Finally, No New Taxes

By James Wigderson
Special Guest Perspective for the MacIver Institute

In his 2003 State of the State address, then-Governor Jim Doyle said to the residents of Wisconsin, “We should not, we must not, and I will not raise taxes.”

Eight years later, we finally have a state budget that appears to be living up to those words.

When Doyle first ran for governor in 2002, he campaigned against a $3.2 billion structural deficit. When Doyle left office, he left a $3.3 billion structural deficit for his successor to solve.

For the last state budget under Doyle, the state faced an even larger structural deficit. Rather than make the necessary cuts to deal with the continuing structural deficits, Doyle and the legislature actually increased spending by $3.6 billion.

To pay for the increased spending, Doyle and the state legislature raised taxes by over $2 billion and allowed a local property tax increase of $1.5 billion. Even worse, the state budget used $3.4 billion of one-time federal “stimulus” money, including over $2 billion on existing programs.

Want debt? There was plenty of that in the last budget. Doyle and the legislature increased borrowing to  $3.58 billion. This is in addition to owing Minnesota $60 million for past due tax reciprocity payments, and owing the state medical malpractice compensation fund over $200 million because of illegal raids of that fund.

Raiding the state’s medical malpractice compensation fund was not the only budget raid under Doyle. Doyle and the legislature raided the state transportation fund for $1.3 billion during his time in office.

What a dramatic change in two years. The state budget that was sent to Governor Scott Walker Thursday night is a wholesale  reversal of the kind of budgeting under Doyle and the previous legislature.

Under the proposed budget, Wisconsin will actually have a budget surplus of $306 million. The current budget does it without a general tax increase, it freezes local municipal property taxes, and actually lowers taxes overall by $24 million.

Legislators and Walker actually tackle the state’s debt by lowering it nearly $2 billion. When the legislature was told that the state expected $636 million more in revenue than previously estimated, the legislature on a bipartisan vote paid off the more than $200 million owed to the medical malpractice compensation fund.

What the state budget does not do is raid the state transportation fund. Money for the state transportation fund was collected from the taxpayers in the form of gas taxes and registration fees with the reasonable expectation that such money would actually be used for transportation. Under the previous administration that was not the case. However, legislators and Walker again recognize not only the importance of the roads to commerce in this state, but also the importance of taxpayers trusting the state to use the money collected for the intended purpose.

On education reform, the legislature also took steps in a new direction toward restoring Wisconsin’s position as a leader in alternative educational opportunity. School choice will now be expanded to the Racine County for the first time. The enrollment caps were lifted for choice schools and for public charter schools, including the state’s online charter schools.

Already the impact of such responsible decisions is being felt. A recent survey by CEO Magazine has Wisconsin going from 41st in the nation in to the 24th most competitive state. A recent review of member attitudes by Wisconsin Manufacturers and Commerce showed 88 percent of them believed the state was headed in the right direction, while just a year ago only 10% said the state was headed in the right direction.

While there are still plenty of flaws in the current state budget, including the ridiculous use of the budget process to enact policy items like the changes in the craft brewing law, the budget that is now sitting on the governor’s desk shows that Wisconsin can live within its means without raising taxes. Instead of looking for new ways to squeeze more revenue out of individuals and businesses, the legislature worked to find more ways to squeeze public services out of a bloated state government.

For many years Wisconsin lived taxpayer paycheck to taxpayer paycheck hoping that the bill collectors could be kept at bay with a promise that the check was in the mail. Now Wisconsin is paying its bills, and doing so without threatening the state’s long term economic growth. That’s a welcome change indeed.

Wigderson is a veteran participant and observer of Wisconsin politics. He and his family live in Waukesha County and his commentary can also be found at Wigderson Library & Pub.