Turns out the topline was pretty good for the final numbers for Fiscal Year 2017.
Wisconsin’s budget finished the fiscal year that ended June 30 with a $579 million surplus, $126 million more than expected and the fourth-largest surplus of the past two decades.We had a good idea that the revenue side would be mostly in line, based on what came out a month ago from the Wisconsin DOR, but the lower-than-expected expenses (aka “lapses” in expected spending) are what led to the bigger carryover.
The amount was higher than expected mostly because agencies spent about $116 million less than they were authorized to spend.
Tax collections and departmental revenues came in almost level — $4.9 million more than projections that were made when the 2015-17 budget was approved two years ago, an indication that economic growth has held steady since then.
So let’s go into the AFR and its more-detailed Appendix, and what we find is that the savings were mostly concentrated in a couple of areas.
1. $353.6 million in lapses for “Health Care Access and Accountability” from the Department of Health Services. The overwhelming part of that was due to Medicaid spending coming in at an estimated $325 million below budgeted levels for the 2015-17 biennium.
I’ll leave it up to you as to how that large amount of Medicaid savings happened, but this cushion allowed for the current Medicaid budget to be reduced, freeing up funding for other areas and additional tax giveaways in the 2017-19 budget.
2. There was a $536.2 million lapse in the Department of Administration’s “Supervision and Management” functions, which seems directly related to several debt swaps the Walker Administration has made, including one in August 2016 to avoid a large balloon payment that would have hit this May (I described it in this post). That debt swap contributes $128 million of the large structural deficit that looms in the next budget.
Oh, and check out this note on another source of savings for the state.
In FY 2017, Chapter 20 included a compensation reserve for employee salary and fringe benefit increases (for state employees). The total amount reserved (appropriated) was $18,616,800 and the amount allotted was $1,224,500 leaving a lapse amount of $17,392,300.So nothing given out in raises....again. And you wonder why the state is having trouble getting enough workers to adequately staff needed services?
Also worth looking at are the figures regarding the Transportation Fund in the Appendix of the AFR. Looks like the Transportation Fund ended up with a year-end balance of $219.1 million, which would be $74 million above what we saw projected in the budget that passed for Transportation last month.
But that’s actually not a good sign, and here’s why
Total state spending in Transportation Fund
2015-16 $1,929.6 million
2016-17 $1,941.1 million (+$11.5 million, +0.6%)
Debt payments, Transportation Fund
2015-16 $340.8 million
2016-17 $356.1 million (+$15.3 million, +4.5%)
So that means we actually SPENT LESS on fixing the roads and in giving out local aids for roads and transportation in Fiscal Year 2017 than Fiscal Year 2016. Which helps to explain the side effects of the 2015-17 austerity budget. Think about how many more wheel taxes and similar local fees that have had to be imposed in the last 2 years so communities could adequately fix their streets, because they didn’t have enough funding from the state or feds to take care of these needs.
That is a direct result of Walker/WisGOP shell games to push the taxes down to the local levels. Makes it pretty darn easy to “hit your numbers” when that happens, but the average Wisconsinite ends up paying more and dealing with more aggravation as a result.
And the other side effect was Wisconsin’s lagging economic performance in the 2 years of the 2015-17 biennium.
Change in jobs, June 2015- June 2017
The stagnant economy and the anti-education GOP policies that became especially pronounced for the 2015-17 budget helps to explain why Wisconsin’s population growth further stagnated from its already low amount. Meanwhile, our neighbors to the west aren’t just gaining more jobs than us, they've added 120,000 more people than we have in the last 6 years.
So while we have slightly more money than we thought we had at the end of Fiscal Year 2017, look at what it cost us to get there. We got our ass kicked economically, our population is growing slower, and we added on more debt. How can anyone honestly stand there and think that was a good trade-off? Or that this decline will turn around with the same crew in charge?