The governor's administration credits some economic growth, as well as "frugal" management.
However, those across the political aisle say don't read too much into the numbers, just yet.
The DOA says state revenues are projected to increase by 3.8 percent in the first year of the next budget and go up 3.5 percent in the second year.
However, spending requests by state agencies are exceeding expected revenues by about $171 million.
Governor Scott Walker says there's a lot of work ahead.
"Surplus is a great way to start out, but it doesn't mean we have a lot of money to blow in the bank, we still have to be careful how we spend it," explained Governor Walker.
FOX 11 caught up with the governor in Oconto.
He talked to us about his fiscal plans, saying he wants to lower income taxes, as well as pay for Medicaid programs and create jobs.
"Job growth is going to be our priority and I think the next budget we are going to try to tackle those areas particularly when it comes to income taxes, helping small businesses, middle class tax payers," Walker said.
"Given how we are, losing jobs and lagging behind other states, I would encourage the governor to take a more measured approach toward the budget. I would push for job creation that has not happened," explained State Senator Dave Hansen (D-Green Bay).
Senator Hansen agrees jobs need to be the focus, but he questions how much money the state will have to work with.
"I take those numbers with a grain of salt and wait for the non-partisan numbers to come out in January," Hansen said.
Walker's plan is somewhat familiar.
He laid out some of his agenda at a speech in California last Friday.
It's a message he says he's been giving to Wisconsin residents.
"I say to them all the time, people covering our events, they'll see I've said them since June, talking about priorities," Walker said. "It was a question that was asked and I gave the answers I've been given repeatedly here in the state of Wisconsin. So there's nothing new that we've talked about that we haven't talked about here first in the state of Wisconsin."
But Democrats here at home, disagree.
"I guess Wisconsin is not as important as governor's donors in California," Hansen said.
They say they should have heard the governor's message first.
Walker plans to lay out his budget early next year.
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