Wisconsin: The Canary in the Coal Mine
Faced with a $9.2 billion budgetary shortfall next year, California Gov. Jerry Brown has not surprisingly reached for the only tool in the Democratic shed — more taxes. Via The New York Times:
Gov. Jerry Brown called on California voters Thursday to approve $6.9 billion in temporary new taxes, including a surcharge on big earners, as part of yet another bad-news budget proposal, this one for 2012. He warned that without those tax increases, California would be forced to impose severe cuts in public schools that could reduce the school year by three weeks.
There is another way to address budgetary woes, of course, the one taken by Wisconsin’s Scott Walker — structural reform. On January 5, Gov. Walker explained the success of his collective bargaining reform law passed last year to a gathering of journalists and academics at the American Enterprise Institute in Washington, D.C. As a result of these reforms, claimed Walker, Wisconsin is in far healthier fiscal condition than it was last year.
And it’s not just Walker touting the reform’s success. Even the editors of the Milwaukee Journal-Sentinel, who had opposed the law, on December 31 were forced to admit:
The governor did balance the budget with fewer gimmicks than in the past; he did reduce the structural deficit significantly; he did put a lid on property tax increases; he did give schools and municipalities more control over their budgets than they’ve had in years. And his efforts at economic development through corporate tax breaks and a revamped Commerce Department (now the public-private Wisconsin Economic Development Corp.) look promising.
And what has been Walker’s reward for righting his state’s fiscal ship without drastic cuts to government services or draconian tax hikes? Unions, furious over being asked to contribute more to their pension and health care plans, have vowed electoral vengeance, and are gathering signatures to force a recall election. Walker seemed calmly resigned to the fact that such an election will happen this summer. He did not give odds on his chances, but seems prepared for another tough fight.
The danger if Walker is recalled and his reforms overturned is this: Many local politicians may well conclude that the union grip on political power in this country is simply too strong to contest. They will look at Jerry Brown, who keeps getting reelected in spite of favoring policies that have transformed the once-great Golden State into a banana republic, and then look at Scott Walker, brutally punished for pursuing a reasonable, prudent course that resulted in a resounding success. Then they will look at the federal government’s $15 trillion worth of red ink, and ask themselves:
Why bother being brave?