Wisconsin ends 2024 fiscal year with $4.6B surplus, down from $7B record but above projections

Wisconsin ended its 2024 fiscal year in June with a larger-than-expected $4.6 billion state budget surplus.

The surplus is over a billion dollars more than predicted earlier this year, but well below the $7.1 billion left over at the end of the last budget cycle.

Gov. Tony Evers and the state Department of Administration released a new Annual Fiscal Report on Tuesday highlighting the surplus and showing the state’s “rainy day” fund hit a record-high of $1.9 billion. 

In May, the state’s nonpartisan Legislative Fiscal Bureau estimated the surplus at the end of the 2024 fiscal year would be around $3.25 billion. At the end of the 2025 fiscal year, next June, the fiscal bureau projected the surplus would be around $3.13 billion. 

Wisconsin Policy Forum President and Research Director Jason Stein said the surplus came in above previous estimates, in part, because tax revenues were about $275.7 million higher than projected and state spending came in about $423 million below projections.

The $423.3 million in spending was budgeted to go into the state’s fund for building projects in 2024 but will go into the fund in the 2025 fiscal year. That means the surplus is actually closer to $4.2 billion, which is still above projections, Stein said.

He also said the surplus declining from roughly $7 billion is “appropriate,” saying that record surplus was higher than it “ever needed to be.”

Stein estimates that about $1.25 billion of the surplus left at the end of the last budget cycle went toward funding building projects and road projects.

“Those are sort of appropriate one-time uses of a one-time surplus because the state does not have to keep appropriating those funds every year,” Stein said. “However, the state is starting to get to the point now where ongoing spending is higher than ongoing revenues.”

He added that the state is expected to end the current two-year budget period with a surplus of more than $3 billion. He said that gives the governor and the Legislature room to make additional investments in the next budget, but they will need to do so “with a little bit more caution.”

In a statement, Evers said the state is in “one of the best fiscal positions” in its history, calling it a “testament to the hard-working folks” around the state.

He said the surplus will inform how he prepares the next two-year state budget with the goal of addressing “needs that have long been neglected.” He said that includes stabilizing the child care industry, investing in public education and addressing rising costs would be a top priority in that next budget.

“We have a historic opportunity this next session to continue building upon the future we want for our state, and I’m looking forward to bringing folks together to get it done this next legislative session,” Evers said.

After Evers released the surplus numbers, State Superintendent Jill Underly called for increasing funding for K-12 education. In a statement, she said “too many of our school districts across the state are forced to go to referendum just to keep the lights on.”

At the same time, the Universities of Wisconsin system is calling for an $855 million state funding increase in the next two-year budget. And some expect Republicans in the Legislature will push for tax cuts.

Stein said neither the governor nor the Legislature are expected to have an appetite for a tax increase to boost revenues, so it’s unlikely that all stakeholders will get everything they want in the next budget.

“There’s not the ability for the state to make those permanent commitments, ongoing commitments at the levels that people wanted to see them,” he said. “Because you can’t do everything, that’s where the prioritization and the horse trading in the budget comes into play.”