Conservatively Speaking

Is Wisconsin in as bad shape as California?

Posted by Mary Lazich on Nov. 13, 2009

California receives major media attention for its catastrophic budget woes. However, other states are also in fiscal danger.

The Pew Center for the States has released a report, “Beyond California: States in Fiscal Peril” that outlines 10 states, including Wisconsin that are experiencing the same kinds of problems that drove California into disaster.

The Pew Center report writes:

“The recession has hit Wisconsin harder than it has hit most state governments, especially when it comes to lost tax revenues and the size of the hole that made in its budget. And unemployment is climbing as the state’s largest sector—manufacturing—sputters.

The recession has cost Wisconsin 140,000 jobs and one-eighth of its manufacturing workforce, according to the Center on Wisconsin Strategy, a nonprofit group based at the University of Wisconsin at Madison. Wisconsin’s unemployment rate rose 4.4 percentage points from the second quarter of 2008 to the same point in 2009.

Wisconsin’s state government has struggled for years to keep its promises to pay a higher share of school costs while holding property taxes low. Often, lawmakers shifted money around, taking money from the state’s transportation fund, for example, to pay for day-to-day operations—and then borrowed to cover the transportation budget. Legislators also failed to put money in reserve before the recession hit.”

The future forecast, according to the report, looks grim.

“Experts predict Wisconsin could face a $2 billion deficit during the next biennium, which starts July 1, 2011, after the federal stimulus runs out.“

Read more in Stateline that contains other related links.

While Wisconsin doesn’t have the magnitude of the problems California is facing, our state has similar problems. The report should be a huge wake-up call for state government.