Do I agree with John Nygren on what to do with extra money? For now, but not the future

After the announcement of a surprise burst of revenue in the state of Wisconsin's treasury this week, there are a number of options on the table as to what to do (or not do) with this money.

The fiscally conservative Wisconsin State Journal is out today with an editorial supporting the ideas of Joint Finance Co-Chair John Nygren (R-Marinette), who said that he and his fellow WisGOPs in the Assembly would rather carry over much of the money, and deposit some of it in the state's rainy day fund.

Unfortunately, some of his Republican colleagues who control the Legislature would rather go on a spending spree. Senate Majority Leader Scott Fitzgerald, R-Juneau, suggested the money be spent on tax cuts and infrastructure. Fitzgerald also has suggested he’s willing to undermine McCallum’s law, which serves as a strong incentive for fiscal responsibility.

Cutting off the relatively meager amount of money going into the state’s backup account would be a mistake. If not for [former Governor Scott] McCallum’s rainy day fund, the state’s savings account would be virtually empty. And the next time state leaders ran into a recession or emergency, they would have little to fall back on, prompting steep cuts in vital public services and higher taxation.

Democratic Gov. Tony Evers has proposed paying off $53 million in state debt, spending $33 million more on worker training and technical colleges, and transferring the rest of the windfall to the rainy day fund. That’s more fiscally responsible than Fitzgerald’s grab-and-spend approach.

Yet Nygren’s suggestion is best — especially when you consider the influx of money isn’t anticipated to continue. State officials say the surge in revenue is largely due to businesses shifting their income across fiscal years in response to federal tax law changes. So the extra dollars are a one-time addition of cash.

State leaders should listen to Nygren, sock the money away and adopt a state budget with a bigger rainy day fund to fall back on.

I'm about halfway there. I agree that the increase in revenue has little to do with any economic growth in Wisconsin that can be counted on to help things in the next two years (the Legislative Fiscal Bureau's explanation of the new money in its revenue projections makes that clear), and that means using the extra money to significantly increase spending in the next 2 years would likely lead to larger budget deficits in the near future.

In fact, all the recent revenue estimates did for the 2 years of the next state budget is return the totals back to where they were at the end of last year, before the GOP Legislature passed a one-time income tax cut for the rich in the Lame Duck session.

Because the LFB says that there won't be much more money to work with between 2019-21, the only real benefit to the budget's flexibility comes with what can be carried over on June 30. Which explains the need to sock away the one-time revenue for later if it's needed, or to use it to accelerate road projects or building projects that would have the benefit of reducing the backlog that developed during the Walker years in those areas.

After Nygren and his fellow Republicans decided to continue tax cuts to the rich and corporate earlier this month, it means there is still a budget hole of more than $915 million to fill in over the coming weeks, even with the large projected carryover of more than $1 billion. You put those numbers together, and it means that the Evers budget is now more than $1.9 billion out of balance before spending adjustments are made.

But this is also where I diverge from what the State Journal editorial board, Nygren and the other WisGOPs, because they assume the current tax structure will largely stay in place for the next 2 years (other than a targeted income tax cut to middle-income Wisconsinites that is in the Evers budget). I will ask those conservative groups "why can't we reverse these wasteful tax cuts to the rich and corporate and instead expand the amount of money we have available for the next 2 years?"

Continuing to give everything away to those at the top isn't going to do that, especially when our job growth is stagnant at best with a declining labor force. We need to be encouraging people to want to come to our state, and use public funding for activities and services that actually improve our economy and quality of life will be more likely to do that.

Instead, this newly-created budget deficit will likely be the excuse given by Republicans in the coming days when they decide to cut some if not all of Evers' proposed increases to K-12 and special education (while continuing increased funding for voucher schools). We should be asking why this direction is being chosen, and why John Nygren and the rest of the ALEC crew want to continue on our present path of "austerity for the everyday person, and socialism for the connected few".

That's not what Wisconsinites voted for in November, when Dems won every statewide office with record midterm turnout. And we need a state budget that reflects what the voters want, and to gather the resources necessary to carry out those wants. They are not infinite, but we can definitely get more than we'll have under the WisGOPs.