MILWAUKEE — A new report from Forward Analytics, a non-partisan research arm of the Wisconsin Counties Association, proclaims the state of Wisconsin is currently “flush with cash.”
Researcher Dale Knapp, who authored the study, said there is currently $4.3 billion in surplus money distributed between the state’s general fund ($2.6 billion) and its rainy day fund ($1.7 billion).
“It’s historic, because this is the largest amount of financial reserves the state has ever had,” Knapp said.
Knapp said the surplus is due in large part to tax revenues coming in above what was budgeted over the last 10 years, particularly the last three or four years. Knapp said the largest increase was in corporate income tax revenues.
He also noted a 2001 change to state law that mandated that, when tax revenues exceed budgeted amounts, half of the excess is supposed to go into the rainy day fund.
Knapp likened the rainy day fund to a savings account, which can only be accessed in the event of emergencies. He said the state’s general fund is the equivalent of a checking account with money flowing in and out throughout the year.
Knapp said the current surplus, 21% of spending, puts Wisconsin somewhere in the middle-of-the-pack when comparing our financial situation to other states’.
He said he does expect the surplus to get larger.
“There’s a good chance it’s going to rise to more than $5 billion in a little over a year,” Knapp said.