It's been a bit quiet on the fiscal front in the last couple of months here in Wisconsin, mostly because the fiscal year ended on June 30, and they're still cleaning up any accruals and other year-end items before they release it to the public. This is itself isn't unusual, and shouldn't be cause for suspicion.
But I've been looking for clues as to what those numbers will show for the 2014 fiscal year, and from what I can tell, it doesn't look very good at all. If you take a look at what was forecast for the state's General Fund cash balance in March (after the last round of tax cuts were passed), here's what they thought was going to be the status for April, May and June.
Projected starting cash balance, April 1- July 1, 2014
Apr 1- $2.0676 billion
May 1- $2.4245 billion
June 1- $2.5256 billion
July 1- $2.0465 billion
Now look at what the reality ended up being, with the same cash balance report from last month. I'll include the differences in there.
Apr 1- $2.0694 billion (+$1.8million)
May 1- $2.1190 billion (-$305.5 million)
June 1- $2.0619 billion (-$463.7 million)
July 1- $1.5006 billion (-$545.9 million)
And the main culprits seem to be lower-than-normal receipts for the state in April (perhaps due to Koo-Koo tax cuts lowering the amount of payments coming in when people did their 2013 taxes?), and higher disbursements in May and June (related to the higher-than-expected enrollments in Medicaid that have led to the $93 million deficit we have to close?). With that in mind, would it be illogical if we're coming in over a half-billion below what we budgeted?
Now, I'm not going to claim that's what we'll see when the annual revenue numbers are released (likely on the Friday before Labor Day, since the numbers will suck), or when the state's CAFR is released in October showing the year-end numbers for both revenues and expenses. But if we are $546 million below expectations, let's go to the LFB's current projections, and see here's how that would affect the budget picture for this budget and the next one.
Budget outlook if FY 2014 is $546 million below expectations
FY 2014- Ending balance +$178 million (original plan, $724 million)
FY 2015- Ending balance -$381 million
FY 2016- Ending balance -$707 million
FY 2017- Ending balance -$1.058 billion
That's a helluva lot to make up, and means there would be a significant budget deficit to be filled for by June 30, 2015, and another billion or so to fix the 2-year budget following that (add $381 million to all those years, assuming 2015 gets filled).
What I'm saying is that you shouldn't be surprised if an exploding budget deficit emerges as an issue as the November elections get closer. Which will be the final nail in the coffin of any debate as to whether Scott Walker fiscal policies have left us any better off in any way- they haven't.