Wisconsin's Future Debt under Governor Walker - part 3

In my “Future Debt (part 2) blog posting, I wrote about the amount of money that Governor Walker pushed into the future in order to balance the current state budget. Since posting that article, I have had people ask me “how much money are we talking about” and “what is the impact on the taxpayers?”

Before answering that question directly, let me start off by giving the governor credit for balancing the state budget as he is legally obligated to do.  When talking about balancing the budget, I just wish that he would refrain from making such public comments as, “…our children and grandchildren aren’t saddled with mountains of debt…”  Nothing could be further from the truth and I cannot believe that more people are not calling him out on such comments.

According to Fiscal Analyst Al Runde in the June 14, 2011 LFB memo, Governor Walker created two debt restructuring plans for being able to balance the budget through ACT 10.  According to the Legislative Fiscal Bureau’s memo, under both plans the principal on existing general obligation debt and commercial paper remains outstanding for a longer period of time and therefore incurring greater interest costs for the state.  In fact, under the plan that Governor Walker chose to go with, we do not even start making payments on until 2013. Basically, the current state budget was balanced in part by pushing millions of dollars out over a twenty-three year repayment plan.   Even though we do not start paying on any of the debt until 2013, we are currently accruing interest each and every day.  The LFB memo shows that potential repayment schedule under the Joint Finance Committee’s “Debt Restructuring Proposal,” Governor Walker would finance $338,341,704.  By the time we make the last payment in the year 2034, we the taxpayers will have paid back $428,240,863, with $89,899,160 of it being interest payments alone.  I encourage everyone to look at the spreadsheet on the June 14, 2011 LFB memo to better understand the repayment plan for this money.

Now that the $306 million projected surplus has been changed to a $143 million deficit under ACT 10, Governor Walker has stated that he will not raise taxes but he may have to resolve the matter through additional debt restructuring.  Additional? Is he serious! We are already looking at taking twenty- three years and $89,899,160 in interest to pay off what we already borrowed from this budget as it is. What will the payments look like and how much interest will it cost the tax payers if we have to do the same thing for the next budget?

Governor Walker certainly is not the first governor to take on such debt structuring, nor will he be the last.  My issue is with Governor Walker doing all of this and then telling us that he isn’t.  That is not being honest or transparent with the taxpayers at all. Yet he keeps getting away with making such false claims.  I do not like the practice of taking on the debt, but I could accept it a whole lot easier if Governor Walker would simply come out and tell us the truth about what he was doing in order to balance the budget.  

For me, it is this type of political spin and deceit that is turning me off from being part of the party.  I would really like to know what others think about this topic and what you are doing to bring it up to your friends and neighbors who support Governor Walker and the GOP. 

Sincerely,

Gary