Jan 23, 201407:20 AMVan Lines
with Joe Vanden Plas
Walker and the budget: Shorting the shortfall
(page 2 of 2)
They have a point, up to a point. Marginal cuts in state tax rates have stimulated economic growth, resulting in modest job growth and more (not less) revenue to state government, but we’re not out of the economic woods yet.
Exhibit A: While the national economy grew at strong pace (4.1%) in the third quarter, it would be nice to see that sustained over consecutive quarters before people assume we’ve turned a corner.
Exhibit B: December’s preliminary national employment figures, which indicated that only 74,000 new jobs were created, are not exactly a reminder of the “go-go” days of the 1980s or 1990s. In his State of the State, Walker claimed that job creation in Wisconsin picked up in the latter half of 2013, but let’s wait and see what the quarterly data tell us. (After the State of the State address, the Department of Workforce Development released encouraging preliminary jobs data that indicates the state created 3,000 jobs from November to December of 2013, the state's unemployment rate fell to 6.2%, and that 43,900 jobs were created from December 2012 to December of 2013. The December figures are based on a very small sampling, about 3% of state businesses, which means they are subject to substantial revision in subsequent months. The quarterly data, produced in the Quarterly Census of Employment and Wages, is based on a much larger sample, roughly 95% of state businesses, and therefore is considered a more accurate barometer of job growth.)
What’s more, we’re still not sure what positive, negative, or neutral impacts the full implementation of the Affordable Care Act will have on job creation, and therefore tax revenue, in 2014.
Until we do, a little more prudence is in order, whether or not your name is on the ballot this fall. I realize this view isn’t politically sexy, but someone has to be the adult in the room. Grown-ups solve problems like structural deficits. They solve them completely.
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