Posted on 02/19/2011 3:01:25 PM PST by Qbert
It has taken hold with conviction: the idea that Wisconsin Gov. Scott Walker ginned up a phony budget crisis to justify his bold bid to strip state employees of most bargaining rights and cut their benefits.
A volley of e-mails, blog posts and inquiries to reporters followed a Madison Capital Times editorial on Feb. 16, 2011, that said no state budget deficit exists for 2010-’11 -- or if it does, it’s the fault of Walker and the Republicans in the Legislature.
Liberal MSNBC talk show host Rachel Maddow joined in Feb. 17, accusing Walker of manipulating the situation for political gain.
"Despite what you may have heard about Wisconsin’s finances, the state is on track to have a budget surplus this year," she said. "I am not kidding."
She added a kicker that is also making the rounds: Walker and fellow Republicans in the Legislature this year gave away $140 million in business tax breaks -- so if there is a deficit projected of $137 million, they created it.
Maddow and others making the claim all cite the same source for their information -- a Jan. 31, 2011 memo prepared by Robert Lang, the director of the nonpartisan Legislative Fiscal Bureau.
It includes this line: "Our analysis indicates a general fund gross balance of $121.4 million and a net balance of $56.4 million."
We were curious about claims of a surplus based on the fiscal bureau memo.
In writing it when it was released, reporters from the Journal Sentinel and Associated Press had put the shortfall at between $78 million and $340 million. That’s the projection for the end of the fiscal year, June 30, 2011.
Walker himself has settled on $137 million as the deficit figure, a number reporters have adopted as shorthand.
We re-read the fiscal bureau memo, talked to Lang, consulted reporter Jason Stein of the Journal Sentinel’s Madison Bureau, read various news accounts and examined the issue in detail.
Our conclusion: Maddow and the others are wrong.
There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it.
More on that second point in a bit.
The confusion, it appears, stems from a section in Lang’s memo that -- read on its own -- does project a $121 million surplus in the state’s general fund as of June 30, 2011.
But the remainder of the routine memo -- consider it the fine print -- outlines $258 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy ($174 million alone), the public defender’s office and corrections. Additionally, the state owes Minnesota $58.7 million under a discontinued tax reciprocity deal.
The result, by our math and Lang’s, is the $137 million shortfall.
It would be closer to the $340 million figure if the figure included the $200 million owed to the state’s patient compensation fund, a debt courts have declared resulted from an illegal raid on the fund under former Gov. Jim Doyle.
A court ruling is pending in that matter, so the money might not have to be transferred until next budget year.
To be sure, the projected shortfall is a modest one by the standards of the last decade, which saw a $600 million repair bill one year as the economy and national tax collections slumped.
But ignoring it would have meant turning away eligible Medicaid clients, which was not an option, Lang said.
This same situation has happened in the past, including during the tenure of Doyle, a Democrat. In January 2005, a fiscal bureau memo showed a similar surplus, but lawmakers approved a major fix of a Medicaid shortfall that would have eaten up that projected surplus.
Reporters who cover the Capitol are used to doing the math to come up with the bottom-line surplus or deficit, but average readers are not. (The Journal Sentinel’s Stein addressed these and other budget questions in a follow-up story.)
So why does Lang write his biennial memo in a way that invites confusion?
Lang, a veteran and respected civil servant working in a nonpartisan job, told us he does not want to presume what legislative or other action will be taken to address the potential shortfalls he lists.
Admittedly, the approach this time created the opportunity for a snappy -- and powerful -- political attack.
But it is an inaccurate one.
Meanwhile, what about Maddow’s claim -- also repeated across the liberal blogosphere -- that Walker’s tax-cut bills approved in January are responsible for the $137 million deficit?
Lang’s fiscal bureau report and news accounts addressed that issue as well.
The tax cuts will cost the state a projected $140 million in tax revenue -- but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.
Here’s the bottom line:
There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion. Walker’s tax cuts will boost the size of the projected deficit in the next budget, but they’re not part of this problem and did not create it.
We rate Maddow’s take False.
Between the revenues generated by Cold Fusion and our Martian Colony, I think Wisconsin will be fine.
is she a man??????
lol
she has even fewer viewers than olberdork did!
ROFL
It only matters because when she says anything all the brain dead Obamazombies accept it as God-given truth and start parroting it all over the place.
Does it really matter if the state has a surplus?
After all, it’s now more than clear that the LAST THING the school teachers in Wisconsin care about are the ‘children’. So it’s more than obvious, at this point, these these unions MUST be broken up. I could care less as to the financial situation of the state.
I like the way you think!
bull...show me the math.
Let’s say this is true. Let’s say there is a surplus. So does that mean we should spend it like drunken sailors? Don’t these people ever save anything?
So this argument, even if accurate, wouldn’t convince me to side with the eduliars.
I’m sure Madcow will correct himself at his first opportunity!
Those nasty businesses. Who needs em anyway? Businesses just steal from workin folks...
(Hopefully I don't need to explain the satirical nature of my post. I'm just trying to think and speak like a Democrat or union thug. And yes they do say “workin” with no g)
“Does it really matter if the state has a surplus?”
Nope. In addition to what you said, even if they had a surplus, it’s still a red herring when you have that much debt.
“Let’s say this is true. Let’s say there is a surplus. So does that mean we should spend it like drunken sailors? Don’t these people ever save anything?”
Exactly. It would be like if Obozo channeled his inner Centrist (cough, cough) and somehow came up with a surplus for this year. It still doesn’t change the fact that we have 14 Trillion in debt to worry about.
He spewed the same data, and was an ass to callers who had the opposing view.
Glad to see this debunked.
However, Gov. Walker says the state is $3.6(?) Billion in the hole. What is that number from?
Rachel often gets his facts wrong.
I read that memo. I believe it didn’t address structural debt that Wisconsin has. In 2009 that was $2 billion. For 2011 it was going to be $2.5 billion.
But then again, Shep Smith is to honest journalism what Rachel Maddow is to feminine pulchritude.
“Wisconsin faces a budget shortfall of $137 million for the current FY2011 and the prospect of a $3.6 billion hole in the coming two-year budget.[1] Gov. Scott Walker proposed budget cuts to balance the state’s budget, and a bill related to collective bargaining by unions triggered days of protests in the state capitol.[1]
Wisconsin has a total state debt of $17,971,519,547 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[2]”
http://sunshinereview.org/index.php/Wisconsin_state_budget
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