Walker’s virtual second term
Walker’s virtual second term
He has a mandate for growth
Waukesha Freeman, Page a6, Opinion, 1/17/13
On Tuesday, Governor Scott Walker gave what could be considered his second inaugural address. The “State of the State” address follows a year of tumult in Wisconsin, including multiple elections and even an unprecedented attempted recall of Walker.
After winning his re-election, Walker begins 2013 in the triumphal air of winning a virtual second term. He will be blessed with bigger Republican majorities in the Legislature to pass his legislation. He has an electoral mandate supporting the reforms he has made so far.
Walker has two successful years behind him of dealing with Wisconsin’s fiscal mess. Gone is the $3.6 billion structural deficit of the Jim Doyle era. Walker’s Act 10 reforms have led to a biennial budget surplus of $342 million.
Walker balanced the budget by spending smarter and without breaking the back of the local property taxpayer. He correctly boasted Tuesday night that the median homeowner actually saw a tax reduction over the last two years.
Local governments were hit with dramatic reductions in state aid. However, school boards and municipalities were also given the benefits of collective bargaining, allowing them to lower their costs. The collective- bargaining reforms also allowed school boards and municipalities more flexibility with work rules for public employees, putting elected officials back in charge.
Even Walker opponents like Milwaukee Mayor Tom Barrett chose to use the Act 10 reforms to lower the costs of government. For all of the marching, protesting, and recalls, Walker’s government reforms have been a success.
But reforming government to make it less costly to balance the budget is not a panacea.
When Walker ran for governor, he promised Wisconsin would create 250,000 jobs. Despite the scoffing of critics, historical growth after recessions made such a number possible.
Unfortunately, we are not in a typical recovery. We are in President Barack Obama’s economy, which is likely to be made worse by the recently enacted tax increases.
Despite a drop in unemployment in Wisconsin from 7.8 percent to 6.7 percent, Wisconsin is still behind much of the country when it comes to job creation.
We can point to the failure of the mining bill in the last legislative session. We can also point to the chaos at the Capitol caused by the protests and the recall elections creating uncertainty.
But while Wisconsin has been mocking Illinois for raising taxes to try to deal with their budget problems, Wisconsin’s taxes are – at best – at parity with Illinois. Illinois’ income taxes are actually lower than Wisconsin’s. That is not a formula for growth.
Walker’s planned phase-in of an income tax is nice but it does nothing to reduce the Doyle-era top rate. We would be better with an income tax cut across the board.
Regulatory reform is good, and overdue. Mining regulation is only a piece of the regulations that shackle Wisconsin’s businesses. As the Waukesha Freeman reported the other day, a prospective new owner of the Golden Guernsey dairy would have to overcome the state’s unique regulations on the industry that give out of state competitors an edge.
On the other side, in his speech Walker again made a commitment to the state’s transportation infrastructure. Taxpayers should be concerned what taxes and fees could be raised to support this spending.
Already the Wisconsin Department of Transportation, in a draft proposal, is considering requesting the state to raise the gas tax, index it for inflation, raise registration fees, index those for inflation, and create a new fee for miles traveled. The new fee would be self-reporting at first, but would likely involve a mandatory mileage tracking system in the future.
It was a Republican Legislature that finally killed the automatic increases to the gas tax. It would be painful irony if a Republican governor and Legislature brought the automatic increases back.
But the most disappointing aspect of the governor’s agenda is his newfound reluctance for real structural reform. He has ruled out reforming the Government Accountability Board, the state’s elections laws, and making Wisconsin a right-to-work state.
After winning last year’s recall election by a wider margin than in 2010, Walker has a renewed mandate for moving Wisconsin’s economy forward. As Margaret Thatcher once said, “this is no time to go wobbly.”
(James Wigderson is a blogger publishing at http://www.wigderson.com and a Waukesha resident. His column runs Thursdays in The Freeman.)