New State Budget Numbers are a Reality Check

 By State Senator Julie Lassa

On January 19, Governor Walker gave his State of the State speech.  Declaring that “the Wisconsin comeback is real,” he lauded his budget surplus and laid out plans for new investments in higher education grants, broadband expansion, and other initiatives.  Two days later, the non-partisan Legislative Fiscal Bureau gave its report on the condition of the state’s general fund, and it became painfully clear that the Governor would have to rethink even these modest plans.

The Fiscal Bureau reported that the balance in the current biennial budget would drop by nearly $100 million, from a previous estimate of $166 million to just $70 million.  The principal cause for this precipitous drop is an estimated decrease of $158 million in tax revenues.  This shortfall causes me great concern for a number of reasons.

To begin with, it is one more indicator that Wisconsin’s economy continues to struggle.  Tax revenues are falling because people and businesses don’t feel safe making new purchases and investments.  Wisconsin has also lagged the national average in new job creation throughout nearly all of Governor Walker’s administration. Last year was the worst year for mass layoff notices in Wisconsin since the peak of the Great Recession in 2010.  According to a report from the Pew Charitable Trust, people in Wisconsin are falling out of the middle class faster than any other state in the nation.  And average folks are feeling the pinch: in the latest WPR/St. Norbert College Survey, 61 percent of Wisconsinites said that our state’s economy was either not so good or poor.

Wisconsin’s situation looks especially discouraging when we compare it to our neighbors in Minnesota.  Thanks to wise investments in education, infrastructure and economic development, Minnesota has a booming economy and a state budget surplus of nearly $2 billion.  Wisconsin has followed the opposite course, so it’s not surprising that our economy has experienced very different results.

Despite the Governor’s enthusiasm, it’s clear that his policies of cutting our public schools and universities, allowing our roads to crumble, and neglecting our state’s investments in job creation in favor of giving tax breaks to big corporations simply haven’t worked.   As their poll numbers continue to decline and the legislative session nears its end, Governor Walker and legislative Republicans have put forward a number of piecemeal proposals in hopes of convincing voters they really care about issues like job creation and college affordability.

Yet even these modest proposals, that serve only to nibble at the edges of these very real challenges, are threatened by the budget shortfall.  It’s difficult to see how the state can make significant new investments in higher education grants, expanding job training programs, or creating a new small business loan program when declining revenues make a budget repair bill a real possibility.   The economic results of Republican legislative priorities over the last five years have taken their toll, and now the Governor and his allies have few options for repairing the damage.

Democrats have long proposed having smarter tax policies and optimizing the return of our federal tax dollars so we can invest in strengthening our state. We have introduced proposals that would deal with our workforce crisis by reinvesting in our schools and addressing our teacher shortage.  We put forward ideas to help Wisconsin’s struggling middle class families be more financially secure and balance the demands of life and work.  And Democrats have advanced legislation that would spark the new industries of tomorrow and help Wisconsin’s economy grow.   These are the priorities we need to pursue if we ever hope for a turnaround in Wisconsin’s long economic malaise.