For the past few weeks, state legislators have gone to bed with visions of their version of the state budget dancing in their heads. Taxpayers, school districts and the University of Wisconsin System slept with dread, as they worried that hopes for a budget before Christmas were dead. But this weekend all woke to a compromise deal instead. And if this budget passes, rest assured that Wisconsin’s bottom line will continue to be red. For this weekend’s compromise proposal first represents what is best for legislators, and second what is best for Wisconsin.
In 2005, a generation of bad budgeting made Wisconsin the state with the largest deficit in the Union when expressed as a proportion of population, according to the Taxpayers Alliance. In 2007, a divided Legislature has made Wisconsin the only state in the nation without a budget. It seems that, when it comes to budgeting, Wisconsin just can’t get its act together. It will take more than this year’s budget to fix the budgetary ailments that plague Wisconsin, but our Legislature’s behavior continues to exemplify the “Wisconsin Method” when it comes to state budgets: we’ll fix it later.
In all of this budgetary excitement, someone needs to point out that this weekend’s compromise is an exercise in increased spending that is incommensurate with taxes. But I suppose that’s just the Wisconsin Way.
Compromise No. 1 was Governor Doyle’s ill-conceived and deceptively packaged oil company tax. This tax — farcically cast as a punishment for those big, bad oil companies but more of a punishment to anyone who dared fill their car’s gas tanks — is thankfully absent from the current budget proposal. But, I thought this tax was meant to fix all those Wisconsin roads that needed fixing, and to build all of those Wisconsin roads that need building.
When you don’t have money to build, you borrow the money to build. Considering the budget passed by Senate Democrats in August would leave a shortfall of $728 million, while Assembly Republicans’ budget would have left a shortfall of $877 million, borrowing seems a poor option for Wisconsin at the moment.
Compromise No. 2 was the cigarette tax. Mr. Doyle’s original budget called for more than doubling Wisconsin’s cigarette tax from $.77 to $2.02. The agreed upon budget proposal calls for a one dollar increase to $1.77.
Compromise No. 3 struck down another Doyle tax, this time for hospitals. Hospitals will not have to pay a .8 percent tax on their revenues in the proposed compromise budget. But don’t count on physicians to be too excited about this compromise as the Legislature’s $175 million raid of the Injured Patients and Families Compensation Fund is still set to go off as planned. This audacious violation reveals the cold reality of Wisconsin’s fiscal situation: Wisconsin simply does not have the revenue to fund our budget’s expenditures.
Further, the real estate transfer fee will not be included in the compromise budget, but increases in financial aid, as well as increased funding for the University of Wisconsin System, will. The $159 million represents a $21 million compromise as the amount is $21 million short of what Doyle and the System wanted. Also on the education front, the proposed compromise budget authorizes the Wisconsin Covenant, which currently lacks a price tag.
Republicans can boast to cutting about $400 million dollars from Doyle’s budget, and, at the very least, the $400 million tax on hospitals and $248 million tax on oil companies (read, taxpayers). Democrats can point to increased funding for the university system, financial aid, as well as authorizing the Wisconsin Covenant, and can also rest their hats on a solid showing for Wisconsin’s heath care.
In all, the budget really isn’t half bad, and it truly is high time we got one. The concessions made for the university system top my list of “goods” for this budget, and I’m a big fan of the increased financial aid and the Wisconsin Covenant. But this budget cycle serves to remind us that fiscal misbehavior seems second nature in the Wisconsin Legislature.
Further, Wisconsin residents can attribute this year’s budget impasse to an embarrassing attempt by Legislature Democrats and Republicans to claim bragging rights for next year’s 2008 state elections.
Breathe a sigh of relief, Wisconsin. Provided this weekend’s compromise proposal has the support its architects claim it will, we just may have ourselves a budget. Your legislators squabbled and fought for months. Your school districts, prisons and university system worried and fretted. The nation snorted and laughed as Wisconsin languished as the last state in the Union without a budget. But the parties may have finally been able to put politics first, and agree on a budget proposal that will patch up Wisconsin for the next two years, and enable us to put off this year’s near fiscal crises for another two years. Through compromise and consensus, legislative Democrats and Republicans have assured us that, while we’ll just have to take care of this mess later, we also won’t have to worry about it until later.
And you know what? That’s really not all that unheard-of in Wisconsin.
Gerald Cox (email@example.com) is a senior majoring in economics, languages and cultures of Asia, and Middle East Studies.