A fiscal watchdog says Wisconsin "budgets right to the brink," and today's Wisconsin Supreme Court decision serves to point out the precariousness of state finances. "The state leaves itself unnecessarily vulnerable," says Todd Berry with the Wisconsin Taxpayers Alliance. "This would not be an issue, nor would most of the economic downturn, if Wisconsin had budgeted reserves of the kind that the typical state did."
The court has ruled the state has wrongly collected sales tax on some computer software sales. That means state government will immediately lose $28 million in taxes it had expected to collect this year. Another $265 million may have to be returned to companies that paid the tax over the years. Still, with elections this fall, Berry doesn't expect lawmakers or the governor call for any immediate action. "I would be surprised, given the behavior of both parties and both branches over the last ten to fifteen years, and over the last year as well," says Berry. "They're very risk averse."
Statements were released today by legislative leaders. Senate Majority Leader Russ Decker (D-Schofield) said in a statement that there was "a strong likelihood" that the state would lose the case. Assembly Speaker Mike Huebsch (R-West Salem) said the decision will have significant financial impact on the state "for several years to come." Huebsch said that "it does not appear that the Legislature will have to come back for a budget adjustment bill."