Updated Comparison of the Last Two State Budgets

MacIver Institute Releases Updated State Budget Index

2009-2011

Benchmark

2011-2013

More than $2 billion

Increased taxes

$0*
6.2% or $3.6 billion

Increased spending

1.8 % or $1.1 billion
$3.58 billion

Allowed Bonding

$1.73 (down 52%)
$1.5 billion

Allowed local property tax hike

$480 million
(-$2.33 billion)

Projected Structural Deficit/Surplus

+$300 to (-$143 million)**
(-$3.6 billion)

Actual Structural Deficit/Surplus

Using the MacIver Institute State Budget Index, the same fiscal responsibility criteria by which we graded the 2009-2011 State of Wisconsin Budget passed by the legislature and signed by Governor Jim Doyle on June 29, 2009, the current state (2011-2013) budget compares quite favorably. The 2011-2013 plan passed by the now Republican-controlled legislature and passed signed into law by Governor Scott Walker on June 26, 2011 is remarkable in many aspects.

First, it does not raise taxes. While some credits for those with no income tax liability were modified, taxes were not raised in this budget*.  No new income tax bracket to punish the successful as Gov. Doyle proposed. No increase in the garbage tax or the nursing home tax. No new tax on iPod downloads or job providers. Nothing. When was the last time a group of politicians who promised not to raise taxes to solve a “fiscal crisis” actually followed through on that promise? Washington, are you paying attention?

Instead of passing on a structural deficit as has become standard operating procedure in Wisconsin for the past 16 years; this budget actually was projected to end in surplus. A surplus. In one budget the entire $3.6 billion structural deficit would be erased. Finally our state budget spending is more in line with what our taxpayers can afford to give. Let’s hope this fiscal precedent becomes a budget habit we never break. Just this month, lawmakers have reacted to recent projections that the budget may end the second year in the red** with new vows to adjust spending, not raise taxes.

The Governor and lawmakers solved the structural deficit not with dramatic increases in state bonding authority or questionable accounting gimmicks, but rather through austerity measures. Spending on programs was cut. Something unheard of in recent decades in Wisconsin.

When times are tough and credit is available it is always tempting to bond as a bridge to some ‘better times’ in the future. Yet, now our borrowing on the state’s credit card is down as well, almost 50% compared to the last budget.

The contrast between the two budgets is even more significant when you consider the 2009-2011 document benefited from the use of $3.4 in one time federal ‘stimulus’ funds, most of which went to ongoing spending programs.

Last, but certainly not least, this budget has stringent controls on local property taxes, thus avoiding the left pocket/right pocket tax game that has become so familiar across the country. Whether the bite comes from the state or your local government, it is still money out of the pockets of families across the state.

The fiscal responsibility displayed in this document also sets new, lower floors, from which new budgets will be based in the future.

Just as every Wisconsin family has cut back on its spending and borrowing to make ends meet in today’s challenging economic times, so too has state government. While, as we have noted before this was not a perfect budget, the comparison to recent past budgets is astonishing.

This budget save Wisconsin taxpayers tens of billions of dollars in the next decade.