I was not a good student in economics at UW-Madison. I regularly skipped that 11 a.m. class because I wanted to finish watching The Price is Right. I justified it by saying the "Showcase Showdown" was an exercise in market valuation. Then I missed two solid weeks of class because a new Legend of Zelda game came out. I justified those absences because Zelda games are awesome.
The Wisconsin Legislative Fiscal Bureau, a group of folks who paid more attention in econ than I did, estimated Monday that the state will face a $1.8 billion structural deficit in its next two-year budget, due largely to multiple tax cut plans Gov. Scott Walker pushed through the Legislature.
But this deficit shouldn't be news to anyone. Outgoing Sen. Mike Ellis (R-Neenah) tried to raise concerns that the tax cuts were too big, but his GOP colleagues went ahead and voted for it anyway. It was almost as if they were afraid other conservatives might take them down if they didn't follow the party line.
"A number of us were concerned, but they did it anyway. But we [Republican senators] voted for it, so we can't hide behind 'I told you so,'" said Ellis to the Milwaukee Journal Sentinel.
My good buddy Jon and I made a cartoon about this topic more than a year ago. Even with my college economics background based more on "Plinko" than profit margins, I could see that Walker's tax cut plan was fiscally irresponsible.
Walker's plan was based around the idea that tax cuts would spur further economic development, and thus the state would actually bring in more revenue at a lower tax rate. It's the same old Laffer curve, supply-side economics stuff that conservatives have been pushing for 40 years.
If these reheated Reaganomics gambits actually worked, though, the Bush tax cuts would have led us to a time of unrivaled economic prosperity.
In Wisconsin, the huge state deficit under Gov. Jim Doyle's grew, in large part, thanks to the greatest economic downturn since the Great Depression. But Walker's huge deficit was created with the stroke of a pen in the midst of a recovery.
Wisconsin's recent tax cuts didn't result in the rosy revenue figures projected by the Walker administration. With an estimated $396 million gap in this current budget alone, the Legislature will be constitutionally mandated to pass a brand new budget repair bill to make up for a brand new deficit.
What's most annoying about this deficit is how pointless it is. As I've written in the past, my wife and I are both public employees, and we both have made serious economic sacrifices over the last few years because of the previous budget repair bill, better known as Act 10.
If we thought our sacrifices were actually going towards the good of the state, it wouldn't seem so bad -- there's some Sconnie pride in tightening your belt for neighbors. But it feels like a slap in the face to see the surplus built partially off our backs get squandered on a tax cut that disproportionately goes to the wealthy.
This deficit is largely a win-win situation for Walker. If reelected, Walker will be spending more time in Iowa than Wisconsin at that point, as the presidential primary campaign season kicks into high gear right after the midterms. Besides, painful new spending cuts would lead to new protests and new cable news coverage, both of which would only help him with Republican primary voters. If Walker loses, Mary Burke will be forced to start off her administration by making tough, painful choices to cut services (which will alienate her base) or raise taxes (which will alienate everyone).
No matter who is in the governor's office, closing this deficit will inevitably be painful. But this situation wasn't inevitable. It is entirely the result of the irresponsible fiscal policies promoted by Scott Walker and the legislators who voted for his tax cut plan.