After hearing Tuesday night’s State of the State address, a Wisconsinite should be able to flush at least one clear and definite thing: The Green Bay Packers will right our economic ship.
Governor Scott Walker issued his first State of the State address on Feb. 1 in Madison. While focusing on job creation and taming Wisconsin’s soaring budget deficit, Walker peppered onlookers with numerous Packers allusions. In an apparent effort to highlight unification as a means of achieving progress toward goals, Walker quoted famed Packers legend, Coach Vince Lombardi: “Our pride for the Green Bay Packers has brought this state together.” Walker continued, “We don’t need a seating chart to bring Republicans and Democrats together – all we need are the Green Bay Packers.” Unity is key.
Walker underscored that job creation is not a partisan issue; rather, it is a Wisconsin issue, a Wisconsin job. Critics insisted, however, that he failed to deliver concrete evidence of immediate increases in employment or decreases in deficit. Sitting together and watching a football game is one thing; curbing deficit and unemployment while actively running a state government is a whole different ball game.
Walker often relied on his slogan that Wisconsin is now open for business, but what kind of business that is remains a mystery. Tuesday’s speech was riddled with enigmatic solutions. Walker’s agenda includes creation of a quarter-million jobs by 2015, but a clear strategy for making those jobs appeared lacking. Rather than delineating a clear path to assist Wisconsin’s 400,000 unemployed, Walker hopes to deal with the issue by creating a more lucrative business environment in Wisconsin. By increasing tax breaks to corporations and enticing businesses to relocate from Illinois, the gov is pursuing a bottom-up solution to create lasting employment.
An enticing business environment is, in fact, a forward-looking approach to economic prosperity and something Wisconsin needs. Nevertheless, critics argue that Walker’s job-creating environment is not evidence enough of unemployment reduction. The newly elected governor has been ridiculed for killing the high-speed rail project as an untenable waste of tax-payer money, even though that project would have created thousands of desperately needed jobs. Sustainability aside, Walker’s address on Tuesday left a vague taste of what is to come for those out of work and hungry for information.
After addressing employment, the governor detailed his plan for curbing Wisconsin’s budget deficit. Walker insisted that past reliance on federal money to balance shortfalls worsened the current problem. Instead, Walker suggested reducing government spending by asking public employees to shoulder contributions to their health care and pensions – something that private citizens, as taxpayers, do all the time. This would save $30 million over three months. Governor Christie of New Jersey has implemented this strategy and is embroiled in a well-publicized battle with enraged teacher unions. As long as lawmakers, who are similarly public employees, are willing to make those same sacrifices, it may be a viable alternative for some savings. In the end though, Tuesday night’s solutions failed to directly address immediate concerns about curbing the $3.2 billion deficit.
Walker primarily seeks to create a more desirable economic climate through corporate tax cuts and limitations on health care funding and eligibility in Wisconsin. As a result, business operations will be facilitated and will provide a larger economic base; this will hopefully generate higher government tax revenues. In effect, this could be counterproductive. His tax reforms will short government tax collection by $117 million; this will likely add to the budgetary shortfall.
As with employment, the guv’s scheme to address budgetary concerns relies heavily on incentivizing Wisconsinites rather than directly addressing issues at hand. In just 30 days, Walker has signed legislation that limits taxes on income for health care, assures tax breaks for companies that relocate to Wisconsin, increases economic development tax incentives and provides for lawsuit reform. On the one hand, Walker’s swift action demonstrates his intention to get the wheels turning with sweeping reform. On the other hand, Walker’s legislation, at least in the short term, belies what is truly needed in Wisconsin: budgetary balance and job creation.
Playing off Packers ethos is quite a marketable approach to wooing a football fueled state. Alluding to Packers unity and winning the Super Bowl, however, aver vague solutions that exploit the high-flying emotions of its citizens. Walker’s two-year budget plan, which will be unveiled later this month, should clearly lay out the specifics of how he will counteract these issues. Until then, much of what Walker has proposed is mere reiteration that Wisconsin is open for business and he’ll somehow create 250,000 jobs.
Dennis O’Reilly ([email protected]) is a senior majoring in economics.
