Governing Is Hard

Walker’s High Spendin’, Debt Raisin’ Budget

Wisconsin Governor Scott Walker talks a good fiscal conservative game on the campaign trail, but his new budget tells a different story.

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Scott Walker isn’t a bona fide presidential candidate yet—but he sure is polling like one.

But as conservative as his potential 2016 platform has become, his state budget tells a different story.

After being stellified at Steve King’s Iowa Freedom Summit in January, the Wisconsin Republican governor has seen his political stock rise inexorably, with good-news poll after good-news poll.

The latest Quinnipiac poll of likely Iowa Republican caucus-goers shows him in first place with a comfy nine-point lead over Senators Rand Paul and Marco Rubio, who are tied for second.

There’s just one itsy bitsy little thing in between the governor and his big announcement: the budget.

Since he laid out his budget proposal in February, it’s attracted predominantly negative press attention and stirred up considerable controversy in his home state.

His luck with the budget is almost an inversion of his national political trajectory—in the same way that he’s drawn adulation from conservative crowds in New Hampshire and Iowa, he’s drawn rancor from conservative lawmakers in Madison.

The same day that Quinnipiac released its glowing results, the state’s version of the Congressional Budget Office released a report that had even more bad news for Madison Republicans.

Due to these tensions, Walker looks set to wrap up budgeting season not with a bang, but a whimper. And the situation could cast a pall over his campaign rollout.

The Badger State has long been dogged by a swelling debt burden and tough fiscal times. Walker looked to end the Bad Old Days with tax cuts and tough-on-union cost-cutting.

In his 2010 gubernatorial campaign, he presented himself as the antithesis of then-incumbent Democratic Governor Jim Doyle, touting his penny-pinching lifestyle and his budget-slashing days as Milwaukee County Executive. During his 2014 re-election bid, he kept beating the anti-Doyle drum. Things are getting better, he argued, and we can’t look back.

Governing is complicated, and a magic supply-sider panacea for the state’s budgetary woes has yet to materialize. The state’s outstanding debt peaked under Walker in December of 2012 at $14.2 billion. Two years later, it had gone down to $14 billion.

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Budget analysts say that, depending on how the legislature times its next round of bonding and debt-repayment, the state could top that $14.2 billion record during the next budgeting period.

Which brings us to Walker’s current situation.

The Wisconsin state government does budgeting for two-year periods, or bienniums.

When Walker proposed his budget for the 2015-2017 biennium on February 3, it drew prompt criticism from fellow Madison Republicans.

Three elements of his proposal made them particularly squeamish: a $300 million cut to the University of Wisconsin system, a $127 million cut to K-12 education, and $1.3 billion in new debt to pay for transportation projects.

The state is dotted with more than two dozen UW campuses—throughout a host of legislative districts—and, well, the public-school-parent vote is quite sizable.

On top of that, the idea of taking out a hefty transportation loan hasn’t sat well with the state’s Republican legislators, many of whom are more conservative than Walker and have often pushed him to the right (which, incidentally, has boosted his national brand as a conservative fighter).

Assembly Speaker Robin Vos dispatched a huffy statement in response to the budget rollout.

“To continue to just borrow and spend isn’t fiscally responsible,” he said, according to the Milwaukee Journal Sentinel. “We will certainly be pushing for a permanent fix instead of just more bonding.”

Other Republicans were comparably underwhelmed.

State Representative John Nygren, who co-chairs the Joint Finance Committee, said he was glad that Walker’s proposal included lower overall bonding than previous budgets, but he was still consternated about the massive transportation spending.

“I got elected to solve problems, not push them off,” he told the Journal Sentinel.

And the MacIver Institute, which has been with Walker through many of his most headline-grabbing moments, isn’t pumped about the new debt.

“In our eyes, we believe that that level of bonding is not a good idea, and that there should be less of it,” said Nick Novak, a spokesman for the think tank.

And Todd Berry of the Wisconsin Taxpayers Alliance said Walker’s decision to push for substantial transportation bonding means he’s actually carrying Doyle’s torch in a sense.

Servicing the transportation debt used to take up as little as 5 percent of the transportation budget, he said, but it’s ballooned under Walker and Doyle, creeping toward one-quarter of all transportation expenditures.

“What is happening to the transportation funding in Wisconsin is what is going to happen to the federal government in 20 or 30 years,” he said, “and that is that the interest costs are getting to be a bigger and bigger part of the transportation fund’s expenditures.”

“When you’re spend one-fifth or one-fourth of your budget on debt service, thanks to Jim Doyle and Scott Walker, that starts to crowd out spending for highways or transit,” he added.

Cutting funds for little tykes’ schooling—conservative legislators’ next source of night terrors—is understandably controversial, and they say saving the children is their top budget priority (as The Capital Times reported Wednesday). And the governor’s office seems to share their concerns.

“Wisconsin will end the biennium with a balanced budget and our proposed budget will result in a near $500 million surplus,” emailed Laurel Patrick, a spokesperson for the governor. “In the next couple months, we will continue to work with legislative leaders to protect public school funding and ensure it remains whole.”

The UW cut has generated uniquely acute headaches for the university system because it’s paired with a tuition freeze. Doyle also cut the university’s budget, notes Wisconsin Taxpayers Alliance’s Berry, but he let administrators raise tuition to offset those losses. Walker doesn’t let them do that. Conservative groups in the state—including the MacIver Institute think tank—have argued that UW has sufficient resources to offset the cut. But the university’s heads disagree.

On top of all that, state legislators recently lost their last lifeline. There were hopes that the state’s Legislative Fiscal Bureau, which is basically its version of the Congressional Budget Office, would revise up its estimates of tax collections, giving them extra wiggle room to boost school funding. But the bureau released a report on tax collection projections this week that squelched those hopes.

“Wednesday’s news means the Legislature will face even harder decisions in the coming weeks as the Joint Finance Committee makes changes to Walker’s budget,” noted AP reporter Scott Bauer.

And it gave Democratic critics a big opening.

“Despite a national growing economy nationally and significant revenue growth in neighboring Midwestern states like Minnesota, which is expecting a $2 billion surplus, Wisconsin continues to fall further behind because of extreme GOP policies,” said Democratic State Senator Chris Larson. “Instead, they have created a self-inflicted $2.2 billion deficit.”

Money troubles aren’t new to Wisconsin.

“In terms of nuts and bolts, structured dollars and cents,” said Berry, “the Walker and Doyle budgets are not that different.”

That’s the opposite of what Walker wants to hear as he gears up for his sure-to-be-showstopping presidential campaign rollout. The question is if Republican primary voters outside Wisconsin will hear it, too.