A Better way to Balance the Budget with the Same Dollars

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Apr 27, 2011 No Comments ›› admin

April 27, 2011

Our economy is beginning to recover. Tax receipts have improved. As lawmakers grapple with the state’s two year budget, forecasts show nearly two billion dollars more in tax revenue.

Tax money goes to pay for schools, health care, prisons and courts, colleges and universities and local government.

These ‘big five’ make up almost eighty percent of what the state buys with the ‘general fund’ checkbook. This checkbook shows a notable improvement in financial health.

Despite the “we’re broke” line, Governor Walker proposed a two year budget with slightly more spending than former Governor Doyle’s last budget.

Spending brings in more ‘matching’ money from the federal government. The Governor’s budget has nearly a billion more in federal dollars than the last budget. Money from fees and product sales increased, bringing in another quarter billion in ‘program’ revenue.

The only area showing less money than the last budget is the special or ‘segregated’ funds – including transportation. People are buying fewer vehicles. Collections are less from new car registration fees. As people drive less and with more fuel efficient cars, gas tax collection is flat.

An improving economy means more money to go around.

But before budget writers began their work they faced about $2.5 billion in money committed to this budget year from past years. A recent court settlement raised the number to $2.7 billion but the Governor’s budget does not address this.

Juggling the people’s wants and needs with available tax revenue is the biggest task facing Governors and Legislatures.
Governor Walker chose to make big cuts to the ‘big five’ – especially schools, local government, tech colleges and the UW. He used increases in public employees’ contributions to health insurance and retirement to pay for some of the cuts. But local officials tell me they still face big losses. At a time when the fund used for these things is bigger, where did this money go?

The Governor addresses the transportation revenue problem by raiding the general fund to the tune of more than a quarter billion dollars.

Money goes to new programs including the private-public Wisconsin Economic Development Corporation; increases in contracts; expansion of private ‘charter’ schools, and ‘choice’ private school vouchers; tax credits and other tax changes.

The Governor’s only tax increase is for those of modest means. Changes to the Earned Income Tax Credit and the Homestead Exemption will increase taxes on lower income families, particularly those with more children. On the other hand tax reductions totaling $82 million go mainly to those with higher incomes.

People contacted me concerned about threats to education, local government, SeniorCare and services for the disabled and veterans. They wonder what other options exist.

With people’s concerns in mind, I propose changes to the Governor’s budget.

Take a balanced approach. Eliminate the tax cuts going to the most wealthy; don’t increase taxes on those of modest means; don’t create or expand programs unless absolutely necessary; return the raids on funds and minimize cuts to education, colleges and local government. Get rid of the charter school expansion and new private school “choice” vouchers. We can’t afford them.

Accept public employee contributions to health insurance and retirement – as unions have agreed to do. Fund local government at last year’s level – this does mean no allowances for increased costs. With these changes there is enough money to reverse half of the cuts to tech colleges and local schools.

My math shows we can accomplish the above and fully fund basic programs like Senior Care; school breakfast and milk, school buses and rural school aid; help for homeless and needy veterans. And revive the deleted transitional jobs for the jobless and the popular Buy Local, Buy Wisconsin programs.

My proposal won’t make any big headlines. There are no glitzy new programs. I eliminate tax increases and tax decreases and keep taxes right where they are now. I take away half the cuts to education and tech colleges and add in the employee contributions. I restore local government to last year’s budget holding down property taxes.

Budgets are all about choices. My budget does not raise taxes; it reduces the hurt on people; invests in our future; protects our communities and vulnerable citizens. It does nothing fancy. But it steadies the ship of state and steers a strong course forward.


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