Wisconsin K-12 Tax & Spending Outlook

Milwaukee Journal-Sentinel Editorial:

Another year and deeper in debt.

No, that's not some sad-eyed, old country ballad. It's the state of Wisconsin's long-term finances.

To pay for highways, buildings and environmental programs over the past decade, the state has increased long-term debt by 87%, a trend that if left unchecked will surely mean increasingly difficult budget decisions down the road.

The Journal Sentinel's Steven Walters noted in a recent report that the Legislative Fiscal Bureau says the state had $8.28 billion in such debt in 2006, up from $4.41 billion in 1996 (www.jsonline.com/689757). The period studied covered the leadership of Gov. Jim Doyle, a Democrat, and Republicans Scott McCallum and Tommy G. Thompson.

In effect, the governors, with legislative acquiescence, have made politically advantageous decisions to have their favorite programs and pay for them later. It's basically credit card budgeting.

But the bill always comes due.

As Todd Berry, president of the Wisconsin Taxpayers Alliance, told Walters, the growing debt is a risk. Principal and interest payments on general-obligation bonds will exceed $700 million for the first time this year. Payments on transportation bonds will cost $174 million.

While state officials say the debt load is manageable, a major bond agency, Standard & Poor's Ratings Services, last week changed its rating outlook from "positive" to "stable."

Other long-term trends make such budget moves all the more troublesome. Per-capita income in Wisconsin is about $4,000 a year less than in Minnesota, for example, a gap that has widened. And the number of elderly is expected to jump 90% from 702,000 in 2000 to near 1.34 million by 2030 while the percentage of working age people is expected to decline from 61% to 57%, meaning fewer taxpayers supporting more people in need of services. Add to that the need to replace aging roads, bridges and sewers.

Clearly, we are unlikely to see significant increases in redistributed state tax dollars to "rich" school districts like Madison [2007-2008 Citizen's Budget].

Related: K-12 Tax & Spending Climate:

According to the Wisconsin DPI, per student spending in Wisconsin has increased by 5.1% annually, since 1987. The Madison School District increased at a 5.25% rate during that time. Clearly, our public schools are attempting to address more issues than ever, from academics to breakfast, special education and health care.

Posted by Jim Zellmer at November 28, 2007 8:23 AM
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