Repairing the Budget

There is a glimmer of hope here. 

Legislative leaders are rejecting Gov. Jim Doyle’s plan to go $257 million deeper in debt to protect transportation spending - prompting fears among some that Doyle may scale back summer and fall highway maintenance and rebuilding projects.

The dispute is one of three major unresolved issues blocking a deal between legislative leaders and Doyle over how to rebalance the two-year, $57 billion state budget that became law in October. Since then, the slowing economy has caused a projected $652 million shortfall in tax collections.

Doyle said this week he is worried that the lack of a budget-repair deal could force the Department of Transportation to reduce $261 million in construction contracts it plans to award in May and June.

“I think we’re going to have to make some decisions and get something done,” said Doyle, who returns from a trade mission to Ireland and the United Kingdom next week. “Each week that passes makes it more difficult.”

Some lawmakers, however, want to see the state cut spending instead of going deeper into debt. In their March version of a budget-repair bill, Assembly Republicans called for $220 million more in spending cuts than the governor proposed.

Long-term debt faced by state government increased by 87% in the past 10 years - three times the U.S. inflation rate over that period. And, this year, payments just on transportation bonds will cost $174 million.

Assembly Speaker Mike Huebsch (R-West Salem) and Senate Majority Leader Russ Decker (D-Weston) don’t like the plan to divert more cash from the transportation fund.

Since 2003, Doyle - sometimes with the approval of lawmakers - has transferred $1.1 billion from transportation to public schools, and covered that transfer with new debt.

It’s nice to see both Huebsch and Decker agreeing on this particular item, but I’m still not hearing alternative solutions other than vague “cut spending” rhetoric.  I’d like to see someone put out a plan on what should be cut.  Personally, I’d start with the the following areas:

- Cut K-12 education spending
- Cut transportation spending
- Implement a general hiring freeze
- Cut all non-essential travel

Things we must not do:

- Increase debt
- Raise taxes

In addition, I would implement broad personal income and sales tax reductions and spend (yes SPEND) some money having Doyle or whoever go around the state and country and try to recruit businesses to Wisconsin.  If Doyle wants to help Wisconsin’s economy, he should be spending more time in places like Iowa, Illinois, Ohio, New York, etc. instead of Ireland.

The truth is that if we are heading into a recession - or even an economic slowdown - then there is going to be an increase in state expenditures in some areas.  Welfare, Medicaid, prisons, etc. are things to which the state is obligated to pay but has little control over.  The State will have to pay these bills.  At the same time, I believe that the state must progress on two fronts:

1) The state must recognize that in an economic slowdown, the citizens are already suffering.  There are fewer jobs, fewer raises, fewer promotions, etc.  Also, the citizens’ bills are increasing.  Food, fuel, etc. are directly hitting family budgets.  Yes, the state may be struggling to make ends meet too, but taking it from people who already have less money and higher bills is not the way to do it.  The state must cut where they can, delay unnecessary projects, and take efforts to scale back the overall cost of government.  Yes, it will be hard, but they were elected to make hard choices.  Governing during an economic boom is easy.  The down times are when real leaders are tested. 

2) Wisconsin must make an aggressive effort to attract and retain businesses.  We should be looking to those states that are booming (Texas, Arizona, etc.) and see what they are doing.  Some things we can’t change.  Despite what Al Gore says, Wisconsin will not have a salt water beach or 70 degree winters any time soon.  What we do have is a good, hard-working, decently-educated population.  What we need to have is a business-friendly regulatory and tax climate.  More than that, we have to be even more friendly than those other states because we don’t have the weather.  Once we have the reality, we need an aggressive effort to recruit businesses to Wisconsin.  This doesn’t mean just going to companies when they have advertised that they are looking to open a new facility or move their headquarters.  It means going to businesses and singing our praises ALL THE TIME so that when they do have a need for a new facility or a move… Wisconsin is already on their mind. 

#1 is the short term fix.  #2 is the long term fix. 

Will any of this happen?  If history is any guide.... no.

1. I would quibble with the “decently educated” statement. One of Wisconsin’s, especially Milwaukee’s problems is percentage of adults with a college degree. That is a severe hindrance to attracting companies. We seem to lose a fair percentage of our college grads to Chicago and even Minneapolis. The “brain drain” problem is one of the two or three major problems that goes unreported, or fails to generate as much attention as crime or taxes. However, I would probably venture that at this moment it is more important than either. If someone could find a reasonable way to attract and retain college grads (and fix our teenage pregnancy problem), they would get my vote without question.

   Posted by on April 24, 2008 at 2012 hrs




2. The first comment is perpetuating a myth.  Wisconsin maybe loosing the best students to other states.  Our state has an average out migration of college grads.  The real problem is that unlike most other states there is a near zero in migration of college grads.  This is a problem that isn’t solved by spending even more and graduating even more.  It is about our excessive regulatory scheme and our high taxes on high earners, as well as winters etc.  This myth needs to be laid to rest.

   Posted by on April 25, 2008 at 0805 hrs




3. You can’t argue that you want to bring business to the state and champion cutting the transportation budget at the same time.  About the only thing other than tax rates that state government can do to really attract business is improve infrastructure.  Given how horribly underfunded both maintenance and new projects are in this state how could you argue that this is a place where cuts need to be made?

   Posted by on April 25, 2008 at 1023 hrs




4. Diamond Jim made his own bed; if he hadn’t robbed the transportation fund initially, most of the funding would be there.

   My guess is that DJ wishes tax freedom day in Wisconsin to be December 31st.

   Posted by on April 25, 2008 at 1201 hrs




5. what apc said plus how do you intend to keep our “decently educated” people if you take more money away from schools without changing the funding formula for K-12?

   I’m also amazed that a person with all of the answers as to how to solve the states problems continues to refuse to run for office.

   Posted by on April 25, 2008 at 1203 hrs




6. I am surprised that there isn’t 200 responses to this post! This is something that we can all have an opinion on.

   To my surprise, I am fairly much in agreement with Owen on this one. We either cut spending or we raise taxes, these are the only two choices. No more borrowing or raiding.

   I see Representative LaSee has even taken time to respond and chose to debate whether we have brain drain and to what extent. Why not produce a solution to the budget crisis Representative? Bounce off of us your suggestions and see if we think they are worthy. You have both sides here, give it a try.

   There are ways that we spend too much money and those that are privileged to be paid to read the budget should have a better grasp of where the waste is. I don’t know if you can save a nickel here and a dime there and come up with $600 million. Some kind of combination would make sense like considering the Hospital tax is supported by the WI. Hosp Assoc. and even WMC if I remember correctly. Why not bring that federal money here to help us here at home?

   On the spending side, I would suggest a good hard look at our criminal justice system. We have more prisoners in our system than any state in the midwest. I’ve heard 5 times as many inmates as Minnesota which has a similar population and demographics. Our budget is devestated by our Dept. of Corrections. 

   We need to have solutions and not finger pointing. Lets get it done.
   WE should make our solutions known. Maybe Rep. Lasee can save the day for us. Maybe it doesn’t matter.

   Posted by on April 26, 2008 at 1919 hrs




7. Cut employees 10%.

   Posted by on April 28, 2008 at 1005 hrs