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7/10/2007
Tough decisions in Assembly budget - but not enough
It’s all about bargaining chips. Throw as much stuff as you can in the budget bill so it’s there to trade for an addition or deletion in conference. Well, that’s being a little harsh – but just like the budget that came out of the State Senate, there’s good stuff and not-so-good stuff in the Assembly budget that’s scheduled to be debated on the floor today. 24 hours time for democrats in the Assembly to review it before acting on it. Just like what the Senate dems did to their GOP Senate comrades. And so the dance goes on…
Just a few points:
True to their word, the Assembly eliminated proposed state tax additions and increases and capped property tax increases more tightly than did the Senate.
The Assembly budget ends in 2009 with a paltry surplus of $5.6M – including $0.00 proposed for what is currently a required $65M rainy day fund. Compare that to the Senate budget, ending 2009 $180.7M in the black, including a rainy day fund of $130 million.
The Fiscal Bureau is still massaging the numbers a bit, but the structural deficit in the Assembly budget is over $900 million! $900 million that’s directed to be spent in this biennial budget, but to be paid in July, 2009, a brand new budget year. What a mess. The structural deficits projected in the Governor’s, JFC and Senate budgets were bad enough – but “just” in the $700M range.
Only two of the many policy pieces in the budget:
Assembly Republicans found a way to begin to nibble away at the high cost of teacher health care benefits. If school districts provide health benefits similar to – and no more expensive than – the still very generous state plan, those districts would receive a significantly higher per pupil reimbursement. That is earthshaking! (See below.)
Liquor licenses would become more available! Under current law, each community has a maximum number of licenses it can issue – exempting only restaurants that seat 300 or more patrons. Well, the Assembly bill would exempt from the maximum any liquor license for a “restaurant establishment” that earns at least 50% of its revenues from food sales.
The bottom line
Wisconsin spends too much. While Wisconsin’s median household income is below the U.S. average, taxes claim 12.2% of income – the sixth-highest percentage in the U.S. Simply not a good combination.
To their credit, the Assembly made some very hard tax and spending cuts, but added their own pet spending projects, cut the reserve fund to an unbelievable $0 and racked up a planned structural deficit of almost a billion bucks. Wow.
How about this?
John Torinus, business owner and self-taught health care benefits expert, talks of annual benefit costs for quality health care coverage in the private sector of about $7,400 per employee. He ciompares that with public sector costs of $20,000 per employee in some school districts! The average is more like $14,000 or $15,000. So let’s just say health benefit costs decrease by a reasonable $7,000 per employee – at about 105,000 FTE’s in school districts statewide, that’s a $735,000,000 savings. Now, state taxes are funding about 2/3 of that, or about $500,000,000. Wow. Goes a long way to decrease spending. And that doesn’t even start talking about municipal employees.
Cadillac employee benefit costs are drowning the dairy state. We can talk until we’re blue in the face – and won’t make much difference without attacking those public sector benefit costs.
For more detail on the Assembly budget, see the Fiscal Bureau’s 185-page analysis. Also find associated news articles by searching the FoxPolitics.net web site for “Assembly Budget” (without the quotes).
COMMENTS
Has an analysis been done that compares health care benefits state by state? Health care costs are a national issue. Are Wisconsin School Districts providing move than other states?
Yes. The Wisconsin Taxpayers Alliance did some work on state to state comparisons in 2006. Federal figures from 2004 were used, the most recent available. Wisconsin schools spent $9,226 total per student, 12th highest in the U.S. Of that, Wisconsin spent $5,121 per pupil on salaries, right at the national average of $5,150. When it comes to benefits however, Wisconsin spent $2,404 per pupil on benefits, the 3rd highest in the nation - and 57% above the US average of $1,531. JE
Jim Perry (Tue Jul 10 07:15:42 2007)
Jo: The problem here is that no politician wants to address the elephant in the room, namely the cadillac benefits that are in place in the public sector. They are what is drowning the budgets of state, municipalities, counties, and school districts. Part of the problem is that the average voter, despite constant information on this, still does not comprehend the financial impact of the current benefit programs.
We need representatives that will address the problem directly instead of either raising taxes or cutting programs. The voters also need to support candidates that will "go out on a political limb" and not expect that this will be done easily. We are getting to the point where the pain in program cuts are getting severe enough that taxpayers should be looking at this more seriously and demanding that their representatives address this issue. At least let's hope so.
Mike Thomas (Tue Jul 10 09:55:51 2007)
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