Short-term fix means long-term budget problems

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Fiscal responsibility took a vacation this week as lawmakers patted themselves on the back for their hard work in reaching a compromise to fix the state's $527 million budget shortfall.

While the final details of the package still hang in the balance since Gov. Jim Doyle has said he will use his veto pen to rework it, the deal crafted by Democrat and Republican legislative leaders and approved by the Assembly and Senate this week is a short-term fix that can only aggravate the state's budget woes in the next budget and for years to come.

It is rife with accounting gimmicks and borrowing tricks that fail to come to grips with the real financial situation of the state. Leading the list is the plan for a one week delay on payment of $125 million in school aid. Presto, the accounting trick may look good on this year's paper but it merely pushes the problem into the next budget where it will loom even larger.

The same goes for the proposal to refinance 12 years of future payments expected from cigarette and tobacco manufacturers to raise $209 million to spend now. Those future payments go up in a puff of smoke and make future budgets even harder to balance.

The head-in-the-sand nonsense doesn't stop there. One of the more insincere money raids in this budget fix is the part that proposes to steal $22 million from the pot that is supposed to pay for more strict state IDs as a counterterrorism measure, something that has been mandated by the federal government by 2009.

Last year lawmakers voted to bump up driver's license fees to pay for the Real ID plans. The budget theft reportedly infuriated Congressman Jim Sensenbrenner, R-Wis., one of the authors of the federal law, who reportedly stopped by the state Capitol pressroom this week to rail at lawmakers and Gov. Jim Doyle for what he called a "breach of faith with the people of Wisconsin." Sensenbrenner called the budget deal a "political shell game" and said he would advise everybody to vote against it.

But perhaps the most telling criticism of the budget package came from the nonpartisan Legislative Fiscal Bureau which told lawmakers this week that even with the proposed "fixes", Wisconsin's government is on track to have a budget shortfall of $1.7 billion just three years from now. The decline in state revenues is expected to give the state is highest structural deficit since the 2003-2005 biennium.

As Wisconsin Taxpayers Alliance president Todd Berry put it this week, "We've made virtually no progress in the last six or seven years . . . we keep digging ourselves a deeper hole."

That deeper hole is caused by the rise in state spending. Yet, remarkably, spending cuts make up only a fraction of this proposed package of "fixes." Just $69 million, or 13 percent of the package, would come from cuts in current programs.

Similarly, the other honest way to truly repair the budget - filling the hole with new tax dollars - amounts to but $15 million in this deal. That's from a business tax increase and it counts for less than three percent of the fix package.

Honest repairs are strikingly lacking in this package of smoke and mirrors and we doubt it can be repaired by vetos from Gov. Doyle. We would prefer that legislative leaders start new with repairs that focus more on spending cuts, but given the shortness of time and the partisan split in the Capitol, that is unlikely to happen. Wisconsin will have to deal again with this mess in a very short time.

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