The Wisconsin Policy Research Institute

Wisconsin's Transformational Governor

By George Lightbourn

Our president fancies himself a transformational president and it’s hard to argue with that. His is a transformational calling that goes well beyond race and politics. His is a transformational calling that will change the face of America: health care, energy, finance, politics. And to the chagrin of conservatives, he is changing things.

At the heart of Obama’s transformational government is, well, government. It is a government that decides, a government that decrees, a government that seeks to define the quality of life for all Americans.

Obama has laid out a steep agenda, one that will require help from all quarters. Not only will he need a compliant Congress, he will need the active support from governors, since his ground game will be executed by state government.

He has a willing acolyte in Wisconsin’s Governor Doyle who, along with governors Corzine, Paterson, Patrick, Granholm and Strickland, hatched a plan to keep $787 billion of stimulus money out of the reach of taxpayers. Give it to the states, argued the six governors, all of whom were facing the same sea of red ink that businesses have been sailing through for nearly a year. “I can’t imagine what we’d be doing if Barack Obama wasn’t president,” said Doyle. And likewise Obama can’t imagine what he’d be doing without Doyle.

Governor Doyle is in the growth business. Let’s examine a few simple numbers. Between 2003 and the end of 2008, Wisconsin tax collections grew 28%, an annual average increase of 5.6%. During that same period inflation was growing at a rate of just 3.8% per year. By that measure state government took in $900 million more than was needed to maintain services. But he spent that $900 million and then some. He tapped $1.1 billion more from the transportation fund and $200 million from the Patients Compensation Fund and on and on. Wisconsin government has clearly been in the growth business.

Wisconsin enters the age of Obama with a governor who is exactly on the same page with the new president. Governor Doyle has been building the foundation for the expansive government that will be needed to carry out Obama’s transformational agenda.

What’s that you say, the media is full of stories about upcoming cuts state government? Well check the facts. In spite of slumping tax collections, Wisconsin state government will continue to grow by $500 million in the next biennium.

More telling are the employment numbers. While Wisconsin’s private sector suffered 73,000 job cuts, there have yet to be any cuts in government. It’s as though sandbags filled with stimulus money have been stacked high to keep the floodwaters of recession away from our state office buildings.

Cuts are portrayed as simply too debilitating, too odious; so no cuts in the number of regulators, grant makers, purchasers, and hiring departments. Governor Doyle has watched indifferently as business leaders have faced up to the fiscal reality and retooled their operations. Yes, as a last resort many have been forced to reduce their workforce. Every small business owner and plant manager has agonized over every one of those 73,000 people they have let go. That is an agony Governor Doyle refuses to share.

The Obama/Doyle policy agenda couldn’t be clearer. It is the goodness of government that will not only lead us out of the recession, but will transform America. Equally clear is that this vision cannot succeed without a robust and healthy government. Yet their agenda goes further.

As Robert Reich laid out in a recent Wall Street Journal opinion piece, “Public investment is the key to attracting long-term private investment so that a nation’s people can prosper.” Reich says that, “Obamanomics … holds that an economy grows best from the bottom up.” So no one should be surprised that Obama and Doyle have turned to the wealthy and businesses (in Wisconsin, the wealthy and businesses are used interchangeably) for the cash needed to fuel their public investment?

We are indeed entering a transformational era. It will be an era marked by We a continuation of the downward slide of business starts in Wisconsin. It is an era that will yield a tax structure which is both more progressive and more aggressive in sticking it to high earners and businesses. And it is an era in which we the public sector will flourish.
For those who appreciate the power of the free market, these are troubling times. We are about to watch a slow motion train wreck.

-April 2, 2009

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