Wisconsin

State Fiscal Briefs

March 2020

Wisconsin’s budget basics

According to the National Association of State Budget Officers (NASBO), Wisconsin’s total expenditures in fiscal year (FY) 2019 were $50.2 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2019 were $2.1 trillion, ranging from $4.5 billion in South Dakota to $311.3 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Wisconsin’s combined state and local direct general expenditures were $53.7 billion in FY 2017 (the most recent year census data were available), or $9,268 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,449.

Wisconsin’s largest spending areas per capita were public welfare ($2,180) and elementary and secondary education ($1,960). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Wisconsin’s combined state and local general revenues were $50.9 billion in FY 2017, or $8,789 per capita. National per capita general revenues were $9,573. Wisconsin uses all major state and local taxes. After federal transfers, Wisconsin’s largest sources of per capita revenue were property taxes ($1,655) and charges ($1,458), such as state university tuition and highway tolls.

Wisconsin’s politics

Governor Tony Evers, a Democrat, was elected in 2018 with 50 percent of the vote. The next gubernatorial election is in 2022.

Wisconsin has a divided government. Republicans control both the Assembly (63 Republicans to 36 Democrats) and Senate (19 Republicans to 14 Democrats). All Wisconsin Assembly seats are on the ballot in 2020 because members serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2020, and the other half will be up for election in 2022.

Wisconsin’s budget institutions, rules, and constraints

Wisconsin uses a biennial budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Wisconsin further limits both spending and revenue growth. These are binding rules and require legislative supermajority or vote of the people to override them. Wisconsin also requires a supermajority vote for any legislation that increases the state’s general sales, individual income, or corporate income tax. Wisconsin limits both total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Wisconsin’s recent fiscal debates

  • Wisconsin is one 14 states that have not accepted funds for expanding Medicaid eligibility created by the Affordable Care Act. The Urban Institute estimates that if Wisconsin had accepted Medicaid expansion, it would have received 13.9 percent more federal Medicaid funds ($744 million), and its state spending on Medicaid would decline 4 percent, saving the state $100 million. The state would spend less on Medicaid after accepting expansion because the federal government would pay a higher share of the costs for some existing Medicaid enrollees in Wisconsin. (In all other nonexpansion states, accepting Medicaid expansion would increase state spending on Medicaid, but savings, such as from lower spending on uncompensated care, would fully or largely offset the costs.) Expanding Medicaid was Governor Evers’s top priority in 2019, but Republican legislators remain adamantly opposed, saying they’re against “expanding welfare.” Governor Evers plans to push for Medicaid expansion again in the 2020 legislative session.
  • In 2017, then-governor Scott Walker, a Republican, announced that Taiwanese manufacturer Foxconn would receive $3 billion in state tax subsidies and $1 billion in local tax incentives to locate its new manufacturing facility in Wisconsin. The governor and company said the megadeal would purportedly bring 13,000 jobs and $10 billion in capital investment to the state. However, Foxconn has fallen well short of its promised investments and hiring. Governor Evers’s administration began trying to renegotiate the deal in 2019, but it’s not clear that safeguards were put in place to protect Wisconsin were the company to not deliver on its promises. The deal has emerged as a cautionary lesson for state economic development strategies.

Wisconsin’s current budget

Governor Tony Evers released his proposed FY 2020–21 budget in February 2019. The governor’s budget and his 2019 state of the state address focused on his proposal to accept Medicaid expansion, which he said would provide coverage for 82,000 Wisconsinites. The governor also proposed 600 million in new transportation funds (paid for largely by a 10 cent per gallon gas tax increase) and $1.4 billion in new education spending.

The legislature passed its budget in June 2019. The enacted budget diverted sharply from the governor’s recommendations. It did not expand Medicaid, and its education spending was well below what the governor proposed. The budget included $465 million in new transportation spending but did not increase the gas tax. Governor Evers issued 78 line-item vetoes and considered vetoing the entire budget, but he ultimately decided the legislature’s spending increases were a step forward for the state. Evers and the legislature also agreed to lower the tax rates for the state’s bottom two individual income tax brackets (from 5.84 percent to 4.93 percent and 4 percent to 3.76 percent).

Governor Evers gave his 2020 state of the state address in January 2020.

For more on Wisconsin’s budget, see