Assembly looks at bill to create ‘rainy day fund’ for Wisconsin

By Andrew Averill
The Badger Herald – Thursday, April 14, 2011

The Wisconsin Assembly took up a host of items on the chamber floor Thursday, including a constitutional amendment to create a rainy-day fund.

During freshman Rep. Travis Tranel’s, R-Cuba City, maiden address to the Assembly, he introduced a resolution to amend Wisconsin’s constitution in order to create a fiscal responsibility fund in the treasury. The Legislature would be required to deposit into the fund any amount of money from state tax collections in excess of 6.5 percent.

Money could be taken out of the fund with a two-thirds vote in the Legislature. If the governor says the national gross domestic product is estimated to decrease in the current or succeeding year, the Legislature can tap into the fund with a majority vote.

Tranel said the amendment was common sense.

“It basically recognizes that leaders in both parties have made mistakes, both Republicans and Democrats,” Tranel said to his colleagues on the chamber floor. “It’s very hard for us to be disciplined. When times are good, we want to spend all the money that comes into the state.’”

He added legislators had to be honest with themselves and understand times are not always going to be good. As a farmer in southwest Wisconsin, Tranel said bean and corn prices are going through the roof, but he recognized those prices would drop and he would have to save some of that money, and in the same vein the state should save its extra revenue as well.

Had the program been enacted 25 years ago, Tranel said a Legislative Fiscal Bureau analysis of his amendment showed taxes would have been reduced by $8.6 billion and spending reduced by $9.7 billion.

Although in favor of the idea, Democrats introduced a number of amendments to the resolution they said would ensure the passage of the constitutional amendment in the next session.

Rep. Tony Staskunas, D-West Allis, offered all six of the amendments to the Assembly. He said he was concerned there was already a rainy-day fund created by Wisconsin statute and that the constitutional amendment was being sent through the Legislature in “grease lightning speed.” Staskunas said he wanted to get the proposal right, mentioning first how he did not understand why a supermajority would be required to take money out of the proposed fund.

“I’m not sure why a constitutional amendment would allow the minority to thwart the majority in regard to the state’s fiscal uncertainty,” Staskunas said.

Other concerns addressed in amendments offered by Staskunas included putting money into the fund even during years when aid is cut to counties and municipalities and K-12 education. The tax return contained within the constitutional proposal would only go to property owners, Staskunas said, and ignore people renting their home.

The proposal has been floated in the Legislature before, Assembly Majority Speaker Jeff Fitzgerald, R-Horicon, said, and it received statewide approval through newspaper editorial board endorsements.

“It’s human nature to spend when it’s good,” Fitzgerald said, adding later the constitutional amendment would control spending and stop the two year cycle of budget fighting.

The Badger Herald