The Legislative Fiscal Bureau (LFB) released updated revenue estimates for the 2025-27 biennium. According to LFB, the state is now projected to end the 2025–27 biennium with a gross general fund balance of approximately $2.5 billion, reflecting a significant improvement in the state’s revenue outlook. Updated estimates show the balance is roughly $1.5 billion higher than anticipated during budget enactment, driven largely by stronger-than-expected income and corporate tax collections. The improved forecast reflects broader national economic trends, including higher-than-projected GDP growth, lower inflation, and a lower effective tariff rate than previously assumed.

The estimate does not account for two notable items. Department of Health Services projects the Medical Assistance (Medicaid) program will end the biennium with a general-purpose revenue (GPR) shortfall of just over $200 million. In addition, there is unresolved federal uncertainty related to changes Wisconsin made to its hospital assessment to draw additional federal matching funds. Federal rulemaking is underway to address the allowability of such changes, and if Wisconsin’s approach is ultimately disallowed, it could result in a reduction of roughly $792 million in GPR over the biennium. Because of these uncertainties, LFB did not include these factors in the current surplus projection.

The Committee on Joint Finance Co-Chairs Rep. Mark Born (R- Beaver Dam) and Sen. Howard Marklein (R- Spring Green) released a press release urging caution with the positive surplus stating, “We must be careful when committing to ongoing spending using one-time money.”