Wisconsin’s fiscal year ends on June 30th and the controller’s office release the official state financial statements in December of each year. The latest release shows a budget deficit of $2.99 billion, long-term debt of $12.9 billion and negative unrestricted net assets of -$9.8 billion.
Wisconsin’s assets are $23.2 billion and liabilities are $17.2 billion. This would seem to give the state a positive net asset position. However, the funds required for the budget deficit and the growth in borrowing exceed this amount resulting in the negative asset position.
The long-term debt has more than doubled since 2001 and has risen from 3.4% to 5.9% of Wisconsin’s personal income. Although bond debt for long-term capital projects such as roads and bridges makes sense, state officials found ways to borrow for current spending.
The budget deficit is always an elusive number. The politicians said they balanced the 2009-11 budget, but the controller’s office reports an ending deficit of $2.99 billion.
The difference is the Generally Accepted Accounting Principles (GAAP) used by the private sector and IRS versus the cash system used by elected officials when it suits them.
This difference can be explained as follows: You purchase living room furniture with a credit card, it is delivered and you, your family, pets and friends immediately start to use it. There is little question for most people, and definitely for accountants, you own and are actively using what was purchased.
However, Wisconsin politicians thinking in cash terms say no purchase has been made and no money is spent until the credit card bill is paid. So, if you have a budget deficit just delay payment of the credit card and then the budget is balanced.
Using the responsible GAAP approach to state finances, Wisconsin was one of twelve states with a deficit last year. Since 1993, Wisconsin and Illinois are the only two states with a negative ending balance every year.
In summary, Wisconsin’s 2011-13 budget may be the first in two decades to truly be balanced. This is an important step to improving our fiscal health, lower the below average bond rating and overall ranking compared to other states.
Taxpayer Vigilance Required to Keep Racine Property Tax Under Control
The city of Racine has a property tax rate of $24.23 per thousand dollars of assessed property value. The taxes collected pay for city, county, Gateway and RUSD operations.
The portion of the rate for the city of Racine operations is $12.21 per thousand dollars and is the 6th highest municipal ratein the state. Following are comparisons to rates in other municipalities:
Green Bay 8.80
Mt. Pleasant 5.63
On the surface it would seem that Racine requires a lot more property tax dollars for city government than other municipalities. If the comparison is made based on property tax dollars per capita, Racine looks better with the 98th highest municipal costin the state.
Following is tax per capita:
Mt. Pleasant $577
Green Bay $496
A primary reason for the city of Racine’s much higher tax rate is low property values compared to other municipalities.
The city of Kenosha has a population 20% larger than Racine and an assessed value 53% larger than Racine. This larger property tax base allows for a lower tax rate to collect as much or more tax dollars.
Racine may or may not be spending more than other municipalities for similar services. Only the vigilance of taxpayers questioning expenditures and turning out to vote will keep costs under control.
The Good, The Bad And The Ugly
Liberal Politicians and the mainstream news media would have you believe the following:
The GOOD - Apple Computer
The BAD - Exxon Mobile
The UGLY - Walmart
It is amazing how the so called “elite” of our society can determine an evil corporation from a good corporation. The oil companies like Exxon Mobile are chastised 24/7 while Apple receives only accolades for new products and long waiting lines.
Last year’s Income Statements from these companies reveals the following:
Income & Per cent of Sales
Apple $34.2 billion 31.6%
Exxon $73.3 billion 15.1%
Walmart $23.5 billion 5.6%
Which corporations are over charging their customers?
Income Tax Paid & Tax Rate
Apple $ 8.3 billion 24.2%
Exxon $31.1 billion 42.4%
Walmart $ 7.6 billion 32.2%
Which corporations are paying their fair share of taxes?
Dividends Paid and Per cent of Net Income
Apple -0- -0-
Exxon $9.3 bil 22.7%
Walmart $4.4 bil 27.1%
Exxon and Walmart have been paying dividends for decades. In 2012 Apple will pay its first special dividend due to its extraordinary profit accumulation of the past few years.
The preliminary 2012-13 RUSD budget forecast depicts the following changes from the current budget:
Property Tax + 2,293,203
State Aid + 743,106
Federal Aid - 3,935,548
Other + 1,244,729
Total Revenue + 345,490
Step Increases + 700,000
Health Insurance + 4,071,620
Other Expenses + 2,160,498
Total Expenses + 6,932,118
Budget Deficit - 6,586,628
Student Enrollment - 301
Revenue/Student + $ 105
Spending/Student + $ 501
The RUSD budget contains six separate funds and the above numbers are from the General Fund which is 86% of the total budget. Not included are capital projects, food service and federal and state aid for special education.
Big Spender With Small Ideas
According to the mainstream media and all democrats, President Obama is always the smartest guy in the room and the most intelligent president we ever had.
He has been in office for 38 months and has overseen a federal government that has increased annual spending $813 billion and added $5 trillion to the national debt.
The president’s answer to this financial problem is not to reduce spending, but increase taxes on the evil rich and the evil industries. Private jet owners $500 million per year, oil industry $4 billion per year and incomes of $1,000,000 plus $30 billion per year.
The president’s ideas would have collected an additional $138 billion during his 4 budget years while he increased spending $2.44 trillion during the same period of time. A whopping 5.7% of the problem solved.
Add to this the reduction of oil drilling and exploration on federal land, the EPA’S new emissions standards that will make it impossible to build any new coal fired facility and the rules currently being drafted to slow down the ‘Fracking” process for oil and gas.
To steal a phrase from President Reagan:
I’m not saying this president is not intelligent
it’s just that everything he knows is wrong.
Government Subsidized Green Light Bulb
The U.S. government last year announced a $10 million award, dubbed the “L Prize,” for any manufacturer that could create a “green” but affordable light bulb.
Energy Secretary Steven Chu said the prize would spur the industry to offer the costly bulbs, known as LEDs, at prices “affordable for American families.” There was also a “Buy America” component. Portions of the bulb would have to be made in the United States. Now the winning bulb is on the market.
The price is $50.
Retailers said the bulb, made by Philips, is likely to be too pricey to have broad appeal. Similar LED bulbs are less than half the cost.
“I don’t want to say it’s exorbitant, but if a customer is only looking at the price, they could come to that conclusion,” said Brad Paulsen, merchant for the light-bulb category at Home Depot, the largest U.S. seller of light bulbs. “This is a Cadillac product, and that’s why you have a premium on it.”