Caffeinated Politics

Last week, a local television news report about the high cost of filling up at a service station caught my attention. The driver complained, and rightly so, about spending almost 70 dollars to fill the tank. Watching the coverage, I thought of the $300 the state had proposed to give back to Wisconsinites through a refund from the state’s fiscal surplus. In just a few weeks, the service station would have had the money. Clearly, there are better ways for the state to use the refund money by investing the surplus for the greater good, which can benefit the state in the long term.

The roughly $2 billion surplus deal struck earlier this year between Democratic Governor Tony Evers and the GOP legislative leaders has proven controversial. According to the Marquette Law School survey, it had strong support from the rank-and-file voters. What they found to their advantage was the ability to use $850 million in rebate checks before the November election. Anyone who earned enough to pay state income tax could have received up to $300, with married couples receiving $600. Also, in the package was much of the state’s surplus, being used on a mix of funding for K-12 schools and property tax cuts. Meanwhile, gubernatorial candidates blasted the proposal in a variety of ways, with some arguing that the proposal was struck by three elected officials who will not have to face voters this fall.

I understand why there was support for the proposal. Where I live, our local schools would have received a $14.8 million increase for special education purposes. Likewise, across the state, the bill would have eased ever so slightly property tax pressures.

I have continuously championed two things when it comes to state surpluses. First, think big about the needs of the state, and second, know that the days of surplus can also become clouded with deficits in the coffers. In other words, manage the money smartly, but do not just give it away.

In 1943, California Governor Earl Warren came into office with a $60 million surplus, and his words to the state sum up how we might consider our present fiscal situation. The surplus “constitutes a sacred truth for those who have the power to spend, for it has been collected from all the people and should be expended and preserved only for uses which will redound to the benefit of all.” I strongly concur with that perspective.

Every pol knows that refunds are politically attractive. Better yet, have those checks arrive before an important election cycle. I wish we had leaders from both parties who considered big ideas for the state’s future needs when talking about how to invest and spend this pot of money.

How about a robust infusion into our transportation systems? Roads and bridges? Our water system needs? Upgrading broadband networks? Or investments in ideas that are new and need a light shone upon them with a statewide dialogue. The safe bet for any elected official is to give the money back to the locals. But should we not expect our top leaders to take bold and far-reaching action, given the data showing a surplus of this magnitude exists, rather than play to base instincts? (Or do I ask or expect too much from politicians?)

On the other side of the issue, and one we must be cognizant of, is that preventing a future structural deficit is imperative. The Wisconsin State Journal made that clear. I would add that responsible fiscal management requires aligning temporary resources with statewide ideas and projects that deliver returns for decades.

So being careful with the state’s money makes sense. The state budget of more than $100 billion would have needed revenue growth of about 4% in the next couple years to cover Evers, Vos and LeMahieu’s showy rebate checks and other expenses.

Such strong growth is possible but hardly a given. Though general state tax collections grew 4.8% during the budget year ending June 30, the previous year saw growth of just 1.7%. And “slow growth” was predicted in the state’s Annual Comprehensive Financial Report in December.

But I come back to our state government operating with energetic resolve. The wise use of a surplus of this size gives us a chance to talk about our statewide priorities. What is on the horizon that we might focus on? Let’s consider ideas that are going to confront us in 20 years and start aiming our policy ship in that direction. Tax refunds may feel good for a moment, but big ideas and statewide investments pay dividends for generations.