Is Story About “Phony" Wisconsin Budget Crisis Itself False?

By John W. Lillpop

Liberals in Wisconsin are in a snit about the negative national publicity generated by 14 dopey Democrats who fled the state in order to circumvent the legislative process, the rule of law, and other irritations associated with public service in a Democracy.

Curious minds now want to know: Did the awful negative publicity drive Wisconsin ding bats to fabricate a story which alleges that Governor Walker created a “phony” budget crisis in order to bust labor unions?

Rachel Maddow, host at MSNBC, reportedly repeated the story on the air, which caused ding bats all across the state to celebrate an apparent justification for the zany actions of the 14 bozos hiding in Illinois.

Unfortunately for the liberal-warped Maddow, the story that she was so anious to broadcast may, in fact, be fabricated.

As reported at the reference, in part:

“It has taken hold with conviction: the idea that Wisconsin Gov. Scott Walker ginned up a phony budget crisis to justify his bold bid to strip state employees of most bargaining rights and cut their benefits.

Liberal MSNBC talk show host Rachel Maddow joined in Feb. 17, accusing Walker of manipulating the situation for political gain.

"Despite what you may have heard about Wisconsin’s finances, the state is on track to have a budget surplus this year," she said. "I am not kidding."

She added a kicker that is also making the rounds: Walker and fellow Republicans in the Legislature this year gave away $140 million in business tax breaks -- so if there is a deficit projected of $137 million, they created it.

Maddow and others making the claim all cite the same source for their information -- a Jan. 31, 2011 memo prepared by Robert Lang, the director of the nonpartisan Legislative Fiscal Bureau.

It includes this line: "Our analysis indicates a general fund gross balance of $121.4 million and a net balance of $56.4 million."

We were curious about claims of a surplus based on the fiscal bureau memo.

In writing it when it was released, reporters from the Journal Sentinel and Associated Press had put the shortfall at between $78 million and $340 million. That’s the projection for the end of the fiscal year, June 30, 2011.

Walker himself has settled on $137 million as the deficit figure, a number reporters have adopted as shorthand.

We re-read the fiscal bureau memo, talked to Lang, consulted reporter Jason Stein of the Journal Sentinel’s Madison Bureau, read various news accounts and examined the issue in detail.

Our conclusion: Maddow and the others are wrong.

There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it.

More on that second point in a bit.

The confusion, it appears, stems from a section in Lang’s memo that -- read on its own -- does project a $121 million surplus in the state’s general fund as of June 30, 2011.

But the remainder of the routine memo -- consider it the fine print -- outlines $258 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy ($174 million alone), the public defender’s office and corrections. Additionally, the state owes Minnesota $58.7 million under a discontinued tax reciprocity deal.

The result, by our math and Lang’s, is the $137 million shortfall.

Meanwhile, what about Maddow’s claim -- also repeated across the liberal blogosphere -- that Walker’s tax-cut bills approved in January are responsible for the $137 million deficit?

Lang’s fiscal bureau report and news accounts addressed that issue as well.

The tax cuts will cost the state a projected $140 million in tax revenue --but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.

Here’s the bottom line:

We rate Maddow’s take False.”

Take THAT, Rachel Maddow and all the leftist moon bats that were celebrating their "gotcha" moment, when they are the ones with "gotcha" egg on their faces!