Editorial: Balanced budget requirement being bypassed

Leader-Telegram, Eau Claire, WI

The issue: Gov. Jim Doyle uses a veto to add to the budget $200 million in "other" revenue that doesn't exist.

Our view: Deferring tough but necessary decisions is irresponsible budgeting.

Gov. Jim Doyle and his fellow Democrats who control the state Legislature expressed pride that for the first time in decades they were able to get a budget passed and signed by the July 1 start of the new two-year budget period.

But an analysis of the final budget by the nonpartisan Wisconsin Taxpayers Alliance indicates that a shortcut to make that deadline left a $200 million hole in the budget that Doyle promises to close during the next two years by some unknown means.

Before lambasting Doyle and the Legislature for passing a half-baked budget, we must acknowledge the difficult task they faced. The three largest state tax sources were all down in 2008-09 compared with 2007-08, figures show. Corporate income taxes fell nearly 22 percent, individual income taxes were down 8 percent and state sales taxes dropped nearly 4 percent.

In response, the budget freezes nonunion state workers' pay and requires 16 unpaid days off during the next two years. State aid to schools and municipalities also was cut in response to the tax revenue decline.

That said, a budget with a $200 million hole is not balanced. According to the WTA, the Legislative Fiscal Bureau covered the budget shortfall by simply adding a line that says $100 million in "other" revenues will flow into the state during each of the next two years. How?

The WTA poses several questions in response to this maneuver.

"First, what prevents any legislature or governor from developing a budget deficit and then, to balance it, 'plugging' into the budget an unspecified promise of future cuts or transfers sufficient to produce an ending surplus?

"And, if the governor can promise $200 million in future lapses this year, why can't a future chief executive or legislature promise $500 million to cover a $500 deficit? Or $1 billion to avoid a $1 billion shortfall?"

Our federal government is on a collision course with financial catastrophe because our debt is growing faster than our economy, which is unsustainable. Our nation's debt is rising by about $5.7 million every minute. To put that in perspective, Congress borrows the aforementioned $200 million about every 35 minutes.

The difference is that the state is required by law to pass a balanced budget and maintain an emergency reserve. The federal government doesn't have to balance its budget. In fact, Congress and the president don't even have to try, and they clearly don't.

But Wisconsin can and should do better than moving closer to the national model. It should stop passing budgets with large gaps, structural deficits and accounting maneuvers that continually push today's problems onto the backs of tomorrow's taxpayers.

- Don Huebscher, editor

View original story here.