Tag Archives: debt

Kansas cut taxes to stimulate economy, now in record debt

Gov. Sam Brownback and legislative leaders on Wednesday authorized a record $900 million in temporary borrowing to cover the state’s expenses through June 2017.

The State Finance Council, which is led by the Republican governor, voted 8-1 to loan the state’s main bank account the money from other, idle funds.

The move, known as a certificate of indebtedness, is one the state has used repeatedly to cover bills when cash is expected to run low. It’s similar to when a family borrows from a savings account or college fund to cover monthly bills because its checking account is temporarily short of funds between paychecks.

The only dissenting vote Wednesday was from Senate President Susan Wagle, R-Wichita, who believes the state is in a recession.

“This isn’t the way I manage my finances. This isn’t the way I manage the finances of my business. This is like me putting groceries on a charge card and praying that the money comes in,” Wagle said. “And now we’re being asked to cover our operation expenses on a certificate of debt and it’s not going stop unless you increase taxes or cut spending.”

The vote came after Budget Director Shawn Sullivan told the council the state is considering sweeping as much as $16 million from the Kansas Department of Transportation and up to $45 million from a Medicaid fee fund to balance the budget for the current fiscal year, which ends June 30. An additional $3 million can be taken from the Kansas Department of Corrections and it is possible the state would delay part of its June payments to school districts until July, Sullivan said.

The state is likely to have between $5 million and $15 million in the general fund to begin the next fiscal year, he said.

The council’s action and Sullivan’s disclosures came a day before legislators convened a special session on school funding. The state Supreme Court ruled last month that the education finance system remains unfair to poor school districts and GOP lawmakers are working on a $38 million plan to comply.

Kansas has struggled to balance its budget since Republican legislators slashed personal income taxes at Brownback’s urging in 2012 and 2013 in an effort to stimulate the economy. While even some GOP lawmakers have acknowledged that the tax cuts didn’t work as anticipated, the governor and his top aides blames the state’s ongoing fiscal problems on regional slumps in agriculture, energy production and aircraft manufacturing. The state’s tax collections have fallen short of expectations 10 of the past 12 months.

Senate Minority Leader Anthony Hensley, D-Topeka, criticized Brownback for refusing to reverse the tax cuts to respond to the financial problems.

“When is it we’re going to admit that what is happening in this state is wrong? We are in a downward spiral when it comes to the fiscal management of this state and we have to correct our house. We’ve got to get our fiscal affairs in order at some point,” Hensley said.

Brownback, who stressed his evangelical Christian beliefs in running for governor, is the most unpopular one in the nation, with only a 26 percent approval rating and a 65 percent disapproval rating.

State budget faces problems, Walker delays $101M in payments

Gov. Scott Walker’s administration said last week it’s delaying $101 million in debt payments to help the state budget’s bottom line. But how big of a problem the state’s budget may be facing isn’t clear.

The decision to restructure debt suggests that the Walker’s administration is concerned there will not be enough cash on hand for the state budget to balance at the end of the current fiscal year on June 30, as required by law.

The latest estimate, prepared by the nonpartisan Legislative Fiscal Bureau in January, projected that the state budget was going to end this year with a $219 million cushion, but a razor-thin $71 million buffer in June 2017.

Walker administration spokeswoman Laurel Patrick called delaying the payment a “prudent financial management tool,” but did not say why it was necessary.

“Normally, if you’re in strong financial condition, you’re not kicking the can down the road,” said state Rep. Gordon Hintz, a Democrat from Oshkosh who sits on the Legislature’s budget committee. He said it was embarrassing and an indication that there wasn’t enough money available to pay for tax cuts approved in the last budget.

Pushing off debt payments into a different budget year is a common tactic used by Republican and Democratic governors alike as a short-term method of balancing the books. Since 2001, more than $1.6 billion in such payments have been delayed.

The accounting move was first detailed in a memo by the Fiscal Bureau to the Legislature’s budget-writing committee. That memo said Walker intended to defer $50 million, but Walker’s administration later said it was actually going to be $101 million.

Walker has now delayed more than $741 million in payments since 2011, including $108 million last year. His predecessors, Democratic Gov. Jim Doyle and Republican Gov. Scott McCallum, also made similar delays totaling about $872 million.

Delaying $101 million will cost the state nearly $2.3 million in additional interest over the next eight years, according to the Fiscal Bureau.

Follow Scott Bauer on Twitter at http://twitter.com/sbauerAP and find more of his work athttp://bigstory.ap.org/content/scott-bauer

 

Walker sends out fundraising plea for campaign debt

Wisconsin Gov. Scott Walker has sent out a fundraising plea to backers asking for their help as he faces an estimated $1 million debt from his failed presidential campaign.

Walker says in the email he “incurred a campaign debt” before seeking donations as low as $10 to “end this campaign in the black.”

Walker says in the email he is disappointed the presidential campaign “didn’t turn out the way we wanted,” but says “there are always new ways to serve others and plenty of conservative reforms to enact in Wisconsin.”

One Wisconsin Now director Scot Ross said Friday that instead of “shaking down donors” to pay off campaign debt, Walker should be focusing on Wisconsin’s economic problems.

Walker quit the presidential race on Sept. 21.

Walker’s inability to manage his personal finances speaks volumes

If tea party Republicans are right about the nation needing more successful business people in public office, then Gov. Scott Walker’s record at handling his personal finances affirms the opposite: that career politicians shouldn’t be trusted with taxpayer money.

Walker, a career politician, has been plagued with economic failures since he took office. His signature job agency, known as WEDC, has lost track of millions of taxpayer dollars and given millions to companies that weren’t required to — and didn’t — try bringing jobs to the state in return. Audits of the agency, which Walker chaired, cited gross mismanagement.

Walker has also hurt the economy by turning down millions in federal subsidies — funds that Wisconsin taxpayers paid into — for no rational reason. At least two of those subsidies prevented diversification of the state’s economy in promising ways and resulted in expensive lawsuits against the state.

The list of Walker’s economic failures goes on and on, and maybe the way he’s handled his own money helps explain why: His personal financial liabilities far outweigh his assets. Maybe that helps us better understand how he took a budget surplus and turned it into a $2.2 billion budget shortfall? Or why Wisconsin has lagged in the bottom rungs of job creation? Or why the state has the nation’s fastest-shrinking middle class?

Walker’s personal financial data was released  recently by the Federal Election Commission, which releases such data for all the presidential candidates (i.e., there was no liberal conspiracy against him). The record shows Walker is one of the least wealthy candidates in the 2016 race and that his personal finances are as messy as the state’s.

Walker reported personal assets between $36,000 and $190,000 — made up mostly of his life insurance and a government deferred compensation plan. The reporting forms offer broad ranges, making it impossible to detail his exact worth.

Walker owes between $120,000 as $280,000, largely because of student loan debt for his children that could be as high as $250,000. He lists no property in the forms.

He lists a governor’s salary of $222,899 and reported a $45,000 advance payment for his recent book.

Walker has two credit-card debts of more than $10,000 each, one of them with Barclays. According to his financial disclosure form, Walker amassed a debt of between $10,000 and $15,000 with Barclays since 2014 and is paying an absurd interest rate of 27.24 percent on the card. Most Americans know you’re supposed to shed credit-card debt as quickly as possible, especially cards with such high interest rates.

Walker has carried credit-card debt for four years, according to the disclosure form, despite his gubernatorial salary of $222,899 since the start of 2014. During that time Walker also received a $45,000 advance for a book, Unintimidated, about his governorship.

Milwaukee LGBT Center pays off debt

The once-beleaguered Milwaukee LGBT Community Center has eliminated its largest debt, which originally amounted to $500,000 for back rent and remodeling costs owed to the organization’s landlord.

After new leadership took control of the center early in 2012, negotiations began with Siegel-Gallagher, the building’s management company, to reduce the amount of space occupied by the center in the former Blatz Brewing Company building. That successful move eliminated the cost of future rent on unneeded space.

Interim executive director Karen Gotzler led a team that included center treasurer Peter Larson and attorneys Kass Hume and Jan Pierce to negotiate a deal reducing the center’s debt to the landlord to $93,000, with the stipulation that the amount would be paid in full within three years.

The center’s leaders were able to eliminate that debt by borrowing $50,000 from several supporters and offering to pay it immediately to the landlord in exchange for canceling out the center’s debt altogether. The landlord agreed.

Center board co-president Paul Williams said the $50,000 borrowed from supporters will be paid back in three years at an interest rate of 1 percent.

“(They’re) helping the center at a critical time so we can move forward toward our goals more quickly and save significant money in the process,” Williams said.

“These supporters saw the logic and the benefits to the center and the community – in terms of reducing overall debt, and in terms of further increasing the confidence of the broad community in the center,” said center board co-president Anne Perry Curley.

Williams praised Siegel-Gallagher for its role in facilitating the negotiations that brought the center so far from the fiscal cliff it faced just 18 months ago. “This is an amazing nonprofit turnaround story,” he said.

Center officials said they believe the debt elimination will enhance confidence in the center’s future and fuel enthusiasm for the “Believe in the Center” fundraising campaign that’s currently under way. The campaign aims to raise money that will expand support for programs such as SAGE Milwaukee and provide for basic resources, such as heat and light, which are not covered by direct program grants.

Next up on the center’s agenda is hiring a new executive director through a nationwide job search. CenterLink and the Johnson Family Foundation provided a $30,000 grant to conduct the search and support the hiring process.

“We have a job description out and we’re accepting applications now,” Williams said. 

“We’re getting a very strong response. It’s very exciting.”

In other developments, the center reported that its 2012 audit was completed on time, with a clean “non-modified” rating.  Copies of the audit are available at the center.

On the web: For more, or to donate to the center, go to www.mkelgbt.org.

Forum on federal debt, deficits set for May 2 in Madison

Former U.S. Comptroller General David M. Walker will be the featured speaker at an evening forum May 2 at the Wisconsin Institutes for Discovery in Madison.

Walker will be joined by U.S. Sen. Ron Johnson, R-Wis., and U.S. Rep. Mark Pocan, D-Wis., for a panel discussion at the forum on “Federal Debt, Deficits and Bipartisan Solutions for a Prosperous Future.”

The forum, 6:30-7:30 p.m., will be hosted by The Concord Coalition, the Bipartisan Issues Group (BIG), The Can Kicks Back, and Fix the Debt-Wisconsin. The program is free and open to the public but reservations are requested at www.concordcoalition.org/WI0502.

Walker served as seventh comptroller general and head of the Government Accountability Office from 1998 to 2008. He has also written three books, the latest one a bestseller titled “Comeback America: Turning the Country Around and Restoring Fiscal Responsibility.”

Pocan said the discussion would include how to responsibly manage the federal budget and “ways we can work in a balanced, bipartisan manner to reduce our long-term deficits by jump-starting the economy and getting people back to work right now.”

WHAT: “Federal Debt, Deficits and Bipartisan Solutions for a Prosperous Future” Forum

WHO: Former U.S. Comptroller General David M. Walker, U.S. Sen. Ron Johnson and U.S. Rep. Mark Pocan

WHEN: 6:30 p.m. to 7:30 p.m. Thursday, May 2

WHERE: Deluca Forum at the Wisconsin Institutes for Discovery, 330 N. Orchard St., Madison.

Right-wing Akin owes nearly $270K from failed Missouri Senate bid

Republican Congressman Todd Akin was outspent more than 3-to-1 and owes almost $270,000 after his unsuccessful challenge of Democratic Sen. Claire McCaskill, according to federal finance reports available online.

Akin’s committee spent a little over $6 million on his Senate campaign, far shy of the $19.3 million spent by McCaskill.

Akin reported $268,830 of debt as of Nov. 26, compared with $238,010 for McCaskill. But Akin could face a greater challenge than McCaskill in paying his bills, because losing candidates often find it more difficult than winners to raise money after an election.

The post-election finance reports were due Dec. 6, but because they are filed as paper copies with the Senate, it often takes several days before they are scanned into computers and posted online by the Federal Election Commission. Other types of committee reports are filed electronically, which is why it was apparent last week that the National Republican Senatorial Committee had quietly channeled $760,000 to Missouri to aid Akin’s campaign despite publically disavowing him.

Akin’s fundraising took a hit after he remarked in an August TV interview that women’s bodies have biological ways of avoiding pregnancy in what he described as “legitimate rape.” Although he apologized, Akin refused calls of top national Republicans to quit the race so Missouri Republicans could pick a replacement candidate.

Although some deep-pocketed Republican groups boycotted Akin’s campaign, others eventually provided money. Akin’s finance report shows that the Senate Conservatives Fund, founded by South Carolina Sen. Jim DeMint, helped raise nearly $400,000 for Akin’s campaign. The Kansas City-based Now or Never Political Action Committee independently spent about $1 million on ads for Akin.

In the closing days of his campaign, Akin received contributions from several political committee associated with Republican officials, including $5,000 from Kansas Sen. Jerry Moran’s Free State PAC, $2,500 from Minnesota Rep. Michele Bachmann’s MichelePAC, $2,500 from Texas Rep. Louie Gohmert’s GOH Conservative PAC and $2,500 from the Patriot Voices PAC of former presidential candidate Rick Santorum.

McCaskill’s finance report shows that she received nearly $109,000 from donors associated with Emily’s List, which backs Democratic women candidates who support abortion rights. She also received contributions from political committees associated with corporations, Democratic officials and other diverse interests, including $10,000 each from the Office of Commissioner of Major League Baseball PAC and the National Association of Broadcasters PAC.

Akin and McCaskill both have continued to make fundraising appeals to try to pay down their debt. Earlier this week, for example, Akin distributed an email criticizing the “so-called ‘leadership’ of cash-strapped Detroit” while asking for $5 donations.

The fundraising pleas appear to have had modest success. As of Nov. 26, Akin and McCaskill each reported about $32,000 in receipts since the election.