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| 5/15/2009 10:34:00 AM | Email this article • Print this article | Crisis? What crisis? Doyle, Dems poised for new spending
State’s per capita deficit more than twice that of California
A news analysis
Despite rising unemployment, sliding tax collections, and a budget deficit described as the nation's fourth worst in absolute dollars, Gov. Jim Doyle and his Democratic cohorts in the Legislature are continuing to push new spending programs and to resist cost reductions in others, even after the governor's latest budget foray.
With a new assessment that state tax revenues will fall $1.6 billion short of previous estimates during the next biennium, the state's deficit is now projected to reach $6.6 billion by the end of the 2011 fiscal year.
That makes it perhaps the nation's worst in per capita measurement - the amount of the deficit accruing to each citizen - though not in absolute dollars.
That latter honor belongs to California, which could be awash in $21 billion of red ink. However, putting the number in perspective - if it goes that high - California's shortfall represents a debt of only $511 on the backs of each of that state's 36.75 million residents, while, in Wisconsin, the debt load of $6.5 billion for each of the state's 5.6 million residents would be more than twice that: $1,100.
Even so, the Doyle administration is poised to proceed with new spending programs that the governor announced in his original budget message earlier this year.
Back in February, when the deficit through mid-2011 was estimated to be "only" $5.9 billion, Doyle proposed an ambitious agenda that would have increased spending by 7.7 percent and added 1,011 new state workers. The spending increase figure was 9 percent when planned borrowing was included.
The governor anticipated raising taxes and fees by $2.9 billion over the biennium to pay for it all, along with one-time federal stimulus revenues of about $3 billion, and a 3.2-percent increase in property taxes, caused in part, according to the Legislative Fiscal Bureau, by state aid reductions in an array of local government programs.
The prospect of free federal money and not-so-free taxes, mostly on the state's business community, apparently kept the governor in a giving Christmas mood more than a month after the holiday. In his Jan. 29 State of the Union speech, the governor said he was creating opportunity in challenging times.
In Santa's bag
His actual budget turned out to be even more expansive than his State of the Union rhetoric. In his speech, Doyle said he could not promise to not cut Medicaid, but when he presented his budget a week later, he called for vastly higher levels of spending for the program.
In fact, his original budget would have increased funding for Medicaid and BadgerCare Plus by $2 billion - an increase of $915.9 million in 2010 and $1.1 billion in 2011. Of that, $176 million would have come from taxpayer dollars.
Using federal stimulus funds and revenues from the proposed hospital assessment, Doyle would have specifically created new programs to expand BadgerCare Plus health coverage to so-called Childless Adults aged 19-64 who earn less than 200 percent of the federal poverty level and to extend the state's Family Planning waiver to boys and men in the same income bracket, a move that would qualify boys as young as 15 and men as old as 44 for state-paid condoms and other contraceptives, not to mention vasectomies.
The price tag for the waiver? About $1.4 million.
Not to worry, the governor argued. According to his math, the family planning coverage would save $280,300 over the biennium in Medicaid and BadgerCare programs, presumably by reducing the number of Medicaid-funded births.
Outside of the Medicaid realm, the governor was just getting started. Most of the spending initiatives went unnoticed, both in the media and among Republicans, who were training their salvos on the governor's proposed tax and fee increases.
But one senator, Joe Leibham (R-Sheboygan), did bother to look at the fine print. What he found was a substantial flow of new cash.
In education, for example, the proposed budget would have increased Department of Public Instruction spending to $13.3 billion, an increase of $315 million over the 2009 base. For elementary and secondary education, Doyle's budget would have increased funding by $426 million over the biennium.
Over at the Department of Transportation, the coffers would be growing by $600 million, according to the Department of Administration, funded in part by federal stimulus dollars and in part by a tax on oil company profits, which critics argue will be passed along to consumers.
Doyle also proposed the creation of regional transportation authorities with their own power to levy sales taxes within their service regions, ostensibly to fund mass transit.
When he was done playing Santa at DOT, Doyle motored on over to Wisconsin Works, where he promised W-2 parents sitting in his electoral lap that he would spend $2 million more in the next biennium to extend the length of time they were allowed to stay at home with a newborn from 12 to 26 weeks and continue to receive benefits.
Jingle bells
Meanwhile, the state continues to pay off its Stewardship bonds - and consequent obligations to local governments - to the tune of about $71 million this coming year and to add to the total each year. Doyle's new budget not only left the land-buying program intact but offered up a new plan to borrow $12 million to purchase permanent conservation easements to protect farmland from development, as well as $420,000 a year beginning in 2010 for counties to update farmland preservation plans.
In addition, the governor's budget would have added $308,500 a year for the DNR to construct new campsite facilities in state parks, and another $128,000 a year for extra warden overtime for increased snowmobile patrols and educational efforts.
Doyle's budget sleigh also made its way a-jingling to the jailhouse. While much was being made of the governor's attempt to save money at the Department of Corrections by releasing some inmates early, what almost went unnoticed was that the department's budget would have increased by $64 million, or 5 percent.
Turns out the early release of inmates came with a $6.5 million price tag on the other end - along with 18 new full-time employees - for a community reentry program "for offender risk assessment, to better manage purchase of services dollars, research and measure programs, and maintain dual-diagnosis rehabilitation programming."
And the list didn't stop there. Indeed, Doyle checked it twice, to see just who was naughty and who was nice.
Among the naughty, apparently, were the folks running the Milwaukee school choice program. According to the governor, Milwaukee's choice schools needed more "accountability" and "transparency" - meaning new personnel in the state bureaucracy to monitor compliance with state requirements.
His budget also increased state aid for the arts by 3.7 percent, or $133,000 over the biennium, and set aside $250,000 a year to restart a longstanding state program to help American Indian tribes save their endangered languages.
All totaled, the governor's February budget proposal would have increased spending by $62.7 billion, or 7.2 percent over the current base. When state borrowing was included in the total, the budget plan increased total state spending a full nine percent over the final 2007-09 number.
Perhaps most stunning of all in the February budget proposal was Doyle's call for the addition of new state employees.
This year he proposed adding 208 general purpose revenue (tax-funded) jobs, bringing the total number of state jobs to 69,038 full-time equivalent employees. That's 1,011 jobs more than the Legislature approved in the 2007 budget bill, Act 20.
When he ran for governor, Doyle promised to cut 10,000 state jobs from a stable 71,040 full-time equivalent employees at the time. Under his proposed new budget, he would have reduced the state work force by 2,002, or a reduction of 2.8 percent in the last six years.
New estimates
Of course, things took a turn for the worse this month when the Doyle administration realized its revenue collections were far below projections, so much so that the new estimated deficit of $6.6 billion was announced.
That finally caused Doyle to turn his attention to spending cuts within the state bureaucracy, in particular its personnel.
Under the new plan, non-emergency state employees would be required to take eight days of unpaid leave in each of the next two years, amounting to a 3 percent pay cut. Prison guards and those who care for the disabled would be exempt.
The governor, with legislative approval, would also halt scheduled 2 percent pay increases for up to 10,000 nonunion state workers, and would ask union workers to renegotiate contracts to achieve the same result.
If the unions refuse, the governor said he would lay off 400 workers during the biennium.
Finally, Doyle announced a new overall 5 percent reduction in unspecified state spending, which the governor said would force another 700 layoffs, as well as deeper reductions in aid to public schools and local government and reduced spending on health care.
Specifically, Doyle told the Associated Press he would likely put a hold on his plan to expand BadgerCare Plus coverage for childless adults.
Republican leaders in the Legislature welcomed the governor's latest moves, but cautioned that most of the new spending programs proposed in February were still intact, at least as of this week.
"While cost-saving measures are now being enacted, this should have been a part of the discussion months ago when Gov. Doyle was expanding the budget and creating new programs," Senate Republican leader Scott Fitzgerald (R-Juneau) said. "Democrats should have been prioritizing families' budgets over the government's wish list."
How Doyle plans to pay the state's bills is worrying other experts and lawmakers. One tactic has been to raid segregated funds, such as the transportation and recycling funds, and use those earmarked dollars for such things as school aids. Because those dollars no longer flow from the general fund, the government appears to be spending less than it is.
More critical is the use of one-time federal stimulus dollars to pay for ongoing programs.
Christian Schneider of the Wisconsin Policy Research Institute calls that a shell game.
"Doyle cut over $500 million in general funds out of school aids and plugged in an equal amount in federal 'stimulus' funds to cover the aids - federal funds which may very well not be available in the next budget," Schneider wrote on the WPRI website. "On top of that, he funds virtually the entire school aid increase with one-time federal money. When 2011 rolls around, school aids could be over $1 billion in the hole and fighting tooth and nail with other state programs for funding."
Finally, critics point to a long list of non-fiscal policy items in the budget proposal they say should be debated on their own merits.
Some of those in fact could have serious fiscal ramifications for school districts and local governments, most particularly the proposed repeal of the QEO, commonly known as the teacher's salary cap, especially if revenue caps on school spending are kept in place.
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