Conservatively Speaking

29 percent

Posted by Mary Lazich on July 29, 2009

State budget, Taxes, Legislation

The expenditure of millions and millions of federal stimulus dollars was supposed to provide a much-needed booster shot to an economic downturn and put Americans back to work. Stateline.org reports a stunning analysis about how states used their share of the stimulus, not to create jobs, but to plug huge holes in their budgets.

According to Stateline, Wisconsin used 29 percent of its stimulus money toward fiscal year 2010. Despite the infusion of federal money, the moment Governor Doyle signed the 2009-2011 state budget into law, it created a gigantic hole of $899 million going into 2010-11 and $1.15 billion the year after. Stimulus dollars were anything but a savior to Wisconsin’s 2009-11 budget that is chock full of tax, fee, and spending increases. 

Stateline reports the National Conference of State Legislatures reviewed the stimulus spending in 25 states, including Wisconsin, and found that nine states spent over half of their stimulus to fix their budgets.

One Democrat quoted by Stateline seems to understand what critics of the stimulus concept have been arguing from the very beginning.

“What’s the exit strategy when this is over?” asked state Rep. Steven Costantino, a Democrat from Rhode Island who heads the House Finance Committee. “The stimulus is really a one-shot infusion that at some point ends.”

Correct. When that occurs, how will states like Wisconsin respond to future budget chaos? Our dismal track record would indicate we will once again resort to the fiscally irresponsible solution of spending more, taxing more, and borrowing more.

Read more in Stateline.