July 10, 2019
Special Guest Perspective by Dan O’Donnell
The art of compromise is essential in divided government, as entrenched hardline positions will produce nothing but a stalemate. Conciliation, even at the tip of the sword (or, in Wisconsin’s case, a line-item veto pen), is the only thing that will advance an agenda—even if by mere inches.
The state’s newly-signed budget is a compromise of both the best and worst sorts. Legislative Republicans were able to exorcise the worst and most ridiculous of Democratic Governor Tony Evers’ policy proposals, but in exchange had to surrender the last vestiges of fiscal sanity left over from the Scott Walker era.
The most troubling thing was the ease with which Republicans did so.
The same GOP leaders who derided Evers’ initial budget proposal as “wacky” and “crazy”ultimately agreed to spend nearly as much money as he did.
“The problem with Governor Evers’ budget is that it spends too much,” Assembly Speaker Robin Vos said in a statement after Evers’ Budget Address. “It spends way more than Wisconsin can afford.”
If that’s true, then why did Vos insist on passing a budget that, before Evers’ vetoes, spent just $2.09 billion less in total? Exactly much wackier was a 2.5 percent larger budget?
Yes, Vos, Senate Majority Leader Scott Fitzgerald, and their representatives on the Joint Finance Committee remained true to their conservative principles and removed the craziest ideas from Evers’ initial proposal such as driver’s licenses for illegal immigrants, massive Medicaid expansion, a repeal of both Act 10 and right-to-work, a restoration of prevailing wage, a substantial gas tax hike, and massive restrictions on choice and charter schools (among many, many, many others).
But even Evers himself had to know that this rampant liberalism never stood a chance of passing a Republican Legislature and included it merely as a virtue-signaling nod to his left-wing base. Liberal policy was never going to get passed in the budget; the only hope Evers ever had was a compromise on spending increases.
Republicans gave it to him—and then some—even after pledging to stop what they called his out-of-control spending.
“Wisconsin can’t afford Tony Evers’ budget,” said Joint Finance Committee co-chairs John Nygren and Alberta Darling in a joint statement in late February. “He’s spending our record surplus and billions more. His budget increases spending by $1,000 for every resident in the state, raises taxes, and eliminates the reforms that worked over the last eight years.”
So outraged were Representative Nygren and Senator Darling that they…approved a budget that increased spending by a whopping $4.34 billion (5.6 percent) over the 2017-2019 biennium. By way of comparison, Evers “only” increased total spending by 7.7 percent over the last Walker budget. Wisconsin, it seems, can’t afford that but it can afford a 5.6 percent increase. Go figure.
This is a compromise budget, though, and Republicans did buy something of value in their spending binge: Approximately $500 million in tax relief. Crucially, the Legislature was able to secure a reduction in the lowest two state tax brackets without increasing taxes on those in higher brackets or eliminating manufacturing and agriculture tax credits. Evers’ budget would have raised the overall tax burden by $2 billion, but legislative Republicans stopped this.
For this they certainly deserve praise, but tax cuts are only truly effective when they are accompanied by a reduction in government spending or, at the very least, a reduction in the increase of government spending.
The final budget has neither, and it has turned a $753 million surplus into a $1.4 billion structural deficit.
A perfectly rational big-picture view is that this was a necessary tactical concession to a free-spending governor who wields the most powerful veto pen in the country, but it can also be seen as an utter rejection of the fiscal conservatism to which Republicans had been paying lip service as recently as February.
Their spending is only slightly less wacky than Evers’, and while their rejection of his liberal policies was both noble and necessary, Republicans may one day come to rue this budget as ultimately a compromise of their fiscal conservative values.