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Aramike · 03-15-11, 03:01 AM

Continuing on...

Eventually the Republicans decided to use the so-called "nuclear option", which was stripping all spending measures from the bill and passing it without a single Democrat present. This was a key miscalculation on the Democrats' part - they believed that the components regarding the pension and healthcare contributions would preserve the need for the supermajority under the fiscal bill clause in the state constitution. Unfortunately for them, said clause only requires the supermajority for appropriations (spending). Ergo, the vast majority of the bill remained intact, and the refinancing portion would be passed now that the Democrats had no further reason to continue their absense.

Furthermore, in a brutal miscalculation Milwaukee Mayor Tom Barrett, Governor Walker's opponent in the 2010 election, publically stated during a policy forum that he believed the bill should be broken up into separate parts. He believed that doing so would result in a vote against the union-related portions. I believe the Republicans were galvanized by this.

Okay, Moving On...

While Governor Walker's Budget Repair bill has stolen the headlines, most people are unaware of the true scope of why Walker deemed the steps taken within are necessary. Guaranteed to be FAR more controversial is Walker's 2011/2012 biennial budget proposal.

To lay down some background, I'm going to borderline editorialize again here, but if you don't agree with this concept, your math needs some work.

Wisconsin is facing a $3.3 BILLION shortfall in the next biennium. I'm going to lay some serious blame here. First, Governor Scott McCallum (R) (who entered office as a result of Gov. Tommy Thompson leaving to join President Bush's cabinet as Secretary of Health and Human Services) raiding the state's ongoing tobacco settlement fund to help balance the budget. Following that, however, Governor Jim Doyle (D) managed to balloon a $600 million deficit into a $6.6 BILLION deficit between 2002 and 2009 (bear in mind the fact that Wisconsin became the 4th highest taxed state in the process).

Doyle's mismanagement is well-documented. He routinely raided the Registration Fee trust (transportation fund) to the tune of millions. He cut sweetheart deals with heavy contributors (the Potowatami's, whom I believe run the state's largest casino, pay next to nothing to the state). There's more, but the details get boring.

However, in his most egregious act of fiscal irresponsibility, he diverted over $2 BILLION in one-time stimulus funds to the state's '09/10 biennium. Here's where we run into an old word-friend yet again: that is PURE structural deficit.

When you face a structural deficit, it's not as simple as cutting funding. Such deficits occur when you use money to create, grow, or even sustain ongoing programs. Government programs, by and large, are long term. That means these programs will maintain a cost beyond the structure of the current budget.

The problem doesn't arise until you pay for such costs without using renewable revenues. In other words, Doyle paid for $2.3 billion in spending using ONE TIME money. In the next biennium, that spending will still be there. The money, on the other hand, will not. That's the structural deficit.

Had Gov. Doyle made the cuts necessary to not require the stimulus influx, Gov. Walker would only be facing perhaps a hair over a $1B deficit, rather than three times that amount.

When such a large portion of state resources goes to NEGOTIATED contracts that have been paid for THROUGH structural deficit spending, that ultimately means that the structure requiring such spending needs to be changed. Hence the repair bill.

The trick here is simple: Municipalities are going to lose more than $1.5B in the upcoming biennial budget. That money needs to be made up. Either there can be mass layoffs (unacceptable in this employment climate), taxes could be raised (more unacceptable in the 4th highest taxed state as it is), or liabilities need to be reduced.

And that is the subject of my next post on the matter.

03-15-11, 03:01 AM	#64
Aramike Ocean Warrior Best of SUBSIM Chairman Join Date: Dec 2008 Location: Milwaukee, WI Posts: 3,207 Downloads: 59 Uploads: 0	WI Budget Battle Explained Pt. 2 Continuing on... Eventually the Republicans decided to use the so-called "nuclear option", which was stripping all spending measures from the bill and passing it without a single Democrat present. This was a key miscalculation on the Democrats' part - they believed that the components regarding the pension and healthcare contributions would preserve the need for the supermajority under the fiscal bill clause in the state constitution. Unfortunately for them, said clause only requires the supermajority for appropriations (spending). Ergo, the vast majority of the bill remained intact, and the refinancing portion would be passed now that the Democrats had no further reason to continue their absense. Furthermore, in a brutal miscalculation Milwaukee Mayor Tom Barrett, Governor Walker's opponent in the 2010 election, publically stated during a policy forum that he believed the bill should be broken up into separate parts. He believed that doing so would result in a vote against the union-related portions. I believe the Republicans were galvanized by this. Okay, Moving On... While Governor Walker's Budget Repair bill has stolen the headlines, most people are unaware of the true scope of why Walker deemed the steps taken within are necessary. Guaranteed to be FAR more controversial is Walker's 2011/2012 biennial budget proposal. To lay down some background, I'm going to borderline editorialize again here, but if you don't agree with this concept, your math needs some work. Wisconsin is facing a $3.3 BILLION shortfall in the next biennium. I'm going to lay some serious blame here. First, Governor Scott McCallum (R) (who entered office as a result of Gov. Tommy Thompson leaving to join President Bush's cabinet as Secretary of Health and Human Services) raiding the state's ongoing tobacco settlement fund to help balance the budget. Following that, however, Governor Jim Doyle (D) managed to balloon a $600 million deficit into a $6.6 BILLION deficit between 2002 and 2009 (bear in mind the fact that Wisconsin became the 4th highest taxed state in the process). Doyle's mismanagement is well-documented. He routinely raided the Registration Fee trust (transportation fund) to the tune of millions. He cut sweetheart deals with heavy contributors (the Potowatami's, whom I believe run the state's largest casino, pay next to nothing to the state). There's more, but the details get boring. However, in his most egregious act of fiscal irresponsibility, he diverted over $2 BILLION in one-time stimulus funds to the state's '09/10 biennium. Here's where we run into an old word-friend yet again: that is PURE structural deficit. When you face a structural deficit, it's not as simple as cutting funding. Such deficits occur when you use money to create, grow, or even sustain ongoing programs. Government programs, by and large, are long term. That means these programs will maintain a cost beyond the structure of the current budget. The problem doesn't arise until you pay for such costs without using renewable revenues. In other words, Doyle paid for $2.3 billion in spending using ONE TIME money. In the next biennium, that spending will still be there. The money, on the other hand, will not. That's the structural deficit. Had Gov. Doyle made the cuts necessary to not require the stimulus influx, Gov. Walker would only be facing perhaps a hair over a $1B deficit, rather than three times that amount. When such a large portion of state resources goes to NEGOTIATED contracts that have been paid for THROUGH structural deficit spending, that ultimately means that the structure requiring such spending needs to be changed. Hence the repair bill. The trick here is simple: Municipalities are going to lose more than $1.5B in the upcoming biennial budget. That money needs to be made up. Either there can be mass layoffs (unacceptable in this employment climate), taxes could be raised (more unacceptable in the 4th highest taxed state as it is), or liabilities need to be reduced. And that is the subject of my next post on the matter.