Scott Walker’s phony surplus will fund his insignificant tax cuts

WiG

During his campaign for governor, Scott Walker made many promises that he promptly abandoned after taking office. We can’t fault him for that – empty promises are part and parcel of our political process.

The centerpiece of Walker’s campaign, however, was the vow to create 250,000 jobs by November 2014. Given the miniscule role governors actually play in the economy, that was an audacious boast. But a surprising number of voters took him at his word. Meanwhile, Walker was clearly betting that the nation’s economic crisis had bottomed out, and he was positioning himself to take credit for a recovery that seemed inevitable at the time. 

Obviously, things didn’t work out the way Walker had planned. So while his party focused the Capitol on everything but legislation to bolster the economy – laws to bust unions, restrict access to abortion, allow guns anywhere and everywhere, eliminate pay equity protection for women, cut funding for health care and education, eliminate alternative energy projects, etc. – he moved his goal post from creating jobs to eliminating the state’s debt. 

Walker claims not only to have achieved that goal, but also to have amassed a surplus from which he plans to provide tax breaks to stimulate the economy. This, like the promise to create 250,000 jobs, makes a wonderful sound bite, but it’s equally disingenuous. 

First of all, the notion that a tax cut averaging $83 annually per household could stimulate economic growth is laughable. Apparently the millions they’ve hauled in from out-of-state billionaires have removed Wisconsin Republicans so far from financial reality that they don’t know what things cost. Here’s a hint: The cuts are not enough to have any impact on the economy, according to the experts, particularly at a time when federal payroll taxes have risen significantly.

But even more upsetting than the governor’s hollow economic-growth strategy is the fact that there is no real budget surplus.  

During his campaign, Walker insisted that he’d use generally accepted accounting principles “to balance every state budget, just as we require every local government and school district to do.”

But Walker’s vaunted budget surplus is not based on GAAP accounting but rather on gimmicky cash accounting procedures.

According to cash accounting procedures, there was money left over in state accounts after all the bills for 2011-13 were paid. But that method of accounting does not take into consideration the GAAP debt increase of at least $320 million that has accrued since Walker took office. By taking the last budget’s operational surplus and giving it back to taxpayers in meaningless increments, Walker is increasing that debt level.

Walker should have used the excess operational money to reduce some of the harmful cuts he made to education and health care in his draconian prior budget. Or he could have paid down the state’s debt.

Instead he chose to use the money in a reckless manner that gives him a sound bite for his next campaign but provides no benefit to the people of Wisconsin.

Even worse, in addition to implementing minimal tax cuts, Walker says he’ll use some of his “surplus” to fund unnecessary road-building projects, thus spreading the faux wealth to political backers who will return some portion of it to his own campaign trough.

That’s just the sort of self-serving trickery that’s characterized every move of Walker’s political career. Wisconsin deserves much better.