Crunched By His Big Tax Cuts, Scott Walker Will Skip $108 Million In Debt Payments

Crunched By His Big Tax Cuts, Scott Walker Will Skip $108 Million In Debt Payments

by Bryce Covert at Think Progress

http://thinkprogress.org/economy/2015/02/19/3624622/walker-budget-debt-payment/

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Wisconsin Gov. Scott Walker (R) will skip making $108 million in debt payments in the face of a budget shortfall due to a slew of tax cuts he enacted.

The governor has to close a $283 million shortfall by the end of June. To do so, he will delay making the $100 million payment that is due in May on short-term debt, which doesn’t require legislative approval. The terms of the debt allow the state to defer a payment in any given year without defaulting. The move will increase its debt-service bills by $545,000 in the next budget year starting July 1 and by $18.7 million in the following one.

A spokesperson for the Wisconsin Department of Administration told Bloomberg News that the state is taking advantage of “favorable short-term interest rates.” He also noted that the previous Democratic governor used similar budgeting tools.

Walker has pushed for and enacted more than $2 billion in tax cuts since he took office in 2011. Although the state had a surplus of $759 million last year, it now faces a projected shortfall that could wind up being more than $2 billion for the next two budget years.


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