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Wednesday, June 23, 2010

Details Needed on State Budget Cuts

Among gubernatorial candidates, only Barrett offers a specific plan

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The next governor of Wisconsin is going to face a tough financial situation and likely make more cuts in the next state budget.

So why has only one candidate—Milwaukee Mayor Tom Barrett, a Democrat—offered a detailed plan of cuts and efficiencies? And why have the two “fiscal conservatives”—Republicans Scott Walker and Mark Neumann—offered nothing but general ideas and one headline-grabbing gimmick?

Walker’s campaign spokeswoman said Walker would outline his plans to cut spending throughout the campaign.

His sole cost-saving proposal released so far is to ask state employees to pay their full employee contribution toward their pension, an idea that Walker says will save $180 million per year.

Whether the various unions that represent state employees will accept this change is another matter.

On his campaign website, Walker promises “government spending and reform” measures, including starting the state budget at zero, changing accounting procedures, stripping “policy and pork projects” from the budget—he doesn’t define “pork” and policy proposals are already routinely removed from the budget—not raiding segregated funds for other programs and restoring Wisconsin’s reputation for clean and honest government.

So other than asking state employees to contribute more toward their pension plans, Walker has no detailed cuts for voters to mull over and inform their decisions.

Likewise, Walker’s challenger in the Republican primary, former Congressman Mark Neumann, offers few details about what he’d cut.

In an e-mail to the Shepherd, Neumann’s spokesman Chris Lato wrote that Neumann “is not singling out line items and everything is on the table.”

Instead, Neumann is proposing to limit the growth rate of spending to 1% less than the rate of inflation, saying that spending less than the revenue generated by the state will result in reduced taxes for Wisconsin residents.

“The spending cut [Neumann] is proposing is an across-the-board effort to implement fiscal discipline throughout state government,” Lato wrote. “He is not cherry-picking certain items in the massive state budget.”

Although Walker and Neumann won’t detail what programs they would cut, they have proposed tax cuts that would decrease state revenue about $1 billion during the next two-year budget cycle. Those tax breaks are mainly for the wealthy, argues the advocacy group One Wisconsin Now.

For example, Walker and Neumann want to re-open the “Las Vegas loophole” for Wisconsin businesses with phony offices in other states ($375 million); cut taxes for the top 1% of income earners ($287 million); and increase the capital gains tax deduction ($243 million). Walker also wants to eliminate $1 billion in taxes on retirement income.

Barrett: Find Health Care, Energy and Corrections Savings

In contrast, Democrat Barrett has offered a more detailed plan for what he calls “putting Madison on a diet,” and has identified more than $1.1 billion in savings in the state budget.

Some of those savings include:

  • Pooling state, county, municipal and vocational or school district employees to increase their purchasing power for health care. Barrett estimates $339 million will be saved per year.


  • Charging BadgerCare Plus enrollees higher monthly premiums for more expensive plans, which will encourage more enrollees to select lower-cost plans. That would save an estimated $200 million annually.



  • Reducing the cost of incarceration by using community corrections programs and alternative sentencing programs where appropriate. An estimated $58 million would be saved annually.


  • Saving $34 million in state government by eliminating the offices of secretary of state and state treasurer; reviewing all regulatory programs, commissions and boards every 10 years with an eye toward ending them; consolidating and reorganizing state programs; and reducing the number of state workers hired to replace retiring employees.


  • Expanding energy-efficiency measures and setting higher energy-efficiency targets to save an estimated $44 million per year.


  • Reducing fraudulent Medicaid billing by at least 20%, which would produce almost $40 million per year in savings.
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