MADISON—"Unlike most states, which amassed major surpluses in recent years, Wisconsin has little with which to withstand a recession," a new report from the Wisconsin Taxpayers Alliance (WISTAX) finds. The nonpartisan public policy research group reports that, while state governments around the country have combined 2007-08 surpluses of almost $46 billion, Wisconsin may be facing a $400-million revenue shortfall with only $124 million in reserve.

Drawing on figures from state budget offices around the U.S., WISTAX found that state surpluses nationwide averaged 6.7% of spending compared to just 0.9% in Wisconsin. "If Wisconsin were a typical state," observed WISTAX President Todd A. Berry, "its reserves would approach $1 billion, and it would be well-prepared to weather slowdowns in both the economy and state tax collections." During 2006 and 2007, Badger State reserves were even smaller at just 0.4% of spending, compared to national averages of 11.5% and 9.6%, respectively.

WISTAX notes that Minnesota has a projected 2007-08 surplus of $1.65 billion, or 9.6% of expenditures. Half the size of Wisconsin, Iowa sits on reserves more than five times the size of ours; the Hawkeye State’s estimated surplus is $636 million, or 10.9% of expenditures. Illinois’ balance totals $919 million (3.4% of spending), while Michigan’s is $251 million (2.6%).

"The state’s likely deficit should come as no surprise," according to WISTAX. It notes that, although the latest state budget was enacted four months ago, a national index of consumer sentiment dropped 24% over the past 13 months. Even more notable, Wisconsin’s nonfarm job growth, decelerating since early 2005, has lagged the nation for 32 consecutive months.

For a copy of WISTAX’s latest report, "States of the States," contact: wistax@wistax.org; 608-241-9789; or WISTAX, 401 North Lawn Avenue, Madison, WI 53704.o