What a mess.
Wisconsin's last budget increased spending by $3.6 billion.
Wisconsin's last budget included more than $2 billion in new taxes and increased bonding to $3.58 billion.
Wisconsin's last budget left the door open for $1.5 billion in local property tax hikes.
Taxpayers are facing a structural deficit of $3 billion.
What did that budget get us?
- 1 in 8 Wisconsinites are on food stamps.
- Unemployment remains high and Wisconsin creates new government employees as the manufacturing sector shrinks.
- The private sector in Wisconsin lost nearly 10,000 jobs in one month alone this year.
- Our economy is expected to reach overall pre-recession employment levels no sooner than 2013.
- Wage earners with more than a billion dollars in income have left the state in recent years.
- Per capita income in Wisconsin is nearly $2,400 less than the national average, according to the most recent figures.
- Wisconsin’s business tax climate remains among nation’s worst.
- Forbes ranks Wisconsin as the 8th worst state for business.
- Wisconsin’s loans from the feds place the state as one of the largest Unemployment Reserve debtors in the country.
- Wisconsin’s General Fund balance is now $265 million below estimates.
How to Get Our State’s Finances Back on Track
Wisconsin is at a crossroads. Wisconsin government simply is too large. It spends too much and tries to do too much. Moreover the process by which our state budget is crafted is fundamentally flawed and facilitates fiscal malpractice. Now is the time to make the necessary changes in both the process and the product. These principles should serve as a guide for the new Governor and new legislature who have an historic opportunity and obligation to, quite frankly, fix this mess. We understand that the recklessness of the Doyle Administration and previous legislatures have left our state finances in such disarray that it will take time to repair them. However, it is imperative that the reclamation process begin immediately.
The MacIver Principles to Guide Wisconsin's Budget
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Spending must be restrained
The next biennial budget should spend less, tax less and bond less than the current budget, period.
Immediately freeze state spending and hiring
Do not wait until the next State Budget to begin to restore fiscal sanity. Until the newly elected Governor and the next Legislature decide what Wisconsin’s spending priorities are, all nonessential spending should be put on hold. Governor Doyle’s secret deal he signed the weekend before the election to obligate taxpayers to build the $810 million not-so-high-speed rail line, a luxury we simply cannot afford during these harsh economic times, should be immediately rescinded. The DNR’s request currently before the Joint Finance Committee to spend $7.9 million for land purchases should be objected to so that it can be considered as part of the larger 2011 - 2013 budget discussion next year. It is just common sense that until we have a plan to get Wisconsin out of debt and back on the road to recovery, new government spending should be put on hold.
Employ honest budgeting
Let’s start over and build a budget from the ground up, using zero-based budgeting. No more cost-to-continue budgeting (take last year’s budget, add in 3-5% more spending without justification or thought) that naturally leads to bigger government. Every two years, state agencies should be forced to prove that each program is vital to the well-being of Wisconsin's citizens and is operating effectively. The creation of new segregated funds should be prohibited, and existing segregated funds should not be raided for uses other than those for which they were intended.
Prioritize needs over wants
State government must only take on those functions that cannot be accomplished by an individual or any other entity. Now is the time to rethink the role and scope of government.
Stop being a social services magnet
Even if stories of day care providers scamming the system by collecting taxpayers’ cash for caring for imaginary kids didn’t make headlines, this area would be ripe for reform. We must aggressively punish those who abuse the good graces of Wisconsin's taxpayers. Further, eligibility for our state’s entitlement programs should be scaled back to where they are no more generous than the federal requirements and should include time limits/lifetime maximums where possible.
Pursue privatization when cost-effective
The costs of providing compensation and benefits for public employees and retirees are a ticking fiscal time bomb. We can no longer afford to pay for state employees to provide janitorial services, food service and a whole host of jobs that the private sector could provide at a better value. In many cases the private sector can deliver cost savings, innovation and exercise the ability to adapt to meet changing needs in the way unionized public employees cannot.
Demand equal treatment for all
The days of budget pork, carve outs or tax incentives for a select few should end. The tax code should be simplified, not re-favoritized. We don’t want to see any earmarks in the next State Budget, which are added solely to secure enough votes for the plan’s passage. No more garbage cans for Wrightstown or bonding for opera houses in Oshkosh.
Scale back the taxing authorities
Consolidation should be incentivized and non-elected boards should be stripped of their ability to tax. The best government is that which is closest to its citizens.
Eliminate unfunded mandates
If a level of government determines that a spending program is beneficial to all of its citizens, that level of government should pay for the entire cost of the program. No more passing the buck down the line. It’s time to empower a Mandate Review Commission, which includes the public and the private sector, to determine the scope and costs of all mandates imposed on local units of government by the state.
Conduct a bureaucratic purge
While the legislature passes new laws, the regulations that guide their implementation often exceed legislative intent. To combat this, every single current administrative rule should sunset by years end and require re-authorization. Any new rules promulgated from now on should be accompanied by an honest cost-benefit analysis and require reauthorization every three years.
No more secret budget deals. Once submitted by the Governor, the Legislature should address the plan and make any modifications in public, in the light of day. Every amendment should have an author who is willing to stand behind the proposal and defend its inclusion in the state budget.