Friday, February 25, 2011

The Cheese Does Not Stand Alone

From the Center for Budget and Policy Priorities:

"2012 is shaping up as states’ most difficult budget year on record.  Thus far some 44 states and the District of Columbia are projecting budget shortfalls totaling $125 billion for fiscal year 2012.  While states are anticipating significant shortfalls in the coming year, their options for addressing those shortfalls are dwindling.  Federal assistance for states, which has been enormously helpful in allowing states to avert some of the most harmful potential budget cuts, will be largely gone by the end of fiscal year 2011, the current fiscal year.  Nearly one-half of the nation’s governors have now released their budget proposals for fiscal year 2012, and their proposals reflect this grim fiscal reality.  A number of these proposals contain deep cuts to state services on top of the substantial cuts that states have already made since the start of the recession."

Assuming the data collected at this site is fairly accurate, there are some interesting facts apropos the Wisconsin situation:

1.  Wisconsin isn't listed as one of the state's having a budget shortfall in the 2011 budget ending on June 30 of this year.  (This is  probably because the data was collected before the recent enactments with tax cuts for business.)

2.  The projected budget shortfall for Wisconsin in 2012 is 12.8 percent of the total 2011 budget.  Certainly not a very happy number, but about 40% less than the average shortfall percentage of the 46 states on which data was compiled.  So compared to other states, Wisconsin is not as deep in the toilet as some.  Texas, for example, which forbids collective bargaining for its public employees and has onerous laws restricting the rights of its public workers, is looking at a percentage shortfall in its next annual budget that is 31.5% of its total 2011 budget.

3.  The range of the percentage shortfalls run from 44% plus in Nevada and Illinois to 4% for West Virginia.

4.  Mineral rich states, Alaska, Wyoming, Montana are doing quite nicely, thank you very much.  Alaska, for example, has no budget shortfall projected for next year, and the taxpayers actually get annual rebates of oil extraction fees.  That has to be the easiest place in the world to be a state governor, unless you're looking for more out of life by going rogue.

One interesting thing this site alerts you to do is to distinguish between cyclical shortfalls and long term obligations:

"As explained in another Center report, Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Create Unnecessary Alarm  cyclical deficits are distinct from the longer term issues related to bond indebtedness, pension obligations, and retiree health insurance.  These latter issues — size of which often has been exaggerated in recent months — can be addressed over the next several decades.  It is not appropriate to add these longer-term costs to projected operating deficits for the purpose of declaring that states are in a crisis too deep for them to handle."

Many of the states in the biggest bind are those with unfunded retirement obligations for its public employees.  Wisconsin is not in this bind, reporting that its retirement programs for teachers and public employees are fully funded.  There are conservative think tanks challenging this about Dairyland, but it is what the state itself is saying.  (Much of it will ultimately depend on the stock market and pension fund investments, I suppose.)

All of this is by way of saying that the situation is far better in Wisconsin than most other states.  The Republican governors of MichiganIndianaNew Jersey and Florida are taking their foot off the pedal on restricting public employee's rights.  But, inadvertently, Governor Walker just revealed to the world his plan to be the Ronald Reagan of union busting of a new Millenium.

1 comment:

  1. LOVE it that you have a blog, keep 'em coming!