State officials say Wisconsin could face a budget shortfall of more than $2 billion over the next two years, but a spokesman for the state’s incoming Republican governor says that number may be underestimated.

The Wisconsin Department of Administration projects a $1.5 billion gap between expected revenue and spending requests from state agencies through June 30th of 2013.

The ‘November 20’ report from DOA Secretary Dan Schoof also explains that the $1.5 billion number assumes the federal government will continue providing its current share of Medicaid after that date. And the report also notes the projected shortfall does not include the $200 million the state must repay to the Injured Patients Compensation Fund, because of the recent state Supreme Court ruling which invalidated the legislature’s transfer from the fund. Taken together, those costs could push the gap between revenues and spending requests to $2.2 billion,if both items are to funded through general purpose revenues.

“The Department of Administration’s revenue projections released today underscore what Governor-elect Walker has said for months-the State of Wisconsin is facing very serious budget challenges. Further, we believe that the true budget shortfall is much higher than indicated,” said John Hiller, transition director for Governor-elect Scott Walker.

“The Administration’s projection assumes more than $800 million in revenue that will require congressional or state legislative approval that remains uncertain. It doesn’t account for the more than $200 million the state will have to repay due to the Patient’s Compensation Fund lawsuit. It also assumes $800 million in agency lapses requested by DOA that will have to be administered by the Walker Administration.”

“When all of these measures are fully accounted for, we believe the true budget shortfall to be in excess of $3.3 billion.”

Department of Administration’s November 20th Report (PDF/4MB)

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