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News Economy Friday, Jun 26 2015

Scott Walker's Campaign Ailed By Budget Crisis

Jun 26, 2015

Scott Walker is suffering from ‘Jeb Bush syndrome:’ the closer he gets to his presidential announcement, the worse his headlines are. Walker plans to run on his record in Wisconsin but that list of achievements is quickly dwindling as the state faces a massive budget crisis. The governor has already lost the support of his state’s Republican party, now he risks losing the national GOP’s nomination before his campaign even officially begins.

From the Chicago Tribune:

Once in lockstep with Walker, GOP lawmakers are flashing some independence as they struggle to make ends meet. They have refused to go along with the governor’s proposed cuts in money for elementary and secondary schools and his plans to finance a big boost in road construction solely by borrowing. They have also forced him to moderate his proposed reductions in funds for higher education.

From 2011 to 2014, the pace of private-sector employment growth in Wisconsin ranked 36th among the states and the District of Columbia, according to the federal Bureau of Labor Statistics. Walker’s state ranked behind all its Rust Belt neighbors, Illinois included. Wisconsin even trailed Kansas, which has been the focus of national attention after steep tax and spending cuts pushed by Republican Gov. Sam Brownback produced big government deficits but little economic pop.

The number of jobs in the private sector grew by 5.7 percent in Wisconsin over the last four years, federal numbers show. Nationally, the growth rate was 9.3 percent

As he ran for that second term in 2014, Walker assured voters that the state was in the best financial shape in years and would begin this year with a surplus.

Instead, even before he could take the oath for a second time, Walker’s own Department of Administration warned that expected tax revenues and spending requests were out of whack and the state budget was headed for a more than $2 billion deficit over the next two years.

In response, Walker’s budget for the 2016-17 biennium proposed significant cuts in aid to elementary and secondary schools and the University of Wisconsin system. At the same time, he wanted to spend $220 million to help the Milwaukee Bucks basketball team build a new stadium. He also proposed putting $1.3 billion in new road spending on the state’s credit card with no added source of revenue to cover the increased borrowing costs.

By April, a poll conducted by the Marquette University Law School showed Walker’s job approval ratings had taken a big hit. Just 41 percent of Wisconsin registered voters surveyed said they approved of the way he was handling himself as governor, with 56 percent expressing disapproval.

Another big sticking point is Walker’s budget for roads, with fiscal hawks in the Republican caucus balking at the governor’s plans to finance it solely through borrowing. With a presidential campaign looming, Walker remains opposed to raising the state’s gas tax or vehicle license fees — common means to defray the costs of borrowing for transportation spending.

Without creating such a new source of revenue, one out of every $4 in the state road fund would be spent on loan interest and principal rather than on actual construction, budget experts warn.

Published: Jun 26, 2015

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