[This article was originally published in the May 16th issue of HUMAN EVENTS newspaper.]
When Scott Walker arrived in the Wisconsin governor’s mansion, he found that every window had a commanding view of the state’s enormous budget gap. Wisconsin was $3.3 billion in the hole. Governments usually try to fill such holes by finding a shovel and a big pile of taxpayer money, but Wisconsin’s economy was already buried under job-killing taxes and regulations.
Walker moved quickly to implement the programs he campaigned on, most famously the public-union reforms that sent Democrat legislators fleeing to hotels in Illinois and filled the capitol with demonstrators. One side effect of this nationally watched political drama was that Madison students can now easily identify Hosni Mubarak, because his photo appeared on a thousand placards declaring Gov. Walker to be his love child. Another, more welcome, effect was that Walker touched off a national conversation about collective-bargaining privileges for public employees, setting an example of commitment and resolve for other Republicans to follow.
The governor had more on his mind than public-union reforms. In his February 2011 State of the State address, he outlined several important pieces of legislation he signed during his first 30 days in office, bills that eliminated the taxes on health savings accounts, reduced frivolous lawsuits, and expanded tax credits for relocation and economic development.
All of these measures were aimed at improving Wisconsin’s economy and job markets. As Walker ruefully noted in his speech, the litigation environment in Wisconsin had investors calling it “Alabama North,” a reference to the business-killing free-fire zone in Alabama courts.
In addition to providing tax incentives for employers to relocate to Wisconsin, Walker drove a rhetorical ice-cream truck through the gloomy business environment of Illinois, hoping to attract the attention of overtaxed and overregulated entrepreneurs. In a Chicago Tribune op-ed piece he wrote with Wisconsin House Speaker Jeff Fitzgerald, he touted his achievements “in contrast to the mess in Illinois.”
“Wisconsin is open for business,” Walker and Fitzgerald wrote. “We are reducing taxes on our businesses and health savings accounts, reforming our state’s regulatory and litigation environment, and transforming our Department of Commerce into a public-private partnership that focuses on economic growth. Of special note to companies south of our border, we are passing legislation that will exempt companies that come to Wisconsin from corporate taxes for two years.
“During that time, we’ll be continuing to lower taxes, curb spending and transform Wisconsin’s business environment,” they promised. “Our hard work begins with this year’s budget, where we will reduce spending by making the long-term reforms necessary for a sustainable balanced budget, all without raising taxes.” Illinois Democrat Gov. Pat Quinn, meanwhile, was signing a combination of tax hikes and spending increases, which the editors of the Tribune described as a “fiasco” in an editorial titled “Goodbye, Jobs.”
“To those of you who are frustrated with the high cost of doing business in Illinois,” Walker and Fitzgerald declared, “our message is clear: Escape to Wisconsin !” They actually put this message on billboards aimed across the state line into Illinois .
Walker’s reforms appear to be working. A recent survey of “Best & Worst States” conducted by Chief Executive magazine showed Wisconsin jumping an incredible 17 spots higher in the past year, from No. 41 to No. 24. Illinois, meanwhile, fell three spots last year.
Walker diagnosed Wisconsin’s problem as “repeated raids on segregated funds, excessive borrowing for operations, and an addiction to one-shot infusions of federal dollars.” He saw that only a robust business environment could provide a constant, reliable revenue stream to close that budget deficit, while he worked to bring government spending under control.
His efforts to control public-sector benefit costs—a ticking bomb that will detonate and demolish many state budgets over the next few years—grabbed all the media attention, but his insights on the importance of sustainable revenue from a robust private sector are equally valuable. Hungry governments are all too willing to kill the geese that lay their golden eggs. Many state governments suffer from endless commitments they made after receiving temporary infusions of revenue long ago.
Walker has always prided himself on having trimmed the state budget without triggering any massive layoffs. He told Fox News host Sean Hannity in a March interview that his reforms would protect “middle-class taxpayers, because in all of these other states where they’re cutting, they are forcing massive layoffs or massive property tax increases. In our state, we’re doing something better than that. We put through true reform that will make for better government and, ultimately, a better deal for our taxpayers.”
In the same interview, Walker ascribed the vicious battle over public-union reforms to Wisconsin’s status as an important swing state: “We are one of the most competitive states in presidential elections. … That’s why the President interjected his political team. It’s why the national political bosses have come in from the unions from Washington, D.C., because they view this as political. And in end, it’s really not about protecting their members’ and workers’ rights. It was about keeping the money they get from union dues here.” Walker was referring to the practice of states automatically deducting union dues from paychecks on behalf of union management—a practice he ended in Wisconsin. A cynical observer might say that was the only reform union bosses really cared about.
Walker’s adversaries at both the local and national levels like to crow about the damage his controversial positions have inflicted on his poll numbers. Supposedly Wisconsin voters have fallen in love with the dashing Democrats who fled the state to avoid a tough vote, and can’t wait to recall the Republicans who stayed behind to do their duty. They absolutely love funding lavish benefits for their public-union betters, won during collective bargaining “negotiations” at which no one represents the taxpayers, and despise Walker for doing exactly what he campaigned on in 2010.
The funny thing is, Walker keeps winning the polls that really count. The recent Wisconsin Supreme Court election turned into an embarrassing rout for the unions’ chosen candidate, JoAnne Kloppenburg. She was supposed to be the avatar of public fury, while her opponent, David Prosser, was a voodoo doll of Scott Walker. Instead, Kloppenburg ended up as a bitter footnote in Wisconsin history, wasting millions of taxpayer dollars on a prolonged, futile recount that did little damage to her opponent’s 7,000-vote margin of victory.
A lot has happened since Scott Walker took up residence in the governor’s mansion, not even six months ago. He is a modest but determined man, living in interesting times.
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