Yesterday, state Senator Joe Leibham wrote a column highlighting the state's budget problems and a looming deficit that puts Wisconsin in one of the worst fiscal situations in the nation. According to the Comprehensive Annual Fiscal Report (CAFR) - published just over a month ago - the state is facing a budget shortfall in excess of $2.71 billion. Senator Leibham explains that the CAFR uses GAAP accounting rules which eliminates many of the shell games and tricks used by the Doyle administration to give us a phony budget "surplus" of $70 million.
The GAAP methods paint a truer picture of the state's situation as it pertains to our bond rating, the amount of interest the we pay on our loans, and what needs to be done to fix the deficit.
Throughout the budget process last year, I spent a lot of time here at LiB talking about the bad decisions and gimmicks that Governor Doyle and legislative leaders were using, and the fact that they would likely do little or nothing to solve our long-term financial problems. The CAFR and a recent study by the Pew Center bear this out.
In his column, Sen. Leibham uses the analogy of making purchases with a credit card, using those purchases on a daily basis, but not counting it as money spent, as debt, or even putting it in a budget until the bill is due. The state's doing this on a regular basis and we ignore the debt we're accumulating and calling our budgets balanced.
In the Pew Center report I linked to earlier Wisconsin is identified as one of 10 states in the nation that faces fiscal peril as a result of the recession and shoddy budget practices. Not surprisingly, DOA Secretary Morgan responded with complete denial. "In no way can Wisconsin be compared to the nation's most financially troubled states, especially California." Even though our bond rating is the third worst in the nation - ahead of only Louisiana and California, and our 2007-2008 GAAP per capita budget deficit nearly quadrupled California's - $445 to $113.
I'm betting that we will need at least one budget repair bill before the fall election. Given the current state of affairs in national and state politics it will surely be a contentious debate. Hopefully we can put enough pressure on our legislators to bypass the politically expedient option of postponing payments and borrowing money and convince them to actually cut spending or eliminate wasteful programs and initiatives.
It was easy to ignore or overlook these reports during the holidays and with the debate over health care at the national level, but now that we have entered a new year we need to refocus our energy and our attention on our own state problems. We may not be able to wait until election day to fix them.