Open Thread: Wisconsin Prospers With Government Reform

You've probably already heard about how reforming Wisconsin governor Scott Walker managed to get more votes than his top two Democratic challengers in that state's primary. What you may not know is the reason why: The state is booming contrary to the dire predictions of the union bosses who swore that Walker's reforms would destroy the Badger State. Walker's choice to reform and cut the budget instead of raise taxes has proved for a perfect contrast with neighboring Illinois which did the very opposite, with poor results:

Unemployment has dropped from 7.7 percent to 6.8 percent since Walker took office. Unemployment in neighboring Illinois, however, only dropped below 9 percent in March—the first time it has done so in two years.

Wisconsin property taxes have fallen for the first time in 12 years. The state’s adult debt per capita is roughly $687. Illinois’ is about $853.

The two states took divergent paths in 2010 in dealing with looming fiscal insolvency. While Walker pushed spending cuts and public sector reforms, Illinois Gov. Pat Quinn and the state legislature floated $7 billion in new taxes, including a 67 percent individual income tax increase and a 46 percent corporate tax increase.

“Quinn’s reasoning was that was going to turn Illinois around, pay its bills, and become fiscally solvent again,” Ted Dabrowski of the Illinois Policy Institute told the Free Beacon. “A year later, we have $9 billion in unpaid bills. We have the worst credit rating in the nation, downgraded below California. We have $2 billion in unpaid Medicaid bills, and our pension obligations are eating up funds that should be going to public safety and schools.”

More than $5 billion of the $7 billion raised by new taxes went to paying down pension obligations, said Christian Schneider, a senior fellow at the Wisconsin Policy Research Institute. [...]

There has been some good news for the Prairie State. Job-growth in Illinois has spiked in recent months. The state gained 32,000 jobs in the 12 months ending in February, the U.S. Bureau of Labor Statistics reported. Wisconsin lost 16,900.

Dabrowski said the job-growth numbers were encouraging but that it was likely what economists call a “dead cat bounce”—a brief rise after a severe decline.

Matthew Sheffield
Matthew Sheffield
Matthew Sheffield, creator of NewsBusters and president of Dialog New Media, an internet marketing and design firm, left NewsBusters at the end of 2013