WISTAX: Wisconsin's fiscal health improving
CONTACT: David Callender or Dale Knapp
MADISON—A recovering economy, replenished unemployment fund, and recent decisions not to “raid” segregated funds have all contributed to Wisconsin’s improving fiscal health since 2010, according to a new report from the Wisconsin Policy Forum (WPF). Despite these recent gains, however, the state remains near or below average when compared to other states.
In “A State Fiscal Checkup,” WPF researchers use information from the recently-released 2017 Comprehensive Annual Financial Report (CAFR) to examine the state’s overall fiscal condition. The CAFR is the state’s equivalent to a public company’s annual report; it details state finances using generally accepted accounting principles. The WPF analysis examines fiscal health from three perspectives: short-term, the fiscal year, and long-term.
Since 2009, liquid assets such as cash and investments more than doubled from $3.3 billion to $8.0 billion in 2017. About 29% of the gain was due to replenishing the state’s unemployment insurance fund, while another 29% was the result of rising balances within the U.W. System.
With liquid assets rising significantly and short-term liabilities nearly unchanged, three indicators of short-term fiscal health reached their highest levels since at least 2002.
The primary measure of fiscal year health compares total revenues and expenditures. CAFR figures show that during 2002-10, revenues exceeded expenditures in just four of nine years. Since 2010, the state has run a surplus in every year. In 2017, total revenues were 4% greater than expenditures.
Long-term fiscal health is driven largely by debt. The WPF report shows total state debt increasing 36.3% during 2004-13, from $10.1 billion to $13.7 billion. Since 2013, long-term debt has stabilized; it totaled $13.6 billion in 2017.
With total debt little changed in 2017 and assets rising, three measures of long-term fiscal health improved. Total long-term liabilities per capita declined from $2,802 in 2016 to $2,739 in 2017. Liabilities as a share of total state assets are also declining, from 41.2% in 2011 to 34.5% in 2017.
While state fiscal health is improving in all three time frames, WPF researchers note that most states are in better shape than Wisconsin. In 2015 (the last year for which data for all states are available), Wisconsin ranked between 35th and 39th on three measures of short-term health. On two measures of fiscal year health, the state ranked 22nd and 27th. On long-term measures, Wisconsin was in the middle of states, ranking from 24th to 26th on three measures.
The WPF report, “A State Fiscal Checkup: Prognosis is Better But Challenges Remain” can be downloaded for free by visiting www.wistax.org. Free print copies are also available by emailing firstname.lastname@example.org or calling 608.241.9789.