Governor Evers announces largest positive GAAP balance in Wisconsin state history
Last year, the governor announced that for the first time since the state began publishing its Annual Comprehensive Financial Report (ACFR) in 1990 the state’s General Fund was no longer running a deficit.
The report shows the state has a GAAP positive balance for the second consecutive year in a row. The positive balance increased from $6.7 million at the end of the 2019 20 fiscal year to a record high of $1.18 billion at the end of the 2020 21 fiscal year.
“This record positive GAAP balance is great news for Wisconsinites as it puts our state in a solid fiscal position to ensure the long term economic success and security of our state,” said Governor Evers.
“This report shows just how far we've come since the state reported a GAAP deficit of $1.25 billion in 2017 18—the last full fiscal year before I became governor. We've worked hard to pay down the state's debt and pay bills on time so we can continue building a strong economy by investing in the issues Wisconsinites care about from schools to roads to affordable, accessible healthcare.”
The significant increase in the state’s positive GAAP general fund balance reflects the continued improved financial position of the state that has resulted from greatly expanded budget reserves, increased ending fund balances, and stellar liquidity.
It is anticipated that the reporting of the state’s vastly increased positive GAAP general fund balance will be well received by investors, which could result in even lower costs of borrowing for the state. The announcement comes as Governor Evers earlier this year also announced upgraded bond ratings for the state.
As stated in this report: “In August 2021, S&P Global Ratings and Kroll Bond Rating Agency raised Wisconsin's credit ratings to AA+ from AA and to Tony Evers from AA+, respectively. Kroll Bond Rating Agency cited Wisconsin's substantial liquidity, continuing healthy revenue growth and an ongoing COVID 19 recovery.
S&P Global Ratings noted an expectation that the State will continue to take responsive budgetary actions to ensure the State's fiscal stability. Higher credit ratings will lower borrowing costs and continue to improve Wisconsin's fiscal position.”
Further, the state deposited a record high $967.4 million into its Budget Stabilization Fund, also known as the “rainy day” fund, earlier this year. The current balance in the state’s Budget Stabilization Fund now totals nearly $1.73 billion, a figure that is by far the largest in state history. ■