WisconsinWatchdog.org used a methodologically flawed report from the American Legislative Exchange Council (ALEC) to whitewash Wisconsin's economic performance under Governor Scott Walker despite many analysts pointing to budget deficits and declining economic performance.
An April 8 WisconsinWatchdog.org (formerly branded as the Wisconsin Reporter) report lauded Wisconsin's jump from 17th to 13th place in this year's index of “economic competitiveness” compiled by the controversial right-wing group ALEC. Watchdog.org's report praised the recently passed right-to-work law -- legislation that weakens unions by baring mandatory fees from non-union workers -- though admitted the new legislation was not passed in time to be considered for ALEC's index. However, Walker's deep tax cuts were cited by both Watchdog.org and ALEC as a major reason for the state's jump in the index:
The Rich States, Poor States report emphasizes the relief property taxpayers have experienced in recent years. Buoyed by better-than-expected state revenue over the past two years, Gov. Scott Walker and the Republican-controlled Legislature pushed hundreds of millions of dollars in tax cuts, particularly relief on the property tax side. Wisconsin taxpayers had for years seen their property taxes rise before the recent round of cuts.
Walker's latest two-year budget proposal includes another $280 million in property tax reductions.
“Just as I promised, property taxes by the end of 2016 will be lower than they were in 2014. That means lower property taxes for six years in a row,” Walker said in his budget address in February.
“Due to property tax relief and other pro-growth reforms, Wisconsin's economic outlook ranking increased four spots,” said Jonathan Williams, vice president of Center for State Fiscal Reform at ALEC and co-author of Rich States, Poor States.
“While the effective date of Wisconsin's recent right-to-work law missed the 2015 edition's cut-off date, I predict that this new policy will increase the state's economic outlook ranking in the 2016 edition of this report,” he added.
ALEC's analysis has come under some scrutiny, most notably in a joint critique of ALEC's rating system by The Iowa Policy Project and labor analysis outlet Good Jobs First who called ALEC's index “snake oil,” and claimed that in promoting tax cuts, the slashing of public services, and other ALEC agenda items, “the [report] provides a recipe for economic inequality and declining incomes for most citizens and for depriving state and local governments of the revenue needed to maintain public infrastructure and education systems.”
Business Insider's Joe Weisenthal also criticized a previous version of ALEC's report saying that maps based on the report were a “a joke,” because “dynamic economies like New York and California are ranked near the bottom, while un-dynamic economies like Indiana and Wyoming are ranked near the top.” He continued:
Obviously ALEC is ranking states based on each state's level of deregulation and awarding the most deregulated states, but the outcomes seem to have very little bearing in where companies actually want to launch and do business.
The economic reality in Wisconsin proves the lack of credibility of WisconsinWatchdog.org's ALEC index coverage. Notably, the state's 2015-2017 biannual budget approved by Walker is projected to produce a nearly $2 billion budget shortfall. While that number is based on requests from agencies that will largely go unfulfilled, the Associated Press noted that “the budget will be about $650 million short by mid-2017 [if] spending [continues] at current levels.”
Bloomberg's Economic Evaluation of States also largely disproves the ALEC report, instead ranking Wisconsin 35th in the country overall and showed that major economic indicators like wage growth and home prices in Wisconsin lag behind the national median:
While job growth in Wisconsin was up in the month of February -- the last month where data is available-- long term measurements place the state in a three way tie for "38th place in private-sector job growth." WisconsinWatchdog.org did disclose near the end of it's report that the Bureau of Labor Statistics (BLS) “showed Wisconsin posted a private sector job-creation rate of 1.16 percent between September 2013 and September 2014,” half of the national average but dismissed it by claiming, without evidence, other economic factors contested the BLS data and showed Wisconsin's “turnaround.”
Wisconsin Watchdog.org's promotion of ALEC's favorable assessment of Walker's economy comes as no surprise as the outlet has consistently defended Walker against campaign finance violation allegations and is heavily funded by an organization whose top executive is Walker's former campaign committee chair.