Wisconsin headed for serious budget trouble

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A new report includes Wisconsin on a list of state governments whose budget troubles could resemble California’s over the next couple years.

The Pew Center on the States report looked at six factors that led to California’s budget collapse. These included the size of the state’s budget gap as a percentage of its general fund, the change in tax revenue, the change in the unemployment rate, and the foreclosure rate.

Pew’s report then scored every other state on how well they fared in those areas. It ranked Wisconsin tenth worst in the nation on those grounds, bad enough to make the list of states that could be in fiscal peril.

The Pew Center’s Susan Urahn says California’s problems have been well documented during this recession, but it’s hardly alone. She says state budget problems will likely get worse before they get better, even if the national economy starts to recover.

Wisconsin’s budgeting practices were part of the reason this report gave the state low marks. Pew noted that Wisconsin has run budget shortfalls for several years, and it’s regularly used money from what are supposed to be segregated funds to pay other bills. The report also pointed out that the state has struggled to keep pace with growing budgets for schools and Medicaid.

The report said that even if the national economy rebounds, upcoming budgets could be difficult for states as federal stimulus dollars run out while Medicaid and unemployment costs remain high.

Tags: news, state, wisconsin, budget