The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.
The Wisconsin Legislature has been working hard to re-establish a Budget Stabilization Fund, also known as our Rainy Day Fund. It is a fund that is meant to stabilize our budget in times of economic recession.
Business people and families understand the importance of saving money when the economy is good, so that they can use these reserves when the economy “turns south.” Local units of government, including our public school districts, understand this concept. State government should also follow these principles.
When I took my first oath of office to the State Assembly in January 2011, the Legislature faced a $3.6 billion state budget shortfall. Our Rainy Day Fund was $0. We had nothing to fall back on.
Through a lot of difficult decisions, careful planning and economy building, we have grown this fund to $616.5 million with a projected upcoming transfer of approximately $291.1 million. I am very proud of our hard work to prepare for the future.
In August, the non-partisan Legislative Fiscal Bureau (LFB) announced preliminary General Fund Tax collections “will be higher than the previous estimates by $592 million in 2018-19, $68 million in 2019-20 and $93 million in 2020-21. The three-year increase is $753 million.”
According to state law, whenever actual general fund tax collections exceed the estimated amount of collections as shown in the biennial budget, half of the excess is deposited into the Rainy Day Fund. As a result, the projected transfer to our Rainy Day Fund will be $291.1 million. This will bring our Rainy Day Fund balance to approximately $616.5 million plus interest in the fund. This is more than twice the amount that was in the fund at the beginning of 2018.
It is very prudent to have a strong Rainy Day Fund to help Wisconsin weather storms in the future. We need to plan ahead and be ready for the inevitable ebb and flow of our state and national economy. I am proud to have been a part of a responsible legislature that has grown it to such a historic level. For comparison purposes, Illinois has virtually no Rainy Day Fund.
Again, I am proud of our hard work to build Wisconsin’s Rainy Day Fund and will continue to monitor the health of this fund and future potential.
– Marklein, R-Spring Green, represents the 17th Senate District.