Gov. Scott Walker’s administration is delaying more than $100 million in debt payments to help balance the budget amid a budget shortfall.
This budgeting tactic has been happening for years, since the days of Democratic Gov. Jim Doyle and Republican Gov. Scott McCallum. Since 2001, the total of debt payment delays is almost $1.5 billion, according to the non-partisan Legislative Fiscal Bureau.
University of Wisconsin political science professor David Canon referred to these payment delays as “kicking a can down the road.” Postponing payments on debt saves money today, but increases interest costs for the future, he said.
“The biggest drawback is that it means in any future budget year, we have less money to spend on UW, K-12 education, building highways, transportation and more money being spent paying off interest,” Canon said.
Cullen Werwie, spokesperson for the Wisconsin Department of Administration, told the Milwaukee Journal Sentinel that Walker is not doing anything Doyle had not done already. Werwie said this was not a “scoop and toss,” as delaying payment is allowed under the current terms of the state’s borrowing agreement with lenders.
Since the delay of the debt payment involves a line of credit that is not under lawmakers’ jurisdiction, the Legislature will not have to sign off on it, state Rep. Gordon Hintz, D-Oshkosh, said in a statement.
“He effectively wants to borrow money from the future to pay for his tax cuts today,” Hintz said. “That doesn’t sound fiscally responsible to me.”
Barry Burden, a UW political science professor, said it is a matter of being focused on the short term or the long-term, with Walker wanting to focus on the short-term budget hole instead of long-term structural problems.
Burden said when a new governor comes into office, they blame the previous governor for accumulating debt and playing tricks with the budget. However, Burden said whoever the new governor is ends up doing the same kind of things, trying to postpone painful payments and pushing them into the future.
“They would like to solve the short-term problems and just hope some solution will come through to deal with debt down the road,” he said.