Christian Schneider

Author, Columnist

Doyle’s New Friend Rosy

In researching my commentary on Scott McCallum yesterday (and it appears that I remain the only one willing to publicly defend McCallum), I ran across this tidbit of info that didn’t quite fit:

When running against McCallum in 2002, then-Attorney General Jim Doyle ripped the Governor for revenue forecasts that Doyle deemed too optimistic.  From a Milwaukee Journal Sentinel blog in 2006:

Four years ago, then-candidate for governor Jim Doyle attacked a prediction that future state revenues will grow by about 5%. But that’s exactly the growth that his own state budget director recently predicted, and said it will wipe out any future budget deficit.

On Sept. 25, 2002, the Democrat’s campaign ridiculed the prediction by the top deputy to then-Republican Gov. Scott McCallum that tax collections would go up by about 5% a year.

“Scott McCallum has been spending too much time with his friend Rosy Scenario,” Doyle, then the attorney general, said in a statement. “That is exactly the kind of wishful thinking and dishonest budgeting that got us into a $2.8-billion (deficit) hole to begin with.”

Now here we are in 2009, in the middle of a recession, with state revenues dropping.  And the number Doyle plugs in to his budget to make it balance out?

4.5%.

So while it took three years after the mild recession of 2001 for the state to show any tax revenue growth, Doyle thinks in one year we’re going to be all the way back to the 5% growth that he sneered at McCallum for predicting.  Doyle ripped McCallum for his forecast saying tax receipts are going to grow 5% in a mild recession, and now Doyle has them growing 4.5% in a disastrous recession.

It gets even better:

Said [Doyle Budget Director] Schmiedicke: “Over the past 20 years, revenues have grown at an average rate of approximately 5% a year. Assuming only average growth — and without having to cut anything from the budget — the state will see revenue growth of about $1.9 billion. That more than covers the so-called ‘structural deficit’.”

Well, we know how that turned out.  Even before the bad economy hit in late 2008, the budget Doyle signed in 2007 carried a $1.6 billion structural deficit, which ballooned to the current $6.6 billion deficit.  This deficit occurred even after tax revenue growth of 5.5% in 2006, 4.9% in 2007, and 3.8% in 2008.  So they got the growth they wanted, but didn’t even come close to closing the “so-called” structural deficit.

Basically, Doyle justified spending beyond our means by saying we’d make more money in the future to balance things out.  Well, that money came, and he continued to deficit spend – which turned into the problem we have now.  (And the problem we’ll have in the future, as the budget in its current form carries a $2.3 billion deficit into the new biennium.)

1 Comment

  1. They didn’t quite get a 5% annual growth in ongoing revenues between 2005 and 2008, but 4.7% annual growth is nothing to sneeze at. It still would have left a structural deficit of over $1.4 billion.

    BTW, I think you forgot me in the “publicly defending McCallum” category.

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