The ability of tax cuts to rich people to solve all the world's problems continues to be questioned by the annoying forces of reality. Kansas is the new poster child for how conservative economic chaos can turn even the farthest-right states away from their trickle-down masters, but today's bad budget news comes from
Scott Walker's Wisconsin:
The Republican governor resolved a more than $3 billion budget shortfall in the months after taking office, but the latest projections show a gap once again opening in the 2015-'17 budget because of tax cuts enacted by Walker and lawmakers and lagging growth in other state taxes.
The latest estimates by the Legislature's non-partisan budget office jumped by more than $1.1 billion over the previous estimate of a $642 million gap released in May. The projections from the Legislative Fiscal Bureau were released Monday for the budget beginning in July 2015 and ending in June 2017.
So Wisconsin was finally making good headway toward closing the recession shortfall (the gap between what a state takes in fees and taxes and what it must pay back out), but now a new one is opening up: Walker's "business-friendly" tax cuts are threatening to do to Wisconsin what it previously took something called "the Great Recession" to pull off.
To close [the recession-era] shortfall, Walker lowered state aid to schools and local governments, and then covered most of that lost money by cutting the benefits and take-home pay of teachers, state workers and other public employees. Labor groups organized massive protests against those measures, which included a repeal of most union bargaining power for most public employees.
Walker and GOP lawmakers also reduced income and property taxes across the board in the state, along with other tax cuts for businesses such as nearly eliminating all income taxes for manufacturers in the state.
So there's not much more to cut, unless Walker intends to pay teachers, firefighters and other state workers with bits of string. Which, no doubt, he will try.
It will be interesting to see if this new tax cut-related "structural" budget hole does for Scott Walker what it did for Sam Brownback's Kansas, which just saw its credit rating cut by Standard & Poor's directly due to the unsustainable structural imbalance of Brownback's cuts. The situation in Kansas has deteriorated to the point where state residents seem to be losing faith in the whole notion of giving rich people tax cuts in exchange for just being them; that's not somewhere Scott Walker wants to be if he still has (cough) presidential ambitions.
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