State Ends 2016 Fiscal Year with Slightly Smaller Balance Than Expected

capture-of-annual-fiscal-reportThe  annual fiscal report released by the state Department of Administration (DOA) Monday shows the state of Wisconsin ended the 2016 fiscal year on June 30 with a balance of $313.8 million in its general fund, or about $76.9 million less than expected.  General fund revenues are used to pay state aid to local school districts, among other things.

At the time the 2015-17 state budget was enacted, the non-partisan Legislative Fiscal Bureau (LFB) had projected the general fund ending balance would be 390.5 million.  The final number ended up being lower because the state generated less tax revenue than expected, according to LFB Director Bob Lang.

For the year, general fund tax revenues, which come mainly from state income and sales taxes, and also known as general purpose revenues (GPR), grew by $556.3 million or about 3.8 percent. This was $77.9 million less than had been projected during the 12-month period ending June 30; however, the slower than expected revenue growth was offset by expenditures coming in $103 million less than budgeted.

The difference between the projected and the actual general fund balance amounts to less than half of a percent given a budget of more than $15 billion. The actual balance would have been lower yet if the administration hadn’t delayed repaying $101 million in state debt. That move freed up cash in the short term but in the long term will cost the state more in future interest payments.

As noted, general fund taxes are used to pay state aid to local school districts. They are also used to pay state assistance to municipalities and counties, fund the Medical Assistance (Medicaid) program and other assistance provided to individuals and organizations and they are used to fund the University of Wisconsin System and the general operations of state government.

The state began the 2016 fiscal year with a general fund balance of $135.6 million. This general fund balance is in addition to the state’s budget stabilization (“rainy day”) fund balance of $281 million.