The Milwaukee Journal Sentinel’s editorial board is trying to support Doyle’s rhetoric. It’s just a shame that reality gets in the way.
Faced with another huge state deficit, Gov. Jim Doyle pulled a rabbit out of a hat Tuesday by presenting the Legislature with a balanced budget that includes no tax increases and imposes restrictions on local government spending that Doyle says will accomplish the same thing as the property tax freeze proposed by Republicans.
Doyle pulled something out. But it wasn’t a rabbit. And he didn’t pull it out of a hat. To say that Doyle’s budget is balanced is to either be economically inept, willfully blind, or a flat out liar. Doyle’s budget includes about a $1,000,000,000 structural deficit. What that means is that the state is going to spend $1,000,000,000 more than it takes in in tax revenue. Doyle is going to accomplish some of this by raiding the Transportation Fund and the Patient Compensation fund. He will accomplish the rest of this bloated spending increase by borrowing. If this is what the editors call “balanced,” then I’d love to see their checking accounts.
Note to the editors: prefacing something with “Doyle says” does not make it a fact. His tax antifreeze is nothing like the GOP’s plan and falls far short of actually freezing anything.
Some Republicans were quick to poke holes in Doyle's budget. They said his tax freeze was a tepid, politically inspired effort at best, based on what Milwaukee County Executive Scott Walker derisively called "Madison math."
But considering the state's very real budgetary problems, coupled with the no-tax-increase juggernaut rapidly picking up momentum in the Capitol, Doyle deserves credit. It appears he and his staff have done a solid job of balancing not just the bottom line but the state's many pressing needs.
Again, Doyle’s budget is not balanced. It is using one-time gimmicks and debt to fund a massive increase in spending. He has done nothing to address the state’s “real budgetary problems.”
Certainly no one can argue Doyle is shortchanging education since he proposed increasing state aid for schools to $850 million to keep the state pledge of two-thirds funding.
I’m sure that WEAC could argue that point, but I certainly won’t. In fact, I would argue that Doyle is shoveling more and more money into an already bloated school system. This spending increase is payback for the teachers’ unions bankrolling Doyle’s campaigns. I refuse to accept the fact that my kids go to a great school where they are educated for $3,100 per year and some districts in Wisconsin insist that almost quadruple that amount is “shortchanging the kids.” K-12 education in Wisconsin is riddled with waste and corruption. Throwing more money on the fire only makes it burn higher and faster.
It's true Doyle managed to balance his budget in part by transferring $180 million from the state's Patient Compensation Fund and another $250 million from the transportation fund, controversial moves likely to run into flak from GOP lawmakers.
From a strictly financial standpoint, borrowing from one account to balance another is not a wise long-term policy.
Well…. No shit. You mean that cashing out my 401k to buy a boat isn’t a good idea? Well golly, Wally.
What they fail to mention is that both of these funds are supported by revenue streams related to their use and that they have always been kept utterly segregated from the general fund. That is, until Doyle raided the Transportation Fund in his last budget. I guess that once he got away with it once, it’s too easy not to do it again.
But Doyle makes a compelling case.
Um.. no, he doesn’t.
Borrowing from the patient fund helped him to avoid cutting important Medicaid programs that provide health care to the working poor and prescription drugs to the low-income elderly. Besides, the $750 million patient fund is flush and the state usually taps into it for only $20 million to $30 million a year, Doyle pointed out.
This is proof of an old political axiom: if you leave a pile of cash around a politician, he will spend it. Just because there is a pile of money does not justify spending it. That money is there for paying out malpractice claims. It is not there to fill holes in the budget or to pay for more spending. Just because I have a pile of cash sitting in my wallet does not give you the right to spend it (I don’t have a pile of cash, BTW).
And while taking money from the transportation fund for education and other needs, Doyle said he is taking less from the fund than has been taken in the past. He sets aside $4.4 billion over the next two years for transportation, 16% more than the last budget. He's also proposing increases in the car registration and title transfer fees to increase revenue.
Ahhh… another non-excuse. Just because he is taking less than last time does not make it a good idea to do it at all. If a scumbag goes home and beats his wife every night one year, but only beats her every other night the next year, isn’t he still a scumbag?
Furthermore, notice the backdoor tax. If Doyle increases car registration and title fees that go into the Transportation Fund, and then takes the money out of the Transportation Fund to pay for more spending, isn’t that just another way of raising taxes? (hint: yes)
Doyle has rightly criticized Republicans in the past for advocating a property tax freeze that he points out is so severe it could force local governments and counties to cut vital services, including schools, police and fire.
The Republicans have never – repeat: NEVER – advocated a freeze that would force local governments to cut vital services. The problem is that that’s what local governments usually threaten to cut first to bully the people into accepting their oppressive tax burden. Furthermore, every property tax freeze that the GOP has ever passed included a provision for the local communities to surpass the freeze limits by holding a referendum. Isn’t it really up to the local communities to decide what’s “vital?”
Doyle's alternative appears to make more sense, especially if the goal of proposing a freeze truly is to provide property tax relief. Providing two-thirds state funding to schools should mean school districts will have to rely less on the property tax to pay their bills.
The difference between the GOP and the Dems is that the GOP want to reduce the overall tax burden. This includes property taxes, sales taxes, fees, income taxes, etc. The GOP wants the government to be less of a burden to Wisconsinites. The Dems, on the other hand, just want to shift the burden around on the backs of the taxpayers until it’s not so uncomfortable.
His proposal to freeze taxes for municipalities and counties also appears more balanced than the freeze advanced by Republican lawmakers. Doyle would allow local government to increase levies based on a reasonable combination of inflation plus 60% of the regional increase in property taxes due to new construction.
“More balanced” means “not strict.” Doyle’s tax antifreeze would allow the local governments to increase taxes at almost the rate that they have in the past. Also, what the editors fail to point out, is that over half of the property tax burden is exempt from his antifreeze. Doyle is pumping $850,000,000 more spending into the schools in the hope that they won’t increase their tax levies. However, there’s nothing in his plan that would forbid them from doing so.
At the same time, Doyle would continue $930 million in state shared revenue to local governments and provide $130 million a year in incentives to municipalities that keep levies below the allowed levels.
Let’s step back into reality for a moment. If you are a taxpayer in Wisconsin, you don’t really care which part of government is taxing you or how they extract it. The point is that too much of the money that you earn with your labor is being confiscated from you and spent by someone else. Doyle’s plan is to give state tax revenue to the local governments so that they will not raise property taxes as much. Where, exactly, does Doyle think that state tax revenue comes from? It comes from the exact same taxpayers. The only difference is that they will pay their tax burden more with the income tax, sales tax, and fees instead of the property tax. Personally, I would rather see an actual decrease in spending, and the requisite tax decrease, than just shifting the tax burden around.
That strikes us as a balanced and responsible approach to local spending.
It’s not local spending. It’s state spending. The whole thing strikes me as the product of a drunk teenager trying to explain to his parents how he managed to put $10,000 on their credit card in a single weekend.
Doyle’s budget is a mastery of delusional thinking and political trickery. It rests on the economics of Enron and the values of Tammany Hall.
(Cross posted at Boots & Sabers