Friday, September 12, 2014


6 things the media won’t tell you about the structural deficit
Wisconsin State Assembly – Rep. Dale Kooyenga – 9/9/2014

1.) This budget which extends through June 30, 2015 is still projected to end with a healthy cash balance.  The rainy day fund is at an all time high.  The "structural deficit" is a state government concept and some states do not even calculate, or calculate using different methods.  In this state, LFB assume there are no growths in revenues or expenditures all the way through June 30, 2017.

Revenues tend to grow, and Walker's team has proven they can manage the expense side of the budget.  Many folks (and even legislators) do not understand that we do not tell the Governor (executive branch) what they have to spend - we tell them the maximum they can spend.  This means the Governor's team can find cost savings, and simply spend less than the maximum amounts the legislature stipulated. There are substantial areas expenses can be cut with a $30 Billion plus annual budget.  If you look at the audited state financial statements - the general fund had less spending in 2012 than 2011, and the 2013 general funding spending was lower than 2012 and 2011 even though the legislative budget was an increase in GPR spending.  

2.)  The structural deficit is projecting revenue all the way to June 30, 2017 - a lot will happen between now and then - including the passage of a new budget.  No company would forecast a budget 3 years out and not assume any changes in revenues or expenses. 

3.)  Some of the confusion, and forward projections, are affected by the fact we are returning a portion of the surplus to the taxpayers who put it there in the first place.  In the private sector, we would call this a return of equity - not an expense or lost revenue!  For example, if GE is predicting a year with zero net income, but still pays out $1 billion in dividends because they have excessive cash, their net income does not become a net loss of $1 billion, their income remains flat.  In Madison, the stakeholders do not view it that way, and they call a return of taxpayer dividends an expense.   This is an important distinction in the private sector, but not understood in government because it is not in their best interest.

4.)  Wisconsin's businesses and families budgets are what really matters.  Since we cut taxes, and the Governor adjusted the withholding tables, budgeting has become less burdensome for families and business.  Republicans made a conscious decision to make budgeting easier at the dinner table and main street - that is what really matters.  We all know the left, assisted by the media, wants to argue against tax cuts because they want to make it easier to keep your cash in Madison so they can spend it on growing government.

5.) The revenue projections going forward are not Wisconsin specific, they are instead based on national economic trends.  There is no doubt that lack of leadership in the White House has created domestic and international concerns which have national economic impacts.  

6.)  Media bias and ignorance is driving the confusion.  I have never seen a Wisconsin paper headline the federal deficit despite Sen. Ron Johnson's best efforts.  Those deficits are real.  Wisconsin is in good shape.  54% of voters think Wisconsin is headed in the right direction, compared to 25% of national voters who think the US is headed in the right direction.

Northwoods Patriots - Standing up for Faith, Family, Country

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