A new Wis budget seems good. But a lot of money in the bank will be gone.

Went on vacation up North for most of this week. Did anything happen while I was gone?

Lots to catch up on, but I'll start with the state budget going from "stalled with lots of work to do" to "done and signed" in 3 days. I'll go deeper into particular policies and changes later on, but I think the overall numbers are interesting in themselves.

For example, there was this complaint from Republican State Sen. Steve nASS, who said that the deal between Republican legislative leaders and Gov Evers left the Wisconsin budget out of balance.

“The Vos-Evers budget deal can only be described as on orgy of spending designed by two leaders that probably won’t be here to deal with the financial mess it will create in the 2027-29 biennium.

Speaker Vos and Governor Evers agreed to a 15% increase in spending over the biennium. The proposed All Funds spending will be $114.3 billion.

Remember the $4.3 billion one-time surplus that many legislators promised to return to taxpayers. Oops, those same legislators spent nearly all of that one-time money on ear-marks in their districts and funding for special interests.

Strange that Sen. nASS doesn't blame Senate GOP Leader Devin LeMahieu for this agreement, given that LeMehaieu and 13 other GOP Senators voted for this budget, and while Senate Democrats gave enough support to get the budget bill into law, it still was only backed by 5 out of 15 Dems.

But Sen. nASS does have a point. Sure, only 43% of that $114.3 billion in spending comes from the state's General Fund, while the rest reflects Federal assistance, the Transportation Fund, and other fee-paid items that don't require general state tax dollars. But the General Fund spends more than it takes in by well nearly $2.4 billion in year 1 of this budget, and $1.2 billion in year 2, which dwindles our General Fund cushion to less than $1 billion by the end of the 25-27 biennium.

Especially when you consider the additional burdens the state might have to take on as the Feds back off funding Medicaid and other programs due to Tax Scam 2.0, having a structural imbalance may make things a bit dicey in 2 years, especially if the economy is in recession and revenues start running short.

One reason there is such a spike in expenses in year 1 of the General Fund is because $565 million is being sent to the Transportation Fund to keep paying for road projects while limiting borrowing and not having to raise the gas tax. That $565 million transfer isn't repeated in the 2nd year, and which leads to there being more expenses than revenues for the Tranportation Fund in year 2, as there isn't enough "regular" DOT revenue to cover the costs.

And even with that year 1 boost from the General Fund, Wisconsin's Transportation Fund ends up losing most of its already-small cushion it had going into this budget.

I still like what Wisconsin ended up with in this budget. They got a small income tax cut that is limited in size and affects taxpayers of many income levels. And while the retirement income tax cut helps richer seniors over ones who only have Social Security for income, it also may well encourage people like my Illinois-based aunt and uncle to spend more time in Vilas County. Kinda gimmicky, but could work in some circumstances.

Construction trades will like the sizable capital and highway budgets in a time when construction spending is declining in America as a whole, and the boost in Medicaid spending may well lessen the chances that Wisconsin is damaged as much as other states by the attacks on health care coverage that is coming from DC. I get why Gov Evers made the compromises he did, especially when he and the Legislature had to play "beat the clock" against Congress to increase the state's hospital assessment fee to get more Fed dollars for health coverage.

But it certainly eats into the large amount of cash that the state of Wisconsin had as the 2023-25 budget ended. And if things go bad in the next 2 years, the great fiscal times that the state has enjoyed throughout the 2020s will likely come to an end. Add in rising deficits in DC causing the spigot to be shut off from the Feds, and we may fall into a crunch to start the next term in office for Tony Evers or whoever else might be governor in 2027.