In an earlier blog post, we reported on steps outlined by Wisconsin’s Department of Administration Secretary to reduce expenditures by executive branch agencies in the current fiscal year (2019-20) to better position the state financially for an unknown future. In his email, Secretary Brennan acknowledged that “current economic indicators signal a national recession and weakness in state tax collections.”
When similar steps to curb state expenditures have been taken in the past, they have often been followed by a determination by the DOA Secretary that a revenue shortfall is to take place. Once the Secretary has reached that determination and the conditions of s. 16.50(7) of the Wis. Statutes are met—i.e., that previously authorized expenditures will exceed revenues in the current or forthcoming fiscal year by more than one-half of one percent of the estimated general purpose revenue appropriations for that fiscal year—the Secretary has the responsibility under s. 16.50(7)(a), Stats., to immediately notify the Governor, the presiding officer of each house of the Legislature, and the Joint Committee on Finance of that determination.
Following such a notification, under s. 16.50(7)(b), Stats., the governor must submit a bill containing his or her recommendations for correcting the imbalance between projected revenues and authorized expenditures, including a recommendation as to whether moneys should be transferred from the budget stabilization fund (a/k/a “rainy day” fund) to the general fund. If the legislature is not in a floorperiod at the time of the secretary’s notification, the governor must call a special session of the legislature to take up the matter of he projected revenue shortfall and the governor must submit his or her bill for consideration at that session.
Since 2001, there have been four instances where the Secretary of Administration notified the Governor and Legislature of his determination that there was a projected shortfall in revenues that would exceed the 0.5% threshold established under s. 16.50(7) of the statutes. In each case, the Governor introduced and the Legislature enacted a budget adjustment bill that addressed some or all of the projected shortfall.
Stay tuned.
