Did Walker Invent the Budget Crisis?

I’ve been devouring news and analysis about the protests and the Budget Repair Bill. As I read, I’m struck by the bias of many of the writers. Just as the protesters and opposition are on different sides of this issue, so are many of the journalists. That makes it hard to decipher which information is true.

An example is the state’s budget crisis, which is the whole pretext for the bill we’re protesting. Supposedly, the state is in dire straits, and every little bit of savings helps get us back on track. According to Governor Walker and his supporters, cuts to public employee earnings will save us $30 million this year, $300 million total. Taking away public union power will ensure that the cuts go through immediately rather than being delayed fifteen months, the typical length of negotiations with unions.

Meanwhile, among the protesters, the counter-rhetoric has been: What does taking away union rights really have to do with the budget? This so-called “crisis” isn’t a real crisis. Wisconsin is actually doing okay; Walker’s just making up excuses for union-busting!

Combing through articles, I’ve concluded that both sides are partly wrong.

Wisconsin does, indeed, have a fiscal crisis.

The Cap Times, Madison’s main newspaper, printed an editorial last week called “Walker gins up ‘crisis’ to reward cronies.” Madison does have a weak economy, the liberal paper argues—but so do most other states, thanks to the recession. And Wisconsin is “managing – or at least it had been managing better until Walker took over.”

Despite shortfalls in revenue following the economic downturn that hit its peak with the Bush-era stock market collapse, the state has balanced budgets, maintained basic services and high-quality schools, and kept employment and business development steadier than the rest of the country.

In fact, the article goes on, “the state will end the 2009-2011 budget biennium with a budget surplus” of $121.4 million.

And furthermore, it continues, the $137 million deficit that Walker claims has actually been caused by his spending $140 million in new “schemes” with special-interest groups. He has invented this crisis in order to serve his own allies and political interests, attacking liberal unions and public employees while redirecting tax dollars to his supporters.

“The facts are not debatable,” the article concludes.

But when I read another piece on Salon.com, I felt that actually, they are. Or at least, they’re up for manipulation.

This article is called “Don’t be fooled: Wisconsin’s budget woes are real.” There’s some truth to the claims against Walker, it says. He did immediately pass tax cuts that created a $137 million deficit.

It’s classic starve-the-beast Republican tactics — eviscerate tax revenue and then use that as an excuse to go on the warpath against Democratic priorities.

But there really is a fiscal crisis, the article goes on to say. For one thing, the numbers cited above (in the Cap Times and other places) ignore $258 million the state owes in debt and health care expenses.

But the situation is even graver than that. Salon.com says the state is projecting a $2.2 to $3.6 billion dollar deficit over the next two years, depending on who you ask. “The reason is simple:” not tax cuts or public sector unions, but Medicaid, which is responsible for around half the shortfall.

Overall, Walker’s tax cuts do make a bad fiscal situation worse, but the dots don’t connect quite as neatly as some defenders of Wisconsin’s public sector unions would like them to.

But the Budget Repair Bill isn’t really about the budget.

So the protesters and their allies are wrong when they wave away the budget crisis and say Walker made it up. However, they’re not completely wrong: the budget crisis has little to do with Walker’s attack on public employees.

The Budget Repair Bill, if passed, would only save the state something like $150 to $300 million—perhaps ten percent of the coming shortfall. It won’t “repair” the budget. Walker hasn’t conjured a fiscal crisis out of thin air, but he has used it as an excuse for union-busting that won’t help it.

And I also believe the reality of the crisis doesn’t justify pushing this bill through so quickly, or taking away union rights at all. Again, what do unions really have to do with the budget? Not much.