What Fox Won't Tell You About Scott Walker's Economic Record

››› ››› SOPHIA TESFAYE

Fox News hyped Wisconsin Governor Scott Walker's economic record, claiming that the governor's economic plan generated a nearly $1 billion budget surplus while ignoring that the current surplus is built upon a projected structural deficit and that the state ranks 28th in the nation for job creation under Walker's tenure.

Fox Provides Walker A Platform To Tout His Economic Record In Wisconsin

Fox's Doocy Hypes Walker's Budget Policies. On the January 27 edition of Fox News' Fox & Friends, co-host Steve Doocy claimed Wisconsin was bucking the trend of rising debt, asking Walker "how'd you do it?" Doocy then went on to highlight Walker's planned tax cuts before declaring that "people are going to like that":

DOOCY: You are honoring your state by, you've got this gigantic close to billion dollar surplus. First of all, how did you do it?

WALKER: Well for us it was simple. We put in place common sense reforms. Allowed the economy to get better. About a billion and half dollars worth of tax relief for the last three years but also reigning in frivolous and out of control lawsuits, and excessive regulations and other things that stood in the way of employers creating more jobs in our state. So we've got more people working, more employers hiring. And the other big thing is [[that]] personal income is up in our state, that along with good prudent fiscal management has allowed us to give this sizable surplus that we are going to give right back to the people.

[...]

DOOCY: So let's take a look at your plan, what you would like to do is to reduce property taxes over $400 million, lessen income taxes by $100 million and $322 million in reduced withholding tax as well. People are going to like that.

WALKER: Oh yeah. It puts about $57 back in the hands of everybody's paycheck each month. That's over $520 by the end of the year, you add that along with the property tax relief and the income tax cuts we are talking about. That's real money, and to show that we are being fiscally responsible we also put about $100 million more into our rainy day fund which by the way, is literally with this plan seven times bigger than it ever was at the height before I took office so we are covering our future debts, we paid off all our bills. Now we think over $800 million of that should go right back in the hands of the people and the employers that have made this economy improve so much so it keeps going. Pretty simple concept.

DOOCY: Sure. Absolutely. It's a simple concept and it's a great news story. Which perhaps you could explain to me if it's such a great news story, why haven't we seen the mainstream media cover this? I mean, to have a billion dollar surplus, that's gigantic. [Fox News, Fox & Friends, 1/27/14]

Wisconsin Budget Surplus In Line With Other States As National Economy Recovers

PolitiFact: Wisconsin Surplus Due To Increased Tax Collections, Similar To Other States. PolitiFact Wisconsin found that Wisconsin's budget surplus is not due to Walker's austerity measures, but because "tax collections are rising faster than expected." The post also noted that other states were enjoying similar surpluses:

Wisconsin is projected to have a $1 billion surplus at the end of the two-year budget period covering July 2013 to July 2015 -- almost all of it because tax collections are rising faster than expected, the nonpartisan Legislative Fiscal Bureau said in January.

The predicted surplus -- expected revenues exceeding planned expenditures -- is a notable switch from shortfalls that forced Wisconsin and other states into emergency changes to keep budgets balanced during the Great Recession and its immediate aftermath.

[...]

We broadened our view, checking with the National Conference of State Legislatures, which also regularly tracks state budgets.

"State fiscal conditions continued to improve in fiscal year (FY) 2013," the group said in its "State Budget Actions FY 2013 and FY 2014."  General fund revenue growth was notably strong and outpaced projections in most states."

Did that leave states with extra money to play with? Yes, the group said.

"At the same time, expenditures were generally on target," its report said. "The combination of these factors enabled many states to shore up reserves and support supplemental expenditures. Overall, the fiscal situation was solid in almost every state in FY 2013." [PolitiFact Wisconsin, 1/27/14]

Economists Say Walker's Budget Surplus Is Built Upon a Long-Term Structural Deficit

The Legislative Fiscal Bureau: Under Walker's Budget, Wisconsin's Structural Deficit Would Grow To $725 Million. A non-partisan analysis of Walker's most recent budget concluded that the Governor's proposed tax cuts would increase the state's budget shortfall over the coming years. Walker's tax plan hyped by Fox would in fact cost the state $180 million and would ultimately turn the touted surplus into a deficit by 2017. [The Legislative Fiscal Bureau, 10/15/13]

Milwaukee Journal-Sentinel: Walker's "Overall Plan Would Leave The State In Worse Financial Shape In The Long Run." A January 22 article in the Milwaukee Journal-Sentinel pointed out that Walker's budget would increase the state's long-term deficit:

Walker would also put more than $100 million more into the state's rainy-day fund, which currently holds about $279 million.

But his overall plan would leave the state in worse financial shape in the long term. Walker said his plan would add perhaps $100 million to the $725 million shortfall projected for the next two-year budget by the nonpartisan Legislative Fiscal Bureau.

[...]

Walker would also put more than $100 million more into the state's rainy-day fund, which currently holds about $279 million.

But his overall plan would leave the state in worse financial shape in the long term. Walker said his plan would add perhaps $100 million to the $725 million shortfall projected for the next two-year budget by the nonpartisan Legislative Fiscal Bureau. [Milwaukee Journal-Sentinel1/22/14]

Walker's Real Economic Record Is His Failed Promise Of Job Creation

Milwaukee Journal-Sentinel: Wisconsin is "37th In The Nation In Private-Sector Job Growth Under Walker." As a candidate in 2010, Walker promised to create 250,000 jobs in his first term. However, entering his fourth year in office, the Journal-Sentinel labeled the state's job growth "anemic" and noted that the Governor is nearly 90,000 jobs short of his 250,000 job promise. [Milwaukee Journal-Sentinel, 1/25/14]

New York Times: "Three Years Into Mr. Walker's Term, Wisconsin Lags Behind Minnesota In Job Creation And Economic Growth." In a New York Times op-ed, University of Minnesota professor Lawrence Jacobs pointed out that Minnesota "adopted some of the most progressive policies in the country" as opposed to Walker's austerity measures and found that "Wisconsin lags behind Minnesota in job creation and economic growth":

Which side of the experiment -- the new right or modern progressivism -- has been most effective in increasing jobs and improving business opportunities, not to mention living conditions?

Obviously, firm answers will require more time and more data, but the first round of evidence gives the edge to Minnesota's model of increased services, higher costs (mostly for the affluent) and reduced payments to entrenched interests like the insurers who cover the Medicaid population.

Three years into Mr. Walker's term, Wisconsin lags behind Minnesota in job creation and economic growth. As a candidate, Mr. Walker promised to produce 250,000 private-sector jobs in his first term, but a year before the next election that number is less than 90,000. Wisconsin ranks 34th for job growth. Mr. Walker's defenders blame the higher spending and taxes of his Democratic predecessor for these disappointments, but according to Forbes's annual list of best states for business, Wisconsin continues to rank in the bottom half. [New York Times,11/24/13]

Milwaukee Journal-Sentinel: In 2012, Wisconsin Private Sector Wages Fell 2.2%, Placing Wisconsin 44th Among All States. According to statistics from the Bureau of Labor Statistics, Wisconsin private sector wages fell 2.2% in 2012. The Journal-Sentinel noted that the change ranked the state 44th out of 50, adding the "rate was double the drop in the national average":

Among the states most affected is Wisconsin.

According to the Bureau of Labor Statistics, private-sector wages in Wisconsin fell 2.2% in the 12 months ended September 2012, ranking the state 44th out of 50.The rate was double the drop in the national average.

Wages in the state's government sector, pressured more by government austerity policies than global competition, registered 49th in the nation during the same period.

With the state also lagging much of the nation in job creation -- ranking 44th in the most recent 12-month period -- it is apparent that Wisconsin is struggling more than many other states in the transition to 21st-century growth industries from its legacy as a bastion of old-line manufacturing. [Milwaukee Journal-Sentinel, 5/26/13]

Milwaukee Journal-Sentinel: Wisconsin Ranks 49th In Economic Outlook. According to a June 6, 2013, Milwaukee Journal-Sentinel article, projections from the Federal Reserve Bank of Philadelphia ranked Wisconsin 49th out of 50 states in economic outlook and the state was one of only five states with a projected economic contraction in the last six months of 2013. [Milwaukee Journal-Sentinel5/28/13]

UPDATE: This post has been updated to correct a typographical error in the listed size of the Wisconsin budget surplus.

Posted In
Economy, Budget
Network/Outlet
Fox News Channel
Person
Steve Doocy
Show/Publication
FOX & Friends
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