State spending exceeds national average

State spending increases in Wisconsin exceeded national averages in both 2011 and 2012, while budget reserves remain among the smallest in the nation, according to a new report from the Wisconsin Taxpayers Alliance (WISTAX).
According to the report, "State budgets in 2012: How do we stack up?," state spending in Wisconsin rose 5.8 percent in 2011 and was budgeted to grow 4.4 percent in 2012. National averages were 4.0 percent and 2.9 percent, respectively.
While only 13 states increased spending more than Wisconsin in 2011, 25 did so for 2012. Some of the largest states (e.g., California, Florida, Michigan, and Pennsylvania) reduced their budgets in 2012.
Although total spending in Wisconsin — and nationally — was up, postsecondary education, public assistance, and K-12 education were most often targeted for budget cuts in 2012. Wisconsin was one of 36 states either cutting or freezing spending for public colleges and universities, one of 26 states either cutting or freezing public assistance, and one of 20 states to reduce or hold the line on K-12 education spending.
According to WISTAX researchers, medical assistance (MA or Medicaid) was the only budget area to see widespread growth. Only four states cut MA, while eight imposed freezes. Thirty-eight states, including Wisconsin, increased MA spending, often dramatically. For all 50 states combined, MA spending climbed a net $19.4 billion, an amount so large that it more than accounted for all state budget growth from 2011 to 2012.
Lawmakers here continued the state’s recent tradition of leaving little money in reserve, WISTAX said. During 2010-12, Wisconsin had one of the nation’s smallest general fund balances, at 0.6 percent of spending, due in part to never budgeting for a rainy-day fund. Only Arizona, Arkansas, and Washington had smaller balances as a share of spending during that time.
Now in its 80th year, WISTAX is a nonpartisan, nonprofit research organization. A free copy of the report is available at www.wistax.org.