The massive protests, AWOL Democratic senators and the battle over public employee unions have garnered national headlines this week as Governor Scott Walker’s controversial budget repair bill attempts to make it’s way through the legislative process. But what’s been overshadowed by all the drama is the plain and simple fact that Wisconsin is broke. Not just broke, but $3.6 billion in debt.
Personally, we all understand the consequences of having no money and not being able to pay back what we owe. But we’ve been conditioned by our government that somehow this public debt is different. Our national debt is in the trillions and rises $4.13 billion per day. Does anyone even understand who we owe, how we’ll pay it back or how our federal government can function? And unlike the federal government, states are required to balance their budgets.
The largest part of Governor Walker’s budget repair bill is being overlooked: the component that would restructure $165 million in state-issued bonds that come due in May. If these bonds were reissued it would push this payment into the future and free up that $165 million for immediate uses. If the budget repair bill isn’t passed by Friday, it will be impossible to refinance the bonds in time for the state to meet its bills for the fiscal year that runs until June 30.
What the protesters seem unable to understand is that one way or another Wisconsin has to find some money. If this bill fails, the governor has already said that layoff notices to state workers could start as early as next week. The governor has estimated at least 1500 jobs would need to be eliminated. Other analysts have found that the number might need to be as high as 6000 to achieve the same budget savings passing the budget repair bill would achieve. The cold hard reality is that without the proposed reforms in public-employee compensation and bargaining, thousands of public employees will lose their jobs.
Alternatively, if Wisconsin were to follow a Democrat idea of taxing its way out of a deficit, it would require income tax hikes of over 50 percent to patch the $3.6 billion hole! Wisconsinites are already one of the highest taxed people in America, there is no way the population would stand for this approach.
Gov. Walker is in between a rock and a hard place. Todd Berry, president of the Wisconsin Taxpayers Alliance, a non-partisan organization, summed it up saying, This state has been conducting budget balancing maneuvers for 15 years and we’ve exhausted our options.