Walker's office: State will have budget surplus
MADISON — Republican Gov. Scott Walker's administration said Thursday that its new revenue projections show the state will finish the 2011-2013 budget years with a surplus rather than the deficit predicted earlier this year.
The projections were based on stronger-than-anticipated personal income growth last year, Walker officials said. The numbers could give the governor a boost as he heads into a June 5 recall election against Milwaukee Mayor Tom Barrett. The Democrat has been pounding Walker over his inability to jumpstart the Wisconsin economy.
"This is great news for the state," said Walker campaign spokeswoman Ciara Matthews. "(This) is why voters in 2010 chose Scott Walker to be governor and why they will stand with him again on June 5."
Barrett campaign spokesman Phil Walzak questioned the accuracy of the projections, which were compiled by the Wisconsin Department of Revenue, an agency within Walker's administration. Assembly Minority Leader Peter Barca, D-Kenosha, issued a statement calling the announcement a political gambit.
"The timing of this announcement from Gov. Walker's partisan budget office is highly suspect given the fact that the governor is in the middle of a campaign," Barca said.
The nonpartisan Legislative Fiscal Bureau estimated in February the state would finish the two-year budget period that ends June 30, 2013, with a $143 million deficit.
But the state Department of Revenue now estimates that the state will take in about $265 million more than the bureau expected, which should translate to a $275.1 million surplus on June 30, 2012, and a $154.5 million surplus on June 30, 2013, Department of Administration Secretary Mike Huebsch wrote in a letter to Walker.
Huebsch said revenue officials based the projections on larger-than-anticipated tax collections through April and revised federal Bureau of Economic Analysis forecasts showing better-than-expected personal income growth in 2011.
State law requires that if revenue exceeds initial projections, half of the surplus must be deposited in the state's rainy day fund. If Walker's projections hold, about $45.4 million would go into that fund after June 30.
That would mark the first time in state history that state officials have added to the fund in consecutive years, DOA spokeswoman Jocelyn Webster said. The Walker administration added $14.78 million at the close of the 2011 fiscal year, she said.
Walzak, Barrett's spokesman, said that if there is a surplus, then the governor should help balance the budget by using the extra money to restore the $26 million he pulled out of the state's share of a national settlement to help homeowners affected by mortgage abuses. Walzak also suggested that Walker use the money to offset University of Wisconsin System tuition increases.
Webster wouldn't say how the administration might spend the leftover surplus money, cautioning that the numbers were projections.
"We'll continue to monitor it and make decisions when the time is appropriate," she said.
Rep. Robin Vos, R-Rochester, co-chairman of the Legislature's powerful budget committee, issued a statement trumpeting the new numbers.
"While critics want to talk down to Wisconsin and root against our state, we are showing once again that we're heading in the right direction," he said.
Vos couldn't be reached for comment Thursday evening on how the state might spend the extra money. Co-chairwoman Sen. Alberta Darling, R-River Hills, didn't immediately return a message left at her Capitol office after hours.
Democrats upset with a contentious law that Walker and Republican legislators passed last year that stripped most public workers of nearly all their union rights have forced the governor and four other Republican officeholders into recalls.
Walker and Republican leaders say they had to pass the law to help balance the state's budget, but Democrats portrayed the changes as a direct assault on organized labor, one of their key constituencies.