State and local governments around the country are increasingly concerned about their bond ratings. Earlier this year, one of the national bond rating agencies downgraded the state of Illinois because of concerns about its budget liabilities.
In the past, Wisconsin faced similar concerns.
When I took office on Jan. 3, 2011, we faced a $3.6 billion budget deficit. Prior administrations had delayed payments, raided segregated funds and used one-time federal stimulus funds for ongoing operational expenses.
As governor, I took immediate action because my state faced a fiscal crisis.
Since the largest portion of our state budget is aid to local governments, we dramatically lowered state aid payments. But our collective-bargaining changes provided a way for state and local governments to more than offset these reductions with savings from pensions and health insurance premium contributions, changes in work rules that allowed bidding out health insurance, reductions in overtime abuses, and overall reform.
These changes saved the hardworking taxpayers more than $1 billion, helped lower property taxes for the first time in 12 years on a median-valued home and turned a budget deficit into a surplus. Wisconsin has a great story to tell about reform.
As I travel to New York City this week to meet with each of the national bond-rating agencies, I am actually looking forward to reporting on our positive progress.
During the past 18 months, we stopped the raid on the transportation and patient compensation funds and dramatically took on the deficit with long-term, structural reforms that allow both state and local governments to balance budgets for years to come. In fact, for the first time in Wisconsin’s history, we’ve set aside money for the rainy day fund in back-to-back fiscal years. In other words, we thought more about the next generation than we did about the next election.
According to a recent Pew Center study, Wisconsin is the only state pension system in the country that is fully funded, and we are one of only seven states that cover retiree health benefit obligations at 25 percent or higher. Last year, Moody’s called our budget credit positive.
A positive fiscal climate also improves the atmosphere for job creators. During my tenure, Wisconsin moved up 12 spots on CNBC’s America’s Top States for Business rankings and 21 spots on Chief Executive magazine rankings. Our unemployment rate is consistently below the national rate.
People often ask what my motivation is for our reforms. The answer is quite simple: Matt and Alex. They are my two sons.
I want each of them (and every other child and grandchild) to grow up in a state at least as great as the Wisconsin I grew up in. Making tough decisions today so our children don’t have to tomorrow is exactly what we did — and that is even more important than maintaining a positive bond rating.
Gov. Scott Walker is a Wisconsin Republican.