Thursday’s Wisconsin State Journal article, “GOP plan would dig $3.4 billion hole to start off budget discussions,” is a misleading and disingenuous portrayal of the budget debate and state finances.
The premise of the article is that by jettisoning many of the governor’s recommendations, the Joint Finance Committee (JFC) has created a large hole in the state budget. This is false.
The governor’s proposed budget takes a $1.8 billion dollar balance and in two short years turns that into a structural deficit of $1.3 Billion (as we pointed out in a recent State Journal op-ed). The governor does this by proposing a nearly 10% spending increase in the General Fund (funds generated by taxpayers) and increasing taxes by a net $1 billion. Proposing massive tax and spending increases as families and businesses strive to emerge from the pandemic and the governor’s economic closures could only be proposed – and endorsed – by people who have never earned a paycheck outside of government.
In a more practical approach, the JFC has indicated it will start from “base”. This means it will start deliberations from the budget enacted two years ago, with adjustments in various areas to maintain current programmatic structures. That means starting with the aforementioned balance of $1.8 billion. From there, the JFC addresses its priorities that likely will include some increases in funding for education, the health care safety net, and broadband access, among other areas, while eliminating the $1 billion net tax increase. With lower than anticipated expenses in various state funds, this balance of $1.8 billion will likely grow by hundreds of millions.
Of course, we haven’t even discussed the literally BILLIONS of federal dollars through COVID relief flowing into the state that will make responsibly balancing this budget far less challenging than many expected back in mid 2020. Nor have we discussed the tax increases the governor has proposed to allow at local levels of government.
Regardless of how the media portrays the budget debate, the JFC can build a responsible budget – a budget that recognizes the challenges faced by families and businesses, a budget that accordingly will lower the tax burden, a budget that isn’t built on temporary federal assistance, and a budget that will fund the priorities Wisconsinites expect from their government as they simply try to earn a living and educate their kids.
CJ Szafir is the President for the Institute for Reforming Government, a think tank based in Madison, WI.