Tag Archives: budget deficit

Analysis: Walker’s presidential campaign cherry-picks economic data

Scott Walker has transformed Wisconsin politics, winning three elections in four years and signing laws that weaken unions, crippling a key ally of the Democratic Party.

But the likely Republican presidential contender has had less success changing Wisconsin’s economy and budget. The state lags in job growth and its budget faces a shortfall. It’s a record that complicates Walker’s path in early primary states as he sells his Wisconsin record as a showcase of what he’ll do for the nation.

“Most of his activity was more politically focused than economically, job-creation focused,” said John Torinus, a Milwaukee businessman and venture capitalist who nevertheless praises some of Walker’s moves. “He was going to concentrate on job creation with a laser-like focus and he got distracted.”

Wisconsin has added private-sector jobs at a lower rate than the national average since July 2011 — six months after Walker took office. Walker promised in the 2010 campaign that if elected his policies would create 250,000 private sector jobs. But only about 145,000 such jobs were created over his first four years.

Wisconsin ranked 40th in private sector job growth for the 12 months ending in September, said the U.S. Bureau of Labor Statistics. Walker has called hiring in his state the “gold standard” for measuring his performance.

Still, the state has seen a higher rate of new businesses starting than the rest of the country and income growth for Wisconsin residents has exceeded the national average.

But at the same time, Wisconsin is in the top tier of states in which the middle class is rapidly shrinking, according to a state-by-state analysis conducted the Pew Charitable Trusts.

In 2000, 54.6 percent of Wisconsin households belonged to the middle class, which is defined as those earning between 67 percent and 200 percent of a state’s median income. By 2013, less than half — 48.9 percent — of Wisconsin households were defined as middle class. In Wisconsin, inflation-adjusted income fell from $60,344 in 2000 to $51,467 in 2013.

Walker, with the help of the state’s pervasive right-wing media, has cherry-picked data that paints a far rosier picture, and Walker’s many die-hard fans choose to believe only the positive numbers — even when their own lives reflect the contrary. They’ve become something of a personality cult, bristling at any information that reflects negatively on the governor.

As a result, Wisconsin is one of the most politically divided states in the nation, with a line drawn in quicksand between Walker’s die-hard faithful and progressives. The latter are alarmed by his massive cuts to education, huge tax giveaways to the very wealthy, relaxation of environmental regulations, the adoption of photo ID laws to give GOP candidates an electoral advantage and a host of other controversial policy moves. Others are angry over the constant questions of corruption and pay-for-play that hover over his political career.

Walker’s political group Our American Revival is concentrating on spinning his record as one of economic success.

“The governor is now taking his reform ideas that led to this economic success in Wisconsin and sharing them nationally,” said spokeswoman AshLee Strong.

Of course, not all of the state’s economic woes are Walker’s fault alone. Heavily reliant on manufacturing, Wisconsin has perennially lagged the nation in job creation and often used fiscal tricks to paper over budget deficits. Walker vowed to change that when he ran in 2010, but his latest budget resorts to the same tricks.

The Republican right adores Walker over his signature move, just six weeks into his first term in 2011, to curtail public unions’ collective bargaining power while also forcing them to pay more for pension and health care benefits.

Following weeks of protests, and the fleeing of Democratic state senators for three weeks to try to block a vote, Walker got his way. That drama, along with Walker’s 2012 recall victory and other laws he’s signed legalizing concealed weapons and last month’s right-to-work law are central in his stump speech, as he presents himself as a man of action with a record of conservative accomplishments.

M. Kevin McGee, an economist at the University of Wisconsin-Oshkosh, said Wisconsin’s job performance kept pace with its Midwestern peers until Walker took office. Then it fell behind. His theory: Walker’s public sector union moves, and subsequent benefit cuts, shocked those workers into cutting consumer spending.

“What happened here changed the behavior of enough people in the state that it affected economic growth,” McGee said.

Last year, facing forecasts of a nearly $1 billion increase in tax revenue, Walker and Republicans who control the Legislature passed an $800 million tax-cut package. The state is on pace to collect only about half of the tax revenue previously projected, exacerbating the latest budget problem.

“We dug our own hole,” said former state Sen Mike Ellis, a Republican, adding that he still thinks the fiscal picture is better than when Walker took office.

Heading into this year the state faced an $800 million shortfall just to continue spending at the current level and $2.2 billion when state agency requests were taken into consideration. Walker’s plan calls for more massive education cuts and borrowing more than $1 billion to pay for roads. The proposal has run into widespread opposition, including from Republicans.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said Walker’s initial budgets were responsible, but the more recent ones resemble those of his Democratic precedessor, Jim Doyle.

Berry said the state’s lackluster jobs record shows Walker overpromised in the campaign. Governors, he noted, rarely have a significant impact on job creation. “This slow rate of job growth is nothing new,” Berry said.

The Associated Press contributed to this analysis.

UW alumni mobilize to fight Walker’s draconian budget cuts

Gov. Scott Walker is fond of comparing his proposed $300 million cut to the University of Wisconsin System to Act 10, his signature legislation that gutted collective bargaining for public workers and sparked massive protests.

Opposition to the UW cuts doesn’t look to flare that intensely, but system leaders have no plans to go quietly into the budget cut night. Despite their president’s call for calm, campus heads are ratcheting up warnings about how the cuts would cripple the system and starting to mobilize tens of thousands of alumni in an effort to convince Walker and legislators to scale the reduction back.

“I realize this may make you feel helpless,” UW-Whitewater Chancellor Richard Telfer wrote on that school’s website. “However, the beauty of democracy is that we all have a voice. I would encourage you to use that voice. … We simply cannot allow the UW System, one of the state’s greatest assets and economic drivers, to be weakened in this way.”

Walker spokeswoman Laurel Patrick said in an email to The Associated Press that the governor’s plan is to empower the system leadership and give them flexibility over the use of their resources.

The Republican governor’s two-year budget plan calls for cutting the system by $300 million while keeping a tuition freeze in place for in-state students. In exchange Walker would give the system more freedom from state oversight and laws on building projects, procurement and tuition increases when the freeze expires in 2017.

Walker, who is grappling with a $2 billion deficit while ramping up a 2016 presidential run, has said less oversight would give the system the flexibility to absorb the cut, much like he said Act 10 helped government employers absorb budget cuts in 2011.

“Our proposal gives new cost-savings reforms to the UW through an authority, while protecting the hardworking families and students by freezing tuition for another two years,” Patrick said.

The depth of the cut coupled with the inability to raise tuition to offset it has left chancellors stunned. A Legislative Fiscal Bureau estimate shows UW-Madison next year would lose $57.7 million, nearly 12 percent of its current annual budget. UW-Whitewater would take the biggest percentage cut at nearly 19 percent.

UW-Madison Chancellor Rebecca Blank railed against the cuts. She warned they’ll lead to layoffs, force tuition increases for out-of-state and international students, push disgruntled faculty to leave and hurt the flagship campus’ reputation.

System President Ray Cross followed that up by imploring chancellors and regents not to view the cuts in a “rhetorical, inflammatory or emotional way.”

But campus leaders aren’t sitting still.

Whitewater’s Telfer made his appeal for a write-in campaign on last week. Blank sent a blast email to UW-Madison’s alumni the day of the regents meeting imploring them to write to Walker and legislators and demand they reduce the cut, saying the reduction “puts at risk the investment that generations of Wisconsinites have made to create a highly ranked university in our state.”

Blank also has scheduled a series of public forums on campus next week to discuss how the cuts would affect the school.

Tom Luljak, a spokesman for UW-Milwaukee, which stands to lose nearly $20 million in the budget’s first year, said that school’s alumni have been calling asking for information about how to contact legislators. He said the school is preparing information for Panther Advocates, a formal group of active alumni who communicate with lawmakers regularly, although that group’s efforts on the cut hasn’t begun yet. Chancellor Mark Mone has promised to reach out to any group that might help lobby for more money.

“I can’t help but be angry,” Mone said during a Jan. 28 speech. “I can’t help but be upset.”

Lynne Williams, a spokeswoman for UW-Superior, which is in line to lose $2.3 million in the first year, said campus officials plan to lobby lawmakers during the Superior community’s annual state Capitol lobbying day on Feb. 25.

Walker tweeted that critics of the UW cuts sound like critics of Act 10, which he said helped the state.

His budget still needs legislative approval. The Legislature’s budget committee will spend months revising it before forwarding it on for votes in the full Assembly and Senate. Republican leaders already have said the UW cuts look too deep and the governor himself has said he would be open to giving the system more money.

Amid presidential campaign, Walker’s deficit balloons to $2B

Wisconsin Gov. Scott Walker will have to plug a roughly $280 million budget shortfall by the end of June, and the state faces a two-year deficit that could be as large as $2 billion, based on new estimates released from the nonpartisan Legislative Fiscal Bureau.

When Walker took office in 2011, the state faced a roughly $3 billion budget shortfall, based on agency requests. Walker declared that the state was “bankrupt” then, an assertion that was supported by the media.

Somehow, there’s no mention of “bankruptcy” in the right-wing media this time around.

Walker used the 2011 deficit as an excuse to dismantle public unions, an action that was high on the agenda of right-wing groups such as the Koch-backed Americans for Prosperity. His Act 10 forced public workers to pay more for their health care and pension benefits and ended nearly all their collective bargaining rights. He made deeper cuts to education than any other governor in the nation, including cuts to public schools, the University of Wisconsin and technical colleges. He also cut the state workforce, taking millions of dollars in income out of the state’s economy.

Over his first term, Walker turned down hundreds of millions of federal dollars for expanding Medicaid, building high-speed rail and expanding high-speed Internet service in the state. Those were among the decisions that put the state on the slowest track in the region for job creation.

But Walker’s Act 10 brought the largest demonstrations to Madison in decades, making him an instant sensation with the  tea party acolytes Fox News. Now Walker is using his fame to mount an exploratory campaign for the 2016 Republican presidential nomination.

The governor has spent a great deal of time since his re-election pulling together his presidential campaign, visiting other states and raising funds. The latest budget figures were released just a day before Walker joined other GOP presidential hopefuls at separate events in Iowa and California. Democrats renewed their criticism that Walker is distracted by his political ambitions and instead should be focused on fixing the state’s budget problem.

“The Scott Walker claiming that he cut taxes and balanced the budget faces a different reality at home,” said WisDems communication director Melissa Baldauff in a press release. “While Walker is campaigning in Iowa and promising caucus voters he’ll be back there soon and often, Wisconsin is facing a $2.2 billion budget deficit for the next biennium that is well on its way to $3 billion and higher. Worse, the state is expected to end the current fiscal year with a $283 million shortfall.”

Baldauff continued: “Instead of bragging to Iowans about how he busted unions with an unnecessary budget repair bill in 2011, Walker needs to start talking to his Republican Legislature about a budget repair bill right now to address this staggering deficit. The $283 million shortfall for this year is more than three times the $79 million threshold in state law to trigger a budget repair and is more than double the amount of the deficit Walker used as justification to pass his contentious Act 10 legislation. Wisconsinites need to start hearing real, serious solutions from Scott Walker about how he will close this deficit without gutting critical services or raising taxes on the middle class.”

Walker will not release an emergency budget plan to balance the $283 million shortfall for the year that ends June 30, his spokeswoman Laurel Patrick said in an email to The Associated Press. The state constitution requires the budget to be balanced, meaning that savings will have to be found over the next five months to make up the deficit.

Walker’s deficit will likely spur deep cuts across state government, which would please conservatives, but make it difficult for him to follow through on additional  promised tax cuts. Walker and Republican legislative leaders have stressed for weeks that difficult decisions lie ahead.

Wisconsin’s two-year shortfall hits about $2 billion when state agency requests — which will certainly not be filled in full by Walker or the Legislature — are taken into account. The budget will be about $650 million short by mid-2017 just to continue spending at current levels.

Walker is set to release his roughly $68 billion, two-year budget on Feb. 3 and the Legislature will make changes to it over the next several months.

Co-chairs of the Legislature’s budget committee issued a statement attributing the budget woes to the $2 billion in tax cuts passed during Walker’s first term, which they supported. Large cuts went to the wealthiest Wisconsinites, while cuts for the middle class were minimal and taxes for some poor residents increased under their plan.

The Associated Press contributed.

Walker proposes $300-million cut, more freedom to UW system

Gov. Scott Walker’s plan to give the University of Wisconsin System more freedom would allow it to impose unchecked tuition increases that could price students out of college, one of the system’s toughest critics and student leaders said.

Walker’s proposal would strip the system of $300 million in funding — in addition to the $250 million that the governor slashed from the system four years ago. In exchange, he would give more autonomy to the governor-appointed Board of Regents, which oversees the system’s 26 campuses, on a wide range of issues, including raising tuition without Legislative approval starting in 2017.

Walker, who’s mulling a 2016 presidential bid, proposed the plan as he struggles to resolve a projected $2 billion deficit in the 2015-2017 budget. The deficit undermines his presidential campaign boasts that he balanced Wisconsin’s budget after inheriting a $3-billion projected deficit.

wThe Associated Students of Madison, UW-Madison’s student government organization, issued a statement saying tuition increases would be inevitable under Walker’s plan.

UW System administration needs to assure students … that the … institutions will not increase tuition as a way to absorb these cuts on the backs of students after this budget,” ASM vice chair Derek Field said.

UW System President Ray Cross has acknowledged each institution will feel the $300 million cut but contends more autonomy is an opportunity to operate more efficiently. System leaders believe it’s in no one’s interest to “simply jack up” tuition, Cross said in an email to The Associated Press.

Under the plan, system leaders would control employee salaries, tenure and procurement contracts, among other things. Future state funding would come through a block grant fueled by sales tax revenue with annual increases tied to inflation. Right now, the state money that goes to the system is a combination of different taxes. The governor and Legislature set the payout amount during budget negotiations every two years.

Walker wants to keep a tuition freeze that the Legislature imposed last year in place until 2017. Then lawmakers would have no ability to limit increases. The system had raised tuition 5.5 percent each of the six years leading up to the freeze.

New estimate projects $1.8-billion budget shortfall from Walker’s corporate tax cuts

A nearly $1.8 billion budget shortfall projected by a new report released yesterday provides yet more evidence that Gov. Scott Walker and Republicans who control the Legislature have mismanaged the state’s finances, critics say.

The two-year budget that ends in June is projected to be nearly $396 million short after tax collections came in $281 million less than anticipated. The $1.8 billion shortfall is forecast for the next budget, which runs from July 2015 through June 2017.

The Legislature will have to address the deficits next year. All of the numbers are estimates and will change based on actual spending and tax collections in coming months.

Walker and legislative Republican leaders downplayed the latest bad news for the budget, while Democrats pressed them for details about how they planned to address it.

“We have a proven track record of managing the taxpayers’ money well,” said Walker spokeswoman Laurel Patrick. “By continuing to grow the economy, finding further efficiencies in government, continuing to eliminate waste, we will take care of any future structural issues.”

Walker’s Democratic challenger, Mary Burke, a former state Commerce Department secretary and Trek Bicycle executive, said the projected shortfall is the result of Walker’s “irresponsible approach” and “failed stewardship of a lagging economy.”

Walker and the Republican Legislature passed about $2 billion in tax cuts over the past three years, approving broad income and property tax reductions and an income tax cut targeting manufacturers. Critics complained that the lion’s share of the tax cuts went to Walker’s wealthy corporate out-of-state donors while taxes on the poor effectively increased.

“Governor Walker has spent money we don’t have,” Burke said in a statement. “In the business world, if a CEO created this big of a financial mess, he would be fired.”

Republican Assembly Speaker Robin Vos accused Democrats of “looking for dark clouds on a sunny day.”

Since Walker took office, only about 103,000 private-sector jobs have been created in the state after about 133,000 were lost during the recession. Walker pledged during the 2010 campaign to create 250,000 private-sector jobs, a pledge he won’t come anywhere close to meeting. During his 2010 campaign, he urged voters to hold him to his pledge, but now he says that he never meant it to be taken literally.

Under Walker and the GOP, Wisconsin’s job growth has been about half the national average. The state ranks last in the upper Midwest for job creation during Walker’s term.

Although the unemployment rate has fallen, experts attribute that partly to people giving up on seeking jobs as well as people taking low-paying part-time jobs.

Walker and Republicans inherited a roughly $3 billion budget shortfall, which they plugged by making deep spending cuts to schools and local governments. Walker also used the shortfall to argue for passage of a law requiring most public workers to pay more for their pension and health care benefits while also taking away nearly all of their collective bargaining power.

The savings from those higher contributions helped schools and local governments deal with the other spending cuts.

Walker argues, as he runs for re-election, that he made the tough choices necessary to turn around the state’s economy, which his critics contend that he turned around from bad to worse.

Even in the face of the recent negative estimates, Walker and Republican legislative leaders have promised to take a similar approach to bring the budget into balance.

“Our local schools, small businesses and communities can’t afford to limp through another round of devastating budget cuts,” said Democratic state Sen. Jen Shilling, a member of the Legislature’s budget committee. She said the numbers definitively prove that Walker and Republicans’ approach has failed.

The Associated Press contributed to this article

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Baldwin rallies Wisconsin Democratic convention

As PrideFest 2013 was getting underway along Milwaukee’s lakefront on June 7, the nation’s first out gay U.S. Senator was rallying the Democratic faithful at the party’s state convention.

Sen. Tammy Baldwin urged her Democratic Party of Wisconsin colleagues to oust Republican Gov. Scott Walker and other GOP officeholders in 2014.

Democrats who filled a hall at an Oconomowoc resort for the convention’s opening night rose to their feet and rained applause on Baldwin as she took the stage. She’s become a beacon of hope for Democrats relegated to the sidelines under Walker and the Republican-controlled Legislature. Baldwin defeated former Wisconsin Gov. Tommy Thompson, one of the state’s most popular Republicans, in November to become the state’s first female senator as well as the first openly gay candidate ever elected to the chamber.

Baldwin touted her own victory, as well as that of President Barack Obama  in 2012, as an affirmation of Democratic values. She said Republicans in Washington still don’t understand the plight of real people, lurching from financial crisis to financial crisis while middle class families in Wausau and Wauwatosa worry about keeping their jobs and getting their children through college.

“We did in fact have a whole election about all of these issues. We laid out our plans and we defended them and then Americans voted. Mitt Romney and Paul Ryan and Tommy Thompson and Reince Priebus didn’t win. We won,” she said, referring to Obama’s victory over Mitt Romney and Romney’s running mate, U.S. Rep. Paul Ryan, and her victory over Thompson. Priebus is the Republican National Committee chairman and former Wisconsin GOP state party chairman.

Baldwin called on Democrats to turn out in droves in 2014 and defeat Walker and any other Republicans vying for office. She said Walker is more focused on running for president than the plight of Wisconsin’s middle class and the state’s stagnant economy.

“Now you get to decide whether we live in a state that lives up to our state motto – forward. … I saw how hard you fought for me. I’ve seen how powerful we can be together,” she said as the crowd applauded.

Other Democratic leaders lashed out at Walker for positioning himself for a  presidential run while Wisconsin’s economy suffers. Again and again they played up that the state has dropped to 44th in the nation in job creation.

“You’ve led our state straight to the bottom of economic growth,” U.S. Rep Mark Pocan, D-Madison, told the crowd to applause. Pocan is an out gay candidate who won Baldwin’s former congressional seat last November.

They also took Walker to task for rejecting a federally funded Medicaid expansion. They also blasted the 2013-15 state budget, which the Legislature’s Republican-controlled Joint Finance Committee finished revising last week.

Tax cuts Republicans included in the package disproportionately benefit the wealthy, and other provisions in the spending plan expand vouchers for private school tuition to students statewide, which Democratic leaders described as an affront to public education. The voucher plan does not hold private schools accountable for state education standards and funnels taxpayer money into religious schools that could discriminate under the mantle of religious freedom.

“We have got to fight this agenda,” Assembly Minority Leader Peter Barca, D-Kenosha, told the crowd. “You reach a critical mass and people will say … we’re mad as hell and we’re not going to take it anymore.”

Wisconsin GOP Executive Director Joe Fadness issued a statement claiming that Republicans have balanced the state’s finances and all Democrats want to do is go back to failed policies of the past. In fact, the state’s future budget deficit has increased greatly under Walker and is forecast to increase even more under his current budget.

Fadness did not deny that the state ranks near the very bottom in job growth while other states in the region have been adding jobs at a much higher rate.

Poll: For LGBT voters economy key issue

A poll released this week for Logo TV shows that the economy tops the issues chart for lesbian, gay, bisexual and transgender voters in 2012.

The poll, conducted online by Harris Interactive, also shows that priorities for LGBT issues are similar to the top issues for the general voting population.

Voters were asked: Which issue will be the most important in how you vote in the presidential election this November?

Eighteen percent of LGBT voters and 24 percent of voters in general said economic issues, which ranked the No. 1 concern.

No. 2, for both groups, was unemployment and jobs.

No. 3 for both: Health care.

About 9 percent of LGBT voters and 1 percent of voters in general said “ gay rights in general” was the most important issue.

Social Security was the most important issue for 7 percent in both groups.

Nine percent of LGBT voters and 11 percent of voters in general said the federal budget was the top issue.

Six percent of LGBT voters and 1 percent of general population voters said same-sex marriage ranked No. 1.

Voters also were asked: Are you more likely or less likely to vote for a candidate who supports the following issues, or would it have no effect on your voting behavior? The issues included fighting bullying with tougher laws, banning workplace discrimination based on sexual orientation, continuing open service for gays in the military, legalizing same-sex marriage and protecting adoptions by gay parents.

Voters in general were more likely to support pro-gay candidates, the poll found.

Kenneth Sherrill, political science professor at Hunter College, CUNY, said in a news release, “This survey documents a political transformation of epic proportions. LGBT rights are no longer a wedge issue in American politics. Instead, support for LGBT rights is now a mainstream position and candidates stand to benefit from their support for LGBT rights.

“The data also demonstrate that LGBT voters are active, savvy, and discerning voters who support candidates who support their interests, but that they also are by no means blindly loyal to any politician or party.”

On the question of who voters will support for president in November, 67 percent of LGBT voters chose Barack Obama; 23 percent, Mitt Romney; 3 percent, Gary Johnson; 3 percent Jill Stein and 3 percent were uncertain.

Among the general population, support was 48 percent for Obama and 42 percent for Romney.

One in five LGBT voters said they’d consider voting for Romney if his positions on LGBT issues were the same as Obama’s positions.