CHICAGO - Wisconsin Gov. Scott Walker touted tax cuts and the state's structural fiscal strides in a State of the State address that offered few specifics on how he plans to erase a looming budget deficit.
He did pledge to cut costs by merging some agencies
"Our fiscal outlook is strong, too," Walker said. "We finished each year with a surplus, and we will again this year. Wisconsin's pension system is the only one fully funded in the country. The state's pension and debt ratio is one of the best. Our bond rating is positive. And the rainy day fund is the largest in state history—165 times bigger than when we first took office."
Walker highlighted reductions in unemployment figures and increases in job numbers and $2 billion in tax cuts that tapped budget surpluses but will contribute to projected deficits in the upcoming biennial budget cycle.
"In particular, I am proud to say property taxes on a typical home were $141 lower in December of 2014 than they were four years ago," he said. "We reduced income and employer taxes, too. And we started taking less out of paychecks for withholding last April, so you could keep more of your hard-earned money."
Walker is exploring a bid in the Republican presidential primary.
He outlined plans to merge several state agencies, including the Wisconsin Economic Development Corporation and the Wisconsin Housing and Economic Development Authority. He also wants to merge several agencies that govern financial institutions and professional services.
The speech made no mention of a push to raise funding for transportation. Walker's top transportation deputy has proposed raising the gas tax and other taxes and various fees to generate more than $750 million in new funding over the next two years.
The state is facing an $824 million shortfall to meet baseline costs anticipated in the next two-year budget, according to a recent report from the Legislative Fiscal Bureau. Walker's speech did not offer a glimpse at what cuts he might make.
The report, requested by lawmakers, looked at the state's ability to meet existing costs. The report figures on an assumption that a $132 million gap expected at the end of the current biennium June 30 would be closed prior to the start of the next budget cycle.
Wisconsin closed out the last fiscal year with a $517 million balance and $279 million in its reserve account. The state earlier this year anticipated a $1 billion budget surplus, prompting Walker and his fellow Republicans who control the Legislature to adopt $600 million of tax cuts.
Moody's Investors Service recently revised Wisconsin's outlook to positive on its Aa2 rating.
The state's GOs are rated AA by Fitch Ratings, AA by Standard & Poor's and AA by Kroll Bond Rating Agency. They all assign stable outlooks.
