Stand up for facts and support PolitiFact.
Now is your chance to go on the record as supporting trusted, factual information by joining PolitiFact’s Truth Squad. Contributions or gifts to PolitiFact, which is part of the 501(c)(3) nonprofit Poynter Institute, are tax deductible.
I would like to contribute
With a better-than-expected tax-collection estimate and savings from delaying some debt payments, Gov. Scott Walker on May 10, 2012 made a small deficit at the mid-point in his two-year budget -- poof -- disappear.
Gone along with it: An issue Democrats were using against Walker in the June 5, 2012 recall election.
This was posted the following day on the Walker campaign blog:
"Not only have we turned away from the failed policies that drove us to the brink of insolvency with chronic billion-dollar budget deficits, double-digit tax increases and record-setting job loss, but we have taken a complete 180 degree turn to true prosperity with a budget surplus that will help far into our future," the post read in part.
The Walker’s campaign boasted the news was so good extra funds will be socked away in budget-stabilization account: "For the first time in state history, we have put millions of dollars into our rainy day fund in consecutive years."
History, or course, can be an awful long time.
Did back-to-back contributions happen thanks to Walker’s policies?
Wisconsin first created a stabilization fund in 1985, so it’s actually a fairly new thing. But the state has seldom put money into it. That’s one reason Wisconsin lives closer to the fiscal edge than many other states.
According to the Legislative Fiscal Bureau, the first deposit into the fund was in 2006-07, during the final term of Democratic Gov. Jim Doyle, Walker’s predecessor.
That deposit totalled $55.6 million, but was quickly used up in a budget crisis later in Doyle’s term.
The second deposit made to the fund -- $14.8 million -- came at the end of Doyle’s last budget, 2010-11. The deposit was made after Walker had taken office. His first six months overlapped the final six months of the Doyle budget.
That brings us to May 2012.
That’s when Walker signalled that he could make another deposit, estimated at $45.4 million, after the fiscal year ends June 30, 2012.
So, did Walker -- for the first time in state history "put millions of dollars into our rainy day fund in consecutive years"?
First, the deposit is a projection. It would make two budgets in a row for the first time if it happens. It looks likely that a deposit will be made, but it’s premature to say it already happened.
Second, the numbers are not based on the "official" revenue estimates that come from the Fiscal Bureau, the neutral scorekeeper on budget items. That caused Democrats to howl in protest when Walker put out the well-timed news.
In February 2012, the Fiscal Bureau said that tax revenues were coming up short, leaving a small projected deficit by June 2013.
The new Walker estimate is based on revenue forecasts compiled by Walker’s Department of Administration for February, March and April. In a May memo to Walker, Administration Secretary Mike Huebsch described it as "the potential" for a $45.4 million deposit when the books close at the end of June 2012.
While not official, the estimates are based on the same sources of data used by the Fiscal Bureau. Bureau Director Bob Lang told us he didn’t verify Walker’s numbers but said they don’t appear unreasonable.
We’ll know the size of the actual deposit, if there is one, when the state completes its annual financial report once accounts are settled, in late summer. It’s also possible the deposit could exceed the projected $45.4 million.
Who deserves credit?
While 2011 was Doyle’s final budget year, it was Walker who brought the budget back into balance with his budget-repair bill in early 2011.
You may recall that little old bill -- the one that included higher pension and health-insurance payments from state and local government employees, and curtailed collective bargaining for most public employees.
Likewise, the expected 2012 surplus would clearly be on Walker’s watch.
But it’s arguable how much a governor has to do with rising tax collections. Walker’s administration attributed the brighter tax-collection forecasts in large part to improved job-creation figures and personal income growth, which are subject to economic cycles.
Additionally, putting money in the stabilization fund is not a matter of choice. By law, 50 percent of any surplus from higher-than-expected income and other tax collections must be transferred to the rainy day fund. That’s exactly what Walker is saying he would deposit.
"I believe that both the Doyle deposit and pending Walker deposit were not done by volition or predetermined plan but by a state law requirement when excess funds appear," said Todd Berry, president of the Wisconsin Taxpayers Alliance.
But we attribute budget deficits to elected officials, so they must also get some credit for surpluses.
Walker’s took credit for what the campaign said was a historic double-up of surplus tax funds into a rainy day fund for stabilizing future state budgets. The chances for a second straight transfer into the fund appear good, but it’s premature to say the money is in the bank.
Walker gets the bulk of the credit, but his campaign claim is just partially accurate, because it skips over the important fact that the deal’s not done yet.
We rate it Half True.
(You can comment on this item on the Journal Sentinel's website)
Scott Walker campaign website, blog on budget surplus, by Nathan Conrad, deputy communications director, May 11, 2012
Phone interview with Jocelyn Webster, spokeswoman, Department of Administration, May 30, 2012
Phone interview with Dave Loppnow, fiscal analyst and program supervisor, Wisconsin Legislative Fiscal Bureau, May 29, 2012
Email interview with Todd Berry, president, Wisconsin Taxpayers Alliance, May 29, 2012
Milwaukee Journal Sentinel, "Walker’s team expects $154.5 million surplus by 2013," May 10, 2012
Department of Administration, General Fund Tax Collections and Fund Condition, May 10, 2012
Milwaukee Journal Sentinel, "Legislature considering steps to create rainy-day fund," April 14, 2011
Read About Our Process
In a world of wild talk and fake news, help us stand up for the facts.