Wisconsin’s projected surplus and its Medicaid deficit are intertwined, and not because the former could be used to remedy the latter (though it certainly could).   What they have in common is that they both result in part from rising personal income in our state.

A new Wisconsin Budget Project blog post explains how increased income has not only boosted state revenue and contributed to the projected $912 million General Fund surplus, but has also boosted the portion of Medicaid spending the state is responsible for, thereby contributing to a Medicaid shortfall recently estimated by DHS to be $93 million GPR.

Of course, the good news is that the projected surplus gives state lawmakers a great opportunity to close the Medicaid deficit.  Unfortunately, the Governor’s proposal for the surplus doesn’t acknowledge that with an improved economy and higher income comes a responsibility under federal law to pick up a larger percentage of Medicaid expenditures.  Instead, he proposes using every available dollar for other purposes.

Read more in the new Budget Project Bog post about how these issues are interrelated, and how they also intersect with the debate over whether Wisconsin should accept the enhanced federal funding for states that expand their coverage of childless adults.

Jon Peacock