Republicans Reduce Borrowing In State’s Building Program By Quarter-Billion Dollars

Republican lawmakers have approved a building program in the state budget that reduces borrowing by a quarter-billion dollars.

Now instead of borrowing a little over a billion dollars for buildings, the state will borrow approximately $800 million.

Governor Scott Walker’s administration had argued that now was a good time to borrow more, saying that with interest rates historically low, money was cheap and it was a good time to build. Republicans on the legislature’s budget committee pushed back, saying that regardless of rates, everything the state borrows would eventually have to be paid off by future generations.

Rep. Dean Knudson was among those voting to cut borrowing.

“When we choose to do projects now by borrowing and having future taxpayers and future legislatures pay the bill for them, what we’re doing is saying that some day there’s a general fund that has to pay that bill – that has to make that principal payment. In one way or another, there will be fewer dollars available for the priorities of the future.”

On this issue, Democrats were arguing the case of the governor. Sen. Robert Wirch told Republicans that if Wisconsin ends up borrowing to pay for these projects later, it could end up hurting the state’s bottom line.

“There’s an old saying – they don’t ring the bell on Wall Street when they raise rates. It happens suddenly. And you know we were so used to low rates. That’s going to change! And maybe the next time we sit here with the next budget, we’ll be talking about 4, 5, 6 percent rates. Folks, it doesn’t go on forever, these low rates.”

Democrats also argued building was one surefire way the state could boost its economy and Republicans were hampering that. Even with these cuts, the budget still includes new borrowing of more than $800 million for buildings.