The Walker wish list

Wigderson Library & Pub (where reading while intoxicated is not necessarily a bad thing, as long as you maintain control of your book/reading device) reports:

In his weekly column for the Waukesha Freeman, Milwaukee radio talk show host Mark Belling said Governor Scott Walker will pursue cuts in the state income tax while reducing state aid to local governments. …

As I’ve pointed out at the MacIver Institute and elsewhere, Wisconsin’s income tax is still higher than Illinois’ despite the huge tax increases south of our border.

With expected Republican majorities in both houses of the legislature after this fall’s election, Walker should be able to succeed in passing a state budget with these changes.

If we are going to attract the capital needed to make Wisconsin’s economy stronger and grow, Wisconsin still needs to be more competitive. Last year’s budget restored budget stability. Now it’s time to move forward with making Wisconsin more friendly to capitalism.

Given Wisconsin’s socialist (but they call themselves “progressive,” like U.S. Senate candidate Tammy Baldwin) heritage, to make Wisconsin “more friendly to capitalism” won’t be easy.

A substantial tax cut is obviously necessary. Wisconsin is high in income taxes (both personal and corporate) and in property taxes. The challenge is to reduce those taxes specifically (particularly corporate income taxes, the appropriate rate for which is zero) and the tax burden generally, and not by increasing the one tax that is relatively small in this state, sales taxes.

One important way to reduce taxes is to reduce the need to increase taxes by controlling government spending. The 2013-15 state budget should include a Taxpayer Bill of Rights that restricts increases in spending to the sum of the (correctly reported) inflation rate and population growth. Putting a spending restriction mechanism in the budget should be a prelude to a constitutional amendment that permanently (or as permanently as possible) restricts spending growth at every level of government.

The weekly newspaper soon to be named Wisconsin’s Best Weekly Newspaper has a story this week about a state Assembly candidate who is certainly a fiscal conservative, but who does not support TABOR-like mechanisms. His argument is that electing fiscal conservatives is more important than creating spending limits that can be circumvented. He has a point, except that there are fiscal non-conservatives in both parties, and electing fiscal conservatives is not enough. Both the state Constitution and the U.S. Constitution are full of passages saying what government cannot do, and it is certainly reasonable to include in that list spending too much money. Fiscal conservatism is popular in difficult economic times; it is not so popular when state coffers are flush (see Thompson, Tommy). That is why legislators of any party need to be prevented from spending money.

Related is the need to correctly measure state finances. It is imperative that state law be changed so that budgets are balanced based on generally accepted accounting principles, not on a cash basis. For the party that will control the Legislature after the November elections, the party supposedly all about fiscal responsibility, to refuse to adopt GAAP budgeting, which every other unit of government in this state is required to do, certainly should call voter question to the GOP’s claim about being better with your tax dollars. (Gov. Scott Walker already eliminated two multibillion-dollar deficits; let’s see him deal with the third.)

Also related is the need to deliver government services – which is the only legitimate function of government, not to employ people (other than to perform government services), or to redistribute income, or to engage in trendy social change – in a more efficient manner. To have a unit of government for every 2,000 Wisconsinites (second only to Illinois) is ridiculous. To have one of the worst school districts in the entire country in this state’s largest city is dragging down the rest of the state. To have redundant public safety agencies does not further the cause of public safety. To blithely claim that Wisconsin has the best schools in the country does not further the cause of better education.

Making Wisconsin more friendly to capital is about government spending and taxes, but it isn’t only about government spending and taxes. You know things are different when, in the course of six weeks, you meet Walker and four of his Cabinet secretaries, and every one of them talks about promoting business, even his secretary of the state Department of Revenue. This is good, but it can also disappear with the election of the next Democratic governor of Wisconsin. I don’t write that because Democrats are always anti-business, but their core constituent groups – organized labor and environmentalists – are. (See Wisconsin Legislature, 2009-10.)

Having been elected twice in less than two years, Walker knows that his Wisconsin political stock will never be higher than it is now. He should not go for an aggressive agenda to stick it to his political opponents. He has a unique opportunity to change Wisconsin’s political culture from one that serves Da Union to one that serves taxpayers.

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