Wisconsin's Future Debt under Governor Walker - part 1

So much is being said about the state budget and how this administration actually balanced it, which required closing a $3.6 billion deficit. In fact, Governor Walker and my senator (Scott Fitzgerald) frequently tout that the GOP led efforts not only balanced the budget, but they even created a surplus in the process, while not raising taxes. As a tax payer, much of this sounds rather appealing until pen gets put to paper in trying to work the figures.  Frankly, it just doesn’t add up when you look at the funds that were cut versus the level of spending that was approved in the 2011-2013 state budget through the highly controversial ACT 10.  

Do not get me wrong-- I am all about fiscal responsibility and living within our means, even if that requires tightening our belts and requiring shared sacrifice, as long as that sacrifice is actually shared by all. But in this case, how exactly did they close a $3.6 billion deficit, generate a $306 million surplus, provide $2.3 billion in corporate tax giveaways, increase the overall budget spending by $1.1 billion, and not have to raise taxes, all while being completely broke? Again, it does not add up.

First of all, we now know that according to the Wisconsin Legislative Fiscal Bureau, the projected $306 million surplus is actually projected to be a $143.2 million deficit by the end of the biennium, on June 30, 2013. Yes, a deficit.

Second, when people tell me that Governor Walker and the GOP balanced the budget and they say it as if it was some sort of monumental feat, I simply ask when the last time was that the state budget wasn’t balanced.  It might be helpful to know that Wisconsin is legally obligated to balance its budget every two years and maintain a reserve of at least $65 million in its General Fund.  If the budget is not balanced on time, the state defaults to the budget allocations from the previous budget until the matter is resolved. This prevents us from having a government shutdown as experienced in Minnesota last summer. If the reserve money falls below the legal threshold of $65 million on hand, the Governor is legally obligated to issue an emergency budget repair bill as experienced in Wisconsin last year. In fact, this projected deficit is actually larger than the deficit that Governor Walker used to justify last year’s emergency budget repair bill.  But this time around the Governor is telling us that there is no need for alarm or for him to issue another emergency budget repair bill just yet.

Third, Governor Walker and Senator Fitzgerald proudly claim that their budget does not kick the can down the road by pushing the today’s fiscal problems onto future generations.  But if you add up $3.6 billion from the deficit, plus $2.3 billion from the corporate tax giveaways, plus the budget spending increase of $1.1 billion, and the $143 million deficit, it comes up to a staggering $7.143 billion. There is just no way that the cuts and changes through ACT 10 even come close to covering $7.143 billion in financial obligation without pushing a large portion of our state debt into the future.

It sure seems like we are intentionally being played for fools by the very people who took an oath to represent us.  Why can’t the Walker Administration just tell us that you had to structure the debt into the future? Be honest and transparent with us. Is that too much to ask for?

I would love to hear from others who are also questioning Governor Walker and Senator Fitzgerald’s math on all of this.

Sincerely,

Gary