A Double Tsunami

Brace yourself.

Wisconsin is facing a double tsunami: one fiscal, one political. And we’re not really prepared for either.

  The fiscal tsunami warnings went out this went when Governor Doyle said that the weakening economy could blow a $3 billion hole in a state budget already held together with spit, twine and smoke and mirrors.

(Recall that just in May, the state “closed” its $527 million budget deficit by a series of fiscal gimmicks including borrowing more money for transportation.)

Senator Bob Jauch (D-Poplar) was quick to grasp for an historical analogy. According to the Milwaukee Journal Sentinel  Jauch “compared the new budget crisis to 1983, when a recession caused a major drop in state tax collections.”

“Then,” recalled the paper,” former Democratic Gov. Tony Earl and legislators were forced to raise the sales tax from 4 cents on every dollar to 5 cents.”

The key word there is “forced,” because, apparently spending cuts were simply inconceivable for Wisconsin pols.

But the historical note is significant for another reason: in 1983, Democrats not only controlled the governorship, but all the Assembly and Senate.

Which brings us to the next tsunami.

Since 1986, when Tommy Thompson was elected governor, Republicans have had a seat at the table, most of the time with divided government. For 12 years the GOP held the governor’s chair and at times one or both legislative houses. Since 2002, Democrats have controlled the governorship, but the GOP has held onto at least one chamber of the legislature. As a result tax and spending issues always required compromise. Republicans, for example, were able to block an $18 billion tax increase for Healthy Wisconsin only because of the tiny Assembly majority. School choice in Milwaukee has also dodged bullets from allies of the teachers union because of the Assembly veto.

That may be about to change. The Republican Assembly majority hangs by a slender thread, a mere three votes (two, if you take out the somewhat unreliable Jeff Wood, who is running as an independent.) You have to go pretty far back, before the Scott Jensen era to find evidence of a more lackluster Republican legislative campaign. (Quick: name a single state GOP theme this year.)

If Democrats score the sort of big win some polls seem to forecast, Democrats could easily take control of the lower house. That would install a liberal activist like Fred Kessler or perhaps Jon Richards as speaker and render minority Republicans all but completely impotent.

But wait, it gets worse. The push-pull of a deteriorating state budget and an incoming Obama administration could result in the premature departure of Doyle from the governorship for an appointed gig – perhaps an ambassadorship, or cabinet position. (Both Patrick Lucey and Thompson resigned to accept presidential appointments.)

That would install the accidental Barbara Lawton as acting governor. Unlike the usually pragmatic Doyle, Lawton is a true believer, an acolyte of Ed Garvey and hero of the “progressive” wing of the Democratic Party. Where Doyle might conceivably have acted as a moderating influence on the fire-breathers in the legislature, Lawton can be counted on to hand out kerosene.

And that brings us back to the fiscal tsunami. Faced with a massive budget shortfall, Wisconsin may also be faced by the most aggressively liberal statehouse in a generation, with long term consequences.

Steep new federal taxes on businesses and incomes at the federal level will have a multiplier effect if state and local taxes are also raised, creating an even greater incentive for the flight of capital from the state.

So, yeah, it can get worse.

-October 17, 2008