“I was wondering how Wisconsin's state debt has been trending over the last several years,” Dave from Durand wrote me. “I'm also curious to know why there has been no talk of paying off the state's debt.”
The state’s debt is important. Before any other bill gets paid, or any other service delivered, the state must make payments on debt. When money goes to pay off bonds – the way the state incurs debt – that money is not available for roads, schools, health care or public safety.
Too much debt can lead to less money available for everyday operations – as more general revenue is used to pay off debt. Think of the credit card or mortgage payment taking up more of your take home pay.
Over the past twenty years the state’s debt has tripled.
In a paper I recently received from the Legislative Fiscal Bureau (LFB), the state’s total indebtedness went from $4.4 billion in 1996 to a projected $14.6 billion in 2015.
For comparison, in the fiscal year 2014-15, the state is projected to take in a total of $14.7 in tax revenue.
From 2007 through 2010, during recession years, total indebtedness increased by 23%. In 2011 through 2015, projections show an increase of a little less than ten percent.