About the state budget

Right Wisconsin asked Wisconsin conservatives (and apparently I am one) their thoughts on the 2013–15 state budget, set to be signed by Gov. Scott Walker Sunday.

I wouldn’t call this a conservative budget, but it’s certainly a more conservative budget than Democrats would enact.

What kind of budget would Democrats enact? The last one Democrats got to enact was the trainwreck that was the 2009–11 budget, which featured a $2.2 billion tax increase, and yet had nine- and 10-digit deficits that Walker inherited when he took office in 2011. (Strange, isn’t it, that Democrats aren’t defending that 2009–11 budget.)

According to the MacIver Institute, Democrats have learned nothing from that:

Senate Democrats proposed amendments that would have increased spending $1.64 billion and increased taxes $646 million last week on the Senate floor, according to an analysis of their more than 50 introduced amendments completed by the MacIver Institute. …

One amendment was a direct attack on the reforms set in place by Act 10 – reforms that have saved the state more than $2 billion – by essentially repealing the law. The provision would have restored collective bargaining rights to all state and local employees, removed the requirements that public unions recertify annually, and reinstated the automatic deductions of union dues from state employee paychecks.

The amendment would also have required state agencies to pay a minimum of four percent of their employees’ earnings to the Wisconsin Retirement System, which comes out to $312 million.

Another Democrat amendment would have deleted the $648 million tax cut and funneled $640 million of the money into increased funding for K-12 public schools. This $640 million dollar increase would have been in addition to the Republican plan that increased funding by $416 million.

Several of the Senate Democrats’ amendments dealt with Governor Scott Walker’s plan to reject the Medicaid expansion. Senate Amendment 13, authored by Sen. Kathleen Vinehout (D-Alma), proposed that Wisconsin accept the federal dollars to expand Medicaid and increase funding for treatment of individuals that abuse drugs and alcohol. The amendment would have increased spending by nearly $477 million.

In addition to massive spending increases, the Democrats’ amendments would have increased taxes by up to $646 million. They introduced amendments that would have deleted the Republican income tax cut of $648 million and removed the $30 million private school tuition tax deduction from the budget.

Democrats also attempted to restore Stewardship bonding, which was reduced by JFC. That provision would have increased borrowing by $63.5 million so the state could purchase private property.

The tax cut is not even half the size of James Doyle’s tax increase, but a Democratic budget would have had no tax cuts at all. How can I make that kind of blanket statement? Because I talked to three of them during a statewide tour of Democrats opposed to Walker’s initial budget. I asked one, a state representative, about a couple of funding questions, one of which had to do with transportation funding. The representative replied that “We need more revenue.” Nothing about prioritizing, or cutting elsewhere to spend more in one place, or any regard at all for the taxpayer. The only justification for increased tax collections is from more money in people’s pockets from a growing economy.

The expansion of school choice will have more long-term effect than people think it will, if for no other reason than the fact that government programs are extraordinarily difficult to kill, particularly popular ones. (I predict statewide school choice will be popular among parents, one of the only two groups that count.) The budget includes too much debt and too much carryover spending to the next budget cycle, thus the structural deficit. The reason for the excessive debt and structural deficit is because Republicans are politicians, just like Democrats are. That is why taxpayers need to be protected from politicians through constitutional limits on taxes and spending. (State and local government is approximately TWICE the size it should be given inflation and population growth over the past 35 years.)

Assuming that it’s not possible to cut state spending in half: I have yet to see a reasonable explanation of why the bail bondsman provision is in the budget. I think the provision on the Wisconsin Center for Investigative Journalism looks like political revenge on an organization reporting on those in power (which now are Republicans). Neither belongs in the budget. Policy items don’t belong in the budget, but for Democrats to complain about policy items in a state budget when state budgets they authored were larded up with policy items is hypocritical.

Overall, the budget still spends too much (including every cent spent on the Knowles–Nelson Stewardship Program),  taxes too much (the correct tax cut is the same size as Doyle’s tax increase) and borrows too much (see Stewardship Program). And that gets to the crux of the budget problem, which is that legislators of any party are not prevented from spending and taxing as much as they like, thanks to the absence of budget and taxation limits in the state Constitution. That’s not a budget item, but if you want actually conservative budgets, you can’t just vote for them; you have to prevent them from growing larger than is justified by inflation and population growth.

The MacIver Institute adds other ways to improve the budget:

10. Delete Pork Projects

When will politicians learn? Taxpayers are sick of their hard-earned tax dollars going to fund needless and wasteful pork projects. While the politicians may think they have gained the temporary love or support of their local Mayor, all they have really done by pursuing pork projects is hurt our children and our grandchildren who will be forced to pay for their reckless spending habits for years to come. The complete list of pork found in the 2013-2015 budget is too long to include here …

9. End the Stewardship Program

As a free market think tank, we find it hard to swallow the very idea of government purchasing private land just so it cannot be put to productive use in the economy and we have long been a critic of Wisconsin’s Knowles-Nelson Stewardship Program. Before the Finance Committee made a modest cut to the program, debt service payments were scheduled to total $91.8 million in ’14 and $94.6 million in ’15. Almost $100 million a year for state government to needlessly collect and hoard land! …

8. Reduce Bonding

Speaking of stewardship borrowing, let’s look for ways to reduce all forms of bonding in the budget. The more we are in debt, the worse off we are as a state. The veto pen is a great tool to reduce the state’s borrowing costs and give taxpayers some relief. …

7. Reduce Spending Everywhere

The 2013-2015 budget as amended increases general fund spending by three percent compared to the last budget. While the majority of the increased spending is attributable to higher costs of healthcare for the poor, there is just too much new spending in this budget.

Like the $2.2 million to replace older state vehicles with 80 NEW vehicles. Guess the 1,500 vehicles we already have are just not getting the job done. 1,500 vehicles? No wonder they call this the Central Fleet.

Or the $500,000 for the creation of regional intergovernmental affairs office director positions “to conduct public outreach and promote coordination between agencies and authorities.” Four new positions to coordinate the many different and increasingly complex layers of government? Isn’t that what every other state bureaucrat already does?

There is the $8.2 million in additional spending added by Joint Finance to increase walleye production at various state fish hatcheries and the directive that DOT erect two signs for the Shrine of Our Lady of Good Help.

Divine intervention to find the shrine would be less expensive and, some would argue, much more effective.

Even though it is not new spending, the $1 million dollars we spend every year on the “Diesel Truck Idling Reduction Program” is not an essential function of state government and unnecessary spending. Why state government needs to provide “financial assistance to eligible Wisconsin freight motor carriers to purchase and install idling reduction technology” is beyond us. …

5. Restore Performance-Based Budgeting

One of the Governor’s most important but least-noticed reforms that he introduced was his attempt to move state government to a performance-based budgeting model. Right now, taxpayers are scammed by the base-year doubled budgeting model where a bureaucrat looks at last year’s budget, adds in three to five percent more spending without justification or thought and calls that the bare-minimum base budget that cannot under any circumstances be “cut.” Governor Walker proposed moving more of state government to real-world budgeting.

To address the skills gap in our labor force, the Governor was attempting to “incentivize Wisconsin technical colleges to address workforce needs and improve student value” by tying a portion of state funding to a set of metrics that focus on job placement and programs in high-demand fields. By 2020, the Governor proposed that 100% of funding for technical schools be tied to job-placement metrics. Fancy that, a state agency funded based on a set of definable outcomes tied to economic progress. But, of course, the Finance Committee had to snatch defeat from the jaws of victory by capping the technical college system performance-based funding at 30 percent. Maybe with a stroke of the pen, we could get closer to the original proposal.

The Governor’s attempt to introduce performance-based budgeting to our K-12 schools died an even quicker death. The Governor’s proposal to use $50 million for school performance incentive grants tied to the new school report cards was met with immediate opposition from State Superintendent Tony Evers and school officials across the state. We should not be surprised that the bureaucrats – the same bureaucrats who stood to face tough questions from irate parents when their beloved school, where every child was above average, fared poorly on the new report card – would oppose performance-based funding.

What was truly surprising was how many members of both parties quickly caved to their local school officials, wishing to buy peace in their next campaign instead of holding Wisconsin’s education system accountable. To borrow a phrase from our friends on the left, what about our children? I guess we care more that the highly-paid, slick talking administrator back home is happy. Ineffective, but happy.

4. Reduce the Amount of State Employees

The Joint Committee on Finance is to be congratulated on this one for making some progress on this problem. The Governor originally proposed adding 710 new state employees to the payroll. Finance actually cut the number of state employees in the budget bill by 730, for a net reduction of 20 compared to the last budget.

But more can be done. According to Department of Administration records, there were 37,037 state employees in 2012, up from 36,342 in 2011 (UW employees, as noted above, are counted separately from state employees). Over 800 state employees made more than $100,000 in 2012. Governor Walker’s salary, the CEO of our state, did not even crack the top 150.

Everyone is doing more with less these days. Technology allows us to be more efficient in everything we do. Gone are the days in government when, in order to accomplish more, you automatically needed more government staff. We need a hard cap on the total number of state employees for three years so that taxpayers can continue to realize the savings of Act 10 and the difficult decisions made in the last budget. Otherwise, “government hiring creep” will persistently eat away at our wallets.

Matt Batzel of American Majority Action is disappointed:

This is not a conservative budget in its current form. The budget spends and borrows too much at a time when Wisconsin needs fiscal discipline.  But those aren’t the only issues, as it increases earmarks, limits school choice expansion, allows bail bondsmen, begins the collection of DNA at time of arrest, and “pauses” common core education standards in a way that really doesn’t address the problems with federal mandated educational standards. There certainly are some conservative aspects with a sizable tax cut, Medicaid reform, and a UW system tuition freeze. But the total amount of increased spending and borrowing prevent me from calling it an overall conservative budget.

Former Rep. Michelle Litjens (R–Oshkosh) was in the Legislature only one term (which included being covered by the spittle from Rep. Gordon Hintz (D–Oshkosh),  who informed her, “You’re fucking dead!”, for which Hintz never sufficiently apologized), but Litjens was in the Legislature long enough to find out how things work:

This certainly isn’t a perfect budget. If Wisconsin wasn’t so politically purple, legislators should have drastically reduced the size of government, programs and spending. Instead, accepting our political reality, this is a much better budget than what the democrats passed in 2009. We aren’t borrowing money from the transportation or patient compensation fund or raising taxes by $5 billion and leaving a deficit of $3.6 billion. The fact that this is a honest balanced budget with $650 million in tax cuts. In comparison to 4 years ago, this is a very conservative budget.

“In comparison to four years ago” is another way of saying “more conservative,” if not “conservative.”

One response to “About the state budget”

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    The Presteblog | Walker vs. libertarians

    […] that Libertarians and libertarians have views about the 2013–15 state budget similar to, well, mine, as reported by the Wisconsin […]

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