Why Tax Cuts Help Economies/More Companies are Moving South
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source: The Washington Independent
Foreign Auto Makers Won Billions in Government Subsidies
General Motors production line. (Flickr: steelcityhobbies)
To hear Southern Republicans tell the story, the financial burdens facing Detroit’s automakers are self-made troubles to be settled by the laws of Adam-Smith capitalism.
“We don’t think it is the role of government to intervene,” Sen. Jim DeMint (R-S.C.) told the Fox Business Network last week. “We need to let the market and the laws work the way they are already in place.”
Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants. Those incentives, arriving in the form of tax breaks, training for new employees and even land, have enticed BMW to South Carolina, Mercedes to Alabama and Nissan to Tennessee. The result of the government subsidies has been the steady emergence of the South as an auto-manufacturing powerhouse. Some are dubbing it the “New Detroit” – a region where real estate is cheap and the labor’s not unionized.
Not coincidentally, these Southern states are represented by the same coalition of GOP senators who led the fight against the recent Detroit bailout proposal. That legislation would have provided $14 billion in emergency bridge loans to General Motors and Chrysler, both of which say they lack the finances to survive the month. Rallying behind the animated opposition of GOP Sens. Bob Corker (Tenn.), Richard Shelby (Ala.), Mitch McConnell (Ky.) and South Carolina’s DeMint, Senate Republicans killed the legislation.
The White House has since stepped in to offer assistance from the $700 billion pot allocated earlier in the year for the Wall Street bailout so that the companies don’t go bankrupt during its tenure.
On Friday, the day following the Senate vote, Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn’t be scrambling now for a taxpayer-funded bailout.
“You look at the South,” Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But that flourishing didn’t come without significant taxpayer help. Shelby’s Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state’s sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts.
Alabama is hardly alone. Corker’s Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on.
Supporters of these deals contend that the economic activity spurred by the arrival of the automakers is worth the up-front costs. Yet some experts say that, considering the ever-growing size of the incentive packages, there’s little evidence to support that claim.
“It’s exceedingly difficult to determine whether the returns warrant the original incentives,” said Matthew N. Murray, executive director of the University of Tennessee’s Center for Business and Economic Research. “It’s just hard to show that it’s going to produce enough tax revenue.”
Others wonder if the incentive packages don’t go too far to divert taxpayer dollars from vital state services. When Tennessee courted Nissan in 2005, for example, its $197 million gift came about the same time the state was cutting 170,000 low-income adults from its Medicaid rolls. A 1998 Time magazine report found that an Alabama elementary school adjacent to the Mercedes plant was home to 540 kids in a building designed to hold 290.
“The Mercedes-Benz plant illustrates a fundamental principle of corporate welfare,” the article read. “Everyone else pays for economic incentives — either with higher taxes, fewer services or both.”
Then there’s the question of whether there’s even a difference between using taxpayer dollars to bring a company to town (as many Southern states have done) and using taxpayer dollars to keep a company around (as the Detroit bailout aimed to do). Rep. Lynn Westmoreland (R), who represents the Georgia district soon to house the Kia plant, told The Atlanta Journal-Constitution last month that there is a distinction.
“I don’t think we were doing that because of bad business decisions Kia was making,” said Westmoreland, who voted against the Detroit bailout. “We did that to get them in here, to create the jobs, to create the taxes, to put economic development into the area.”
A great deal of focus has been placed on the United Auto Workers role in the financial troubles of the Big Three, but there are complicating factors that extend far beyond the union-versus-non-union debate. Much of the labor costs paid out by the Big Three, for example, go to cover health and retirement expenses — a tab that’s largely picked up by the governments of the foreign transplants.
“They [foreign governments] use taxpayer dollars to subsidize our competition,” Ron Gettelfinger, president of the United Auto Workers, said Friday after the Senate killed the Detroit bailout proposal. “It doesn’t help our industry.”
The age of the companies also plays an enormous role. General Motors, for example, has four times as many retirees as it does workers, placing a disproportionate burden on the company to meet its health and pension promises. “It’s much easier for the transplants because they’re much younger companies,” said Gary N. Chaison, a labor professor at Clark University in Worcester, Mass.
Not that the automakers don’t bear much of the blame for their current troubles. For years, the Big Three fought higher mileage standards while focusing production on gas-guzzling trucks and sport utility vehicles — models that fell from public favor when gas prices leapt over the summer.
“None of us want to see them go down,” McConnell, the Senate Minority Leader, said last week, “but very few of us had anything to do with the dilemma that they’ve created for themselves.”
Still, there’s plenty of blame to go around. Consumers purchased those large vehicles, thus creating the demand. And contrary to McConnell’s statement, many observers argue that Congress had a responsibility to nudge the industry toward better fuel economy years ago. A 1990 vote to increase mileage standards to 40 miles-per-gallon came three votes shy of Senate passage.
McConnell voted against it. Shelby, a Democrat at the time, did too.
Foreign Auto Makers Won Billions in Government Subsidies
General Motors production line. (Flickr: steelcityhobbies)To hear Southern Republicans tell the story, the financial burdens facing Detroit’s automakers are self-made troubles to be settled by the laws of Adam-Smith capitalism.
“We don’t think it is the role of government to intervene,” Sen. Jim DeMint (R-S.C.) told the Fox Business Network last week. “We need to let the market and the laws work the way they are already in place.”
Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants. Those incentives, arriving in the form of tax breaks, training for new employees and even land, have enticed BMW to South Carolina, Mercedes to Alabama and Nissan to Tennessee. The result of the government subsidies has been the steady emergence of the South as an auto-manufacturing powerhouse. Some are dubbing it the “New Detroit” – a region where real estate is cheap and the labor’s not unionized.
Not coincidentally, these Southern states are represented by the same coalition of GOP senators who led the fight against the recent Detroit bailout proposal. That legislation would have provided $14 billion in emergency bridge loans to General Motors and Chrysler, both of which say they lack the finances to survive the month. Rallying behind the animated opposition of GOP Sens. Bob Corker (Tenn.), Richard Shelby (Ala.), Mitch McConnell (Ky.) and South Carolina’s DeMint, Senate Republicans killed the legislation.
The White House has since stepped in to offer assistance from the $700 billion pot allocated earlier in the year for the Wall Street bailout so that the companies don’t go bankrupt during its tenure.
On Friday, the day following the Senate vote, Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn’t be scrambling now for a taxpayer-funded bailout.
“You look at the South,” Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But that flourishing didn’t come without significant taxpayer help. Shelby’s Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state’s sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts.
Alabama is hardly alone. Corker’s Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on.
Supporters of these deals contend that the economic activity spurred by the arrival of the automakers is worth the up-front costs. Yet some experts say that, considering the ever-growing size of the incentive packages, there’s little evidence to support that claim.
“It’s exceedingly difficult to determine whether the returns warrant the original incentives,” said Matthew N. Murray, executive director of the University of Tennessee’s Center for Business and Economic Research. “It’s just hard to show that it’s going to produce enough tax revenue.”
Others wonder if the incentive packages don’t go too far to divert taxpayer dollars from vital state services. When Tennessee courted Nissan in 2005, for example, its $197 million gift came about the same time the state was cutting 170,000 low-income adults from its Medicaid rolls. A 1998 Time magazine report found that an Alabama elementary school adjacent to the Mercedes plant was home to 540 kids in a building designed to hold 290.
“The Mercedes-Benz plant illustrates a fundamental principle of corporate welfare,” the article read. “Everyone else pays for economic incentives — either with higher taxes, fewer services or both.”
Then there’s the question of whether there’s even a difference between using taxpayer dollars to bring a company to town (as many Southern states have done) and using taxpayer dollars to keep a company around (as the Detroit bailout aimed to do). Rep. Lynn Westmoreland (R), who represents the Georgia district soon to house the Kia plant, told The Atlanta Journal-Constitution last month that there is a distinction.
“I don’t think we were doing that because of bad business decisions Kia was making,” said Westmoreland, who voted against the Detroit bailout. “We did that to get them in here, to create the jobs, to create the taxes, to put economic development into the area.”
A great deal of focus has been placed on the United Auto Workers role in the financial troubles of the Big Three, but there are complicating factors that extend far beyond the union-versus-non-union debate. Much of the labor costs paid out by the Big Three, for example, go to cover health and retirement expenses — a tab that’s largely picked up by the governments of the foreign transplants.
“They [foreign governments] use taxpayer dollars to subsidize our competition,” Ron Gettelfinger, president of the United Auto Workers, said Friday after the Senate killed the Detroit bailout proposal. “It doesn’t help our industry.”
The age of the companies also plays an enormous role. General Motors, for example, has four times as many retirees as it does workers, placing a disproportionate burden on the company to meet its health and pension promises. “It’s much easier for the transplants because they’re much younger companies,” said Gary N. Chaison, a labor professor at Clark University in Worcester, Mass.
Not that the automakers don’t bear much of the blame for their current troubles. For years, the Big Three fought higher mileage standards while focusing production on gas-guzzling trucks and sport utility vehicles — models that fell from public favor when gas prices leapt over the summer.
“None of us want to see them go down,” McConnell, the Senate Minority Leader, said last week, “but very few of us had anything to do with the dilemma that they’ve created for themselves.”
Still, there’s plenty of blame to go around. Consumers purchased those large vehicles, thus creating the demand. And contrary to McConnell’s statement, many observers argue that Congress had a responsibility to nudge the industry toward better fuel economy years ago. A 1990 vote to increase mileage standards to 40 miles-per-gallon came three votes shy of Senate passage.
McConnell voted against it. Shelby, a Democrat at the time, did too.
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I take it that you're in agreement with government intervention, i.e., offering of taxpayer funded incentives to corporations, to boost economic development ???
Living in one of those Southern states, I can tell you they find ways to pay for those incentives: they raise property taxes on homeowners and cut services to disabled/special needs citizens. These I can tell you firsthand.
Well if you can tell em, I can too !!! 
Seriously, I live and practice in a southern state as well. I do a lot of municipal work and I've helped several cities set up and fund incentives and I can attest, as you say, someone pays.
In many cases, the incentives are exceptions to state constitutional prohibitions against financing private development with public dollars, therefore, properly noticed public hearings must be held to fully disclose the transactions. I don't recall a public hearing yet where citizens voiced serious objection to one of those deals.
Seriously, I live and practice in a southern state as well. I do a lot of municipal work and I've helped several cities set up and fund incentives and I can attest, as you say, someone pays.
In many cases, the incentives are exceptions to state constitutional prohibitions against financing private development with public dollars, therefore, properly noticed public hearings must be held to fully disclose the transactions. I don't recall a public hearing yet where citizens voiced serious objection to one of those deals.
Well if you can tell em, I can too !!!
I don't recall a public hearing yet where citizens voiced serious objection to one of those deals.
Billionaires and millionaires use these tactics to get the public to pay for professional sports venues, while schools, hospitals, infrastructures and public transportion are in woeful need.
Seattle was willing to let their beloved professional basketball team leave the state if it meant using public money to build a rich person's playground.
It seems the south is more susceptible to this type of coercion.
Yeah, there have been instances of professional teams applying pressure to get arenas built, in whole or in part, using public funds - - but you have to weigh the benefits and burdens in each case to see whether it makes sense as many of those professional teams generate local revenue as well which benefit schools, hospitals and public infrastructure. But, arena deals are sort of disbursed across the spectrum whereever sports teams are located, aren't they?
I remember the sports-arena/public-dollar debate going on a few years ago in Minnesota where public funds helped build the Twins stadium -- about the same time as that Iinterstate 35 bridge collapsed -- but I don't think there was a causal relationship between the lack of public funds for maintenance on the I-35 bridge and use of public funds to build that stadium. (I could be mistaken though).
Well if you can tell em, I can too !!!
Seriously, I live and practice in a southern state as well. I do a lot of municipal work and I've helped several cities set up and fund incentives and I can attest, as you say, someone pays.
In many cases, the incentives are exceptions to state constitutional prohibitions against financing private development with public dollars, therefore, properly noticed public hearings must be held to fully disclose the transactions. I don't recall a public hearing yet where citizens voiced serious objection to one of those deals.
I'm one who's supported several public/private partnerships. I think the benefit can often outweigh the cost and bring in revenues. But very often it seems like someone's donations made more impact than public benefit.
There was a heated controversy about building a new arena in downtown Charlotte many years ago when the Charlotte Hornets were threatening to leave. With many twists and turns, we ended up with the arena (Hornets still left and the NBA quickly sold a franchise to Bob Johnson to fill the void) and many hard feelings. Since then that arena has hosted events that used to pass Charlotte by including concerts from Prince and Sade (I used to get so mad seeing Sade's tour dates and her going to Raleigh or Greensboro but never Charlotte) and hosts the CIAA basketball tournament which was hosted by Raleigh, NC for years and they said the deciding factor was the centrally located arena. The arena now pretty much pays for itself.
My main beef is when states/municipalities on one hand make hard, drastic cuts to public services and local education because of, as they story always goes, deficits but have money for huge tax cuts for businesses in the same budget.
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I'm curious Thought1, what "tactics" do they use?
For one, paying people like yourself to post.
whats wrong Thought?
Anyways, back to the question....What "tactics" are you referring to?
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Because the Federal Govt increased its spending. It's not a revenue problem its a spending problem.
http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related
I don't take sides I look at the facts. There was factors in play long before Bush took office that help cause this recession. Add on the things Bush did do and you have the mess we are in now.
Also you can't compare tax breaks given to companies by the states to entice companies to move/build there as the same for what the Federal Govt does. In the long run those new factories are bringing in more jobs and money to the areas. In Atlanta we are now within 6 hours of 7 auto assembly plants.
I agree as long as the people come out on the winning end of the deal. The things the citizenry receive in jobs and hopefully higher standard of living should more than offset the loss in tax revenue and possible environmental damage. If it doesn't, it's a bad deal.
The things that led up to this recession were definitely in the works before Bush got into office but it's the current tax policy that's the biggest deficit driver, even more than the prescription drug giveaway and the wars in Iraq and Afghanistan. So that should be the first and easiest thing to undo.
Tax cuts that aren't paid for = tax expenditures. Those cuts had little to no stimulative effects.
Finally, my point is that your ideology of providing tax cuts, the vast majority of which are claimed by people who end up saving that money rather than spending it and stimulating the economy, has been proven to be an abject failure.
Tax cuts that aren't paid for = tax expenditures. Those cuts had little to no stimulative effects.
Finally, my point is that your ideology of providing tax cuts, the vast majority of which are claimed by people who end up saving that money rather than spending it and stimulating the economy, has been proven to be an abject failure.
My ideology is that the Fed Govt spends too much. Bush put into play the tax cuts, the prescription plan, the wars, and other costly programs without funding them. Of course the deficit went up. Also I don't remember the democrats raising too much hell about his budget proposals. So therefore I place some blame with them too. Most people don't realize that the Bush tax cuts for the 'rich' were actually tax cuts for everyone. The rich got more because they pay more in taxes. Check out this clip
http://www.youtube.com/watch?v=Xj7nRc3_EG0&feature=player_embedded
This is what the tax debate sounds like...
My ideology is that the Fed Govt spends too much. Bush put into play the tax cuts, the prescription plan, the wars, and other costly programs without funding them. Of course the deficit went up. Also I don't remember the democrats raising too much hell about his budget proposals. So therefore I place some blame with them too. Most people don't realize that the Bush tax cuts for the 'rich' were actually tax cuts for everyone. The rich got more because they pay more in taxes. Check out this clip
http://www.youtube.com/watch?v=Xj7nRc3_EG0&feature=player_embedded
This is what the tax debate sounds like...
The rich got more because they donate more to Republican politicians and Bush was looking out for them.
Gore ran a horrible campaign but he warned us about the Bush plan and people voted who would gain the least for him anyway.
My ideology is that the Fed Govt spends too much. Bush put into play the tax cuts, the prescription plan, the wars, and other costly programs without funding them. Of course the deficit went up. Also I don't remember the democrats raising too much hell about his budget proposals. So therefore I place some blame with them too. Most people don't realize that the Bush tax cuts for the 'rich' were actually tax cuts for everyone. The rich got more because they pay more in taxes. Check out this clip
http://www.youtube.com/watch?v=Xj7nRc3_EG0&feature=player_embedded
This is what the tax debate sounds like...
So where else do you want to see cuts?
We can agree that there's a spending problem so we need to end the Bush tax cuts since tax cuts are spending. These were not rate changes but active cuts. We can't afford them so end them.
Excellent question QueEx! I've been watchin the thread & no one wants to answer. Well, this is my take; It is govt. intervention, corporate welfare! This is what differentiates Ron Paul from Romney, Bachmann, Cain, Obama, Biden etc.
This type of intervention distorts the free market. Think about it; In a true free market, there would be no need for Corker, McConnell & Shelby to offer incentives to relocate. The company would just do it because it is a sound business decision.
This, my friend, is the difference between Capitalism & Corporatism.
There is a democrat mayor who is pro business who runs a neighboring city close to mine. Very good mayor I might add. He won both elections with help from several thousands republicans. I voted for him twice!! Normally, his policies are widely accepted. But his policy on bringing some sort of water park/ amusement area to the downtown area has went down in flames twice. What irks myself and other voters is that he wants to use public funds to give this project life.
My take on this is that if it is so great someone in the private sector will step in and provide a service. The government can create incentives like negotiating lower taxes and energy costs. Louisiana has lost many large deals with big corporations due to high business taxes and energy costs.
In a neighboring parish the council negotiated a deal with tax payers for a Bass Pro Shop. It was linked to bonds for the school district with promises not to raise taxes. Well you guessed correctly, the council lied. The school board came back to the voters asking for more money. This was wrong.
I would be against it. Let's say the venture fails, who's left holding the bag? You are. We had a governor who used tax payer funds to buy a golf course. A Fricken golf course. It failed.
Create the incentives, without public funds.
I'm pretty sure you live in a very TONY neighborhood. Would you prefer your neighborhood designed by a private developer with the lakes, golf courses and kids playground? Or would you prefer central planning like the projects and city parks where all the drug deals go down?
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You committed voter fraud ?
You'd have to know our crazy laws. Within my parish there are several neighboring cities. Well my city is able to vote for the metropolitan mayor but they cant vote for ours. It's rather stupid I agree. Every few years someone challenges it. It fails due to the Metro's need for our tax dollars.
Southern democracy at its best! And in 2011 to boot.
I guess the repubs havent kicked all the dems out yet even 100 years after they took over. Someday.
It's coming. A lot of switchacrats claiming the democrats left them.
I see you are quick to respond to the bullshit posts.
Foreign Auto Makers Won Billions in Government Subsidies
Why do people keep lying for Paul? He's in favor of corporate welfare too. He has voted consistently for the Big Energy subsidies. I know he can double talk it to death but he voted against repealing them. That's corporate welfare.
Suckers have bought in to Paul's Fantasy view of government. What he has proposed has never existed at least successfully in the history of the earth. They have never given me any real example where it has.
WISC GOVERNOR SIGNS BALANCED BUDGET ON TIME WITHOUT RAISING TAXES
Blaze/AP) Republican Wisconsin Governor Scott Walker signed his first budget Sunday, a two-year $66 billion deal that will balance the state’s $3 billion shortfall without raising taxes. Balancing the budget without raising taxes fulfills a campaign pledge, and Gov. Walker was able to accomplish this prior to the new fiscal year starting July 1. The budget passed without the support of a single Democrat in the Legislature.DEMOCRATS MAD
“He released just 50 vetoes early Sunday morning, signaling the Republican-controlled Legislature had given him almost everything he wanted when lawmakers revised the document. Democratic Gov. Jim Doyle issued 81 vetoes with the 2009-11 budget, his last before leaving office.
‘As a state, we can choose to take the easy road and push off the tough decisions and pass the buck to future generations, or we can step up to the plate and make the tough decisions today,’ Walker said in prepared remarks. ‘Our budget chooses to fix our problems now, so that our children and our grandchildren don’t face the same challenges we face today.’”
To find the state out of the fiscal quagmire which he inherited, Gov. Walker had to make major cuts including shaving $1.85 billion from education and $500 million in unspecified Medicaid programs. The budget expands Milwaukee’s school voucher program to suburban schools in Milwaukee County and the city of Racine.
Gov. Walker signed the budget before a crowd of about 100 people in Green Bay, with a few hundred protesters gathered outside chanting “Shame!“ and ”Recall Walker!” reports the Milwaukee Journal Sentinel. Democrats have criticized the budget as an attack on middle class values since it cuts funding for public schools and tax credits for poor people.
Wisconsin is scheduled to have recall elections in August that could result in Democrats gaining a majority in the Senate and with it power to block Walker and the GOP’s agenda in the future.
Blaze/AP) Republican Wisconsin Governor Scott Walker signed his first budget Sunday, a two-year $66 billion deal that will balance the state’s $3 billion shortfall without raising taxes. Balancing the budget without raising taxes fulfills a campaign pledge, and Gov. Walker was able to accomplish this prior to the new fiscal year starting July 1. The budget passed without the support of a single Democrat in the Legislature.
DEMOCRATS MAD“He released just 50 vetoes early Sunday morning, signaling the Republican-controlled Legislature had given him almost everything he wanted when lawmakers revised the document. Democratic Gov. Jim Doyle issued 81 vetoes with the 2009-11 budget, his last before leaving office.
‘As a state, we can choose to take the easy road and push off the tough decisions and pass the buck to future generations, or we can step up to the plate and make the tough decisions today,’ Walker said in prepared remarks. ‘Our budget chooses to fix our problems now, so that our children and our grandchildren don’t face the same challenges we face today.’”
To find the state out of the fiscal quagmire which he inherited, Gov. Walker had to make major cuts including shaving $1.85 billion from education and $500 million in unspecified Medicaid programs. The budget expands Milwaukee’s school voucher program to suburban schools in Milwaukee County and the city of Racine.
Gov. Walker signed the budget before a crowd of about 100 people in Green Bay, with a few hundred protesters gathered outside chanting “Shame!“ and ”Recall Walker!” reports the Milwaukee Journal Sentinel. Democrats have criticized the budget as an attack on middle class values since it cuts funding for public schools and tax credits for poor people.
Wisconsin is scheduled to have recall elections in August that could result in Democrats gaining a majority in the Senate and with it power to block Walker and the GOP’s agenda in the future.
WISC GOVERNOR SIGNS BALANCED BUDGET ON TIME WITHOUT RAISING TAXES
Blaze/AP) Republican Wisconsin Governor Scott Walker signed his first budget Sunday, a two-year $66 billion deal that will balance the state’s $3 billion shortfall without raising taxes. Balancing the budget without raising taxes fulfills a campaign pledge, and Gov. Walker was able to accomplish this prior to the new fiscal year starting July 1. The budget passed without the support of a single Democrat in the Legislature.
“He released just 50 vetoes early Sunday morning, signaling the Republican-controlled Legislature had given him almost everything he wanted when lawmakers revised the document. Democratic Gov. Jim Doyle issued 81 vetoes with the 2009-11 budget, his last before leaving office.
‘As a state, we can choose to take the easy road and push off the tough decisions and pass the buck to future generations, or we can step up to the plate and make the tough decisions today,’ Walker said in prepared remarks. ‘Our budget chooses to fix our problems now, so that our children and our grandchildren don’t face the same challenges we face today.’”
To find the state out of the fiscal quagmire which he inherited, Gov. Walker had to make major cuts including shaving $1.85 billion from education and $500 million in unspecified Medicaid programs. The budget expands Milwaukee’s school voucher program to suburban schools in Milwaukee County and the city of Racine.
Gov. Walker signed the budget before a crowd of about 100 people in Green Bay, with a few hundred protesters gathered outside chanting “Shame!“ and ”Recall Walker!” reports the Milwaukee Journal Sentinel. Democrats have criticized the budget as an attack on middle class values since it cuts funding for public schools and tax credits for poor people.Wisconsin is scheduled to have recall elections in August that could result in Democrats gaining a majority in the Senate and with it power to block Walker and the GOP’s agenda in the future.
Shouldn't someone be mad? Cutting money from public schools while funding business tax cuts and funding a voucher system that's been a proven failure. Is this a victory? Scott Walker is killing the Republican Party in Wisconsin. They better hurry up and get those voter suppression bills passed.
