Wisconsin Lacks Adequate Funds to Weather Moderate Recession

Wisconsin would lack adequate revenues to manage a moderate economic downturn without raising taxes or cutting services, according to a new analysis from Moody’s Analytics.

If a moderate recession were to strike, Wisconsin would face a shortfall equaling 4.8 percent of its total 2019 revenues, the analysis says. That’s the 11th worst outcome among the 50 states, according to Moody’s Analytics.

That state’s current rainy-day balance represents 1.9 percent of its 2019 revenues, the study found. The severity of the fiscal shock the state would face in a moderate recession equals 10.9 percent of the 2019 funds, according to the study.

Twenty-eight states were found to have adequate revenues to weather such a downturn in the future, the study said. But 10 states would have significantly less money on hand than they would need.

The stress test numbers show that states on average would need funds equaling 11.3% of their general fund revenues to weather the recession without tax hikes or service cuts, according to Moody’s Analytics.