With Governor Doyle due to sign the state budget this morning, Republican Party of Wisconsin Chairman Reince Priebus offered the following comments.
Over the past few months, it’s been no secret that Wisconsin’s budget is in a mess. A record deficit and a slowing economy surely haven’t made the task of setting a new two-year spending plan any easier. But just because the task was difficult doesn’t mean fixing the problem was impossible. Wisconsin legislators, and, in particular Governor Doyle and the Democratic leadership members who control both houses, would have done well to follow a simple, guiding principle. When you’re in a hole, stop digging.
Family budgets and small business budgets work based on this rule every day. When times are tough, we cut back. Families certainly can’t tax the neighbors down the street when they want to spend money on something new, but state government can. Just look at the new state budget.
The new budget, approved by both houses of the legislature late last week, contains $4 billion in new spending, $2.1 billion in new taxes and fees on everyday expenses such as telephone service or garbage disposal, and $1.5 billion in property tax hikes. Democratic leaders attempted to balance the books by borrowing $2.9 billion, but even employing this questionable method of funding new spending leaves the state with an unsolved $2.3 billion structural deficit.
In total, in the five months since Wisconsin Democrats have held the Governor’s office, the state Assembly, and the state Senate, they’ve raised taxes in Wisconsin by $5 billion dollars. That’s almost $1000 for every Wisconsinite.
These tax increases are presumably an attempt to solve the budget mess, but the Democrats are overlooking one important detail. An increasing and excessive tax burden forces business out of the state at a time Wisconsin is bleeding jobs. Not only do higher taxes hurt families, they’re dampening the chances for the type of economic recovery that will put Wisconsin workers back on the job and our state’s finances back on track.
It’s not just Republicans that have been pointing out the disastrous effects that anti-business provisions can have on a budget. Chief Executive Magazine ranked Wisconsin a disappointing 43rd in the nation in its annual ranking of “The Best States to Do Business In.” And don’t expect the ranking to get better anytime soon. The new budget hikes taxes on investments, making businesses are even less likely to grow here in Wisconsin.
Equally as disturbing as the tax increases and new spending contained in the new state budget are the policy items that have no place being tucked in to a spending plan, as they have nothing to do with balancing the books. These non-fiscal policy items have the potential to wreck havoc on an already sour economy, and the new budget contains many such items.
For instance, auto insurance minimum coverage changes mean insurance rates are going up due to the new budget, driving up both costs and the number of uninsured. Take a look at your auto insurance premiums now. They are estimated to increase by up to 40 percent under the budget approved on a partisan vote by legislative Democrats.
The auto insurance changes are only one example out of almost one hundred non-fiscal policy changes currently included in the budget bill. It’s almost impossible to know the entirety of the impact each of the changes will have on our economy, but initial reactions from business owners across the state are marked with concern.
Unless lawmakers get serious about creating more jobs, cutting back on bloated state spending, and recognizing that increasing taxes on families and businesses hurts our economy, the budget mess could become a full-blown disaster.
As we await the Governor’s vetoes and signature on the budget bill, it’s already almost inevitable that the Wisconsin legislature will be forced to reconvene within a year to address a revenue shortfall when it becomes sorely apparent that taxing businesses out of the state means good-paying jobs and taxable revenue sources are leaving with them.
At this juncture, taxpayers should be calling the Governor to convey an important message. Ask the Governor to remove non-fiscal policy items that plague the budget bill. Tell the Governor you don’t think taxing families and businesses in the state will turn the economy around.
Most importantly, taxpayers should tell the Governor to stop digging. Wisconsin’s budget hole is due, in part, to creative funding transfers the Governor has made with his veto pen in the past. Wisconsin’s budget is bad enough.
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