It’s helpful when discussing state finances to be able to share the observations of a Certified Public Accountant — in today’s case Rep. Dale Kooyenga (R–Brookfield), who has six observations:

1.) This budget which extends through June 30, 2015 is still projected to end with a healthy cash balance.  The rainy day fund is at an all time high.  The “structural deficit” is a state government concept and some states do not even calculate, or calculate using different methods.  In this state, LFB assume there are no growths in revenues or expenditures all the way through June 30, 2017.

Revenues tend to grow, and Walker’s team has proven they can manage the expense side of the budget.  Many folks (and even legislators) do not understand that we do not tell the Governor (executive branch) what they have to spend – we tell them the maximum they can spend.  This means the Governor’s team can find cost savings, and simply spend less than the maximum amounts the legislature stipulated. There are substantial areas expenses can be cut with a $30 Billion plus annual budget.  If you look at the audited state financial statements – the general fund had less spending in 2012 than 2011, and the 2013 general funding spending was lower than 2012 and 2011 even though the legislative budget was an increase in GPR spending.

2.)  The structural deficit is projecting revenue all the way to June 30, 2017 – a lot will happen between now and then – including the passage of a new budget.  No company would forecast a budget 3 years out and not assume any changes in revenues or expenses.

3.)  Some of the confusion, and forward projections, are affected by the fact we are returning a portion of the surplus to the taxpayers who put it there in the first place.  In the private sector, we would call this a return of equity – not an expense or lost revenue!  For example, if GE is predicting a year with zero net income, but still pays out $1 billion in dividends because they have excessive cash, their net income does not become a net loss of $1 billion, their income remains flat.  In Madison, the stakeholders do not view it that way, and they call a return of taxpayer dividends an expense. This is an important distinction in the private sector, but not understood in government because it is not in their best interest.

4.)  Wisconsin’s businesses and families budgets are what really matters.  Since we cut taxes, and the Governor adjusted the withholding tables, budgeting has become less burdensome for families and business.  Republicans made a conscious decision to make budgeting easier at the dinner table and main street – that is what really matters.  We all know the left, assisted by the media, wants to argue against tax cuts because they want to make it easier to keep your cash in Madison so they can spend it on growing government.

5.) The revenue projections going forward are not Wisconsin specific, they are instead based on national economic trends.  There is no doubt that lack of leadership in the White House has created domestic and international concerns which have national economic impacts.

6.)  Media bias and ignorance is driving the confusion.  I have never seen a Wisconsin paper headline the federal deficit despite Sen. Ron Johnson’s best efforts.  Those deficits are real.  Wisconsin is in good shape.  54% of voters think Wisconsin is headed in the right direction, compared to 25% of national voters who think the US is headed in the right direction.

This contrasts to the fiscal approach of the Doyle administration, which involved 2009-11 budget deficits of nine digits, structural deficits more than twice this one, a huge GAAP deficit (which is being reduced, but is still too large, “too large” being any number greater than 1), using federal stimulus funds, raiding of the Patients’ Compensation and transportation funds (the former of which was smacked down by the courts), denial that anything was wrong with state finances, and calls to raise taxes.

About which, Sen. Paul Farrow (R-Waukesha) observes:

“These projections by the Legislative Fiscal Bureau are not perfect calculations and should be treated as a learning opportunity.  It is time for Wisconsin residents to remember where we as a state have been in the past.

“I am surprised that Senators Shilling, Hansen, Lassa, Lehman, Miller, and Taylor; all of whom served on the 2009-10 Joint Finance Committee that kicked the fiscal can down the road, are now decrying these projected numbers as signs of impending doom.  It’s unfortunate that these legislators have forgotten that our charge is to continually analyze the state’s fiscal condition and make adjustments accordingly to our state’s expenses or revenues.

“I find it disingenuous for the same Democrats who drove our state into a truly staggering $3.6 billion deficit, and felt the only way to recover was by instituting the largest tax increase in our state’s history, are now unjustly portraying the work that Republicans have done to reduce the tax burden on all Wisconsinites.

“Rather than help work towards solutions to fix the deficit they created, Senate Democrats ran to Illinois and Assembly Democrats put on Orange Shirts and shook their fists. Now they are clamoring for answers when they have done nothing to find solutions and are using any “bad news” to portray a Wisconsin decline.

“Republicans on the other hand have passed two consecutive balanced budgets and have given the hardworking taxpayers of Wisconsin tax cuts and a sense of optimism.  We are a long way from experiencing a full economic recovery; it would be nice to get some help from the other side instead of having them work against Wisconsin’s successes.

The Walker administration has not been perfect on fiscal matters, but its approach is certainly better than what Doyle did or Mary Burke would do as governor. Democrats, as you know, believe all your money belongs to government.

To that end. the aforementioned Shilling — Sen. Jennifer Shilling (D–La Crosse) — issued a news release yesterday claiming the way to fix Walker’s alleged fiscal crisis was to increase the minimum wage (that is, increase unemployment by 40 percent) and to take the federal Medicaid money, because taking money from the unit of government $16 TRILLION in debt and therefore that likely to renege on its funding obligations is good fiscal policy.

As it is, for those who believe in smaller government (as in something fewer than our 3,120 units of government), fiscal shortfalls are not the worst thing. A lack of money allows the adults in the room to say no. It’s also helpful to remember that, back in the Act 10 debate, we learned that then a state employee cost Wisconsin taxpayers $79,000 a year. And state legislators make nearly $50,000 a year, which is nearly $50,000 a year too much. The worse thing, in fact, is when more money comes in than estimated. That’s when every fiscal want becomes a full-blown crisis demanding more money, and the taxpayer gets stuck with the expanding bill. (That is a disease that infects Democrats and Republicans, since they are part of the same party, the Incumbent Party.)

The Republican Party isn’t perfect on fiscal matters either. Except for part of 2012 between spasms of Recallarama, the GOP has controlled both houses of the Legislature, but has failed to move ahead on permanent, as in constitutional, limits on state and local government spending. Readers know that had government spending been limited to the inflation rate plus population growth, government in Wisconsin would be half the size it is now.

Constitutional amendments require passage of consecutive sessions of the Legislature before statewide vote. Had the 2011-12 and 2013-14 Legislatures done their job and approved that referendum, voters could be choosing permanent (or as permanent as is possible in politics) fiscal responsibility soon. That would mean elections would matter less, and legislators would be severely limited in wasting your hard-earned tax dollars.