Be cautious with any commitments relying on the surplus.
LET’S GIVE CREDIT where it’s due: In just over two years the administration of Gov. Scott Walker has turned Wisconsin’s $3 billion deficit into a $484 million surplus.
That deserves a round of applause.
Getting there was, in a significant understatement, difficult. Wisconsin became the poster boy for political warfare between the parties. The debate over whether the governor and his allies went too far will continue for years.
But the result is undeniable: Wisconsin is in much better shape fiscally than many other states.
SO NOW WHAT? It appears Walker will propose income tax cuts and other investments when he delivers his biennial budget address next month.
The growing surplus allows the governor considerable leeway in making such decisions. And Heaven knows Wisconsin needs a more competitive income tax system, and citizens will welcome such reform.
Our only caution is this: Pay yourself first, by continuing to build Wisconsin’s rainy day fund. Walker has made a good first step with earlier payments and should sock away some more.
The cycle of growth and low inflation has helped build this surplus, but the cycle will turn again some day. Be careful how the surplus is spent to avoid a later boom-and-bust outcome. Wisconsin has seen that before, and it wasn’t pleasant.