State of the State: Walker's Jobs Deficit Grows

Governor Scott Walker’s State of the State Address sounded more like a campaign speech than a plan for governance. He pulled out all the stops, right down to a live video feed from Dallas, wasting much of his 30 or so minutes on peripheral fluff. When he finally got down to business, he boasted about all the job creation laws passed so far. Walker seemed pleased with himself and proud of his accomplishments during his first 30 days in office. But he lacks the intellectual capacity to understand that his insubstantial plans only dig the hole deeper. He owes the citizens of Wisconsin 5208 jobs for the month of January, and another 5208 for the month of February, and every one of the remaining 46 months of his term of office to fulfill his promise of 250,000 new jobs. So far, he has failed to create any jobs. At the same time, he has chased untold  jobs away in several emerging industries and decreased tax revenues -- not a good start.

Walker’s Jobs Plan

Walker pointed with pride to newly passed laws intended to loosen regulation of corporations and create a more friendly climate for business:

1. Eliminating taxes on Health Savings Accounts (HSAs)
2. Reducing “frivolous lawsuits” by making it nearly impossible for a citizen to hold a company accountable for damages
3. Tax credits for businesses that relocate to Wisconsin
4. Regulatory “reform” placing control of all agency regulations in the hands of Governor Walker, rather than the Legislature.
5. Rebuilding the Zoo Interchange in Milwaukee at a cost of $2 Billion as a means of spurring global commerce. He did not specify the source of the $200 Million in matching funds required from state funds -- an amount equal to the projected deficit the state will have at the end of this fiscal year.
6. A taunting op-ed piece in the Chicago Tribune “inviting” Illinois companies to move to Wisconsin.

The sum total of these laws is a $140 Million loss in tax revenues, every year -- not a great idea when reducing the deficit is one of his major goals. Also, none of these half-hearted measures will lead to more than a handful jobs, at best. Since Wisconsin ranks 24th in corporate taxes, it is not suffering from job losses due to high taxes. Although he made no predictions as to how many businesses he could convince to relocate in Wisconsin because of these improvements in the business climate, the Governor was glowing with pride. These shallow jobs-creating plans are naive and ineffective, but Walker is pleased.

Dismantling Healthcare Programs

Walker then turned his attention to Medicaid and BadgerCare. He never had the courage to say that he planned to make cuts in those programs, but blandly talked about the costs of the programs and the need to make “tough decisions.” The team he has assembled includes Dennis Smith (a national activist who has advocated that the states withdraw from Medicare completely) as his Secretary of Health and Human Services.  His Deputy Chief of Staff, Eric Shutt, was a lobbyist for UnitedHealthcare. Walker turned Attorney General J. B. Van Hollen loose to join the suit seeking to have the Affordable Care Act declared unconstitutional. We can assume that this team’s most likely goals would be dismantling Medicaid, BadgerCare, and SeniorCare. Drastic cuts would be the most merciful of their plans.

Potential Union Busting and Loss of Benefits for State Employees

Next, Walker attacked state workers and their unions. He has already suggested that he might abolish the unions entirely, and reduce pay. Blaming them for budget deficits, he suggested ending or reducing the benefits for state employees. Walker claimed that state employees paid less for their pensions and health care than private sector employees. What he failed to say is that salary and benefits comprise a package of compensation. Singling out one factor as unfair while not accounting for the rest is disingenuous. 

Of course, he could reduce the state workforce, thus reducing access to services. Or, he could hire less qualified employees at lower wages. In either case, this would not create the business friendly climate he advocates, and would accelerate the departure of existing companies. All of Walker’s antipathy applies to county and local employees whose salaries are subsidized by the state -- teachers, police, firefighters, health care workers. He’s ready to create massive unemployment, and substandard government services in order to make Wisconsin more business friendly.

Zoo Interchange for Global Commerce

Returning to transportation, Walker proclaimed the need for a modern transportation network (after rejecting nearly a billion dollars for a Wisconsin link to a nationwide high speed rail system). He told us that 96% of the global market for Wisconsin goods is outside the US, so we need a modern transportation system. He boasted about the Zoo Interchange project (which was going to be built anyway) as a way to move Wisconsin manufactured products. He failed to explain how this would expedite shipping things to customers in Asia and Europe. 

Granted, the project will generate many jobs, but we could have had the high speed rail funding in addition to the Zoo Interchange. That would have paid for much-needed improvements on tracks that move freight as well as passengers. Only his blind ideology prevented Wisconsin from having both projects. Walker passed up $1 Billion in federal stimulus funding to bolster our economy, create jobs, and generate tax revenues. He didn’t hesitate to take the highway funding, which will cost the state far more in matching funds and maintenance.

Wisconsin Is Open For Business

So, he ended his speech by saying, “We want to lower the cost of doing business in this state — through lower taxation, regulation and litigation costs and more relief from health care costs — so that more employers are able to create jobs for our people.” 

1. Lower taxation makes sense when a state is running a surplus and can afford the loss of revenue. If Wisconsin truly is in the financial crisis Walker claims it is, the state must raise taxes to meet its costs. Reducing spending only partially solves the problem. Taxes raise needed revenue. At 24th nationally in tax rates, Wisconsin suffers no disadvantages.
2. Removing inconvenient regulations from the cost of doing business and making it difficult to sue corporations for damages attract the worst, least ethical, most careless, most polluting companies. 
3. So far, except for eliminating the HSA tax, Walker has provided no relief from employers’ health care costs (although the Affordable Care Act does exactly that). If he guts Medicaid, BadgerCare, and SeniorCare, employers will pay more for health care, if only through higher taxes to provide for those unable to afford care for themselves and their families. And if Dennis Smith and J.B. Van Hollen succeed in having the Affordable Care Act ruled unconstitutional, the burden for health care costs shifts back again to employers, either as benefits or as higher wages. High health care costs have been a major factor in making American manufacturers uncompetitive in the global market.

Rejecting Industries and Future Jobs

Rather than bringing jobs to Wisconsin, Walker has chased emerging high-tech industries out of the state:

1. High Speed Rail 
• The Talgo manufacturing plant would have built rail cars for High Speed rail projects in other states, and provided jobs and tax revenues for many years into the future.
• Our state economy lost all the construction jobs for the immediate project (and still more jobs as the link to the Twin Cities was built).
• Walker refused to accept $1 Billion from the federal government to invest in Wisconsin’s economy and the potential for far more later ) preferring to give it away to other states.
2. Clean, renewable energy 
• Wind power projects were in the works totaling almost $2 Billion, until he proposed a law making proper siting impossible. The law is the most restrictive in the entire country.
• More wind power projects were planned, worth another $4 Billion, but the new law forces wind power companies to leave the state, not expand operations. 
• He forced the abandonment of a biomass energy project at UW-Madison even before he took office.
• He will allow $16 Billion to leave Wisconsin’s economy every year to buy fossil fuels instead of boosting Wisconsin’s economy, creating jobs, and generating tax revenues within Wisconsin.
3. Stem cell research 
• He has opposed stem cell research and advocates legal restrictions to hamstring this emerging new industry. The “business friendly” tax laws also target the industry with unique taxes on essential equipment. 
• Stem cell research, which had its beginnings at the University of Wisconsin-Madison, will now gravitate to states that don’t mind the economic stimulus, jobs, and tax revenues. 
• Potential new medications and treatments for diseases will generate enormous profits, but Wisconsin will not share in most of the financial benefits from this emerging new industry.

Shallow, Superficial Short-Term Fixes

What Walker proposed in his State of the State Speech is nothing more than wispy vapors disguising the lack of any meaningful plans to create jobs and reduce the deficit. If we take the plans in this speech as his best effort, we are left with a Governor who is shallow, incapable of analyzing a problem and synthesizing a solution, a Governor who is not intellectually capable of carrying out his duties. His announced plans do little more than throw a few bucks to his wealthy contributors and encourage the bottom-feeder companies that favor lax regulation to move into Wisconsin. Worse, he has stopped or discouraged many development efforts that would have brought billions of dollars, many jobs, and new tax revenues into our state’s economy. 

Walker’s Jobs Deficit Grows

Creating new jobs requires serious efforts at developing new markets and encouraging newly emerging industries. Federal stimulus funds can boost a state’s economy, both directly and indirectly. Walker seems unaware of any approach beyond lowering a few taxes. Where are the jobs? Where are the PLANS to create the jobs? Our Governor seems not to have a clue about retaining existing businesses, much less attracting new ones, or nurturing new industries. No long-term plans for governing our state. No jobs for the citizens of our state. Just the empty rhetoric of campaign speeches. 

Each month that passes without new jobs creates a deficit of 5208 jobs against the 250,000 Walker promised to create. Has Governor Walker lived up to what he so proudly claimed in his State of the State Address? You be the judge:

“As you all know, I was pretty specific on our plans and even on the day I'd start implementing those plans, so I saw no reason to wait a year, or six months or even a month to get to work. Now is the time to take action.”