He rocketed to national fame – and the top tier of Republican presidential hopefuls – on his reputation as a gutsy leader who stood up the unions, cut spending, and cut taxes all while balancing the budget.
I saved Wisconsin, Scott Walker says to cheers. And I can save Washington.
Except the two-term governor may have only saved Wisconsin for a while.
The mood among budget-writers these days is gloomy in the cavernous stone and marble chambers of the state capitol. State lawmakers are scrambling this week to avoid big cuts to popular programs as they painstakingly try to craft a balanced budget. Walker wants big reductions in school aid, changes to the university system and more, but his remedies to make up a projected billion-dollar shortfall are proving unpopular, even among many Republicans.
The final outcome of this struggle over the next few weeks will define the governor’s image in the crucial months ahead and could help determine whether he makes it to the White House.
Party loyalists around the country now know this much: He made tough decisions during 2011, his first year in office, that stabilized the state’s budget. He took on powerful special interests and stood up to often ugly protests, including a virtual occupation of the Capitol. He won approval of big corporate, income and property tax cuts. And then he survived two attempts to unseat him.
Now, though, comes the wrenching second act, sustaining that success in a fiscal environment where revenue is lagging and constituents demand money for favorite programs.
If Walker is seen as presiding over budget turmoil, he’ll have a tough time arguing he’s uniquely equipped to deal with Washington, where Congress is badly polarized and its rules can drag out budget fights for months and even years. Nor does the federal government have to balance it budgets, as most states are required to do.
Walker stays upbeat and brash, vigorously defending his plan. He insisted to McClatchy in an interview that his $68.4 billion budget would produce a $499 million surplus. “The Legislative Fiscal Bureau specifically says in their report … that the next budget ends with a $499 million structural surplus,” Walker said.
The bureau does predict that surplus – but not until the end of fiscal 2019. And it based that number on what could happen if Walker’s budget is adopted intact, which is not going to happen.
Walker spokeswoman Laurel Patrick cited the bureau’s estimates to contend “there is no imbalance.” She noted the bureau said the governor’s proposed budget for the next two years should produce a $123 million surplus by the end of fiscal 2017, and a $499 million surplus during the 2017-19 budget.
There’s another voice in this, though. The Legislature’s Joint Committee on Finance, a 16-member bipartisan panel, is meeting daily to grapple with the budget problem.
Republicans dominate the panel, and uniformly offer praise for Walker, but they also show signs of defying him. They rejected his education cuts. Some are considering new ways to raise money. Republican leaders said no to Walker’s plan to revamp the state’s long term care system for the elderly and disabled. And the Republican-run Assembly approved changes to a food aid program that will cost more money.
State Rep. Robert Brooks, a Saukville Republican, acknowledged the complaints about Walker’s proposed plan.
"We may have a crap budget,” Brooks said in the Assembly. “But we're going to make it better."
Up and Down
“If history had stopped in 2010-2011, and you were writing about Walker’s legacy, you’d say he did reduce the structural deficit. But history didn’t stop in 2011,” said Andy Reschovsky, professor emeritus of public affairs and applied economics at the University of Wisconsin.
Walker swept into office in 2010 as the Great Recession was decimating state budgets. He took tough steps to cut spending, dramatically reducing bargaining power of most state and local employees.
“It’s fair to give him credit for taking a difficult budget stance,’’ said Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance.
Wisconsin by some measures is doing even better than when Walker took office. The state’s unemployment rate in March was 4.6 percent, well below early 2011 levels. Earlier this month, Chief Executive Magazine rated the state’s business climate 12th best in the nation, up from 41st in 2010.
An unsuccessful union-led 2012 recall strengthened Walker’s reputation for standing up to special interests. By the end of fiscal 2013, the state had a $759 million surplus. Walker used a chunk of that money to reduce income, corporate and property taxes, and was re-elected last year with 52 percent of the vote.
But forces were building toward another budget crisis. The economy wasn’t growing as fast as expected, tax cuts dramatically reduced revenue and the surplus not only evaporated, but new projected deficits appeared.
Wary Republicans
Republicans continue to praise Walker, but are uneasy about the budget choices they face. “We have to make difficult decisions that affect real people. That’s tough for everyone,” said Rep. Adam Neylon, a Republican from suburban Milwaukee.
Constituents in his district aren’t buying big school cuts, nor are many other Republicans – in fact, they want to give more school aid. “A zero increase will be hell to pay when you go home,” said Sen. Luther Olsen, a Republican from Ripon. It’s come up with the money by using an accounting gimmick.
On Thursday, the committee agreed to reverse Walker’s cuts in the state’s SeniorCare prescription drug benefit.
Taxes? Rep. Kathleen Bernier, a Chippewa Falls Republican, mentioned the dreaded word. She’s discussing allowing local governments to impose a half-cent sales tax to repair or build local roads. Others are toying with the idea of raising the vehicle registration fee.
The committee still has other spending cuts to tackle as it inches towards completing its work by the end of this week The Legislature would then vote on a budget in June, and once it does, Walker is expected to announce his presidential intentions.
Hard Choices
Walker was hoping new revenue estimates this month would improve and make things easier.
But with the economy turned sluggish, the Legislative Fiscal Bureau this month reported that revenues would not grow any more than it predicted in January.
At one point last week, lawmakers agreed to spend more to keep child abuse caseworkers from leaving. When Democrats sought even more funds, Republicans said no. Republicans are flirting with danger, warned Rep. Chris Taylor, a Madison Democrat, who said children are being left in “horribly dangerous situations.”
Such messages are hard to ignore. When lawmakers walk into the wide-open spaces in the Capitol, they find people such as Bruce Moffat, a Madison nonprofit manager, trying to tell their story.
Moffat’s special needs daughter, Valeria, 22, has benefited from a state program that gives people a fixed amount to spend as they wish for items such as medical and personal care and job training. She now works for the state.
Walker wants to have private companies run the programs. Opponents fear that would dilute community control, and those newly in charge “could view my daughter as sick, and not as a productive member of society,” said Moffat.
The day after his visit, just before the committee went into an all-day budget-writing session, Rep. Dean Knudson, a Hudson Republican, announced, “We are rejecting the governor’s proposal. There needs to be public input before a proposal is finalized.”
Then he headed into the committee room, for more than eight straight hours of debating how to fund programs for the needy, a debate so contentious that a scheduled discussion of school aid was postponed.
At some point, money must be saved, and to Republicans, so must Walker’s reputation. “Walker’s policies don’t mean he doesn’t care,” said Bernier. “But this budget is a big challenge.”