Wisconsin Budget Project > Budget Basics > Wisconsin Budget Basics Guide > The Wisconsin Budget Process > Does Wisconsin Have a Balanced Budget?

Does Wisconsin Have a Balanced Budget?

The Wisconsin Constitution requires that the state pass a balanced budget, where estimated revenues are equal to or greater than estimated spending. By this definition, the state budget is in balance.

Even with a balanced budget, Wisconsin has a structural deficit. A structural deficit occurs when ongoing revenues are less than ongoing spending. The structural deficit represents the gap between the amount of revenue raised and the amount of money needed to continue existing programs.

There are several ways the state can find itself with a structural deficit, yet still have a balanced budget. One common way in Wisconsin is to use one-time revenues to support ongoing costs. The Governor and Legislature are well versed in this technique. For example, their budget proposals might transfer money from a segregated fund to the General Fund, or delay a payment from one year to the next year in order to keep the budget in balance. Structural deficits also grow when lawmakers adopt deferred or phased‑in tax cuts that haven’t been paid for.

The problem is that although some sources of revenue are one-time, spending almost never is. Even big purchases like land or buildings are spread out over many years through the use of bonding, and thus have ongoing costs. Supporting ongoing services with one-time revenue sources will work for a while, but it will lead to a structural deficit and long-term difficulties.

Wisconsin has a long history of structural deficits. We have already used up many of our one-time revenue sources and will have a harder time supporting services in the future.