Let's go with Koo-Koo's claims individually.
Opponents of the Governor’s plan argue that the structural deficit should be lower in order to make the state more fiscally solvent. However, the structural deficit is not necessarily a good measure of financial solvency. In fact, a transfer of money to the rainy day fund increases the structural deficit! Even if every single penny of the $976 million surplus is placed in the rainy day fund, the structural deficit would still increase.This is mostly BS. The only way this is remotely true is that a deposit to the rainy day fund reduces the carryover amount that goes into the next budget. But it has NOTHING to do with how revenues vs. expenses match up for 2015-'17, as the LFB memo on the fiscal outlook with the projected surplus points out.
Table 4- LFB memo, Jan. 22, 2014, no rainy day fund transfer
2015-'16 Revenues- $15.503 billion
2015-'16 Expenses- $15.369 billion
Table 7, LFB memo, Jan. 22, 2014, w/ rainy day transfer
2015-'16 Revenues- $15.503 billion
2015-'16 Expenses- $15.369 billion
See, ZERO DIFFERENCE. So Strike 1 for Koo-Koo. Here's another doozy from Kooyenga.
$440 million of Governor Walker’s $976 million plan is going towards strengthening the financial health of Wisconsin’s State Government. $117 million will be deposited into the rainy day fund. Additionally, $323 million will facilitate adjusting the withholding income tax tables. Adjusting the withholding tables means less of your money is subject to an interest free loan to the state. Your loan to the state represents a state liability, very similar to a debt, and adjusting the withholding tables means Wisconsin is paying off $323 million in debt.This is a whole lotta hope and spin. First of all, Walker's tax cut bill doesn't force a $117 million transfer to the Budget Stabilization (rainy day) Fund, it just assumes that the state will get a significant amount of revenues above what is budgeted, after the tax cuts goes into effect. And then 50% of that excess, or $117 million, goes into the rainy day fund. With 6 months yet to be measured in the 2013-'14 fiscal year and the full 2014-'15 year to come, along with NONE of the previous Koo-Koo tax cuts taking effect in the 6 months that we had above-trend revenues, that's quite a gamble.
Second, the $323 million "saved" from changing the withholding tables isn't "lower debt", as Koo-Koo tries to imply, but trades letting people take home more pay now, instead of having the same amount of money refunded to them later. In fact, it's a one-time revenue INCREASE in the next budget (as shown on Table 4 of the LFB analysis), because people won't get as high a tax refund from the state as they're used to for the 2014 and 2015 tax years. Koo-Koo is just hoping people spend their up-front money sooner than later, and that it leads to a multiplier effect that adds to job and income growth (HAH!). It's the equivalent of a one-year "tax rebate check" that gets paid back in later years. Ask George Bush how well that warded off the recession in 2008.
Oh, and speaking of Bush, here's Koo-Koo's next claim.
This is the third time that the Legislature is discussing tax cuts in Wisconsin in less than a year. Every time a tax cut is announced and therefore the previous projected deficit becomes a surplus, the same structural deficit chorus criticizes the plan. In February 2013, the Governor introduced the biannual budget. This budget received criticism for having a modest structural deficit. In May 2013, revised tax revenue numbers eliminated the structural deficit. Immediately, the Legislature introduced another round of tax cuts and reforms and once again, dissenters said we should not cut taxes because of structural deficits. The additional tax cuts were adopted in the budget despite the objections. In October 2013, Governor Walker advocated for another $100 million in property tax cuts. For the third time, dissenters raised concerns over structural deficits. In January 2014, the state announced that a projected structural deficit was now a structural surplus. Governor Walker announced another tax cut. Despite the detractors being incorrect on their previous three structural deficit warnings, the same group now warns tax cuts are irresponsible because of a projected structural deficit.So Koo-Koo says because we've had a bunch of upside revenue surprises for the last year, there's nothing to worry about. I mean, the $5.6 trillion in projected federal surpluses from 2001-2011 that Dubya used to shove through his first round of tax cuts held up, right? There weren't two stock market crashes or two recessions or Middle Eastern wars that broke out in that time period to change those surplus numbers and make the tax cuts a fiscal hamstring, were there?
Lastly, Koo-Koo decides to appeal to authority.
A recent survey by George Mason University rated the financial solvency of states’ budgets. Of the ten most solvent states, five of the states do not have an income tax and the remaining five states have generally low tax burdens. The top ten most insolvent states all have an income tax and are generally high tax states. In conclusion, lowering taxes leads to economic growth and economic growth leads to financial solvency for the state’s government and its citizens. Wisconsin’s greatest obstacle is our reputation for being a high tax state. The evidence shows that states with low taxes, or no income taxes, are more likely to be solvent.Koo-Koo is referencing a study from the Mercatus Center at George Mason. And he shouldn't. The Center for Media and Democracy's Sourcewatch tells you why.
The Mercatus Center was founded and is funded by the Koch Family Foundations. According to financial records, the Koch family has contributed more than thirty million dollars to George Mason, much of which has gone to the Mercatus Center, a nonprofit organization. Democratic strategist Rob Stein described the Mercatus Center as "ground zero for deregulation policy in Washington.”In other words, Koo-Koo is Koch-whoring, quoting arbitrary measures designed to reach a certain right-wing, low-tax conclusion. Sorry Koo-Koo, but outside of the 262 bubble-world, you need a real source before I even consider buying your bullcrap.
The Mercatus Center has engaged in campaigns involving deregulation, especially environmental deregulation. It now fills the role once played by the economics department at Chicago University as the originator of extreme neoliberal ideas. Fourteen of the 23 regulations that George W Bush put on his hitlist were, according to the Wall Street Journal, first suggested by academics working at the Mercatus Centre....
The Mercatus Center was founded as the Center for Market Processes by former economist Rich Fink, executive vice president of Koch Industries and former president of the Koch Foundations, who went on to found Citizens for a Sound Economy. Fink heads Koch Industries’ lobbying operation in Washington. In addition, Fink is the president of the Charles G. Koch Charitable Foundation, the president of the Claude R. Lambe Charitable Foundation, a director of the Fred C. and Mary R. Koch Foundation, and a director and co-founder, with David Koch, of the Americans for Prosperity Foundation. In the early 1980s the center moved to George Mason University. It merged with the Center for the Study of Public Choice during 1998 to become the James M. Buchanan Center for Political Economy. The Mercatus Center brand was developed in 1999 from the JBC.....
In addition to being funded by the Charles G. Koch Foundation, the Mercatus Center also has ties to several prominent right-wing gropus, including the American Legislative Exchange Council (ALEC) and National Federation of Independent Business (NFIB).
But then again, Koo-Koo was also the main voice behind the failed expansion of charter schools in the state legislature at a hearing last month, sitting side-by-side with a voucher lobbyist who was a trusted advisor in putting together the bill.
I think this is being done because Rep. Kooyenga realizes that Paul Ryan has put together a great career in saying Koch lies with a straight, endearing face, and wants to follow in his footsteps. And while Purty Mouth Pau-LIE has done quite well, Rep. Kooyenga, it doesn't change the axiom that states "If you're lyin', you're losin'."
Supply-siders have nothing....other than billionaire greedheads padding their pockets.