GUEST POST: CARRIE SCHERPELZ
Governor Walker’s proposal for another tax cut is misguided, because Wisconsin’s fiscal house is not in order.
I keep my small business in order by handling my finances wisely: I live within my means, save for a rainy day, and invest in my business’ future. I pay the bills first and reinvest in my business only after all debts are paid, especially credit card bills. I pay them off before they are due, because why would I want to pay interest?
I’d love to see my state follow this budget wisdom.I am a fiscally conservative Wisconsin citizen and business owner. Fiscal conservatism is purportedly the hallmark of Governor Scott Walker and his wing of the Republican Party. So faced with the issue of what to do with an unexpected extra $900 million in estimated new state revenue, we should agree on what to do with the surplus, right?
I’m afraid not. Governor Walker and some GOP lawmakers want to use the money for a tax give-away before they pay down Wisconsin’s credit card debt — plus the interest on that debt. They want to spend money instead of setting it aside to cover projected expenses and income shortfalls.
That sounds just plain foolish to me. Instead, why not first pay our bills and then, as is required by state law, put about $450 million into Wisconsin’s rainy day fund?
Our infrastructure is woefully underfunded, and the structural deficit in the Transportation Fund alone is over $1 billion. That means Wisconsin is spending more money than it takes in, earning an “F” in budget wisdom from me. The non-partisan Legislative fiscal Bureau has warned that federal highway funds might be reduced in the near future, leaving Wisconsin to pay an even bigger portion of road and bridge construction costs. Let’s save money for that.
Wisconsin’s debt is higher than ever. Governor Walker, like previous governors, made decisions that resulted in unpaid debt bills being rolled into a larger and larger debt payment. As a result, our debt payment reached record levels in the 2013-15 budget. More money goes to pay off Wisconsin’s credit card debt than ever before. That is not a smart budget decision.
We also have problems in our state’s General Fund, which I’ll call our “household budget.” Important ongoing expenses like education, health care, local government, and corrections are underfunded in Wisconsin’s household.
Let’s say your home needs a new roof. In your household, what would happen if you put off the necessary $10,000 roof repair and, in an effort to be more popular with your teen aged kids, used the $10,000 to pay for a family vacation? If you used $10,000 you had in the bank, you would now have zero in your bank account — and you’d still have a leaky roof. Even though you had a great time on your trip, you’d have to come up with another $10,000 to fix it.
Now let’s say you have a leaky roof but you don’t have $10,000 in the bank, and you still want to go on that trip. You borrow $10,000 to travel, come back to your leaky roof, and borrow $10,000 more because the repair can’t be put off. Now you owe $20,000 dollars and interest will begin accruing immediately.
I hope Wisconsin lawmakers are smarter than that.
Let’s go beyond the management of household spending and debt and talk for just a minute about investing in our future.
As a business owner, I understand the importance of investing in resources that will keep my business going strong into the future. As a state, our children are that resource. Investing in their education should be a top priority.
Since Governor Walker came into office, he has made the largest cuts to K-12 and higher education in Wisconsin history. The tax dollars that were pulled out of schools’ budgets helped build the current $900 million surplus. The consequence? Our public school system, strapped for cash even before the latest cutbacks, is now reeling from a death by a thousand cuts. If the end result of all that pain was retiring Wisconsin’s debt to gain a clean slate for future education investment, I could grit my teeth and bear it. But if that money is instead squandered on a fleeting tax cut we can’t afford, we are handicapping our future. This is not the Wisconsin way.
Wisconsin is not fiscally healthy, and tax cuts, in this instance, are not the prudent course of action. No matter how good a tax cut sounds, a give-away to Wisconsin citizens is wrong if it mortgages our future.
Alliance member Carrie Scherpelz owns Design That Gets Results.