Does Wisconsin really have a budget crisis?
That's the question being raised by skeptics who cite a Jan. 31 Legislative Fiscal Bureau memo projecting a $121.4 million surplus in the state's general fund on June 30, the end of the current fiscal year.
But that figure doesn't include significant bills that are coming due soon, including about $200 million that Wisconsin has been court-ordered to repay to the state's medical malpractice fund, and $58.7 million in tax money owed to the state of Minnesota, the LFB said.
If the entire amount — $258.1 million — were to be paid by June 30, the agency said, the general fund would have a deficit of $136.7 million: the figure Gov. Scott Walker has been citing as one reason for seeking to eliminate most public employee collective bargaining rights.
Critics also charge that Walker made the problem worse last month by pushing for and winning legislative passage of tax credits for businesses that create jobs in Wisconsin and tax deductions for people with health savings accounts. The tax break for businesses is projected to have a one-time cost of $11.8 million, while the tax deduction for HSAs will cost the state $49 million in tax revenue over two years.
But the Fiscal Bureau memo shows those costs don't affect the current budget because they take effect after June 30.
"Union officials have repeatedly stated that the bills enacted by Governor Walker created our current fiscal crisis," Walker spokesman Cullen Werwie said. "The truth is that the tax bills enacted by Governor Walker have a zero-dollar impact on the current fiscal year."
Even so, the biggest savings Walker is proposing for the current budget have nothing to do with public employees. His bill proposes to save $165 million this year by simply refinancing state debt.
And state Rep. Mark Pocan, D-Madison, said Walker's tax giveaways are only adding to the long-term crisis that he says he wants to avert.
"Walker keeps talking about how the state is broke, yet he had no problem making $3.8 billion in campaign pledges to the wealthy to reduce the state's tax collections," Pocan charged, citing figures estimated by the liberal advocacy group, One Wisconsin Now. "Furthermore, he later promised an additional $1.5 billion pledge to repeal the corporate income tax."
Pocan acccused the governor of "spinning his fake budget crisis."
Walker has said without major concessions from state employees this year, Wisconsin will be forced to lay off 1,500 workers and reduce health care services for the poor.