Some people have been all over the revelation from Wisconsin Taxpayer Alliance president Todd Berry that Wisconsin ended the 2009 fiscal year with a $2,712 million general fund GAAP deficit, a brand-new record and an increase of $209 million over FY2008. A quick, untrained look at the actual report from the state controller is actually scarier:
- The “unreserved fund balance” deficit in the general fund was $3,121 million, which was $269 million higher than it was in 2008. From page 28 of the report, “A deficit unreserved fund balance represents the excess of the liabilities of the General Fund over its assets and reserved fund balance accounts. Reservations of fund balances of governmental funds represent amounts that are not available for appropriation. Examples of fund balance reservations reported in the General Fund include reserves for encumbrances, inventories, prepaid items, and the Budget Stabilization Fund.”
- The net asset situation is also not good (see page 22). While the total net assets for the state was $11,831 million, it represents a drop of $970 million (or 7.6%) from FY2008.
- Continuing on that theme, the largest portion of the net assets, capital assets, was a net $17,142 million. You may have noticed that it is significantly higher than the net assets. Allow me to explain this.
- Once the $17,142 million in capital and $3,600 million in “restricted” (by either the state Constitution or statute, and not available for day-to-day operations) assets are subtracted from the net assets, the “unrestricted” net assets, which the report notes would be available for day-to-day operations if it were a surplus, ran a deficit of $8,910 million, an increase of $817 million from last year. Again quoting the report, “Therefore, based on this measurement, no funds were available for discretionary purposes.”
- Because for accounting purposes, long-term obligations are recognized at the time they are incurred, two items weigh heavily on that negative “unrestricted” net asset number – the $2,712 million general-fund deficit, and $16,328 million in long-term obligations. The latter number, which includes $975 million that is due by June 30, 2010, is a $17 million increase, due entirely to a $462 million (5%) increase in “governmental activity” long-term debt.
