MADISON, WI (WSAU) - The organization that praised Governor Scott Walker’s first budget is a bit more skeptical of his new budget proposal. Dale Knapp is with The Wisconsin Taxpayers Alliance.
He said the last budget was tough, but it got the state going in the right direction. "When you look for example at the last budget, there was a lot of fiscal pain by everybody to get the state's fiscal house in order. We got rid of a deficit, we got rid of a structural deficit, and really did a lot to get ourselves on better footing for this budget.”
Knapp says the new budget proposal proposes spending most of what was saved in the last budget, and that concerns him. "We're spending the reserve that we had built up, the 450 million dollar of reserve, we're spending most of that. We're setting up to go back to structural deficits in the next budget, although they're small, we're still taking a half a step back."
The Wisconsin Taxpayers Alliance says there are two variables that can have a huge negative impact on the state’s finances, especially with a relatively small reserve or “rainy day” fund. "There's a couple of problems, not with how the budget was put together, but one (issue) is there's very limited revenues available. When you look at the amount of new money that's going to be coming in, the economy is still growing fairly slowly, so revenue growth is not large by any means, and we have a rapidly growing Medicaid program eating up as much as half of those revenues."
Knapp says the pending Federal sequester is another variable. He says the Wisconsin economy generally moves with the national economy, so if the federal sequester is a negative for the nation, it will also be for Wisconsin.
The Wisconsin Taxpayers Alliance will digging into the state’s spending. Knapp says the three big money issues for Wisconsin are education funding and where the dollars go, transportation funding in the future, and the rapidly-growing Medicaid program.