Shifting Positions To Ease Pressure On A Jackass

Here's an interesting little tidbit from Governor Doyle's budget:

This bill creates a program for the issuance of revenue obligations to fund MA costs. The amount of expenditures for the program that may be paid from these revenue obligations may not exceed $130,000,000. The bill provides that the principal and interest costs on the revenue obligations are to be paid from excise taxes that are currently imposed on the sale of liquor, fermented malt beverages, cigarettes, and tobacco products.

What this means is that Governor Doyle wants to securitize future tax revenue in order to get a lump sum to pay for his spending in this budget. Basically, he sells bonds in the amount of
$130,000,000 which are guaranteed to be repaid - with interest - with future excise taxes.

It's horrible fiscal management, but it is typical of Doyle's budget.

The most interesting thing is that another Wisconsin governor did the same thing with the tobacco revenue in 2001. You remember the massive extortion scheme in which the tobacco companies were forced to pay the States billions of dollars over the course of a couple of decades? Scott McCallum proposed securitizing those payments in order to get a lump sum payment to balance the state budget. Here's what Jim Doyle, who was the Attorney General, had to say at the time:

The administration's "proposal to sell off future payments at fire-sale prices, and then to spend a good share of it to cover its past debts, is shortsighted, selfish and harmful to the fiscal and physical health of the people of the state," Doyle told the Legislature's Joint Finance Committee.

Doyle noted McCallum has said the state must budget like a family.

"I agree. No parents would choose to deliberately sell off their children's college fund, or their retirement annuity, to pay a Visa bill. That is precisely what the administration wants you to approve," said Doyle.

[...]

The issue is pretty simple. Will we be reckless and selfishly spend this money to get the administration out of its short-term problems? Or will we be visionary and disciplined and act as a prudent steward of this money for future generations?" Doyle said.

If you ask me, securitizing the tobacco settlement, which was paid by the tobacco companies, is not nearly as bad as securitizing future tax revenue.

But, then again, I'm just a guy sitting here in my pajamas.

(Cross Posted @ B&S)