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12/11/2008
One budget solution: Freeze spending
Now it’s not only us Wisconsinites hearing it, our esteemed governor will be whining in Washington about our $5.4B deficit. No. Repeat after me... WI’s deficit is NOT $5.4B. Governor Doyle will continue to repeat this overstated number over and over and over again – because just as he’s begging the feds in Washington for our federal tax dollars, be assured he will absolutely be asking you to pay more state taxes and fees. (More here in today's P/C covering an interview with Todd Berry, President of the Wisconsin Taxpayers Alliance.)
Here’s the problem with Doyle’s math. The governor assumes increased spending of 15% (!) over the 2009-11 biennium and also assumes that nothing will be done to remedy the $2.8B deficit that’s created as a result of huge spending increases the first year. So a huge deficit of $2.8B is essentially counted twice.
Berry has suggested defining Wisconsin’s “problem” budget (hmmm. Now that’s an understatement) by looking at possible solutions. One hypothetical scenario he presents is first freezing spending at ’08–’09 levels for ’09-‘10 and ’10-’11, and then going one step further, reducing spending in each of the 2009-2011 budget years by $1.25B. Ok. It's a hypothetical scenario. And it will take some serious work to cut back on spending – about 9% - in each of two years. But it can be done.
Yes. It won’t be easy. And it won’t be easy because not much of it (only 20% of the budget, actually) has to do with all those agencies Doyle tells us he’s asking to cut back on their budgets.
A full 80% of the state budget is tied up in- School aids
- Medicaid >
- Corrections>
- UW
- Aids to cities and counties
Those are the huge, significant programs in which the tough trimming needs to take place. Every one of them it’s own “3rd rail.” It’s exactly why career politicians haven’t had the courage, haven’t been able to make the tough choices against the clamoring of the electorate, to balance our budget over the last decade and a half.
Berry warns strongly against repeating earlier smoke and mirrors solutions - accounting tricks that have mired us in ever deeper trouble and deeper in debt. He warns too, against solving the problem solely with increased taxes – which is exactly what was done to ‘solve’ a similar deficit problem in 1984. Permanent tax increases in recessionary times are absolutely not a good idea. When the economy recovered, revenues flew in. And not a darn dime (well, not quite that bad – but almost) was set aside for downturn after downturn, which came like clockwork. Tax increases as a solution in the 80s, accompanied by extreme lack of fiscal discipline, planted the seeds for the severe problems we have today.
So, the state can fix the problem with trimming programs and serious spending discipline. And/or it can export the problem to local property taxes (cutting state aids with or without cutting state mandates) and/or it can look for programs that can raise their own dollars, for example, the university system.
The bottom line is cutting spending. And IF revenue increases are part of the program, it’s absolutely critical the legislature sets aside a very significant, very theft-tight Rainy Day Fund and controls spending increases regardless of revenue increases when the economy turns around.
It’s called spending discipline by disciplined, courageous politicians. Those politicians will definitely need our help to hold them to it. And a leader that doesn’t exaggerate the size of the damn deficit. Dang it.
Jo Egelhoff, FoxPolitics.net
COMMENTS
Good article, though I have to take a slight issue with the math. It only makes sense if one includes only general-fund spending. It represents something less than half of total state spending.
steveegg (Thu Dec 11 08:50:21 2008)
Jo, how in the world do you expect our state legislators to limit spending when they are paid by the special interests to increase spending! That's the way the system is designed. Either fix it or live with it!
Jack Lohman (Thu Dec 11 09:24:08 2008)
A modest proposal. I would go further and ask them to make real cuts to spending. Some areas: DNR Look at their website. It is full of pro-"Smart Growth" propaganda. If the state is going to propagandize us with our own money, I demand equal time.
Schools and cities: We need to have LESS state funding here too. State funding makes it easy to be big spenders because those in other communities are going to foot the bill. If all schools and lower levels of government had to fund themselves with locally raised taxes, I dare say they would be a bit more frugal. You want a higher level of services? Move to a community willing to tax more.
And a REAL HARD look should be taken at the productivity of state workers. I remember standing in line at DOT offices while workers in the background fumbled with papers in a very transparent effort to NOT do any real work. And I have been in state office buildings and found that many workers spend the better part of the day in the cafeteria.
AND government workers at all levels have been averaging 3-4% raises even as we who pay the bill have seen our incomes cut. There is no reason that government employees should be immune to economic problems that they, in part, created.
Shared highway revenues probably make sense, but funding parks and rec, grandiose public buildings, etc. at the state level does not.
Ken Van Doren (Thu Dec 11 10:30:01 2008)
I'm beginning to wonder if the name of this commentary should be changed to "What I Would Do If I Were Governor."
Fox Politics is rarely if ever these days about Fox Politics, it's about state issues very likely repeating the talking points of how and where to continue to dismantle government here there and everywhere.
Or the name of this commentary could be "What I Would Do if I Were Mayor."
The reason I check in here is to discuss local issues. It's an effort to inform myself about things I know a paltry amount. Ignoring the local area with this endless twanging on how best
to deprive government in a way that does not promote the general welfare is tedious.
"What I would Do If I Were Mayor" or "What I Would Do If I Were County Executive" would bring the focus back to making better communities in Fox Politics which is one of the few discussions of
local issues.
Lon Ponschock (Thu Dec 11 11:40:57 2008)
I'm going to have to disagree with Lon.
Little by little the state has taken from us the opportunity to say, "What I would do if I were Mayor/Exec/Chairman is...." They've replaced it with mandatory state programs, most of which are funded at 85%, and limited our ability to fund local initiatives locally by limiting our levy authority to 2% per year.
I just today received a "Legislative Update" email from my State Senator. In it he noted the state is looking at about a 19% budget increase. As a local and county elected official I'm insulted that the high-and-mighty state elected officials have, for the past several years, called me an irresponsible spendthrift and have taken from me the authority to levy what is needed to keep our town and county roads in good repair. Instead we've seen wasteful "roundabouts" (over 130 of them I believe), state-owned health insurance schemes, and expenses for DNR forced stormwater regulation. All things we REALLY need, and right away!
The trend, sad to say, in both state and federal governments, is to consolidate authority (read "purse strings") at the highest level possible. This has led to ethically challenged individuals in Madison trying to emulate the unconstitutional behaviors of the comically absurd collection of egotistical clowns in Washington. For example, it has led to our Governor (about as ethically challenged as they get) to repay his supporters by building roads in circles when no new roads are needed. Even when a county government officially opposes such construction, it goes forward!
The reason we talk about state and federal issues is because we're complaining about having something called "local control" taken from us. Tell me: Do you see this trend reversing direction?
Duke (Thu Dec 11 14:19:57 2008)
Duke,
That was a very effective response: well thought out and logical. I'm learning all the time.
To answer your question, no I do not see the trend reversing until there is more local participation.
Even with more participation the question as to how new rules could be developed can be made needs consideration. Fox Politics deals with
the questions the print media has not addressed. All too often though I hear the wrong answers. That's what local debate is about.
The place that has thought about this most is in Minnesota.
www.ilsr.org.
They have the New Rules Project and have thought about this in many relevant areas. The Institute For Local Self Reliance was started after the oil embargo and has published since the early 80's. David Morris kept the localization ball rolling where we in Wisconsin dropped it.
Thanks for your answer.
Lon Ponschock (Thu Dec 11 17:40:10 2008)
I find that very few disciplined, courageous politicians have an[R] attached to their ballot slot.
Donn (Thu Dec 11 20:37:45 2008)
Hope you're not including me Donn, in the undisciplined, lacking courage (R) category....
Jo (Fri Dec 12 06:09:57 2008)
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