Wisconsin's Budget Hole
Wisconsin's finances are in worse shape than I thought.
According to Wisconsin's Comprehensive Annual Financial Report, or CAFR, the state ended the most recent fiscal year with a $2.15 billion deficit. Unlike state budgets that do not account for all future commitments, thus masking our true financial condition, the CAFR prepared by the state controller's office must follow generally accepted accounting principles (GAAP) from the nation's Governmental Accounting Standards Board and recognize these obligations.
This explains why state budget officials said the 2006 general fund balance was $49.6 million, while the controller put the deficit at $2.15 billion. Last year, Wisconsin was one of only three states with a GAAP deficit and, relative to population, it had the largest deficit in the nation.
Wisconsin has a population of around 5.5 million people. That works out to a deficit of around $400 per person.
It gets worse.
The state controller reported a second figure regarding the state's net assets that also merits attention. Accounting lingo can be confusing; but, in household terms, net assets are simply savings and investments, plus the value of cars, housing, and other property, less any loan debt.
According to the controller, the state's unrestricted net assets for governmental purposes were -$8.23 billion. According to the CAFR, "a positive balance in unrestricted net assets would represent the amount available to be used to meet a government's ongoing obligations to citizens and creditors." Wisconsin cannot now do that without selling roads, buildings, parks, and campuses.
Maybe we should show some restaint in our spending. I'm wondering if the legislators in Madison have considered that? Nah, that'd actually be demonstrating some responsibility -- can't have that in politics.