Massachusetts, Wisconsin Vie For Dubious Fiscal Distinction

For all the shouting and self congratulation about the states’ record budget surpluses, broad-based tax cuts and overflowing revenue streams, Massachusetts and Wisconsin are the unwilling finalists for an ignominious distinction: being last in the nation to pass a budget.

Even though Massachusetts has $1.4 billion in general fund reserves and Wisconsin has $545 million, each state is now 48 days into Fiscal Year 2000 without an official spending plan, and neither is anywhere close to striking a deal.

And with each passing day, the embarrassments and frustrations grow deeper.

“This raises the question of really, what’s wrong here in this state with our process?” said Wisconsin Department of Administration Secretary Mark Bugher. “Why is this the second budget in a row that we have this prolonged delay?”

Like most other states, Wisconsin’s government does not shut down if no budget is in place by the beginning of the new fiscal year. Instead, monthly stopgap spending bills are passed by the legislature, allowing programs and agencies to operate at previous funding levels.

That doesn’t assuage the bruised egos in the statehouse and the budget office, however, as many begin to wonder whether lawmakers actually play such a crucial role if state government can continue largely unaffected.

And with no drop-dead budget date in place, stopgap bills can be passed indefinitely until a groundswell forces compromise.

Massachusetts lawmakers have ensured, through partisan wrangling and political posturing, that the state’s budget will go to the governor later than in any year since 1975.

“These people don’t seem to have any sense of urgency about resolving the budget,” Gov. Paul Celluci said.

What much of the delay is about is legislators fighting over who gets to be the bearer of good news, whether that be massive tax cuts or budget boosts for social programs.

“When the state is going through good times, more people have more ideas about what to do with the surplus. And I think the reality is that it creates more conflict and makes it more difficult to achieve compromise and consensus,” State Representative Paul Demakis said.

The Massachusetts legislature has already adopted a stopgap funding resolution for August, and sees no problems in doing so again for September, Demakis said.

The budget delays in Massachusetts and Wisconsin are the longest since the recession of the early 90s, said Stacey Mazer of the National Association of State Budget Officers.

“New York in 1991 is the latest budget that I can remember. Their fiscal year starts in April, and they went well into August without an agreement. At that point, it became an issue of shutting down services. Since then, New York has become skilled in continuing resolutions,” she said.

It is a bit strange, Mazer said, that these two delays come at a time when both states are experiencing economic high times. But because times are good, she said, there is less public scrutiny of the budget process and less pressure to reach a swift resolution.

Wisconsin has promoted itself as being the nation’s most innovative state (and was pronounced so again last week in a Christian Science Monitor cover story), but the budget battle belies a more mundane reality: Wisconsin is as scarred by partisanship as any other state.

Republicans who control the assembly walked out on budget talks last month, saying they wouldn’t meet again until the Democratic majority in the state Senate was willing to adopt a $900 million dollar tax cut package that favored income tax reductions over property tax cuts.

Democrats, given the perfect political cover by the Republican walkout, favored cutting property taxes. The message was hammered home earlier this month when the Democratic leadership staged a photo opportunity at a half-empty negotiating table in the capitol building.

“We can’t do anything until the Republicans come back to the negotiating table,” Senate Majority leader Chuck Chvala said.

Some are turning to Republican Gov. Tommy Thompson for an end to the impasse.

Thompson, though, seems content to stay above the fray and allow the parties to come to a resolution on their own. Unless, that is, public pressure for a settlement grows.

Wisconsin political observers note that Thompson is leery of cutting a budget deal that could undermine his former Chief of Staff and fellow Republican leader Scott Jensen, who is widely viewed as Thompson’s hand-picked successor in 2002.

According to Secretary Bugher, real pressure for action will not come until late September or October, when local governments and school districts will demand to know how much state aid to write into their budgets.

Official student counts are performed on the third Friday in September, and it is this annual census that determines each school’s per-pupil aid payments.

Massachusetts’ budget impasse is also caused in part by a surplus in state funds.

Both House and Senate negotiators are pushing for a $20.8 billion budget, but they include wildly varying tax cut and education funding proposals. The debate centers on a House plan that cuts the state income tax rate across the board by .25 percent and a Senate plan that instead offers specific tax credits for the elderly and other groups.

The Senate budget also proposes $90 million more than the House budget for education aid.

Political ambitions are playing a role in the Massachusetts deadlock as well. Both House Speaker Thomas Finneran and Senate President Thomas Birmingham are rumored to have their eye on the governor’s office.

Both sides say that they have negotiators meeting daily, but as in Wisconsin, no resolution appears near.