Wisconsin lawmaker proposes legislation requiring that money is set aside during good economic times.
Wisconsin state Rep. Travis Tranel, R-Cuba City, testified Thursday before the Wisconsin Ways and Means Committee in support of his bill called the Wisconsin First — Fiscal Responsibility and Stability Fund Amendment. It would create a constitutionally protected “rainy-day” fund in Wisconsin.
“Most families, farmers and small-business owners in the state of Wisconsin understand that there are good and bad economic cycles,” said Tranel. “When times are good, they plan for the future and put a small amount of money aside for emergencies. Maybe there is an illness in the family, a piece of machinery breaks, someone loses a job, or sales drop off suddenly. Having a “rainy-day” fund set aside for these tough times can help to weather the unexpected storm. It is common sense in my book.”
The state’s current rainy-day fund has not been properly funded over the years, according to Tranel. He said politicians from both parties have not had the fiscal discipline or foresight to consistently set aside tax dollars in good economic times.
“I think that by working to pass a constitutionally protected rainy-day fund today, we can prevent our state from finding itself in another very difficult financial situation in the future,” he said. “As our state’s economy begins to grow, it is only prudent that we look at enacting serious long-term budget reforms. I don’t want my kids and grandkids to have to go through the polarizing debates that we have seen taking place over the last few months up here at the Capitol.”
Here’s how Tranel’s bill would work:
- State tax collections in excess of 6.5 percent of statewide personal incomes are deposited into the Fiscal Responsibility Fund. If taxes are below that level, a small minimum deposit is made instead.
- During a recession, money can be withdrawn from the fund to help balance the budget.
- Any accumulated balance over a set maximum must be returned as a property tax credit.
- The fund can only be tapped in a recession, or during fiscal emergency when approved by two-thirds of the Legislature.
“Responsible budgeting and planning for the future is something that the citizens of my district told me that they wanted to see state government do,” Tranel said.