spending over the next two years as opposed to the $6.8 billion that it projected two years ago.
Wisconsin is projected to have a $4 billion surplus at the end of this two-year budget, the Department of Administration recently stated.
“The state’s main fund is spending more than it is taking in and the state’s balances are falling,” the report said. “The state retains billions in reserves, but state leaders now have more reason to exercise caution in approving permanent spending and tax cuts than they did in November 2022.”
One of the largest budgetary expenses is Medicaid, which Wisconsin Policy Forum projects will cost an additional $1.1 billion over the next two years.
The group said that expanding Medicaid could save an estimated $1.7 billion over the biennial budget by using federal funds instead of state funds, which the group notes that Republican leadership has said it is unwilling to do.
Overall, the report said that decisions by both state and federal leadership has put Wisconsin in a good position moving forward but that leadership should carefully consider investments moving forward because of how much projected conditions have changed over the past two years.
