By Kirsten Adshead | Wisconsin Reporter
MADSION – The $400 million rolls in … and the $400 million rolls out.
Gov. Scott Walker added millions of dollars to his list of budget priorities Wednesday, calling for an additional $28.9 million for the state’s mental-health programs.
But Walker also said he’d like to give an undisclosed sum to shore up the state’s transportation infrastructure, mentioning freight rail in particular, and address workforce development.
Walker and Assembly Speaker Robin Vos, R-Rochester, repeatedly have said they’d like to spend up to $350 million over the next two years on income-tax relief primarily aimed at middle-class families.
And taxpayers might be asked to pony up tens of millions more if Walker can’t find alternative funding for one of his pet projects, a venture capital program.
Walker’s priorities are starting to add up – to something akin to the $419.7 million the nonpartisan Legislative Fiscal Bureau projects will be in the general fund at the end of the fiscal year.
The governor is set to reveal his budget plan Feb. 20.
Asked if funding his priorities will require budget cuts, he said, “No. I mean, there might be little issues here and there, but we’re not talking broad-based cuts.”
Rather, he said, his priorities are “about things we’ll be adding on to, not subtracting,” relying heavily on the “surplus,” the fiscal bureau is projecting.
There are, however, a lot of “buts” built into that “surplus” scenario.
COSTS GO UP
Inflation alone ensures that the programs taxpayers paid for last year will cost more going forward.
Last month, for example, the Wisconsin Transportation Finance and Policy Commission released its suggestions for transportation funding – but concluded that, even if the state simply wants to maintain its current level of transportation funding, that plan will cost $2 billion more over the next decade than the state can expect to generate in transportation revenue.
THE $419.7 MILLION IS JUST AN ESTIMATE.
The fiscal bureau already dropped revenue projections by $259.1 million for the upcoming biennium, mostly because a November estimate counted on Congress not averting the “fiscal cliff.” Had Congress not passed the American Taxpayer Relief Act of 2012, Wisconsin would have gotten $219 million in estate taxes.
As it theoretically tries to tackle a $16.4 trillion deficit, Congress may propose and pass solutions that affect Wisconsin’s bottom line.
The economy may not recover as expected.
And while the fiscal bureau report considers state agencies’ budget requests, the cost of government won’t be known at least until the Legislature passes a budget a few months from now.
But under Walker, the state does have some wiggle room: The $419.7 million is in addition to a $65 million statutorily required fund balance, and Walker has set aside money in a “rainy day” fund two years running.
THE “SURPLUS” DOESN’T ACCOUNT FOR WISCONSIN’S DEBT.
Wisconsin has been borrowing money since, well, forever.
Lawmakers borrowed to replace money taken from the transportation fund.
They borrowed money in order to shore up the pension fund.
They borrowed money in order to pay unemployment benefits.
That money has to be repaid — with interest.
And while Wisconsin continues to make those payments, talk of a budgetary “surplus” doesn’t otherwise address the financial hole Wisconsin is in.
As for the mental health funding, specifically, Walker said the money will mostly go to counties and is intended to expand programs aimed at coordinating services and providing individualized care for Wisconsinites with mental health issues.
“These are dollars that will greatly impact the delivery of mental health services in our counties,” WCA Executive Director Mark O’Connell said in a statement. “We are grateful to the governor for recognizing the partnership between the state and counties in providing these critical services to our citizens and look forward to being able to meet the mental health needs of those in our communities.”
Walker announced the proposed funding hours before Vos held his own press conference, announcing a bipartisan task force intended to study the state’s mental-health needs.
The governor again on Wednesday said he has no interest in raising the gas tax to fund transportation.
And he said there’s one thing that won’t be in his budget plan – at least not this year’s: hiking the sales tax in exchange for eliminating the income tax, an idea Department of Administration Secretary Mike Huebsch floated before the WCA on Tuesday.
“I hope that going forward into the next budget, and which ultimately means the next election, having a wide-open discussion about tax reform — what’s the right method for providing the highest quality of life for people in this state and, as part of that, what would have the biggest impact in terms of job creation,” Walker said. “But I don’t have a specific plan.”
Contact Adshead at [email protected]