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Walker proposes Borrow & Spend policy

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 is seeking approval from the County Board for his new plan. Supervisors would be well advised to reject the plan. If not, they’ll 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 if Supervisors aren’t careful, next spring that piece will likely show up on 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 is changing as County Executive Scott Walker wants to now 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 support this resolution are making 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 are making 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.


"In a time of universal deceit, telling the truth is a revolutionary act."

George Orwell


"We cannot defend freedom abroad by deserting it at home".

Edward R. Murrow


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