Since Wisconsin Governor Scott Walker has a bit of a scary Ronald Reagan fetish, let's take a page from The Gipper's book, and ask if we are better off fiscally in Wisconsin than we were 4 years ago. With Walker being sworn in for a second term today, it seems like a good time to look at the then-and-now.
As Governor Walker took office in January 2011, the best estimates we had of future budget numbers were from the estimates done by Jim Doyle’s Department of Administration that were done in Nov 2010. At that time, it said the following.
Nov 2010 DOA estimates
FY 2010 Ending balance +$71.1 million
FY 2011 Ending balance +$10.1 million
FY 2012 Revenues $13.651 billion
FY 2012 Projected expenses $14.392 billion
FY 2012 Ending balance -$731.0 million
FY 2013 Revenues $14.147 billion
FY 2013 Projected expenses $14.840 billion
FY 2013 Ending balance -$1.424 billion
PLUS $65.0 million required reserves
TOTAL TO MAKE UP FYs 2011-13- $1.489 billion
Here’s what the 2014 version of the same November DOA document shows for the upcoming budget.
Nov 2014 DOA estimates
FY 2014 Ending balance +$516.9 million
FY 2015 Ending balance -$132.1 million
FY 2016 Revenues $15.540 billion
FY 2016 Projected expenses $16.636 billion
FY 2016 Ending balance -$1.096 billion
FY 2017 Revenues $16.126 billion
FY 2017 Appropriation requests $17.244 billion
FY 2017 Ending balance -$2.214 billion
PLUS $65.0 million required reserves
TOTAL TO MAKE UP FYs 2015-17- $2.279 billion
Now it’s worthy to mention that the DOA figured $1.633 billion in lapses for the 2011-13 budgets, compared to “only” $918 million in lapses for 2015-17. But even so, the 2015-17 “zero-lapse” deficit is still higher by a total of $75 million (both are over $3.1 billion).
Let’s also compare the projected tax revenue growth for the year in progress for both of these reports.
FY 2010-11 DOA projected revenue growth +4.25%
FY 2011 year-over-year revenue growth thru Nov +3.61%
Final FY 2011 Year-over-year revenue growth +6.43%
FY 2014-15 DOA projected revenue growth +4.98%
What I estimated FY 2014-15 revenue growth to be after Nov 2014 +2.94%
And I’m not even taking into account the state's Transportation Fund’s issues, which had a surplus of $110 million in FY 2010 (even after $85 million was sent to the General Fund to shore up that budget), and still had $200 million in the bank at the end of FY 2011 (see page 7 of this PDF). By comparison, that bank balance was barely half that by the end of FY2014, and that was with the General Fund and other sources kicking in $57.8 million. With $751 million in added taxes and fees being asked for in the next budget just to keep the Transportation Fund solvent, this is another area where we are clearly not better off than we were in January 2011.
The bottom line is that the State of Wisconsin has a current-year budget deficit (which we didn't have in January 2011), and a larger deficit looming in the 2015-17 budget than we had in the 2011-13 one (with a higher likelihood that current-year revenues will fall short, which would increase the budget deficits for all three of those fiscal years). We also are in significantly worse shape in the Transportation Fund, with a large number of freeway projects that have been started in the last 4 years, with nowhere near enough money to pay for them. I don’t see how January 2015 can be honestly portrayed as a better situation, especially when the one-time bullet of Act 10 benefit cost savings has been shot, and is now baked into the larger budget deficits of today.
So any talk from Governor Walker and his spokespeople on Faux News or AM radio about how “Wisconsin's budget is better off than it was four years ago,” is simply not true. In fact, much like his idol Ronald Reagan, he's taken an iffy situation and made it much worse with his "tax cut and spend taxpayer dollars on his buddies" policies. And unlike Reagan in 1986, there are fewer options left to get out of the mess that us in Wisconsin are in.
Feel free to keep these facts in your quiver if/when Walker tries to sell his bid for the White House, because you can bet much of our media won't make the effort to look too deeply into the reality back here.