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When the state owes you money, you expect to get a check, not an IOU.
But in California, budget problems got so bad that in 2009, the state issued temporary IOUs to state employees and business contractors. In 2010, it delayed issuing tax refunds as well as payments to schools, community clinics and day care providers.
In October, Gov. Arnold Schwarzenegger vetoed nearly $1 billion in spending from the 2011-2012 budget. Then, less than two months later, he ordered the legislature into special session to address a $19 billion deficit in that budget as well as a $6 billion shortfall in the 2010-2011 one.
Now those are some serious budget problems.
Believe it or not, Wisconsin’s budget situation is just as bad, according to Wisconsin state Sen. Alberta Darling (R-River Hills).
On the "Upfront with Mike Gousha" TV news program Dec. 5, Gousha asked Darling about contracts the state is negotiating with state employee unions. Darling said the contracts should not be finalized until after Republican Governor-elect Scott Walker replaces Democratic Gov. Jim Doyle on Jan. 3.
"I think what we need to do is say, Can we afford the benefits and salaries that we pay for our state employees? That is the question," said Darling, who will co-chair the Legislature’s Joint Finance Committee starting in January. "We are in deep debt. Our spending is over the top.
"And we are proportionally in as much trouble as the State of California, who we hear about all the time in national news."
Hey, we were planning on getting a state tax refund from Madison in a few months.
If cautious Wisconsin is in as much of a fiscal mess as crazy California, we’d like to know now.
Let’s sort it out.
One of Darling’s aides said the 20-year state lawmaker based her comment on a December 2009 article by Todd Berry, president of the Wisconsin Taxpayers Alliance.
Using the most recent figures available at the time, Berry said that Wisconsin’s 2007-2008 state budget deficit of $2.5 billion amounted to $445 per person -- tops in the nation. California, according to Berry’s analysis, ranked fourth at $113 per person.
So, as of mid-2008 Wisconsin was actually worse off than California.
But Darling’s claim was that Wisconsin is in as much trouble as California is now.
Berry provided us state deficit numbers for 2008-2009, the most recent period, and suggested we use 2008 U.S. Census population figures to make the same per-capita calculation. He said that’s what the census bureau does when generating per-person state statistics for budget periods that start in one calendar year and end in another.
Our calculations show Illinois had the highest state budget deficit per person ($595.39) for 2008-2009. Wisconsin was second ($481.81) and California was third ($437.58).
So by that measure, Wisconsin was still in worse shape than California as of mid-2009.
But let’s look at a more common measure used by a number of national research organizations -- budget shortfall as a percentage of a state’s budget.
Jon Shure, an official at the left-leaning Center on Budget and Policy Priorities, said the percentage is preferred over deficit per capita because it compares a budget shortfall to the state’s budget, rather than to an "artifice" such as population.
Shure’s group, based in Washington, D.C., found that Wisconsin’s 2008-2009 budget gap was 11.7 percent of its budget. California, at 36.8 percent, was much worse off.
We checked with other outside groups as well, some of which have made projections into the future. That helps provide perspective on the comparison Darling is making.
In a November 2009 report, Beyond California: States in Fiscal Peril, the Pew Center on the States labeled Wisconsin as one of 10 states in fiscal trouble. The rankings were based on six measures, including budget gaps.
"California’s problems are in a league of their own," the report said. But Wisconsin "narrowly" made the list partly because of "the size of the hole" the recession made in the state budget.
The report said Wisconsin’s 2009-2010 budget gap was the equivalent of 23.2 percent of its state budget. Not good, perhaps, but much better than California, which was at 49.3 percent.
In October 2010, the Center on Budget and Policy Priorities found that Wisconsin’s shortfall in the current budget -- 2010-2011 -- was $3.4 billion, or 23.9 percent of its budget.
That indicated Wisconsin was in slightly worse shape than California, whose deficit was $17.9 billion, or 21.6 percent of its state budget.
Looking ahead, the Center on Budget and Policy Priorities put Wisconsin’s budget gap at 8.7 percent of its total budget for 2011-2012. Much better than California’s 25.7 percent.
The National Conference of State Legislatures, in a report released Dec. 7, 2010, also found Wisconsin better off. The report says Wisconsin’s gap is 9.2 percent of its general fund budget while California’s is more than twice as high, at 18.7 percent.
The National Conference of State Legislatures also projects gaps out to 2012-2013. The budget gap for both states is expected to grow -- but again, Wisconsin fares better.
The report projects Wisconsin’s gap at 9.6 percent and California’s at 20.2 percent.
Back to the present:
There has been considerable debate about the size of Wisconsin’s current budget shortfall. We rated as False the claim by Doyle’s administration that it is $1.5 billion. The general agreement is around $3 billion.
The situation has prompted unpaid furlough days, and promises from Walker to seek union concessions. But unlike California, Wisconsin has not been in the national news for extreme measures, such as issuing IOUs or paying its bills late.
So is Darling’s comparison of the Badger State to the Golden State on the mark?
In the TV interview, she said Wisconsin is "proportionally in as much trouble" as California and pointed to figures from a year-old article as support. Those figures showed that Wisconsin’s budget deficit per person was higher than California’s; updated numbers for 2008-2009 also put Wisconsin’s per-person deficit higher than California’s.
But under a more common measure that many consider a stronger approach -- budget shortfall as a percentage of a state’s budget -- various groups found Wisconsin in better shape than California in 2008-2009 and in 2009-2010; in slightly worse shape in 2010-2011; but much better off than California for 2011-2012 and 2012-2013. Darling’s statement was on target to a point, but left out important details. We rate it Half True.
WISN-TV, Upfront with Mike Gousha, Dec. 5, 2010
Capital Times, Todd A. Berry: The $2.7 billion state deficit no one told you about, Dec. 31, 2009
Los Angeles Times, Governor’s veto ax falls heavily on welfare, child care and special education programs, Oct. 9, 2010
California Legislative Analyst’s Office, The 2011-2012 budget: California’s fiscal outlook, Nov. 10, 2010
California State Controller’s Office, November 2010 summary analysis
California State Controller’s Office, news release, Oct. 11, 2010
Interview, Alberta Darling aide David Volz, Dec. 6, 2010
Interview, Wisconsin Taxpayers Alliance president Todd Berry, Dec. 6 and Dec. 8, 2010
Interview, state fiscal project deputy director Jon Shure, Center on Budget and Policy Priorities, Dec. 8, 2010
E-mail interview, Tax Foundation staff economist Kail Padgitt, Dec. 8, 2010
Pew Center on the States, Beyond California -- states in fiscal peril, November 2009
Tax Foundation, State Surplus or Deficit Per Capita, Fiscal Year 2007, Feb. 5, 2009
Interview, Tax Policy Centerspokeswoman Kim Rueben, Dec. 7, 2010
Center on Budget and Policy Priorities, States Continue to Feel Recession’s Impact, Oct. 7, 2010
JSOnline.com, Darling to co-chair Joint Finance Committee, Nov. 8, 2010
Wisconsin State Senate, Alberta Darling biography
National Conference of State Legislatures, State Budget Update: November 2010
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