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Walker’s
Borrow & Spend policy passes Board
Bills
to come due in 2008
"In
a time of universal deceit, telling the truth is a revolutionary
act."
--- George Orwell
I
don’t usually start my column by quoting others, but there is no
better way to sum up what is happening with the County’s finances
than with Orwell’s words.
County
Executive Scott Walker wants to borrow money to pay the County’s
bills now. That money will have to be repaid starting in 2008. He
recently received approval from the County Board for his new plan.
Supervisors who voted for the plan will likely have to face the
music in their races next spring.
Campaign
rhetoric is different in Supervisory races than in County Executive
races. Exec races rely on 30-second ads with campaign slogans and
pretty pictures. Supervisory races are typically heavier on
substance. Any challenger could easily lay out a case for voters.
Picture the campaign lit. Column one: “The Incumbent: Borrow and
spend.” Column two: “The Challenger: Fiscal restraint.”
That’s not a campaign piece any incumbent wants to see but a well
informed challenger would be foolish not to make sure it gets to
voters doors.
No
one would question that the County is in a tough financial
predicament. But it was a predicament brought on in part by
Supervisors foolishly ratifying Walker’s 2003 budget which had
built in deficits of nearly $25 million. Tooth fairy budgeting
isn’t supposed to be possible in the real world. When it happens,
organizations collapse. Even Enron managed to hide their problems
for a while.
The obscene part
of the last County budget was that the board held hearings in public
and still there was no coverage of the fiscal problems as they were
unfolding. Last fall, rather than making their editorial
pronouncements based upon a solid analysis of the budget, the Milwaukee
Journal-Sentinel ran an editorial lauding the budget based
entirely upon Walker’s budget address. They failed to provide an
independent analysis of the budget and instead credited Walker with
fiscal restraint that he did not show in the budget. In fact, the
only in-depth media analysis of the budget was done in this
newspaper last March. In May the County announced what readers of The
Press already knew would happen – the County was running a
budget deficit.
During
his campaign, Walker promised he would not raise taxes if elected.
On the surface it seems like a laudable goal. It does however seem
a little odd that the promise came from a man who, as a State
Representative, did more than almost anyone else to drive up
corrections costs and make the criminal justice system a budget
hell hole that will haunt the State for years to come.
After all, it was Walker who bullied through “Truth in
Sentencing” legislation without having a fiscal analysis done
showing what the costs would be. The ironies of these sorts of
fiscally retarded policies coming from a
Legislator-turned-Executive shouldn’t be wasted on the
politically aware, let alone anyone who can add.
No-tax
increase campaign promises are difficult to deliver on and the
impacts are often painful. Walker has run out of ideas on saving
money and the only way he can continue to support his spending
practices is to borrow money to do it. In the vintage cartoon Popeye,
the character Wimpy would often say, “I’ll gladly pay you
Tuesday for a hamburger today.” Although he hardly seems like a
role model, today’s Walker is yesterday’s Wimpy.
When
State and Federal governments borrow money, they have a chance to
painlessly recoup the funds if the national growth rate increases
in future years. As the national growth rate increases, personal
income increases and since State and Federal governments get their
revenues from income taxes, tax collections increase. When local
governments borrow funds, they must rely on strong increases in
property values to avoid painful tax increases since they receive
their revenues from the property tax.
Years
back, when the County instituted a 0.5% sales tax, citizens were
promised these funds would be used for capital improvement
projects and debt service (paying the mortgage on infrastructure).
This policy changed to allow County Executive Scott Walker use
that same money for the operating budget.
The
problem is obvious -- now that the County is going to use these
funds for operating expenses, what funds will be used to pay the
County's mortgage and to maintain infrastructure? There's the rub.
Unless the County simply abandons maintaining any of its
facilities, costs will be incurred and these bills will still have
to be paid. But even that possibility of abandoning services
isn’t far-fetched. Several County pools closed this summer. For
the first time in my lifetime, Bradford Beach doesn’t have
lifeguards despite the fact that in years past, guards at that
beach would rescue up to a dozen swimmers in distress. County
officials are considering ways to spin off the parks and quality
of life programs into their own taxing authority. If the County
isn’t providing these services, funds will be freed up for other
expenses.
Barring
the elimination of entire departments, the County will have to
borrow money to pay the interest on outstanding bills. But don't
underestimate Walker -- the bills from the new borrowing won't
start to have a significant fiscal affect until 2008 -- the same
year Walker is expected to move on to seek statewide office.
When
the bills will come due, the County will be forced to raise
property taxes to pay for its current mismanagement. Supervisors
who supported this resolution made a policy decision that will
result in one of the largest
and most permanent tax increases
in Milwaukee County's history. This is not just poor decision
making. Supervisors made a conscious decision to pass a fiscally
reckless policy, which will encourage taxpayers to flee out of
Milwaukee County once the bills come due in 2008.
Historically,
elected officials were stewards of the public interest. They at
least shared the value that they didn’t want to saddle future
taxpayers with a burden they themselves would not want to face.
This borrow and spend plan, if enacted, amounts to a calculated
effort to saddle County taxpayers with long term pain for short
term political gain. It should be a shared American cultural value
not to pass responsibility on to others. Unfortunately this is not
a value which is given much weight in the halls of the Courthouse
these days.
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