Posted: Friday, November 30, 2007 12:00 am
What we hear and read about is the biannual struggle over spending, yet there is an almost invisible trend in the state budget which bears watching and which in the long term is of equal importance. That trend is the amount of debt which Wisconsin amasses, and the trend isn't good.
From 1997 to 2006, the state contracted for an average of $549 million of debt each year, according to a report from the Legislative Fiscal Bureau. That average has increased recently. From 1997 to 2001, during Tommy Thompson's administration, the average per year was $477 million. In 2002-03, the brief tenure of Scott McCallum and a time of recession, the average was $490 million. From 2004-06, during Jim Doyle's tenure, the average has been $709 million.
By the end of 2006, those annual debt amounts added up to $5.7 billion of general obligation bonds and commercial paper. The total was $8.3 billion if one also added transportation revenue bonds for roads, Building Commission bonds for highway and administrative facilities, and revenue bonds to support the petroleum cleanup fund which remediates, for example, contamination from leaking service station gasoline tanks.
Not all of that debt falls directly on the wallets of taxpayers. Transportation bonds, for example, are repaid with money from vehicle registration fees. Student fees pay off dormitory construction bonds for the University of Wisconsin campuses. In general, this self-amortizing debt accounts for 20 to 25 percent of total debt. And of course the state does pay off several hundred million each year. But in the past few years the debt taken on by the state each year is a higher and higher percentage of what is allowed.
The reason this is important is the same reason the amount of your credit card debt is important. Sooner or later the bill comes due. In the case of the state, the question is whether one generation will satisfy the debt before the next takes over. Generations X and Y have fewer taxpayers in them and thus less ability to pay that debt, assuming they stay in Wisconsin or move here.
Mentioning governors is a way to define eras, but that's not where the responsibility stops because the Legislature has a strong voice in the budget, too, as evidenced by the recent deadlock. And all politicians benefit from this credit madness as do citizens.
Like frenzied Christmas shoppers with credit cards, everyone enjoys the benefits of multiple government services but doesn't pay the cost right away. Pledges of no new taxes or tax cuts are pointless because the fact is that we go beyond our means when we accept the fiction that we can have something for nothing. The only fiscally sound solution is to raise taxes or fees, or accept rough and unplowed roads and sicker people because we can't buy enough vaccines. It's time to stop thinking that we can have Lexus service at a Chevy price.
Politicians are more than willing to play Santa especially when we let them, but when was the last time you looked up on Christmas morning to find Santa hanging around to help clean up the mess?