Bruce Murphy
Murphy’s Law

The Debtor Governor

Figures from non-partisan Legislative Fiscal Bureau figures show Walker’s debt level the worst since 1970.

By - Sep 10th, 2013 10:45 am
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Gov. Scott Walker

Gov. Scott Walker

Milwaukee Journal Sentinel reporter Tom Kertscher is a loyal soldier who follows orders and doesn’t rock any boats. In short, he can be counted on to deliver the sort of story his editors expect.

Kertscher recently did a Politifact column which concluded that a statement in an op ed by state Sen. Kathleen Vinehout (D-Alma) about Gov. Scott Walker was only “Half True.” Vinehout declared that state debt has reached “record levels,” as “more money goes to pay off debt in this budget than ever before.”

It is a damaging charge that goes to the heart of Walker’s image as a fiscal conservative who was going to reduce government spending and debt. And everything in Kertscher’s column confirms Vinehout’s view — except for his final conclusion.

Kertscher tells us that Walker issued new debt in order to pay off $558 million in debt payments that were due in 2011 and 2012. “It’s just taking one credit card to pay off another credit card,” says Fiscal Bureau analyst Al Runde. This, in turn, pushed the principal payments some 20 years into the future, which will add another $156 million in interest costs.

As a result, the percentage of general tax dollars going to pay for debt has gone up significantly. Vinehout requested an analysis of this from the Fiscal Bureau, which issued a memo noting that, “Historically, the state’s debt management policy” has kept the debt service on its general obligation bonds “at no more than 4.0%” of annual general tax revenues. “This policy is intended to ensure that debt service does not consume an increasing share of the state budget.”

But under Walker the level of indebtedness has jumped to “5.26% in 2013-14 and 4.88% in 2014-15 based (on) estimated revenues and debt service expenditures,” the memo noted.

No governor, Republican or Democrat, has ever driven borrowing up this high. Going back to 1970, the Fiscal Bureau told Kertscher, the level of indebtedness was always below four percent. Typically the level was below three percent.

But Kertscher decides that Walker shouldn’t get all the blame for this. He notes that Jim Doyle and other past governors “have done long-term borrowing that is still being repaid. In other words, much of the debt, and debt payments, were inherited by Walker from previous governors.”

Exactly. Every governor inherits debt. Yet even though Doyle inherited debt and also restructured debt himself, the state never went above the four percent level of indebtedness. That’s because Doyle always made sure to pay enough debt back to keep the level below four percent.

During his eight years in office, Fiscal Bureau figures show, Doyle “restructured” or added debt of about $96 million per year in debt, compared to $140 million a year under Walker. That 46 percent jump in the rate of restructuring debt is what caused the level of indebtedness to exceed the four percent ceiling every other governor has maintained.

Walker had a choice here and choose a higher rate of debt than any previous governor. Yet Kertscher decides all the past governors should also be faulted for Walker’s decision.

By that line of reasoning, it would be difficult to hold any governor responsible for any decision on his/her watch. It seems a strange thing to do in a Politifact column, where the sole purpose is to decide the facts.

But Kertscher goes even further out on a limb, chastising Vinehout for putting all the blame on Walker for the current level of indebtedness. But Kertscher can offer no direct quote from Vinehout actually saying this.

In fact, Vinehout’s column noted that “In the depths of the recession, Gov. Jim Doyle delayed debt payments to gain cash and keep government going.” But Walker, she notes, “did not pay an even larger amount of debt payments coming due.”

That statement is not only completely factual, but remarkably nuanced for a Democrat throwing stones at a Republican.

Vinehout’s point was that it was “a myth” that the state eliminated the debt under Walker, as some have claimed. “This is false. In fact, state debt reaches record levels in the 2013-15 budget,” she wrote.

Once again, her statement is completely factual. Yet Kerstcher and the Journal Sentinel distort what she said in order to turn Vinehout into the issue, in the process obscuring the truth about Governor Walker — that he hadn’t eliminated or even lowered the debt level but had pushed it to an all-time high.

This distortion will be of great help to Walker when his opponent claims he is first governor in history to push the debt level this high. Walker can quickly blast this as factually inaccurate, as determined by the Politifact column of the state’s largest newspaper.

Categories: Murphy's Law

42 thoughts on “Murphy’s Law: The Debtor Governor”

  1. Dean Deardurff says:

    Do you realize how ignorant you sound in your column? But then again, your ignorance gets me to respond. The only reason I read it is because of the facebook on urban Milwaukee… The people of Wisconsin has spoken–Twice– That tells me how much of a looser you are…

  2. Raul says:

    Real losers, when faced with facts they don’t like and which disrupt their fragile illusions, insult the messengers. Also, it’s “loser” not “looser.”

  3. Dave K. says:

    Dear Mr. Murphy,

    Your facts don’t reflect my beliefs. Ergo, you’re a [sic] looser. Chew on that you fact checking fact checker.

    Love, “Dean Deardurff”

  4. Scott says:

    Bruce-Is the state’s credit rating in trouble? Have you reviewed municipal bond reports from Moody’s or S&P or Fitch? Has the state had its credit rating downgraded like Illinois? I’m guessing the answer to all these are no. Is Wisconsin’s pension fully funded? And there is no doubt that Act 10 greatly helped municipalities throughout the state deal with their debt issues. You should write an article about that, though that is not what East Side liberals want to hear. The fact that debt service goes from 4.1% to 5% then back to 4% or whatever is not a big deal, bro. Your analysis is fairly simplistic and the reader deserves more than the usual Walker bashing.

  5. Dohnal(Wis. Conservtive Digest says:

    This is not as cut and dried as your column believes, it involves restructuring because of the interest rates and the 3.6 billion shortfall from Doyle, worst governor in our history. Will have to do some more research.

  6. bruf says:

    Tom Kertscher buys
    Republican lies.
    J-S economics?
    Better stick to the comics.

  7. John Michlig says:

    “The people of Wisconsin has spoken–Twice– That tells me how much of a looser you are…”

    Surely, “Dean Deardurff ” is a parody account.

  8. Kyle says:

    I suppose it’s completely irrelevant to point out that even at these elevated rates, it’s still lower than the national debt service, which is about 6%?
    ( http://www.usnews.com/news/articles/2012/11/19/how-the-nations-interest-spending-stacks-up )

  9. John Michlig says:

    Kyle, you are absolutely corrent. That is indeed irrelevant.

  10. dohnal(Wis. Conservtive Digest says:

    In this column, a while back blamed the lower Lake levels that foible “Global Warming” Read the headlines in the Journal today and find out why the Lakes are lower.
    There is an old saying: “better for people to think that you are an idiot than open your mouth and remove all doubt”.

  11. nmc1 says:

    Scott September 10th, 2013 2:41 pm :
    “Is Wisconsin’s pension fully funded?”

    Yes, no thanks to Tommy Thompson. The Supreme Court in 1994 ruled that his 1987 fund raid was illegal, which has done a good job of ensuring that public pension funds have remained untouched since. http://statecasefiles.justia.com/documents/wisconsin/supreme-court/1994AP000712-(1997-01-17).pdf

    Naturally this has a lot to do with the answers to your earlier questions.

    “And there is no doubt that Act 10 greatly helped municipalities throughout the state deal with their debt issues.”

    Classic case of a man hears what he wants to hear and he disregards the rest. How do you think the massive cuts to shared revenue impacted municipalities’ ability to deal with debt issues?

    “The fact that debt service goes from 4.1% to 5% then back to 4% or whatever is not a big deal, bro. Your analysis is fairly simplistic and the reader deserves more than the usual Walker bashing.”

    We can look at the General Obligation debt increase of $1.3 billion during the course of Walker’s first budget if you like. That far, far exceeds his claimed (cash) “surplus” and proves that his pretense of budgetary balance is a complete sham.

  12. Todd Spangler says:

    Out of everything that’s been written here, including the original column, I’m most impressed with Scott’s response and think that the column, in general, is much too hard on Walker, as a similar column a month or two ago was. To focus only on the one fiscal parameter of the level of indebtedness is misguided, in my view. It’s not that Walker inherited debt so much as that he inherited a deficit, which was not being funded. Debt had to be increased in order to eliminate that deficit because the state cannot simply print money as the federal government can. Doyle and the Dems also inappropriately and probably unethically raided the state transportation fund to fund other programs, as well as not keeping up with the reciprocity payments on college tuition to other states. The state pension program was also not being funded at the level that Walker and the Republicans have kicked it up to.

    I would argue that for all those reasons, some additional debt had to be issued in order to adequately fund those programs and properly balance the books. To not do so would have required Walker and the GOP to behave as irresponsibly as Doyle and the Dems did. I think the Republicans deserve far more credit than criticism here and that the point being raised in the column above is not an especially objective or well considered one.

  13. bruf says:

    How very convenient of Scott to address the debt and deficit without mention of the draconian cuts the governor has made to services for the weakest of us: those on Badger Care, the public schools, the universities, public transit. Do Republicans really believe that deficits are the only concern of government? Do they not believe in state services?

  14. Dohnal(Wis. Conservtive Digest says:

    Draconian cuts? that is a joke. If they were drconian it just means that we were spending too much cause no one noticed.

  15. Bruce Thompson says:

    When I read it, I too thought this PolitiFact rated several Pinocchios (to mix newspapers). Encouraging nuance is desirable but everything Vinehout said was true and she even went out of her way to mention that Walker inherited a debt from Doyle. At some point people should be allowed to not include every small detail.

    Although the increasing debt will not please Walker’s supporters, there is a strong case to be made the in a recession using debt can be good public policy–so long as it is paid down when the economy improves.

  16. Casey says:

    Um…..again….what does this article have to do with urbinity in Milwaukee? Is this turning into The Shepherd 2.0?

  17. Julia says:

    It is sad that the only reason people in this state defend Walker is not based upon his performance and lack of experience. The facts are the facts, and the only thing his supporters care about is that Walker stuck it to the democrats and unions. That’s all they got, and all they will ever have. As for the democrats, there’s not much they can do until the next election. The people of Wisconsin will speak again, I know I am eager to hear what they have to say about Walker…..will he stay or will he go? Looking at the condition of this state, I think we are at 49th in job creation right now and have the worst economic outlook in the country right now, I don’t think he stands a very good chance. He can talk all he wants when he is in office, but when it comes down to it people have to work and support their family. Walker already said it really isn’t about jobs. The hell it’s not, because people are moving out because they can’t find work. So, I do think he’s going to stand a very large chance of not getting re-elected when it’s time to vote. When people are out of work, and a governor can’t produce what he promised and made it worse, I think all the stuff about “The Unions” simply won’t matter anymore.

  18. dohnal(Wis. Conservtive Digest says:

    Walker is liked by those who want government to work. Under Doyle it did not,. They spent merrily along and left us with big debts and budget shortages. Walker moved to make public employees pay their own way on healthcare and pensions, as the rest of have to do. He balanced the budget, redid some debt for lower interest rates, built the roads and did not waste billions on worthless halfast trains that we don not need. Fact is that Amtrak can build a train between Madison and Milwaukee right now, that will go about the same speed, but they know it will be big money loser. We have excellent hiways and bus service between the two cities. Train service that is necessary is between Milw. and Chicago but Obama refused to upgrade that, stuck in this mode of halfast trains cause Europe and japan has some. California has giant mess right now with their trains. It has becoem joke out there.
    Walker also is concerned about the schools in this state, Universities have over charged the kids for years and Walker comes down on side of the parents and students while the Left sides with the Educrats. MATC is way over blown and not delivering.
    during the D oyle reign education went downhill in Wisconsin, look at MPS. Did Doyle do anything to improve these kids chances of making it in the world or did he accelerate the rush towards dependency?
    All in all Walker is just what we needed at this time and he will win in fall cause people respect competency.
    The Left still resides in the 1800′s where kids do not have the chance to learn, they worship windmills and trains when the rest of us want to use cars and planes. We cannot return to those wonderful days of yesteryear, the Left needs to move into the 21st century.

  19. Jerry Hason says:

    The deficit was the difference between previous budgeted spending and revenue. The recession caused revenues to drop and thus the deficit. Walker blamed public employees for the deficit when in reality less revenue was the cause. BORROWING and carrying money over from the last fiscal year technically balanced the budget. But borrowing to balance the budget results in an ongoing structural deficit that eventually surfaces unless revenue grows enough to cover spending. Not paying debt bills when they come due results in added interest which means more tax revenue is used for debt and less for government. “Kicking the can down the road.” Sadly the recently passed budget spends more than it collects and a deficit exists but borrowing is used to mask this as a balanced budget.

  20. Tom D says:

    Dohnal says (post 18): “Fact is that Amtrak can build a train between Madison and Milwaukee right now, that will go about the same speed, but they know it will be big money loser.”.

    Not true.

    Starting next month, Amtrak is prohibited by federal law from operating any short-distance train (defined as a route under 750 miles) unless it (1) has state subsidy or (2) makes a profit.

    Would a Madison train be a “big money loser”? No, its operating loss would be similar to that of the existing Chicago-Milwaukee train that Dohnal HIMSELF says “is necessary”.

    And if the projections were wrong and Madison ridership fell far below expectations, Wisconsin could simply have cut back the number of daily trains from 6 to as few as 2 or 3, thereby limiting the operating subsidy.

    And let me save Dohnal the bother of posting (“We don’t need a Milwaukee-Madison train because it’s easy to drive!”). It wasn’t a Milwaukee-Madison train (which I agree isn’t cost-justified); it was a Chicago-Madison train that stopped in Milwaukee along the way.

    Does Wisconsin need train service from downtown to Mitchell Field? No, yet Wisconsin subsidizes exactly such a train because it’s part of a Chicago-Milwaukee train, a train that Dohnal calls “necessary”. Likewise, Madison-Milwaukee service would be a byproduct of a Madison-Chicago train.

    If Milwaukee conservatives were consistent, they would either (1) call for killing the Hiawatha train or (2) explain why Milwaukee is entitled to state subsidies that Madison isn’t.

  21. Jerry Hanson says:

    The 2013-15 budget spends $4 billion more than the previous budget. State spending is greater than it has ever been. The 2013-15 budget began with a small surplus, revenues improved slightly. But the recently passed budget spends more than it collects. Spending is greater than revenue thus a deficit exists. To mask this money was carried over from the last fiscal year to technically balance the budget as required by the constitution. When spending exceeds revenue borrowing is used to correct the spending/revenue mismatch. Unfortunately the borrowing eventually comes home to roost and the 2015-17 budget already shows a $545 million deficit. Currently debt in Wisconsin is at an all time high and debt payments not made in the last budget add to the problem along with increase interest. More money is now required to pay off debt than ever before or nearly 101% of general tax revenue. The surplus we hear about is not real and does not warrant a tax cut. Accounting techniques not GAAP [Generally Accepted Accounting Principals] have been employed to alter the picture for political expedience. The Legislative Fiscal Bureau report tells the story of the budget deficit and debt.

  22. Todd Spangler says:

    Jerry, I appreciate your comments on this issue, and if nothing else, agree with you that the recent tax cut was probably not wise. This remains one of the largest fundamental differences in philosophy that separates me from conservatives, in that I think they tend to hate taxes to such a degree that they oftentimes become irresponsible in regard to funding government. It is the libertarian aspect of conservatism, I think, that is responsible for this.

  23. jake says:

    Conservatives want punishment of anyone left of their right and walker is their hatchman. All the cronyism and abuse of power by their filthy rich white wannabe authoritarians in State government.

    Wi conservatives are facists.

  24. Dohnal(Wis. Conservtive Digest says:

    I hate to burst your little bubble but all the rich people are now democrats, look at the billion dollars that Barak raised, suppose welfare people gave that? No, the bankers and big players in the money field are democrats cause they like all the government spending. The Middle Class votes for the Conservatives.

  25. Dean Deardurff says:

    Seems to me that all the arguments are meaningless. Liberals are senseless and repulsive at best.. Examples. California, doing just a magnificent job for the state. Illinois, another. Detroit. Milwaukee is on its way. I will not knowingly do any business knowing they are liberals period. Want to give me a list? As prove from your own convention. Your Godless, your gay, don’t believe in life, your willing to kill are children, what else is there? Al Quada is considered to be are sworn enemy, but hussein says their are allies… and we should fight for them.
    Thats enough for me to turn my stomach…..
    Oh yes, I’m just a parody

  26. bruf says:

    Not a parody, Dean, but a demonstration of the
    strengths and weaknesses of free expression
    in a democracy.

  27. Dean Deardurff says:

    maybe that would be true if we had a democracy ….You should learn what are country is all about first. It’s a REPUBLIC …..Where was you schooled?

  28. jake says:

    I guess Dean agrees with the punishmemt aspect and likes the authoritarianism of the walker regime.

  29. jake says:

    Dohnal you make me laugh. Your twisted fox news take on reality on what side has more money is a joke.

    We have the people, your side is the 1 percent wealthy corpoate and white establshment fighting for its hold on power in this country.

  30. STACY MOSS says:

    Dohnal: Ok Obama got millions, spent millions, therefore rich people are now democrats.

    Some rich people are democrats. Meanwhile, I think the Republicans still out spent Obama. That, by your logic, mean more rich people are Republicans.

    Oh well, you should know by now through personal experience that intelligence (no matter how you measure it… education, IQ, or professional accomplishment) correlates best with party party affiliation. Scientists have also found that once you get the the middle class and above, Democrats tend to have 17% less body fat than Republicans. Maybe that is because a majority of Republican don’t believe in Evolutionary theory and gravity, either the Newtonian or Einsteinian versions.

  31. dohnal(Wis. Conservtive Digest says:

    Are you on LSD?

  32. Dohnal(Wis. Conservtive Digest says:

    I do not watch tV except for Rachel and Chris. What ever Bruce sez is gospel to me.

  33. dohnal(Wis. Conservtive Digest says:

    The Global Warming nutcases have really had a tough time. Rirst no hurricanes this year, half the usual number of wildfires, oceans are not up and even though the Great Lakes are down the Journal headline shows it is because of dredging the river bottom. Temps are down over last 16 years and the ice pak is 60% bigger.
    Get ready for the new scare: “Glaciers are coming back”, we need to spend trillions taking down our wind mills and get giant magnifying glasses to get more sun.
    What a bunch of idiots. My Dad said once: about Joe McCarthy. “Some people put out lies so huge that no one can possibly refute them.
    Finally a big thank you to the citizens of Co.. especially the democrats that recalled the nut case gun grabbers there. Leftist watch out if you want to take away our guns.
    Thank God for Putin, making sure that we do not get into another war from Obama and co. My kids are tired of fighting Washington wars.

  34. Dohnal(Wis. Conservtive Digest says:

    Some of you Leftists might make it. Pope sez that you do not have to believe in God to get to heaven, he did not okay baby killers getting there though.

  35. Tim says:

    Bob Dohnal, are you this much fun in person too? Honestly, do you just spew your propoganda online or do you go door to door as well?

  36. Tom D says:

    Dohnal (post 33) wrote: “The Global Warming nutcases have really had a tough time. Rirst [sic] no hurricanes this year…”

    Find a better news source.

    There is an Atlantic hurricane (85 mph sustained winds) right now, today (which I assume even a conservative would agree is part of “this year”)

    http://www.nhc.noaa.gov/text/refresh/MIATCPAT4+shtml/121439.shtml

  37. dohnal(Wis. Conservtive Digest says:

    What a year the Global Warming nuts have had: First the temps have gone down the last 16 years compared to what Al Gore and co. predicted, the ice pak that was supposed to disappear by 2013 is 60% bigger, wildfires are at the lowest in years, no huricanes, and the Great Lakes are down, not cause of Global warming but because of the dredging, headlines in Journal so “Global warming nuts can become quit famous without ever having been right.”
    Put that in your pipes and smoke it.

  38. Dohnal(Wis. Conservtive Digest says:

    I go door to door right after my Mormon friends handing out Watchtower and the guide to the most important ideas, (Conservative), of the century by Bob Dohnal and Bruce Murphy. Bruce’s is much shorter of course.

  39. bruf says:

    No, no, no, Dohnal. You’re not following them closely enough.
    If they hand out The Watchtower, they’re Jehovah’s Witnesses
    from Kingdom Hall not Latter Day Saints from the local Mormon
    stake.

  40. dohnal(Wis. Conservtive Digest says:

    I hand them all out, I am an ecumenical type.

  41. Dohnal(Wis. Conservtive Digest says:

    Leftists are always amazing, they go off on esoteric romps with no help of ever solving the problems, like Global Warming, and the elephant issues that they could really do something like Milwaukee crime and MPS reading scores of the kids we lose every year because of Leftist incompetence.

  42. Paul Sickel says:

    Those who like to remark that Walker is responsible for a fully-funded pension or that it was not fully funded previously are simply incorrect. Wisconsin has a de-politicized, highly centralized pension system which is very efficient and has been fully funded for many years. The only credit Walker can claim is that he has done little to change it. The claim that public employees now pay into it is baseless since the “employee required contribution” has always existed but many employers paid it in lieu of pay increases. This strategy generated federal tax advantages for local governments and saved WI taxpayers money. No matter, that is now illegal so if employers (the taxpayers) want to increase pay in the future it will actually cost more. At any rate, none of these changes have impacted how well the pension is funded.

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