Sen. Kathleen Vinehout: State’s debt growing, not shrinking, under Scott Walker

  • Picture of Senator Vinehout

Sen. Kathleen Vinehout: State’s debt growing, not shrinking, under Scott Walker

April 29, 2015 10:30 am  •  KATHLEEN VINEHOUT | Democratic state senator from Alma

“I’m okay with the cuts,” the man wrote me. “It’s shameful to pass debt on to our children.” In the man’s message, he implies a common misconception about Wisconsin — there is no state debt.

Wisconsin owes a lot of money and the state budget proposes we borrow even more. The nonpartisan Legislative Fiscal Bureau reported in January that the state owed about $13.8 billion. This is slightly less than the previous year, but almost $600 million more than when Gov. Jim Doyle left office.

The conservative Tax Foundation reported in 2011 that Wisconsin ranked 18th of 50 states in terms of the worst state debt per person ($4,013). In 2013, Wisconsin ranked 16th of 50 states ($4,044 per person). Wisconsin is headed in the wrong direction in paying off the debt.

Gov. Scott Walker is proposing a great deal more borrowing in the new budget. Of greatest concern is the borrowing to pay for roads and bridges. ThePicture of Governor Walker LFB estimates by the end of the coming budget, almost a quarter of every dollar in transportation will be spent on debt payments.

Adding to debt is the governor’s proposal to build a stadium for the Milwaukee Bucks. The LFB estimates the interest alone on this proposal exceeds $400 million using the plan proposed by the governor. Final payments are estimated to be in fiscal year 2046-47.

I’d say that’s passing debt on to our grandchildren.

Another common budget myth is the governor paid all the debt bills coming due. The fact is the governor is not paying about $108 million in debt payments coming due this year. In order to free up cash, governors of both political stripes did not make debt payments. Doyle and Gov. Scott McCallum did not make debt payments during downturns in the economy. The largest delayed debt payments were under Walker in the 2011-13 legislative session, in which over $550 million in payments were delayed.

I imagine the reason the governor delayed making debt payment this year was to free up cash to cover a deficit in the current budget, which brings us to another budget myth: that Walker has spending under control. But spending in the current budget outpaced revenue. In February the Wisconsin Taxpayers Alliance analyzed three factors leading to an imbalance between revenue and spending: “Tax cuts, the technical college aid jump, and soft tax collections led to revenues once again falling short of expenditures. The shortfall was $261 million last year and could grow to as large as $800 million this year, which would be the largest gap in over 20 years.”

BudgetThese problems continue going forward. Using estimates released by the LFB last month, spending is estimated to outpace revenue in the next budget by over a billion in the first year and nearly $700 million in the second year. The Legislature is required by the Wisconsin Constitution to submit a balanced budget to the governor. Therefore, when the state budget passes in June, spending will be trimmed or revenues enhanced to deal with this imbalance.

Another common myth is that the governor is spending less money in this new budget than in prior budgets. The truth is the 2015-17 state budget spends $4.76 billion more than the last.

At $74.7 billion, this budget is the largest in state history. That said, because of inflation, nearly every new budget is larger than the previous one. But to say this budget is smaller than the last is false. One reason the myth of a smaller budget exists is because some estimates of the size of the coming budget did not include all University of Wisconsin spending. Of course, to make an apples-to-apples comparison we need to include all the spending from the UW, as we have in the past.

I hope this clears up a few of the common budget myths.

Kathleen Vinehout, D-Alma, is a member of the state Senate