A rapid collapse in the Wisconsin fiscal prospects (but pretty predictable, as long as one doesn’t believe in supply side miracles).
Three weeks ago, I documented the deterioration in Wisconsin budget prospects. Since then, the fiscal hemorrhaging has continued.
Figure 1: (Negative of) General Fund Amounts Necessary to Balance Budget, by Fiscal Year, in millions of dollars (blue bars); and estimate taking into account shortfall of $281 million for FY2013-14, and total $1.8 billion for biennium (red squares). “structural” denotes ongoing budget balance, assuming no revenue/outlay change associated with economic growth. Source: Legislative Fiscal Bureau (September 8, 2014), Wisconsin Budget Project, and author’s calculations.
The FY2013-14 estimate (red square) incorporates the estimated $281 tax revenue shortfall. It does not incorporate the likely higher than budgeted Medicaid expenditures.[Peacock/WBP] I estimate the FY2014-15 shortfall using the $1.8 billion estimated shortfall for the biennium noted by WisPolitics.
The downward revision in the structural budget balance since May is also remarkable.
Figure 2: Change in the (Negative of) General Fund Amounts Necessary to Balance Budget, by Fiscal Year, in millions of dollars, going from May 22 to Sept 3 (red bars). Source: Legislative Fiscal Bureau (May 22, 2014), Table 6, and Legislative Fiscal Bureau (September 8, 2014) and author’s calculations.
But at least we gave tax cuts to upper income households!