Curmudgeon's Corner

Glimpse Into Our Future?

Posted by Al Campbell on Nov. 16, 2009

Economy, Taxes, Wisconsin, Germantown, School Board, County Board

Following up on the blog I wrote last week based on the Pew Center on the States' press release, there is further information to consider.

The finance directors of two of the other "top ten" states (remember that Wisconsin made that list), so far as likely future financial problems, California and Michigan, have discussed the future as they see it today.  Both states closed their budget gaps using one-time federal "stimulus" monies, and will be hard-pressed to find the money necessary in the future without such federal doles.

Wisconsin has used similar monies to "balance" its budget, along with the now typical budget gimmicks (structural deficits) that defer costs into the future.  The futures of California and Michigan, according to those states' finance directors, appear somewhere between very bleak and impossible.  That is the case, from their perspectives, even after whatever will pass for "economic recovery" has finally arrived.

What does this mean for Wisconsin?  It probably means that taxes will be increased almost no matter who wins office, except that taxes would almost certainly be used more by a "Governor" Barrett than by a "Governor" Walker (presuming that Mark Neumann is all but out based on polling).

Our schools will suffer more and more; the two-thirds state share of local school district budgets, that has already eroded, will dissipate more rapidly.  Communities will suffer as their shared revenue numbers continue to shrink.  Not only will state taxes likely be increased, local taxes will go up.  The finance directors included local community bankruptcies as a very real possibility in both California and Michigan.  Will Wisconsin be far behind?

Medicaid costs dumped on states by the federal government have escalated over the past several years, and that will continue as the federal budget takes ever-increasing hits on tax collections.  Add to that the cost impact of such costly programs as national health care and cap and tax programs, and the states look to be getting real short shrift in the future.

Germantown has had problems getting to a balanced budget for 2010, and the storm hasn't really begun to hit yet.  How will trustees handle the future demands?  How will school board members deal with this new reality?  How will the county supervisors deal with these issues?  How will the representatives and senators in Madison handle the coming problems?

There is a price to be paid for the foolhardy manner in which our state government's finances have been handled and we will see that piper demanding payment before too long.