Boots & Sabers

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Owen

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1950, 22 Feb 21

Evers Spends Projected Surplus, and Then Some

Jinkees

Gov. Tony Evers’ biennial budget proposal fulfills many Democratic priorities with big spending increases, but Republicans have raised concern that the $91 billion proposal would almost entirely drain the state’s coffers — by close to $2 billion — and leave Wisconsin in a more precarious financial position down the road.

 

The state is projected to have a nearly $2 billion surplus in its general fund by the end of the year, but Evers’ projected budget, which includes $1.6 billion in new tax revenue from marijuana, big manufacturers and the wealthy, still reduces that to around $143 million by mid-2023.

Remember that the surplus is just projected. It may be more. It may be less. But either way, Evers wants to spend it all and raise taxes to boot.

And this is possibly the dumbest statement I’ve read today:

“It’s not necessarily inappropriate to draw down a big chunk of your reserves when you’re facing a once-in-100-years pandemic,” Wisconsin Policy Forum research director Jason Stein said. “You don’t have the reserves just to put them on a wall and admire them, but at the same time … you have to think about what’s going to be sustainable for the state budget because some of these challenges are not just going to evaporate either.”

A projected surplus is not “reserves.” Stein suggests that the surplus is some sort of rainy day fund. It is not. It is projected surplus revenue because tax collections were higher than expected and/or spending was less than expected. That money could be rolled into the next budget, used to pay off debt early, or it could also be given back to the people because we didn’t need to spend it. Evers just wants to spend it.
Then Stein goes on to suggest that it might make sense to spend it because of the pandemic. But the mere fact that we have a project surplus tells us that the government has sufficient money for expenses without drawing from any rainy day fund. While the pandemic impacted thousands of people and businesses, the government did just fine. The fact that we had a pandemic should not be used as a lazy excuse for more government spending.
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1950, 22 February 2021

2 Comments

  1. dad29

    Stein used to write for the J-S., which would explain his ignorance.

  2. dad29

    Your idea of returning the surplus to the taxpayers has the advantage of ‘stimulating’ the economy without incurring debt.\

    That’s why it won’t happen.

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