Gov. Scott Walker says Wisconsin is broke and $3 billion in debt

During the summer of 2011, the Republican-controlled state Legislature gave swift approval to the $66 billion 2011-’13 state budget, which was signed into law by Gov. Scott Walker.

That budget closed a $3.6 billion shortfall from the previous fiscal year, and also, for the first time in many years, closed the state’s structural deficit. In fact, as we noted in an earlier item, Walker’s budget is projected to leave a structural surplus at the end of the two years.

That’s why we were puzzled by a two-page fund-raising appeal that his campaign mailed to supporters Sept. 2, 2011.

"Wisconsin state government is $3 billion in debt, spending is too high, our business climate isn’t what it should be and Badger State voters gave me a mandate to turn our great state around," Walker said in the two-page letter.

"A fiscal tornado is barreling down on us at top speed. And we simply cannot continue spending, taxing, borrowing the way we have been," Walker added, declaring: "Wisconsin is broke! This is our moment of reckoning. By dealing with our problems head-on and solving them, we’ll win a victory for Wisconsin’s future."

Wait a minute.

That does sound like something straight out of the campaign office -- but from the 2010 campaign.

We called Walker spokesman Cullen Werwie to ask about the statement. He said he knew nothing about the letter, and sent us to state Republican Party spokeswoman Katie McCallum. She said she would look into the letter and get back to us. She didn’t.

Let’s start with the "we’re broke" statement.

That was a refrain used by Walker (and other Republicans locally and nationally) on the campaign trail and in early 2011, when Walker introduced a budget repair bill that called for curtailing collective bargaining for most public employees.

In the midst of that debate, PolitiFact Wisconsin rated the "we’re broke" statement False, noting that numerous experts said the state wasn’t teetering on the brink of bankruptcy or insolvency, and had numerous tools available to deal with any shortfall -- even if some of the options, such as tax increases, were declared off limits by the GOP.

We heard from many readers who disagreed with that assessment.

But repeating the statement now flies in the face of the many positive statements Walker made after the budget passed.

Significantly, the state budget by law must be balanced, so the $3.6 billion shortfall had to be resolved. And the nonpartisan Legislative Fiscal Bureau -- accepted by both sides as the neutral scorekeeper on such matters -- says the structural deficit is gone for the first time since it started using the calculation to measure the long-term impact of future obligations the state faces.

Here’s what Walker said when he signed the budget June 27, 2011: "Through honest budgeting, we are providing an alternative to the reckless tricks and gimmicks of the past."

We asked Werwie whether Walker has recently used the "broke" phrase.

"He hasn’t said that in eons," Werwie said.

Beyond that, the state never was $3 billion in debt -- we rated a statement on that topic by GOP state Senate candidate Jonathan Steitz as False. Why? The state faced a $3.6 billion budget shortfall -- the difference between tax revenue projections and what agencies plan to spend in the next budget. But that’s separate from any long-term debt obligations.

The contradictory statements in the letter also extend to comments about the state’s business climate, which Walker said "isn’t what it should be."

The letter does not specify by what measure, but this also flies counter to what Walker has been stating publicly.

He routinely notes Wisconsin’s standing improved from 41st to 24th on the list of business-friendly states compiled by Chief Executive magazine. A Wisconsin Manufacturers and Commerce survey found "88 percent of Wisconsin business leaders said they are confident the state is heading in the right direction, up from just 10 percent a year ago."

And Walker and GOP lawmakers note that their first actions this year came in a special session of the Legislature dedicated to steps aimed to improved the state’s business climate.

Here’s what WMC president Kurt Bauer said July 11, 2011 in a column on the group’s website.

"Governor Scott Walker set the right tone even before he took office by announcing the state was ‘open for business.’ Walker backed up his slogan by introducing a two-year budget plan that solved the $3.6 billion deficit without raising taxes. "

Said Werwie: "Certainly our business climate has gotten substantially better."

Our conclusion

In a fund-raising letter full of urgency, Walker criticizes unions and Democrats in the Legislature while proclaiming the state is broke and $3 billion in debt. But the statement flies in the face of a balanced budget with a structural surplus and the upbeat rhetoric coming out of the governor’s office.

Understandable, perhaps. After all, the letter is geared toward getting supporters to contribute money to the campaign in the face of a possible recall attempt in 2012. But in doing so, Walker contradicts his own statements -- and reality.

The statements are false and ridiculous. Pants on Fire.