There’s much debate — more than there should be — about the size of the projected Wisconsin state budget deficit. In late November, the Doyle Administration announced a projected deficit of only about 1.5 billion dollars. As the Milwaukee Journal Sentinel‘s PolitiFact Wisconsin observes, the projected deficit is closer to 3 billion dollars:
An independent researcher who has studied the deficit, University of Wisconsin-Madison economist Andrew Reschovsky, said the DOA report obscured the real size of the problem by incorporating solutions into the mix — solutions that Walker may or may not pursue.
“You have to go back to the status quo — before furloughs — to see what the magnitude of the problem is,” Reschovsky said.
Reschovsky issued his own estimate in September pegging the deficit at $3.1 billion, though he says it would be under $3 billion if he did it today.
That Wisconsin’s projected deficit is twice as large as projections that assume continuing the furlough program (and other spending reductions) shows how troubled are Wisconsin’s finances.
It’s predictable that an outgoing administration would want to minimize Wisconsin’s fiscal problems. Republicans, having served for years, should not be surprised. There’s much fuss that this is all ‘Madison math.’ In Madison or any other state capital, it’s more like incumbents’ math, regardless of party.
Local officials will be sure to complain that any reductions in state aid to cities and schools are all Madison’s fault. Therein one sees the double standard to which those local leaders adhere. Now that times are bad, reductions in aid are loudly decried as Madison’s fault (rather than the fault of local over-reliance on outside revenues; when times were good, and the state poured money into cities and schools, local officials saw those funds as proof of their own vision and competency (with little credit going to Madison).
Reliance on state sources of revenue is simply imprudent over-reliance. Cities that have battened on the state’s contributions, and yet haven’t managed to cut more than just a bit, will find the next few years particularly difficult.