WISCONSIN'S BUDGET DISASTER: WHO IS TO BLAME?

So, the great game in Madison is over. After years of telling us that the budget could be and was balanced without raising taxes, our Governor has been caught, literally with his pants down, explaining that the Day of Fiscal Reckoning is coming sooner than later. A budget deficit that was projected at $5 billion in March has now ballooned to $6.5 billion for the 2009-2001 budget cycle, and we all need to cross our fingers that a continued erosion in the economy does not drive the deficit even higher.

It turns out that Governor Doyle and his fiscal advisors are no better than the Bernie Madoffs and Enrons of the world. Shifting money around works as long as money is coming in at a rate higher than what is going out. Unfortunately for Doyle, and us, the flow rate has reversed, and the Doyle Administration's policy of raiding existing state funds to provide the fuel for their program and spending increases has been exposed.

An April 30th letter from the Wisconsin Department of Administration to the Chief Clerks of the Assembly and Senate shows just how dire these raids have been. The report shows various funds are virtually insolvent due to these "transfers":
The Injured Patients and Families Compensation Fund - After a $200 million transfer in 2007-2009 budget, the fund was nearly $77 million in the red at the end of March
Forestry Account of the Conservation Fund - It has been raided twice - $23 million in the 2003-2005 budget and $31.6 million in the following budget. It now faces a deficit of $18.8 million as of March 1.
In fact, the report shows deficits in a number of segregated funds, as of March: the General Fund ($485 million in the red), the Utility Public Benefits Fund ($2.1 million) and the Lottery Fund ($4 million). The main reason is that Doyle has signed budgets since 2003 which have raided more than $1.6 billion from segregated funds.

So where does the blame lie for this mess? Let's begin to line up the suspects for identification:
Governor Jim Doyle - Harry Truman had a saying that the buck stops with him. And, in the case of the Wisconsin budget crisis, the buck stops with our Governor. If his past is any indication, that buck came from a segregated fund. His previous claims of balancing the budgets, while ignoring warnings of structural deficits and failing revenue models, are now being exposed as hollow campaign literature intended to deceive the voting public.
Wisconsin Legislature - I am not making this a partisan issue. Republicans, like our very own State Representative, Joan Ballweg (R-Markesan), have voted for Doyle budgets in the past, and need to share equally in the blame. The GOP controlled the Legislature until the most recent state elections, and are just as liable for the mess we find ourselves in
Special Interests - Once again, I am not targeting one specific group. From the teacher' union to the public employees' union to the roadbuilders, all groups have been in a state of denial over the fact that our current tax-and-spending patterns cannot continue, and we are not going to grow ourselves out of this one.
You - Yes, you, and me, and everyone else who has continued to send politicians to Madison who are not capable of accepting basic accounting facts and making tough, potentially unpopular and politically damaging decisions on spending and taxing. Rather than realizing that you cannot send the same people back to Madison to work on a deficit when they played key roles in creating that deficit, we continue to hope that they will correct their mistakes, and our hopes are falling far short of reality.
The economy - This is the easiest thing to blame the deficit on, and Doyle will milk this cow to the point of dehydration. The fact is that our state revenue numbers are a clear reflection of the dismal state of the current economic climate, but it also begs the question - Unless you were expecting the greatest economic turnaround in history, how can you propose a budget with 10 percent more spending? That question needs to be answered, and soon, by our Governor.

The trickle-down effects of the state deficit will be felt here in Ripon. A possible 5 percent cut in state aid will result in deficit of as much as $50,000 for the city's 2010 budget. Now, I can do the easiest thing and raise taxes. A 2 percent increase will likely take care of that aid cut problem. Of course, you will likely be paying a bit more for the school system, since their aid also faces a reduction. And, other costs will be increasing as well across the budget. We can sit back and hope that our growth will cover the state aid cut, but that may be setting us up for even more problems come this fall when we craft the 2010 budget.

I am not prepared to say exactly what we will do with next year's budget. There are several months to go before we begin to tackle the issues, and the final budget deficit resolutions have many versions to go through. The Governor has proposed some "cuts", including furloughs and layoffs, but they do not come close to closing the gap. The main thing we can do, you and I, is to keep informed on all of the proposals, understand their impacts, ask tough questions, and demand thorough answers. And keep in mind, that the day of reckoning for the state is here, and the federal government's may not be far behind due to our recent borrowing and spending habits.