State’s crisis political, not financial

Wisconsin’s Legislative Fiscal Bureau was created in 1968 by a Republican governor, Warren Knowles, and a Republican-controlled Legislature.

The purpose was to establish a nonpartisan agency that would provide honest fiscal analysis for state legislators. The bureau has done just that, earning the respect of legislators from both parties, including a young Scott Walker, who frequently cited the bureau when he served in the Assembly.

Less than a month ago, a Fiscal Bureau memo reported that the state had a $121 million surplus through the remainder of the current fiscal year.

That is a fact that is now under attack by Gov. Scott Walker, who the conservative publication Human Events refers to as the “new hero” of the Republican right. Human Events points out -- as the Fiscal Bureau and this newspaper have -- that the state’s fiscal house is not in order and that unsettled issues relating to a payment due Minnesota, as well as rising health care and prison costs, could well create a shortfall before the end of the year.

So it is possible that Wisconsin might need a budget repair bill before the fiscal year is finished.

But Wisconsin has not reached the statutory trigger -- roughly $188 million -- that would demand a repair bill. And though it is not unprecedented in state history for budget repair bills to be introduced before the statutory trigger is reached, why is Walker rushing to act now? Why is he doing so with a bill that massively extends his own authority over Cabinet agencies while creating new positions to be filled by his political cronies?

The governor says that he is doing so because he thinks the trend lines point to more serious shortfalls in the future. We share his concerns about those trends, as do the state’s public employee unions, which have agreed to dramatic concessions in order to help avert fiscal problems.

What we cannot figure out, however, is why the governor engineered roughly $140 million in new tax breaks for multinational corporations, which the Legislature passed in January. Why has he rushed to reject federal transportation funds that other states have rushed to get? Why, in the very week that he was pushing his budget repair bill, did the governor reject federal broadband money, which rural counties have been seeking for years?

The answer is that Walker has made too many budget decisions not with an eye toward fiscal responsibility but with an eye toward rewarding his political benefactors. Out-of-state corporations, road-building interests that did not want competition from high-speed rail, and telecommunications corporations that want to cash in on the demand for broadband all benefit from decisions made by Walker in recent weeks.

Now the governor says that Wisconsin needs to end collective bargaining for public employees and teachers and alter the way in which the state operates on multiple levels in order to address a fiscal crisis.

This is simply absurd.

On the one hand, the governor argues his tax breaks for corporations will not be fully implemented until the next fiscal year. So, he says, we ought not accuse him of ginning up a crisis to achieve political ends. On the other hand, he says that he must act now -- via his budget repair bill -- to address the challenges the state will face in, you guessed it, the next fiscal year.

In an editorial last week, we picked up on arguments made by several legislators that the tax breaks enacted in January were making matters worse in the current fiscal year. The governor disagreed, arguing that the tax breaks are not an issue at this point. We accept the governor’s point with regard to the timeline and note it here because of the importance of clarity in these debates. But budgeting is a bit more complex than the governor chooses to acknowledge.

As Nicholas Johnson, vice president for state fiscal policy with the Center on Budget and Policy Priorities, noted in a memo to the Washington Post, “(In) a technical sense, the tax cuts didn’t create the current-year shortfalls that in turn are creating the specific opening for the ‘budget repair bill.’
However, it is true that the tax cuts are worsening the state’s overall budget picture, and it is the state’s overall budget picture -- not the current-year picture alone -- that the (governor) is using to justify going after the workers.”

Debates about budgeting are often complex. Lots of heads are spinning. More importantly, the governor, his aides and the media echo chamber are spinning. It is easy to get confused.

So let’s get down to the basics:

1. The Fiscal Bureau reported in January that Wisconsin had a $121.4 million surplus through the end of the fiscal year.

2. The state has an unresolved dispute with Minnesota and some potential spikes in health care and prison costs that could require a budget repair bill. But the state has not reached the trigger point where such a bill would be necessary.

3. When the trigger point is reached, the wise counsel of the Legislature’s senior member, state Sen. Fred Risser, D-Madison, is well taken: “This is not a crisis. We’ve done budget repair bills before. We’ve always been able to sort these things out.”

Risser is absolutely right. He is also right when he says: “We now know this struggle is not about the money. Public employee unions have offered many concessions to help solve the state’s fiscal crisis. When those efforts at compromise were ignored, it became clear that Governor Walker and his allies are part of a national agenda, fueled by big-money conservative groups, to destroy the unions at all costs.”

That’s the bottom line: This is not about the money. This is not a fiscal crisis. This is a political crisis. And Walker has the power to resolve it by refocusing on fiscal issues, as opposed to pursuing the political goal of breaking unions.