Saturday, September 30, 2006

What the JS was saying 4 years ago

The Journal Sentinel has started a snarky new feature, designed mostly, it appears, as another platform to take potshots at Gov. Jim Doyle for things he said on the campaign trail in 2002 that either have not come to fruition or, in hindsight, turned out to be wrong.

The series is supposedly about "what the candidates were doing and saying four years ago." But Doyle was running for governor, while Congressman Mark Green doing little except raising and banking Washington special interest money while winning a lopsided re-election victory. So Doyle clearly will be the recipient of most of the cheap shots.

Here's Friday's:
4 years ago, Doyle didn't expect 5% growth

Madison -- Four years ago, then-candidate for governor Jim Doyle attacked a prediction that future state revenues will grow by about 5%. But that's exactly the growth that his own state budget director recently predicted, and said it will wipe out any future budget deficit.

On Sept. 25, 2002, the Democrat's campaign ridiculed the prediction by the top deputy to then-Republican Gov. Scott McCallum that tax collections would go up by about 5% a year.

"Scott McCallum has been spending too much time with his friend Rosy Scenario," Doyle, then the attorney general, said in a statement. "That is exactly the kind of wishful thinking and dishonest budgeting that got us into a $2.8-billion (deficit) hole to begin with."

According to the non-partisan Legislative Fiscal Bureau, state tax collections have averaged annual growth of 5% for decades.

Now, fast-forward to Aug. 15 of this year, when a Doyle appointee, state Budget Director David Schmiedicke issued his own "rosy scenario." It dismissed conclusions of Republicans like Mark Green, the GOP candidate for governor, and the non-partisan Wisconsin Taxpayers Alliance that there is a deficit -- a two-year gap that could be $2 billion or more, depending on how you count.

Said Schmiedicke: "Over the past 20 years, revenues have grown at an average rate of approximately 5% a year. Assuming only average growth -- and without having to cut anything from the budget -- the state will see revenue growth of about $1.9 billion. That more than covers the so-called 'structural deficit'."

Schmiedicke's report came out days before Doyle proposed new tax deductions for health-care premiums paid an employer, if those premiums are not already tax-exempt, and for child care.

Another in an occasional series of what candidates for governor and their aides were saying, and doing, four years ago.

And here's what the newspaper didn't tell you:

Reporter Steve Walters forgot to mention that we were just coming off of an economic recession that had been made worse by the Sept. 11, 2001 terror attacks. The previous two years had shown very low growth.

Here's what the JS had to say in an editorial at the time:
Fuzzy math from McCallum
Posted: Sept. 28, 2002

We mean no disrespect when we assert that straight talk in this gubernatorial campaign will be at a very high premium. Example: Gov. Scott McCallum's recruiting of Rosy Scenario. The other day, talking about economic growth to the La Crosse Tribune, McCallum said his computer models estimated an increase in state revenue of more than 5%. This, the governor seemed to imply, would do wonders toward addressing Wisconsin's fiscal mess - specifically, spending projected to exceed tax revenue by as much as $2.8 billion for the biennium beginning next July 1. "The focus needs to be on growth," the governor said, "instead of saying how deep do (cuts) need to be."

There are a couple of problems here. First, the budget repair bill that McCallum signed in late July already may be obsolete. Tax revenue for fiscal year 2001-'02 - the first year of the current biennium, which ended June 30 - fell short of expectations by nearly $190 million. As a result, revenue must grow by 6.8% in the current fiscal year to hit estimates made by the non-partisan Legislative Fiscal Bureau earlier this year.

Slight problem No. 1: The state has averaged about 5.5% in annual revenue growth over the past two decades, and it may be mighty difficult to hit even that target if the national and state economies don't pick up some steam soon. The fiscal bureau itself acknowledges as much: It has projected an increase of tax collections in the current fiscal year of 3.1%, less than half of what's needed to fill the gap.

Slight problem No. 2: A return to average revenue growth, unlikely as it is, would not absorb a $2.8 billion shortfall, still leaving a massive hole - more than $1 billion - to fill. McCallum has ruled out any and all tax increases. Fair enough: We don't much like tax increases, either, and we believe the governor is right to hold the line. But exactly how does he propose to solve the problem if he is not prepared for deep cuts in spending?

Attorney General Jim Doyle, McCallum's opponent, hasn't earned a bye in this fix-the-budget board game. The Democratic candidate also has ruled out general tax increases on income and sales, regularly stressing that Wisconsin taxpayers have paid their fare share and that the state must shed its reputation as a high-tax state. But Doyle's education proposals might well result in higher property taxes, as McCallum supporters assert in attack ads, unless he can detail another way to pay for them.

Even so, McCallum was Tommy Thompson's lieutenant governor for 14 years and has been his own man in the hot seat since February 2001. Along with the Legislature, he was a party to the budget repair bill that, in fact, repaired nothing because it used onetime tobacco-settlement money to patch things up.

Both men need to better spell out how they intend to deal with the state's fiscal mess. But given his performance during the state budget follies of 2002, McCallum shoulders the bigger burden in explaining how he intends to tame a structural deficit once and for all.

From the Sept. 29, 2002 editions of the Milwaukee Journal Sentinel


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