$2.44 Billion Deficit

Contact: Todd A. Berry
608.241.9789 or wistax@wistax.org
January 2, 2008

Wisconsin's General Fund Deficit Grows 13.7% to $2.44 Billion
State's New Comprehensive Annual Financial Report (CAFR) Out

MADISON—The state’s general fund deficit for fiscal 2007 reached $2.44 billion (b), a 13.7% increase over last year’s $2.15b, according to the Wisconsin Taxpayers Alliance (WISTAX). The deficit news was contained in Wisconsin’s 2006-07 Comprehensive Annual Financial Report (CAFR), released just before the holidays.

According to WISTAX, the deficit increase was the largest since 2002-03 and marked the fifth consecutive year Wisconsin neared or exceeded the $2b deficit threshold. The CAFR also showed that, in 2006-07, Wisconsin carried $8.99b of bonded debt for government activities, more than double the $4.4b reported in 2002-03.

Issued by the state controller, the CAFR is the state’s official financial report, comparable to the annual report a major company releases to shareholders and analysts. Unlike state budgets, however, the CAFR is prepared according to generally accepted accounting principles (GAAP) established by the nation’s Government Accounting Standards Board.

"Because the state does not budget using GAAP, state political leaders can claim balanced budgets when official financial statements show otherwise," explained WISTAX President Todd A. Berry. "In lay terms, the issue is somewhat like a credit card purchase," Berry continued. "When an item is charged, the state controller and the CAFR would say money has been spent. But state politicians would not budget for the spending until the charged expense is actually paid off."

Celebrating its 75th anniversary, WISTAX is dedicated to public policy research and citizen education. For a free copy of the latest Focus, titled "State gets $2.44 billion lump of coal," contact WISTAX by email at wistax@wistax.org; by phone at 608-241-9789; or by mail at 401 North Lawn Avenue, Madison, WI 53704. o

(Editors' Note: An electronic version of this column is available at www.wistax.org.)

The Wisconsin Taxpayers Alliance, founded in 1932, is the state’s oldest and most respected private
government-research organization. Through its publications, civic lectures, and school talks, WISTAX aims to improve Wisconsin government through citizen education. Nonprofit, nonpartisan, and independently funded, WISTAX is not affiliated with any group—national, state, or local—and receives no government support.