In another sign of the fiscal crisis, repaying debt will take a greater share of Wisconsin’s revenue in years to come.
Like a financially strapped consumer facing higher credit card bills, the state would face unprecedented debt payments over the next four years under state budget proposals by Democratic Gov. Jim Doyle and lawmakers.
By 2012, yearly payments on state debt will likely consume at least 4.5 percent of the state’s total income from taxes and fees, according to projections by the Legislature’s and Doyle’s budget offices. That’s 13 percent higher than the 4 percent threshold state officials have long considered to be a reasonable limit.
“If you cross that threshold, that’s a new development,” said Todd Berry, president of the Wisconsin Taxpayers Alliance. “We have been pushing the borrowing and debt envelope because we haven’t been coming to grips with our budget problems.”
The rising debt levels are one more sign of how the state’s financial crisis — the worst in at least a generation — will linger for years to come, threatening further cuts to state services and increasing pressure to raise taxes.