Here & Now

Capitol Insight: Johnson Previews State Biennial Budget

Frederica Freyberg:

In tonight’s Capitol Insight, we’re joined by Wisconsin Public Radio Capitol Bureau Chief Shawn Johnson to talk money. It’s kind of like finding 20 bucks in your coat pocket when you pull it out for the winter, an unexpected if modest windfall. In this case state budget writers are looking at better than expected state tax revenues and lower than expected spending. More now with Shawn. Hi Shawn.

Shawn Johnson:

Hey Fred.

Frederica Freyberg:

So I want to take a look at those numbers right away, the kinds of numbers that budget writers are now looking at. State revenue estimates show $455 million more, with spending at $266 million less. So that’s good news. But people up at the capitol already have designs on $300 million of this, right?

Shawn Johnson:

It happens quickly as soon as you get a good revenue estimate, people have ideas for it. There’s no shortage of ideas when estimates are good. And so the thing to remember is that this money is not in hand yet.

Frederica Freyberg:

It's not like that $20?

Shawn Johnson:

It is not like that $20. It’s like pulling out an idea of $20 you’ll have over the course of two and a half years. It’s not there yet. It’s not to say that it won’t be and it’s the best number that legislators have and the governor has as he goes ahead to craft that budget. But it is a projection.

Frederica Freyberg:

So the $300 million is something that Speaker Robin Vos wants to make use of to help fill this transportation budget hole.

Shawn Johnson:

Yeah. So the way that the governor said he would raise transportation revenue is if he had a corresponding tax cut somewhere else in the budget. And so Assembly Republicans are saying, “All right, we have this money now. Let’s cut taxes by $300 million in the general fund.” They didn’t say how. And then we can raise revenues in the transportation fund. They didn’t say how they would do that either. So it’s really kind of a tax swap, but this new revenue estimate if it holds makes it possible.

Frederica Freyberg:

It’s interesting, though, because I know that the Republicans are intent, many of them, on this sustainable kind of revenue for transportation, but if this is a one-time, $300 million tax reduction, or would that be forever? Is that laid out at all?

Shawn Johnson:

We don’t know. If you look at the press release where they announced this plan, it was a lot of quotes and about one line in there that said, “Here’s basically what we want to do.” The governor’s office said they’re waiting on details of the plan. So are we.

Frederica Freyberg:

Well, it’s a good start at least to be able to talk about having these kinds of extra revenues. But you’ve reported before on the idea that sometimes these estimates don’t hold.

Shawn Johnson:

You have to look back to 2014. I mean, they had really good estimates in 2014. They came in almost a billion dollars higher than expected. Republicans quickly passed a tax cut. The estimates didn’t really pan out. By the 2015 budget they were facing cuts to a variety of agencies. So that’s the danger of putting too much stock in these estimates. When they’re off even by a little bit in terms of percentage, it can mean big cuts down the road potentially.

Frederica Freyberg:

It is good, though, notwithstanding the idea that, you know, it’s not cash in hand and they are just estimates because the governor has these proposals to increase funding for things like broadband and K-12 and other things. So at least they’re starting on the plus side with their estimates.

Shawn Johnson:

Right. I mean, Assembly Republicans have their ideas. The governor has been talking about stuff for months now where people were saying, “How are you going to do that?” Here’s one way you could do it.

Frederica Freyberg:

All right. Shawn Johnson, thanks very much.

Shawn Johnson:

Thanks.