Reschovsky: State Budget Deficit to Top $3.1 Billion

reschovskyUW-Madison economist Andrew Reschovsky has found that Wisconsin likely faces a larger biennial budget deficit than the oft-quoted $2.7 billion.

While the state’s Legislative Fiscal Bureau determined the state would need about $2.5 billion to balance the 2011-13 budget, Reschovsky asserts that figure does not take into account the rising cost of public education and Medical Assistance. The Wisconsin Supreme Court has also ordered the state to repay $200 million to the Injured Patients and Families Compensation Fund, money that was transferred to the General Fund in 2007 to help to balance the 2007-09 biennial budget.

That likely budget gap is more than 10-percent of the state’s General Fund budget. “To put this deficit in perspective, in dollar terms it is equivalent to 70 percent of the total amount of money the state is spending this biennium on the University of Wisconsin System and on revenue the state shares with municipal and county governments to help lower local property taxes and fund local public services,” Reschovsky says.