Unions aren't to blame for Wisconsin's budget

[lunatica]

By Ezra Klein

Let's be clear: Whatever fiscal problems Wisconsin is -- or is not -- facing at the moment, they're not caused by labor unions. That's also true for New Jersey, for Ohio and for the other states. There was no sharp rise in collective bargaining in 2006 and 2007, no major reforms of the country's labor laws, no dramatic change in how unions organize. And yet, state budgets collapsed. Revenues plummeted. Taxes had to go up, and spending had to go down, all across the country.

Blame the banks. Blame global capital flows. Blame lax regulation of Wall Street. Blame home buyers, or home sellers. But don't blame the unions. Not for this recession.

Of course, the fact that public-employee pensions didn't cause a meltdown at Lehman Brothers doesn't mean they're not stressing state budgets, and that the pensions they've been promised don't exceed what state budgets seem able to bear. But the buildup of global capital that overheated the American housing sector and got packaged into seemingly riskless financial products that then brought down Wall Street, paralyzing the economy, throwing millions out of work, and destroying the revenues from state income and sales taxes even as state residents needed more social services? The answer to that is not to end collective bargaining for (some) public employees. A plus B plus C does not equal what Gov. Scott Walker is attempting in Wisconsin.

In fact, it particularly doesn't work for what Walker is attempting in Wisconsin. The Badger State was actually in pretty good shape. It was supposed to end this budget cycle with about $120 million in the bank. Instead, it's facing a deficit. Why? I'll let the state's official fiscal scorekeeper explain (pdf):

more at the link...

http://voices.washingtonpost.com/ezra-klein/2011/02/unions_arent_to_blame_for_wisc.html

[lunatica]

1. Can people keep this kicked?

[girl gone mad]

2. k & r

[AnOhioan]

3. k & r

[Klukie]

4. Good piece but we need to be careful not to blame Walker for this years deficit

Klein retracted that sentiment with an update at the end of the article


Update: I've been persuaded that the surplus-to-deficit picture is more complicated that I initially understood. The budget report is working with two time periods simultaneously: 2010-2011, and then 2011-13. The $130 million deficit now projected for 2011 isn't the fault of the tax breaks passed during Walker's special session, though his special session created about $120 million in deficit spending between 2011 and 2013 -- and perhaps more than that, if his policies are extended. That is to say, the deficit spending he created in his special session is about equal to the deficit Wisconsin faces this year, but it's not technically correct to say that Walker created 2011's deficit. Rather, he added $120 million to the 2011-2013 deficits, and perhaps more in the years after that.

[DCKit]

5. Manufactured Disaster Capitalism. K&R nt

[ProSense]

6. Walker gins up ‘crisis’ to reward cronies

Walker gins up ‘crisis’ to reward cronies

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There is no question that these are tough times, and they may require tough choices.

But Gov. Scott Walker is not making tough choices. He is making political choices, and they are designed not to balance budgets but to improve his political position and that of his party.

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To the extent that there is an imbalance -- Walker claims there is a $137 million deficit -- it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January. If the Legislature were simply to rescind Walker’s new spending schemes -- or delay their implementation until they are offset by fresh revenues -- the “crisis” would not exist.

The Fiscal Bureau memo -- which readers can access at http://legis.wisconsin.gov/lfb/Misc/2011_01_31Vos&Darling.pdf -- makes it clear that Walker did not inherit a budget that required a repair bill.

The facts are not debatable.

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Dems Closed Much Larger Budget Shortfall In Wisconsin Without Destroying Worker Rights