Friday, February 18, 2011

Is the State in a Crisis? Here’s the truth….

Jsonline: Is the state of Wisconsin really in a financial crisis? The short answer is yes.

Opponents are pointing to a Jan. 31 memo by the Legislature’s non-partisan budget shop that says that the state will finish this fiscal year with $121.4 million in its main account … the budget surplus will only happen if the state keeps its spending in line with what has been budgeted.

But the memo lays out about $258 million in spending by the state that is projected to go over budget … including health care spending for the poor, prisons and a payment due to Minnesota in December after the cancelling of an income tax agreement between the two states.

“We’re in the hole by $137 million,” said Bob Lang, the director of the Legislative Fiscal Bureau.
Recent business tax cuts:

Another issue has been the tax cuts passed in recent weeks by the Republican governor and lawmakers.

The tax cuts have no effect on this fiscal year … But in the 2011-’13 state budget, the Legislative Fiscal Bureau memo found that tax collections would drop more than $100 million because of the tax cuts. That adds to the projected deficit.

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