Wednesday, February 8, 2017

First budget reactions- Merry F'ing Christmas (Tree), Wisconsin!

I have a job, wife and a life, so I haven't had too much of a chance to go in-depth on the newly-released state budget, other than skimming the Budget in Brief, 0but here are a few thoughts.

1. This thing is clearly set up as a Christmas tree of talking points, and full of minor tax cuts and symbolic funding increases that Walker hopes to sell on the 2018 campaign trail. But a $5-a-month income tax cut or a $10 property tax cut doesn't seem to be as much help for our economy vs. using the $300 million of those tax cuts to fix roads or restore the 2015-17 cuts to the UW System (neither of which seems to be happening with this budget). And there's even pointless crap like depositing $20 million to the state's rainy day fund instead of using that money for real needs. But what do you expect from a lifetime politician who has no regard for anything other than helping his donors and grabbing more political power.

2. As I predicted yesterday, the budget counts on $60 million in savings from starting up a new self-insurance system for state employees in 2018. Somehow, the Walker people figure that the only fiscal impact will be in cost savings, without any drop in economic activity due to higher premiums and deductibles (both by state employees, and in other HMOs who will raise their fees to make up for the lost business), or in the numerous state job losses that would happen from certain health care organizations not being part of the new program. Yeah, I'm not counting on that, and that reality may well sink this scheme when the Joint Finance Commission is able to give an up-or-down vote on the plan later this year.

2. There seems to be NOTHING to improve things for the deficit-ridden Transportation Fund, other than cutting spending by $171 million beyond the already-bare budget request. This is after the budget request expected several projects, but somehow, the budget still claims that projects like Verona Road and I-39/90 won't be delayed. I gotta figure out how that magic trick works. The only positive I can find so far in this budget on DOT is the decision not to build an unnecessary expansion of I-94 from the Zoo Interchange to downtown.

3. K-12 public school spending does go up by $649 million, but only $72 million of that is in General aid (and that's only in Year 2 of the budget). Combine that with a $43 million increase that is slated for voucher schools (with much of that money being offset with aid CUTS to the local public school district), and we're in a situation where even though the per-pupil bump in aid will help, many Wisconsin schools could fall even further behind their peers over the next 2 years. This will likely creating districts and communities with an even wider gap between the haves and have-nots, and I think there's a better, more equitable way to invest in our underfunded schools than this.

4. Walker's Administration projects a Fiscal Year 2017 ending balance of $453 million, which is even higher that the $427.2 million that the Legislative Fiscal Bureau projected 3 weeks ago. Looks like that's based on higher estimates of non-tax revenues and spending that's even lower-than-already expected. But then that $453 million is blown over the two years of this budget.

Projected balance, Walker 2017-19 budget
2017-18 Start $453.0 million
2017-18 End $297.8 (-$155.2 million)
2018-19 End $81.7 million (-216.1 million)
2018-19 Required reserves $75.0 million

That $6.7 million cushion is less than 0.04% of all state expenses...or about 3-4 HOURS of General Fund operations. And this is going off of the LFB's assumption of a Trump Boom over the next 2 years. Not an "implosion" kind of Boom mind you, but one of alleged economic growth that lowers unemployment from 4.8% to 4.1%. Let's just say I think we should be a bit more cautious than Gov Walker on that projection.

Lots more to look at as we go further, but those are my immediate impressions at first glance. Feel free to add in your own below.


  1. You might think that I-94 east-west in Milwaukee is unnecessary, but I, as a daily driver, do not. With the improvements thus far in the Zoo, eastbound evening traffic piles up at the Stadium and 27th st interchanges.

    We can debate whether or not the designs they had "approved" were the correct ones, but something needs to get fixed through there or Barrett's "might not be a bad thing" will choke city growth. I support him on developing alternatives, but turning a blind eye to the only viable cross town artery is short-sighted.

    Third Ward (ok, maybe it's basically done) and now Park East areas are growing, and unless the city gets out more fairy dust, not all of the people who live there are going to be walking or riding the streetcar to work...Some of them might just have to -- gasp! -- drive to the suburbs for work.

    There used to be a reverse-commute advantage in Milwaukee. My empirical evidence says that that is basically gone.

    1. Nah, it's not worth $1.2 billion to tear up land abd add a 4th lane to an area that generally doesn't need it. An extra 5 minutes in traffic is a small price to pay by comparison.

      James Rowen has a good post at The Political Environment explaining more.

      On a related note, I looked inside the DOT section if the budget, and it looks like they didnt count $300 mil in borrowing for highway rehab that the Walker Admin is planning to do. So they are spending (slightly) more money at DOT, but nowhere near enough to take away 2 years of delays for all those projects. Watch fir that reality to crash through very fast.

    2. Actually, the preferred alternative ( shows next to none as far as land acquisition (Miller Park parking lots and some old factory land the state already owns).

      Yes, $1.2B is excessive...Maybe they could start with a smaller project that kills some of the left-hand merges and tight ramps that cause most of the issues instead of sitting around waiting for a giant pot of money to appear. They let the perfect be the enemy of the better and simultaneously strangle growth of any real alternative transport modes.

      Looks like they figured out staged improvements in an area near you:

    3. Now if they improved the antiquated and dangerous exchanges near Miller Park and the VA, I'd think that's a much better investment than adding a lane and ripping the whole thing up. Might help traffic flow as well.

      I still don't get how $31 million pays for the Racine County part of a $1.2 billion, 30-mile project. Which is why I bet there's a lot of backpedaling and modifications on transportation as we go forward.