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Thursday, October 23, 2014

Scott Walker Bamboozles Voters With Bogus $535M Surplus Claim

It's been about a month now since State Sen. Jennifer Shilling laid out a series of state budget documents and press releases clearly showing Wisconsin has a potentially deeper structural deficit than the $1.8 billion hole the state's non-partisan budget bureau had reported.

The best part of her presentation was that she used commonly available fiscal reports (no gimmicks) supplied by the Legislative Fiscal Bureau (LFB). Her summary was not based on any new or different assumptions to change the calculations, instead it restored off-balance sheet items such as the state's K12 fund, the transportation fund deficit and reports of revenue shortfalls that added up to real potential for a $4 billion state budget deficit.

What isn't told often enough is that the current projected $1.8 billion state deficit, was an estimate calculated, in order to be historically consistent, using the same set of assumptions and variables the LFB has used since 1995.

By the way, it's the same mathematical exercise that also produced the state's now infamous 2011-13 $2.5B projected structural deficit Scott Walker used to carpet bomb state employees and Wisconsin communities with. Nothing is different in the LFB's assumptions or formula to produce the $1.8B deficit. Except this time, it came on the heels of Scott Walker's and state republican's re-election campaigns and is the direct result of their "reforms."

With their careers on the line and the election just weeks away, there was no way Walker or state republicans would let the truth grow legs and become the reality. Their flacks and hacks responded within days of Shilling's deficit summary and began trashing her simple and honest mathematical calculations in an obvious partisan attack.

To defeat the truth, they've unabashedly resorted to cooking the books.

Believe it or not, they asked the LFB, which by the way operates much like the congressional budget office in D.C., to walk backwards into a new balance using a made up set of assumptions to create a surplus. They could have just as easily told them to count each cranberry in Wisconsin during harvest as a dollar and report it back as farmland tax revenue. Under their politically twisted assumptions, the new fiscal estimate shows a $535 million surplus. It's nothing more than garbage in, garbage out.

With this new but rigged calculation, Scott Walker and state republicans have used the LFB office as the authority to flip a legitimately sanctioned deficit balance into a phony surplus, and then wasted no time using the bogus talking point during his debate with Mary Burke and in political ads.

In private practice, when you defer costs, accelerate revenue (in this case tax revenue), delay transfers, create off-balance sheet items, and develop a false set of assumptions using excess reserves or old sales projections - to inflate assets in a presentation to snooker potential investors and buyers - they call it cooking the books. This is precisely what state republicans did with the LFB's budget projections. They cooked the books, but the "investors" are the voters.

If this happened in a private sector company with Walker as the CEO, directors and stockholders would be looking to file charges against him for fraud and embezzlement. Here in Wisconsin, he is one of two choices for governor.

Come on Wisconsin! We can do better than that.


WCM COOP - Smoke and Mirrors: Wisconsin’s actual debt and the fabricated "surplus"

1 comment:

Anonymous said...

Here's an updated link to "Smoke & Mirrors"

"After you learn that Wisconsin’s debt has increased by at least $1.3 billion* since Scott Walker’s first budget went into effect, you’d swear you were at a circus watching clowns (Wisconsin’s media and the Walker Administration) juggle numbers to magically transform $1.3 billion in increased debt into a “$400 million surplus” and then a “$517 million surplus” that never existed. How are they doing this?"

* $1.3 billion increased debt in his first 18 months. Walker only had a balanced budget 1 year out of 8.

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