A recovering economy, replenished unemployment fund, and recent decisions not to “raid”
segregated funds have all contributed to Wisconsin’s improving fiscal health since 2010, according to a new report from the Wisconsin Policy Forum (WPF).
In “A State Fiscal Checkup,” WPF researchers use information from the recently-released 2017 Comprehensive Annual Financial Report (CAFR) to examine the state’s overall fiscal condition. The CAFR is the state’s equivalent to a public company’s annual report; it details state finances using generally accepted accounting principles. The WPF analysis examines fiscal health from three perspectives: short-term, the fiscal year, and long-term.
Since 2009, liquid assets such as cash and investments more than doubled from $3.3 billion to $8.0 billion in 2017. About 29% of the gain was due to replenishing the state’s unemployment insurance fund, while another 29% was the result of rising balances within the U.W. System.
With liquid assets rising significantly and short-term liabilities nearly unchanged, three indicators of short-term fiscal health reached their highest levels since at least 2002.
The primary measure of fiscal year health compares total revenues and expenditures. CAFR figures show that during 2002-10, revenues exceeded expenditures in just four of nine years. Since 2010, the state has run a surplus in every year. In 2017, total revenues were 4% greater than expenditures.
Long-term fiscal health is driven largely by debt. The WPF report shows total state debt increasing 36.3% during 2004-13, from $10.1 billion to $13.7 billion. Since 2013, long-term debt has stabilized; it totaled $13.6 billion in 2017.
With total debt little changed in 2017 and assets rising, three measures of long-term fiscal health improved. Total long-term liabilities per capita declined from $2,802 in 2016 to $2,739 in 2017. Liabilities as a share of total state assets are also declining, from 41.2% in 2011 to 34.5% in 2017.