The Spending Gap, the Promise Gap

What if your paycheck this month was only half the size you expected?

You’d ask your boss about it, of course. He promises that you’ll get the rest next month. But next month comes, and you are paid that month’s salary, but not the other half owed to you.

Your boss says don’t worry, I’ll take care of it next month. But he doesn’t – in fact, your paycheck is still smaller than it’s supposed to be. This happens again, any time your employers’ cash gets a little tight.

How long would you put up with that?

What would your bank say if you tried that with your mortgage? Maybe, for one month, they’d let you put off part of a payment. But you’d better make up for it the next month.

We don’t to expect the private sector to accept it, but it’s routine for our state government. For example, local governments and schools get the money the state promises them just after the New Year begins. Yet we make them pretend they get it before the New Year.

According to the Wisconsin Taxpayers Alliance, our state government spent $2.12 billion more than we actually had last year. That’s a $2.12 billion deficit over that 12-month period.

But wait – Wisconsin’s Constitution requires a balanced budget! True, and the budget was balanced. In fact, according to the way the state handles its books, the budget was $4.1 million in the black.

In the private sector, accountants use “generally accepted accounting principles,” or GAAP. Generally, the rule is: don’t spend what you don’t have, either in hand or on credit.

A CPA who ignores GAAP rules could lose his/her license, be fired, even go to prison. It’s very serious.

The state uses what are called “budgetary/statutory” (B.S.) standards, which means the budget is balanced as long as the statutes – thus the Legislature and the Governor – say it’s balanced (I wish my bills were paid just because I say they are).

So: Wisconsin was $2.1 billion in the red, or $4.1 million in the black, depending on how you look at it.

GAAP deficits aren’t unusual for the state. Throughout the 1990s, we had GAAP deficits ranging from $743 million to $1.5 billion.

Then the recession hit, and our deficit exploded to over $2.3 billion. Then-AG Jim Doyle made it a campaign issue – no more accounting tricks!

And yet, that’s exactly what he gave us. More accounting tricks, more borrowing against the future to spend now, more spending what we don’t have, and a GAAP deficit that is poised to get even bigger over the next two years. Budgeting by Ponzi scheme.

The promises to stop this practice come every couple of years, but it never does stop.

The definition of insanity is to do the same thing over and over, expecting different results.

According to that definition, we’re all insane. We keep sending people to Madison on promises of responsible budgeting, but those promises are never kept.

Time to try something new.


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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.