May 15, 2025 – The Wisconsin Legislative Fiscal Bureau (LFB) has alerted the Joint Finance Committee to a $331 million reduction in projected general fund revenue for the 2025-27 biennial budget, according to a memo released today. This shortfall will constrain the state’s fiscal resources as lawmakers begin crafting the next two-year budget.
The LFB memo, available here details that general fund tax collections for the 2024-25 fiscal year and the 2025-27 biennium are expected to be $331 million lower than estimates provided in January 2025. The reduction stems from updated economic forecasts affecting key revenue sources.
This revenue hit presents a challenge for the Joint Finance Committee as it prepares to review Governor Tony Evers’ 2025-27 budget proposal, which includes dramatically increased funding for nearly every area of state government. The $331 million gap may necessitate adjustments to these priorities or the exploration of alternative revenue sources to maintain a balanced budget, as required by the Wisconsin Constitution.
The LFB notes that the state’s general fund balance remains positive, supported by prior fiscal management and federal relief funds. However, the reduced revenue projection could limit the state’s ability to fund new initiatives or maintain surplus reserves. The memo does not address potential impacts on specific programs or services, leaving those decisions to the budget process.
The Joint Finance Committee is expected to begin budget deliberations in the coming weeks, with public hearings scheduled to gather input from Wisconsin residents. Lawmakers will need to address the $331 million shortfall while balancing competing demands for state resources.
For further details, the full LFB memo is accessible on the Wisconsin Legislature’s website at https://docs.legis.wisconsin.gov/misc/lfb/revenue_estimates/190_may_15_2025.pdf.
Previously on Dairyland Sentinel
