Is it wrong to use lines from 80’s songs in my column? I think not. My column for the West Bend Daily News is online. Here it is:
During the budget debate earlier this year, the Democrats called for tax increases to fix Wisconsin’s $2.2 billion budget deficit. They were wailing about the impact of the deficit on things like education and health care. Sen. Jon Erbenbach went as far as to call it “Governor Walker’s $2.2 billion deficit crisis.”
Prominent news agencies like Bloomberg, the Milwaukee Journal Sentinel, the Wisconsin State Journal and others went on to report on Wisconsin’s huge budget deficit and advocate ways to repair it. The budget deficit meme was even picked up as recently as a few weeks ago by Republican opponents of Gov. Scott Walker to attack him during his aborted presidential run.
The problem with all of those news reports and political rhetoric is that was false then and it is false now. In March of this year, Bob Lang of the nonpartisan Legislative Fiscal Bureau sent a memo indicating that the projections at that time showed the state of Wisconsin would finish the budget year with a net positive balance of $58 million.
Now that the budget year is over and a final accounting has taken place, we know that the truth is even better. According to Wisconsin’s Department of Administration, the state finished the year with a surplus of $135.6 million. If you are reading about the great news of the strength of the state’s finances for the first time in this column, you are not alone. While the Democrats’ fictional $2.2 billion deficit garnered headlines for months, the real story scarcely warranted a blurb in most of the state’s media outlets.
The news of “why” the state has a surplus is also worth knowing. The state took in more revenue than projected and spent less than budgeted. The excess revenue to the state came primarily from corporate taxes and sales tax collections. This indicates a state economy that is performing slightly better than expected. State income tax collections were actually slightly down thanks to the Legislature’s reform of withholding schedules to allow Wisconsinites to keep more of their paychecks for longer.
On the spending side, the state spent $271 million less than allocated in the budget. And while the state spent $271 million less than expected, the state still spent 4.8 percent more in fiscal year 2015 than it did in fiscal year 2014. Yes, despite the lamentations of liberals whose thirst for tax dollars is never quenched, the state is still increasing spending faster than inflation and has a ghastly spending addiction.
That increase in spending included things like increasing the state’s rainy day fund to the largest-ever balance of $279.7 million, a 7.6 percent increase in aid to school districts and local governments, a 10 percent increase in aid payments to individuals and organizations, and an illadvised one-time $406 million property tax offset for Wisconsin’s technical colleges. The spending increases were partially offset by a 5.3 percent decrease in state operations spending.
After all of the beans were counted, the state taxed more and spent more than previous years, but still finished the year with a surplus.
Why did the state media and Walker’s opponents fixate on the fictional $2.2 billion deficit for so long? The $2.2 billion number was based on an estimate from the Department of Administration issued in November of 2014. The same department issued the projected surplus a few months later, which the media largely ignored. And why are we not seeing the same volume and intensity of news stories touting the actual budget surplus? I suppose good news isn’t as much fun.
The fact that the state’s finances are sound is great for the state’s citizens. When that fact is coupled with the fact that Wisconsin unemployment rate is at a 14-year low of 4.3 percent, Wisconsin’s future is really looking bright.