Gov. Scott Walker says the state is on track to face a nearly $700 million budget shortfall by mid-2019.
The estimate from the state Department of Administration is the first to take into account spending requests made by state agencies for the next two years.
The $693 million gap is about 2 percent of what state agencies requested in funding and is far from the $2.2 billion gap that existed at this same point two years ago.
State law requires a balanced budget.
What comes next is the every-two-year push and pull between what state agencies say they need, what the governor proposed they get and what the Legislature ultimately passes.
The drama plays out in stages.
Walker will likely submit his budget, with scaled back funding from what agencies asked for, in February.
The Legislature, where the Republicans will have their largest majorities in decades, will then spend months rewriting the spending plan before passing it likely in June.
Walker can then move things back closer to what he wanted through his powerful veto authority.
Republican Senate Majority Leader Scott Fitzgerald declined to weigh in on the report’s findings. His spokeswoman, Myranda Tanck, said Fitzgerald would withhold comment until after he could review Walker’s budget proposal in a couple months.
Other legislative leaders did not immediately respond to a request for comment.
The state budget affects nearly every person’s life in the state, including how much gas costs, when hunting season begins and ends, eligibility for state-funded health insurance through Medicaid, and how much income, sales and property should be taxed.
Writing the budget could also be affected by changes coming out of Washington, with Republicans in full control of Congress working with Donald Trump as president.
Their promises to either repeal or replace large portions of the federal health care law and move toward different ways of sending money to the states for such things as Medicaid and highways could alter Wisconsin’s budget picture.
Walker and Republicans both in the state and nationally, have talked about moving toward block grant funding for the states that would give policy makers more flexibility but that Democrats and opponents fear could lead to less money going toward programs like Medicaid that help the poor and disadvantaged.
The state budget estimate for the next two years will be further refined in January when the nonpartisan Legislative Fiscal Bureau releases likely figures for state tax revenue in the next two years.
The next state budget will run from July 1 through June 30, 2019.