(The Center Square) – A new report puts Wisconsin’s state debt load as the second-highest among the state’s neighbors.
The Institute for Reforming Government on Thursday released its look into Wisconsin’s debt and finances.
“As of June 2022, Wisconsin holds $13,122,300,000 in debt which equates to roughly $2,226 per capita,” the report states.
The June 2022 numbers are the most recent from the state’s Department of Revenue.
The $2,226 per-person debt load is far more than Michigan with a per-capita debt of just $922, Iowa with a per-capita debt of $977 and Minnesota with a per-capita debt of $1,622. The report notes Illinois has the highest per-capita debt load at $17,231.
“Illinois will make most states look like wise financial stewards, but there is definitely more work to be done in the way of taxes and spending in Wisconsin,” Alex Ignatowski, IRG’s Director of State Budget and Government Reform, told The Center Square. “Wisconsin has been able to keep its borrowing in check, mostly due to constitutional constraints.”
Wisconsin is required to have a balanced budget, though debt is not included in that requirement.
IRG’s debt report looks at all state debt, including borrowing for roads, the UW System, state parks, and other projects throughout state government.
Wisconsin’s largest source of debt is the Department of Transportation with $352 million in debt, followed by the University of Wisconsin System with $164 million in debt.
The report notes Wisconsin’s borrowing is down, significantly, from the last state budget.
“The budget authorized a total bonding of $681 million, a 59.3% decrease in bonding when compared to the 2021-23 budget which authorized bonding of $1.6 billion,” the report stated.
“Some level of bonding is always necessary and makes financial sense. Capital projects with a long useful life sometimes necessitate the use of long-term bonding to finance,” Ignatowski said. “This report didn’t look into what projects were funded through borrowing, only at the high-level amount. Certainly, people will disagree over whether individual projects are reckless or not, and that probably deserves additional scrutinization and oversight.”
The new state budget will spend $1.7 billion on payments on the state’s debt, or about 2% of the total state budget for debt service.
Ignatowski said the debt report can be seen as another endorsement of Wisconsin’s decade-plus of sound fiscal management.
“Wisconsin’s financial situation did not happen overnight [and certainly not in the last four and half years],” Ignatowski explained. “When Gov. Walker took office in 2011, the state was facing a $3.2 billion deficit. At the start of the 2023-25 budget season, the state was faced with a $7 billion surplus and now has a rainy day fund topping $1.8 billion. We are still reaping the benefits of Gov. Walker’s financial management over the eight years prior to Gov. Evers.”
