Walker Says Spending Cuts, Economic Growth Will Fix Projected Budget Problems

Though he did not get into specifics, Gov. Scott Walker said to reporters in Madison on Friday that he thinks a combination of spending reductions and economic growth will fix a projected shortfall in the state budget.

The Department of Revenue reported on Thursday that tax collections for the last fiscal year came in $281 million short of expectations. The shortage will not throw the budget out of balance immediately, but by the end of this fiscal year, the nonpartisan Legislative Fiscal Bureau said that if nothing else changes, Wisconsin’s budget would be $115 million in the red.

Walker said he was confident the shortfall would be taken care of.

“And I believe that just as there will be an over $400 million surplus in fiscal year ’14, I believe we’ll finish the year with a balanced budget and ideally a surplus that we’ll then take and reinvest in the taxpayers,” he said.

Walker noted that the state’s rainy-day fund had enough money to cover the shortfall, though he said he did not want to use it.

“The rainy day alone could be a source if need be, but my goal is not to tap the rainy day fund as a primary source, but instead to look at expenditures and ways to increase revenues that are part of economic growth,” said Walker.

Walker would not say what expenditures he wanted to look at.

The size of the budget shortfall might actually be larger than $115 million if tax revenue for the current fiscal year is also lower than expected.