Yesterday, the Legislative Fiscal Bureau released their summary of the state budget as rushed through by the Joint Finance Committee last week. It’s a long and complicated document, so we here at WPRI have enlisted some help in explaining many of the big themes included the budget.
As it happens, most of what legislative Democrats passed can be explained by eccentric chocolatier Willy Wonka, star of the 1971 children’s classic “Willy Wonka and the Chocolate Factory.” Here are some famous quotes from the movie, and how they shed light on the budget currently before the Legislature. Cuddle up with your favorite little Oompa Loompa and read along:
Willy Wonka: [singing] There is no life I know to compare with pure imagination. Living there, you’ll be free if you truly wish to be.
For weeks, Legislative Democrats have been adamant that this budget “cuts” government, pointing to the fact that general purpose spending is down 3.2% over the base year doubled. By making the case that this budget “cuts” anything, they are living in a world of “pure imagination.”
In fact, total (all funds) spending increases in this budget by 6.3% over the biennium – in a budget that we are told balances a $6.6 billion deficit. This is primarily because President Obama “made it rain” federal dollars, which simply supplant much of the general fund spending that is reduced in the first year. This will leave us with a gigantic hole in the next budget, when the federal dollars aren’t there to support the ongoing programs we have created.
One needs only to look at the state employee numbers to see how deep these supposed “cuts” are. The budget passed by the Joint Finance Committee actually increases state employees by 367.8 positions over Governor Doyle’s proposed budget. These increases come in a year when not only is the Legislature supposedly cutting spending, but when over 118,000 private sector jobs have lost their jobs.
These “cuts” are pure imagination.
Willy Wonka: [making a mysterious formula] Invention, my dear friends, is 93% perspiration, 6% electricity, 4% evaporation, and 2% butterscotch ripple.
Mrs. Teevee: [as Mr. Wonka drinks the formula] That’s 105%!
Mr. Beauregarde: Any good?
Willy Wonka: [smacks his lips, then speaks thinly] Yes.
Legislative Democrats tell us this budget is “balanced.” Yet the Legislative Fiscal Bureau has issued a memo telling us that the new budget creates a structural deficit of $2.3 billion to begin the next biennium – over $700 million more than the state had at the beginning of this biennium (caused by prior imbalanced budgets.)
Clearly, the numbers don’t add up. Maybe they should add some butterscotch ripple.
Veruca Salt: I wanted to be the first to find a Golden Ticket, Daddy!
Mr. Salt: I know, angel. We’re doing the best we can. I’ve got every girl in the place to start hunting for you.
Veruca Salt: All right, where is it? Why haven’t they found it?
Mr. Salt: Veruca, sweetheart, I’m not a magician! Give me time!
Veruca Salt: I want it now! What’s the matter with those twerps down there?
Mr. Salt: For five days now, the entire flipping factory’s been on the job. They haven’t shelled a peanut in there since Monday. They’ve been shelling flaming chocolate bars from dawn till dusk!
Veruca Salt: Make them work nights!
The petulent Veruca Salt wanted that golden ticket, and was willing to make all her dad’s factory workers log in overtime to get it.
For 15 years, WEAC (the state’s teachers’ union) has been kicking and screaming to get rid of the QEO law that guarantees them at least a 3.8% salary and benefit increase per year. They wanted more, and it didn’t matter if the “twerps” working two jobs in the private sector had to work extra hours to pay for their increased salaries.
Finally, in this budget, they get their wish (although they lobbied to have their golden ticket pushed back one year, realizing what a good deal it was in a bad economy.)
Start working nights, twerps.
Mr. Turkentine: I’ve just decided to switch our Friday schedule to Monday, which means that the test we take each Friday on what we learned during the week will now take place on Monday before we’ve learned it. But since today is Tuesday, it doesn’t matter in the slightest. Pencils ready!
Ultimately, this budget will be judged on its contents, not necessarily how it was crafted. But the Joint Finance Committee’s attempts to schedule themselves out of any scrutiny of the contents shouldn’t be forgotten. Backroom dealings, late night votes, and committee meetings on holiday weekends became routine with the Democrats on the Joint Finance Committee. It’s a sure sign that they’re embarrassed about what they passed, and their 5:45 AM votes on Friday mornings confirm that.
Willy Wonka: A little nonsense now and then is relished by the wisest men.
Governor Doyle and the Wisconsin Legislature seem to live by these words.
Take, for instance, the so-called “oil franchise fee” Doyle has been pitching for years. According to the plan, oil companies would pay a higher tax on their gross receipts, and not be allowed to pass the cost on to consumers.
Yet there’s no court in America that would uphold such an “anti-pass through” provision. The scheme, which is expected to raise the price of gas between 5 and 7 cents per gallon, is a gas tax increase, pure and simple. This has been demonstrated time and time again. Yet delusional lawmakers still somehow believe oil companies will end up paying the tax, despite all the facts to the contrary. In fact, when the oil companies eventually sue the state, they will win, and taxpayers may be asked to foot the bill for all the taxes they paid, plus damages.
Relish the nonsense.
Willy Wonka: Bubbles, bubbles everywhere, but not a drop to drink – yet.
Wonka was wildly optimistic about his new flavorful concoctions – just as the Legislative Democrats’ budget may well be overly optimistic about the revenue numbers in the coming years.
While everyone agrees that general purpose tax receipts have dropped over the past year due to the sinking economy, this budget actually expects sales, income, and corporate tax revenues to jump 4.8% next year.
In 2001, when the state suffered a relatively mild recession, state revenues remained flat for a full three years after the downturn (even when one factors in the tax cuts that went into effect in 2000.) To expect revenues to rebound so quickly after such a dramatic economic downturn seems to be asking too much. Of course, the budget goes ahead and spends those hypothetical funds, which could send the state into another budget crisis should those new revenues not materialize.
Willy Wonka: It’s all there, black and white, clear as crystal! You stole fizzy lifting drinks! You bumped into the ceiling which now has to be washed and sterilized, so you get *NOTHING*! You lose! Good day, sir!
Grandpa Joe: [shocked] You’re a crook. You’re a cheat and a swindler! That’s what you are!
If Wonka was incensed by Charlie and Grandpa Joe sampling some of the factory’s fizzy drinks, imagine how angry he’d be with the Legislature stealing $140 million from the transportation fund to plug the general fund deficit. But rather than missing out on free chocolate for life, state taxpayers will instead be punished by having to pay 20 years’ worth of interest on the bonds used to replace those stolen funds. This, of course, is on top of the interest they are already paying for the $1.2 billion in bonds issued in past budgets to plug the general fund hole (which generally blows a hole in the subsequent budget – sensing a theme here?)
Mr. Salt: Wonka, how much do you want for the golden goose?
Willy Wonka: They’re not for sale.
Mr. Salt: Name your price.
Willy Wonka: She can’t have one.
Veruca Salt: Who says I can’t?
Mr. Salt: The man with the funny hat.
Just as Willy Wonka had a golden goose, our legislators have figured out who lays their golden eggs – the taxpayers.
This budget, plus the “mini” budget passed in April, raises taxes by $3.3 billion – at a time when Wisconsin residents can least afford to pay more. Taxpayers can expect to pay more for gas, cigarettes, hospital care, nursing home beds, and they will also be asked to start paying sales taxes on an array of goods which were previously exempt. Property taxes are expected to go up by $316 on a median-value home. Even in cases where the new tax isn’t directly applied to the consumer (combined reporting, for instance), businesses will be forced to increase their prices to customers in order to make up their loss.
Of course, the business and taxpayer golden goose can always fly away to other friendlier states, leaving the rest of us to pick up the tab.
Mrs. Gloop: [Augustus Gloop is sucked into the suction pipe which takes him to the vertical pipe] Don’t just stand there, do something!
Willy Wonka: [unenthusiastically] Help. Police, Murder.
When Augustus Gloop is sucked into a chocolate tube, Wonka is unconvinced that any wrong necessarily had to be righted. Gloop, after all, had been gluttonous, and probably got what he deserved.
For some reason, the Legislature decided there were some imaginary problems for which they had to “do something.” For instance, the budget increases the amount of car insurance drivers must buy in Wisconsin. Has this really been a problem? Were lawmakers hearing from constituents who were clamoring to pay $300 per year more in auto insurance premiums?
In fact, legislators likely only heard from the trial attorneys, who will receive larger payouts as a result of the increased insurance coverage by Wisconsin drivers. As such, the trial lawyers’ gluttony dwarfs that of poor Augustus.
Mrs. Gloop: He can’t swim!
Willy Wonka: There’s no better time to learn.
This budget was the perfect time to make fundamental, systemic changes to how the Wisconsin budget works. The Legislature could have started to put money aside for future downturns, to ameliorate the effects of a slowing economy. They could have asked state workers to pitch in just a small amount to their own retirement accounts, in order to help balance the books. They could have ceased raiding state funds for cash, which has caused a large part of the shortfall in which they now find themselves.
While Augustus took being sucked into the tube as a chance to learn to swim, lawmakers in this budget learned nothing. They made no government worker reductions. They plug budget holes with temporary money, almost certainly causing another large deficit in the next biennium. They exacerbate the state’s fiscal problems by issuing more debt, and stuffed the budget with pork projects to get them through to the next election.
Sam Beauregarde: Don’t talk to me about contracts, Wonka, I use them myself. They’re strictly for suckers.
Wonka adheres strictly to contracts, as do state employees. That’s why, despite the budget eliminating 2% raises for state employees, the state only saves $72 million from the maneuver. Employees that are unionized don’t lose the raise, as their contracts are in effect. (They do, however, have to take part in the 16 day furlough plan in the budget.)
Mrs. Teevee: I assume there’s an accident indemnity clause.
Willy Wonka: Never between friends.
Wonka won’t be pleased when he finds out the Wisconsin Legislature has now made him liable for 100% of the damages to his visitors, even if he’s only 20% negligible. Perhaps he can pay the trial attorneys off with the everlasting gobstopper secret.
Willy Wonka: Not a speck of light is showing / So the danger must be growing / Are the fires of hell a-glowing? / Is the grisly reaper mowing? / Yes! The danger must be growing / For the rowers keep on rowing / And they’re certainly not showing / Any signs that they are slowing!
For years, our “rowers” (elected officials”) have been rowing our state’s finances into a ditch. And there’s certainly no sign that they’re slowing.