Four years after the arrival of COVID-19, Wisconsin’s state finances are the strongest on record, with ample reserves and comparatively low debt levels, a new Wisconsin Policy Forum report finds. State finances ended 2023 showing greater strength than at any point in decades, but while the overall picture is bright, the research finds a few points of concern.
Promising report findings include:
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The state’s largest source of reserves, its general fund balance, reached a new record high of $6.7 billion by June 2023;
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The state is well positioned to cover immediate financial obligations, with a “cash ratio” in June of 2.48, meaning the state had almost 2.5 times more cash and liquid assets than short-term bills and obligations;
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In a comparison of total annual revenues to expenditures from all state funds, known as the “operating ratio,” was 1.05 for 2023, meaning the state had enough revenues from taxes, federal aids, and other sources to cover its spending that year;
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As of December 2023, the state had $11.14 billion in total outstanding debt, down 2.6% from the prior year; and
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The state’s fiscal condition has also improved with respect to overall long-term liabilities, with Wisconsin performing well in this area because of its fully funded pension fund and its manageable retiree health care obligations;
Areas of concern include:
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From 2002 to 2019, the share of state transportation fund revenues going to debt payments climbed from 7.0% to 18.9%, raising questions about the fund’s fiscal condition, and it’s projected to fall to 16.2% by 2025; and
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Due to the COVID-19 unemployment spike, the balance of Wisconsin’s unemployment insurance fund fell by $871.5 million by June 2021, and as of Jan. 1, Wisconsin’s jobless fund ranked 30th among the 50 states on a key measure of readiness for a recession.
Click here to read the full report.
