The co-chairs of the state's budget-writing Joint Committee on Finance, State Senator Alberta Darling (R-River Hills) and State Representative John Nygren (R-Marinette), issued the following statement regarding the Legislative Fiscal Bureau memo on the projected general fund balance in Governor Walker's proposed budget for the 2015-17 biennium:And if you look at the budget figures, what they're saying is true on the surface- Walker's budget numbers do add up on paper.
"Governor Walker's proposed budget keeps our finances in the black, end of story. The non-partisan Legislative Fiscal Bureau confirms the gross general fund balance of the governor's 2015-17 budget bill would be $123 million with a net balance of $58 million. This is a far cry from the supposed $2 billion deficit Wisconsin Democrats have repeated many times.
"Governor Walker's budget plan provides a solid fiscal starting point as we begin the budget process in the Legislature. The numbers don't lie. We are proud our reforms are working. Wisconsin is on the path to economic success and prosperity, and we're looking forward to using the governor's budget as a base to continue our common sense reforms."
On November 20, 2014, the Department of Administration submitted the statutorily required report to the Governor and the Legislature on the 2015-17 condition of the general fund based on the administration's revenue estimates and state agency budget requests. That report showed a gross general fund balance of -2,149.1 million and a net balance (after consideration of the $65 million statutory reserve) of $2,214.1 million.But the fact that Darling and Nygren are trying to spin that Walker's "balanced" budget is somehow OK is laughable (as laughable as the scenario that they claimed a $535 million surplus off of last September), and a sign that voters aren't buying what WisGOP has been selling in recent months.
Under the Governor's 2015-17 budget bill, the gross general fund balance would be $123.0 million and the net balance would be $58 million.
I'm going to even humor the GOPs and give me the assumption that revenues hold up for the last four months of this fiscal year to give a sufficient base to start from (something I think will be very unlikely). With those numbers in place, let's keep in mind what had to be done in order to get the 2015-17 budget numbers to allegedly add up.
1. An assumption of sizable revenue growth based on a continually growing economy and jobs being added. In its estimates from January, the LFB estimated general fund revenues to grow by 4.7% in 2015-16 and 3.8% in 2016-17. This is largely based on the projection of more than 5 million more jobs being added nationwide and a booming housing market being part of big GDP growth.
However, other steps the Walker Administration are taking to make the budget balance make it highly unlikely that Wisconsin will get their share of that growth.
2. The $300 million cut from the UW System, and related lack of outreach requirements to the rest of the state.
3. A $150 cut in per-pupil aid to public schools for next year, leading to deficits across a huge amount of Wisconsin school districts, which will likely mean more cuts to services and compensation.
4. $15 million in cuts to Senior Care, and the subsequent offloading of Wisconsin Seniors onto Medicare Part D.
5. Shared revenues largely remaining at the diminished levels we've seen for the last couple of years.
6. And as the LFB just re-figured, nearly $1 BILLION in unspecified lapses over the 2 years of the budget, including $699 million in the second year of the budget.
7. As previously mentioned, no real salary or benefit increases for state workers over the next 2 years.
Those cuts in services, combined with the lower wages from the just-signed work-for-less legislation and the limited raises for state workers makes it less likely that we will see the job growth and higher revenue figures that the Walker budget counts on. You don't get to have this both ways- with budget cuts usually comes some kind of cut in revenues due to lower growth.
And I'm not even talking about the added debt that Walker is planning to take on- $1.3 billion in borrowing for roads in this budget alone. This does not count as a "deficit" for state budget purposes (it would if it was the Feds), but it is money that will have to be paid back, with debt service crowding out future road projects and other Transportation-based aids. There are also the first payments in this budget that result from the skipped debt payment that the Walker Administration is pulling in order to desperately try and balance 2015's deficit-ridden budget without a budget repair bill.
My guess is that the WisGOPs are trying to pull this meme of "balanced budget" out right now because there is more bad economic news to come in Wisconsin, especially with huge downward revisions in total jobs for 2014 coming out last week. The "gold standard" Quarterly Census on Employment and Wages coming out next week is likely to show Wisconsin in the bottom end of job growth yet again, and you can see that the belief that things are going the wrong way in Wisconsin would get a new piece of evidence.
Combine that with Gov's Walker's tanking job approval ratings, and you can see why Nygren and Darling tried to repeat their Big Lie of 2014 by deceiving on the true nature of Walker's bad budgets.