Boots & Sabers

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1219, 06 May 20

The Surplus Is Gone. It’s a Good Thing We Didn’t Spend It.

Sometimes an “I told you so” is necessary. Back in January, the LRB projected a surplus and Governor Evers immediately jumped on it and wanted to increase government spending. I wrote a column reminding everyone that you can’t spend a projection. If and when a surplus materialized, we could decide what to do with it. I said:

In January, the LFB estimated that the state will collect $620.2 million more in taxes than the budget estimated. If the LFB is right, that would mean that the state would generate a $620.2 million surplus at the end of the budget – in July of 2021. In other words, the state does not have $620.2 million in extra cash stashed in Governor Evers’ desk. The state might have $620.2 million in additional money sometime next summer – if the LFB’s forecast is correct.

The LFB does a really good job, but it is not a Delphic Oracle with divine sight. It makes estimates based on the economic data available. This changes, however, in unpredictable ways. For example, if the United States elects a communist to be president this year, it is likely that our economy will enter a deep recession, thus undermining tax collections in Wisconsin and any chance of a surplus.

From this basis, we must evaluate Governor Evers’ plan on both a financial and moral basis. Governor Evers wants the Legislature to pass bills to spend $250 million of the projected surplus on government schools. From a financial perspective, it is outright mismanagement to spend money that state government does not have. Evers wants to spend money based on a single financial projection made three weeks ago about where the state’s finances might end up in 17 months.

Tax collections were down $870 million in a single month. The projected surplus is completely gone and the budget is now in a projected deficit. It’s a good thing that the Republicans didn’t follow Evers’ lead, eh?


1219, 06 May 2020


  1. jjf

    Don’t worry, there’s always Trump’s spending.

  2. Merlin

    I can hardly wait for the tax increase chatter to start. They’re going to have to be pretty inventive with the sob stories for why the state can’t cut expenditures enough to align with cratering revenues. The crassly insensitive attitude Evers and his cabal have had toward the WuFlu’s economic impact on citizens throughout the state is going to come back to bite him in the ass.

    If the legislature can retain its spine there’s a forming possibility of a walk-off game winner in the future. “Make it hurt” can be made to travel both ways.

  3. dad29

    If the legislature can retain its spine

    There is one?  The only walk-off winners here will be the State employees and the lobbyists.

  4. Jason

    >This would have helped.

    Sure, just like checking couch cushions will help the 33 million people suddenly found non-essential and stripped of their income.

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