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When Gov. Jim Doyle signed the 2009-11 state budget last week, he and Democrats who run the Legislature raised state and local taxes and fees a record-setting $4.9 billion, increased borrowing by $3.5 billion, increased state spending over 6 percent and left the 2011 budget with a $2.2 billion hole.
At the end of 2008, the state reported an outstanding principle balance of $5.939 billion for general obligations bonds. With interest, the repayment amount climbs to $7.6 billion. Wisconsin taxpayers are scheduled make the last installment on this debt 29 years from now in 2038.
At the same time, the state is carrying another $2.786 billion of principle for outstanding revenue bonds and $650 million in outstanding short-term commercial paper.
After five years with Doyle at the helm, Wisconsin’s outstanding debt per capita in 2007 was the 15th highest in the nation at $3,841 according to the Washington, D.C. based Tax Foundation. Our neighbors in Iowa and Minnesota fare much better, ranking 36th and 42nd, respectively.
And yet, Doyle and the Democrats increased general obligation borrowing another $2.901 billion and revenue bonding $681 million during the next two years.
Principle and interest payments on general obligation bonds made with income, sales and excise tax revenues are steadily climbing according to the nonpartisan Legislative Fiscal Bureau: $449.6 million this year, $468.89 million next year and $484.45 million in 2011.
From there, the Doyle administration has projected a whopping 34 percent increase in 2012 when state taxpayers will pay an unprecedented $650 million in principle and interest. That’s nearly equal to the amount of state tax dollars we will spend on the Department of Commerce, the Department of Natural Resources, the Department of Justice and financial aid programs combined over the next two years.
Between January 1970 when the Legislature began the bonding program and December 2008, the state authorized over $21 billion of borrowing. Principle and interest during that time have totaled $11.5 billion. Interest paid in just the last 10 years totals $2.072 billion.
That $2.072 billion could pay for state health-care programs for seniors and low-income families for a year, fund the University of Wisconsin System or the Department of Corrections for nearly all of the current two-year budget cycle, or support two years worth of Shared Revenue payments to local governments with $400 million to spare.
According to the LFB, debt service payments have historically accounted for 3.5 to 4 percent of expenditures from income, sales and excise tax dollars. Doyle administration officials say their action will take that percentage to 4.5 or more. Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance, said the state is “pushing the borrowing and debt envelope because we haven’t been coming to grips with our budget problems.”
Doyle and Democrat lawmakers have committed our families to making payments on this debt for decades to come. Their shortsighted decision will mean sacrificing funding for other programs, or taxing families, small businesses owners and employers even more than the $4.9 billion signed into law by the governor a week ago.
State Rep. Mike Huebsch, R-West Salem, represents the 94th District.
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