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As the economy slows and the talk of recession increases, state officials will have to make tough decisions to deal with a projected shortfall in state revenues. The Legislative Fiscal Bureau (LFB) is predicting state revenues could be up to $400 million short over the next 17 months. With the $200 million of unidentified cuts included in the budget deal passed last fall, Wisconsin is now facing up to $600 million in red ink.

According to Todd Berry of the Wisconsin Taxpayers Alliance, Wisconsin is poorly equipped to deal with this problem compared to other states that build more of a cushion or reserve into their budgets. Wisconsin has no choice but to find new revenue sources or cut programs.

There will likely be a budget repair bill in the near future. Wisconsin is already 7 months into its 24-month biennial budget, and choices will only become more difficult.

The segregated transportation fund and other state funds will likely be targeted to make up for the missing revenue. In a Wisconsin Radio Network interview, Berry cautioned against raiding such funds. He said that it leads to more shortfalls down the road or could result in lawsuits, such as one by doctors over a raid in the state's patient compensation fund.

TDA will be making the case that now in a weakening economy is absolutely the wrong time to cut transportation investment. Transportation investment creates jobs and stimulates the economy.

The revenue projections from the LFB are preliminary. Final figures are expected in February.

Click here to view the LFB letter.