Balanced budget or kicking the can down the road? | Wis.Community

Balanced budget or kicking the can down the road?

One of Governor Walker's claims always seems to be that he has miraculously balanced the budget, lowered taxes, and improved the business climate of the state. A careful look at the numbers always seems to reveal a more complicated picture,  but it's hard to get a complicated picture into a 30-second TV ad.  The balanced budget and "surplus" that he is touting comes at least partly from debt restructuring - or the "kicking the can down the road" that he is so fond of denigrating when it was done by the previous administration.

New documents from Senator Kathleen Vinehout shed light on the $558 million in money that is being owed into the future as part of the current budget. This is a little like saying that you are solvent because you have $100 cash in the bank while you owe $20,000 on your credit card.  As we keep seeing, most of the miraculous economic advances in the state are nothing but smoke and mirrors.

2011 Act 13 and Act 32 Debt Restructuring Actions

You requested information on the amount of state general obligation debt that has beenrestructured under 2011 Acts 13 and 32. Since May, 2011, the has issued three series of bonds thatinvolved restructuring $453.5 million in long term GPR debt: (a) 2011 Series 1, issued in May,2011, restructured approximately $190.1 million, net of bond premiums, in GPR debt principal thatwould have otherwise been repaid in May, 2011 (this transaction used the $165.0 million in bondrefinancing authority authorized under 2011 Act 13, along with additional structural refinancingauthority): (b) 2011 Series 2, issued in September, 2011, restructured approximately $45.4 million,net of premiums, in GPR principal that would have otherwise been repaid in November, 2012; and(c) 2012 Series 1, issued in March, 2012, restructured approximately $218.0 million, net ofpremiums, in GPR principal that would have otherwise been repaid in May, 2012. In addition,under 2011 Act 32, the state will restructure $104.8 million in GPR supported commercial paperprincipal that would have otherwise been due to be repaid in May, 2012. Therefore, in total, sinceMay, 2011, the state has issued additional debt to restructure, or make the principal payments on,approximately $558.3 million in GPR supported principal that would have otherwise been paid offin 2010-11 and 2011-12.

Published

May 25, 2012 - 10:59am

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