In the News

 

 

By Rep. Gwen Moore

 

 

Governor Scott Walker has done it again. He's found a way to seek the glow of the national spotlight for himself at the expense of working and middle class Wisconsin families. His latest plan: prioritize a whopping tax cut package totaling more than $500 million over education and job training, infrastructure improvements, and long-term fiscal discipline. If he is successful, this would be the third round of tax cuts in less than one year. But what would be the true cost for the state's fiscal health -- not to mention the people of Wisconsin?

 

Governor Walker is mighty proud of himself for this latest proposal. His plan includes a property tax cut of around $400 million, plus a nearly $100 million cut in personal income taxes, as well as a nearly $40 million change to the Alternative Minimum Tax. Those are the top-line numbers -- but let's cut to the chase. In sum, Governor Walker's plan would put the State of Wisconsin in a hole for the next budget in order to provide tax cuts primarily to wealthier Wisconsinites. Unconscionably, the plan also fails to invest in programs that could improve Wisconsin's human capital and economic competitiveness in the future.

 

The State of Wisconsin is projecting an approximate $1 billion surplus for next year (through mid-2015). This is due to a few factors, including higher state tax collections. Our governor has decided to run with that projected surplus and slash taxes once again -- even though the Legislative Fiscal Bureau warns that the state could then face up to a $700 million shortfall during the next biennial budget cycle, after the end of the July 2013-June 2015 period.

 

I support several of my Democratic friends in the state legislature, who would prefer to choose a different path -- for example, to craft tax cuts that would offer more targeted support for struggling low- and middle-income families. According to the Wisconsin Budget Project, analysis shows that 18 percent of the tax cuts proposed by the governor would accrue to the top 5 percent of Wisconsin residents. The bottom 40 percent of taxpayers would see just 15 percent of the benefits under Governor Walker's plan. Not to mention the fact that his alterations to the Alternative Minimum Tax would largely benefit a minority of wealthy taxpayers. During a time of record income inequality, I find this distribution to be a bit of a head-scratcher.

 

In fact, even Governor Walker's Republican friends have voiced their squeamishness about going down this road. They have expressed concern that if the economy weakens again, the state could face extreme deficits. Like these Republicans in the state legislature, I see no need to lower our revenue stream further and risk creating structural deficits. We could be setting ourselves up for future disaster, and end up right back where we started.

 

Not to mention the fact that we know what happened last time we were in a budgetary crisis. Scott Walker used that situation to force through radical cuts in spending and taxes, and historic attacks on public-sector unions. As a result, Wisconsin is currently operating at critically low spending levels for several of our key programs. To add insult to injury, the tax cut deal winding its way through the legislature now also includes an additional $38 million in spending cuts. Further spending cuts could conveniently help win a few votes from Republicans in the legislature, but during a time of surplus they are nonsensical and unwarranted.

 

The sad reality is that Governor Walker's income tax cuts amount to a measly $46 for the average taxpayer, with an average of $131 in savings for the average homeowner. I know that for poor families, every dollar counts. However, I question whether these relatively small tax cuts are really worth throwing our state budget out of balance in the future. I also wonder if the "average taxpayer" would be better served if we invested in giving our children a better education -- or providing opportunities for Wisconsin's workers.

 

As the Wisconsin Budget Project pointed out, the most disappointing result of this budget battle could be the lost opportunities for the state. Our governor has chosen to turn his back on several possibilities -- for example, the option to restore programs cut in the 2011-13 biennial budget (like the state Earned Income Tax Credit for low-wage working people), or address Wisconsin's serious workforce and infrastructure needs.

 

Perhaps most importantly, he could have tried to reverse some of the damage caused when he presided over a 15 percent cut in K-12 education. Those education cuts have had tragic results for our children, but they were also short-sighted. There is simply no way to build a strong economy without investing in human capital along the way.

 

Our budgets reflect our values and our priorities. They also reflect our strategic vision for our state and our nation. In my mind, the goal is clear: We must stay out of the budget holes we've been in the past few years, and work to avoid future deficits. But we can't forget to reinvest in the people of Wisconsin. Our future depends on it.