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Harsdorf Column: What Does the Federal Stimulus Plan Mean for Wisconsin?

Friday, February 27th, 2009 at 11:11 am

The following is a column written by WI Sen. Sheila Harsdorf:

The federal government is on a spending spree and the state of Wisconsin is poised to be a big beneficiary.  With Wisconsin facing a $5.9 billion budget shortfall, the Governor’s two-year budget proposal increases taxes by $1.5 billion while increasing total state spending by nearly 10%.  It is estimated that the state of Wisconsin will receive over $3.7 billion in new allocations from the federal government as part of the recently passed stimulus bill.

So, how are all these new federal stimulus dollars being spent in Wisconsin’s state budget?

Nearly $789 million is being used to displace current state expenditures for K-12 education.  Wisconsin is also set to receive $1.2 billion for Medicaid programs.  Another $719 million in transportation infrastructure funding is provided, of which $529 million can be used for highway projects.  The Governor has estimated that work on road projects will increase over 50% with these new funds.  There remains another $1 billion for a variety of state programs, such as nearly $200 million for weatherization and energy programs and $107 million for a state revolving clean water fund.

These funds help our budget now, but do not get us out of the woods.  We should be concerned that the influx of federal monies props up a state budget that is badly out-of-line with taxpayers’ ability to pay.  Outside of highway and building projects, the federal funds will serve as one-time monies to pay for ongoing state operating expenses.  It will be impossible to maintain this level of spending when the federal funding ends without historic tax increases or staggering budget deficits.

As we face a national economic downturn, I support investments in aging infrastructure that adds jobs and does not commit the state to future commitments we cannot afford.   Unfortunately, the federal government is dictating how stimulus funds will be spent by the states.

Let me know what you think about the state budget and federal stimulus dollars.  I can be reached via email at Sen.Harsdorf@legis.wisconsin.gov or by calling 1-800-826-1092.

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