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How Walker's Tax Schemes are Undermining Wisconsin's Future

Sep. 5, 2017
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Photo credit: Gage Skidmore

Scott Walker has had the advantage of being Wisconsin’s governor during the third-longest economic expansion in U.S. history. While Wisconsin’s economy has lagged behind the national average during his time as governor, there still has been state revenue growth in each state budget. Despite these increases, Gov. Walker has slashed funding for the UW System and K-12 education.

If Wisconsin has had more revenue, why hasn’t that resulted in increased investment in educational opportunity? The answer: It was a bigger priority for Gov. Walker to direct state resources to tax cuts for the wealthy.

Wisconsin’s budgets continue to be hobbled by the governor’s so-called “Manufacturing and Agriculture Tax Credit” included in the 2011 budget. At that time, the credit was forecast to cost $128 million each year when fully phased in by 2016-’17. However, state estimates show that the credit cost has more than doubled and is expected to balloon to $334 million a year by 2018-’19. In addition to cuts made to public schools and higher education, 148 school districts have voted to raise their own property taxes by nearly $630 million to avoid harmful cuts to educational programs since 2011. The lost revenue from this credit has also resulted in the governor borrowing $209 million the last three years from future taxpayers—just to keep the budget in the black.

In other words, there have been significant consequences and costs associated with this credit. It would be one thing if the hundreds of millions spent on this credit had resulted in successful job creation. But they have not. Under Gov. Walker, Wisconsin dropped from 12,009 manufacturing jobs gained in 2010 to 3,776 manufacturing jobs lost in 2016.

Which brings us to Foxconn and Wisconsin’s future.

Over the past six and a half years, Walker has desperately tried to define himself as the pro-business/jobs governor. His efforts have, of course, been a colossal failure. Currently, Walker’s track record includes: an unfulfilled pledge to create 250,000 jobs by the end of his first term; a mining bill which promised thousands of jobs but created zero; anti-worker reforms; and reckless tax credits aimed at drawing new business. 

These failures have led a desperate governor to double-down on a costly economic trickle-down fantasy: his proposal to offer the most expensive state taxpayer-funded subsidy to a foreign company in U.S. history. It is important to note that because of that previously-mentioned Manufacturing and Agriculture Tax Credit, Foxconn’s billionaire owner will owe basically nothing in taxes and will therefore be receiving up to $3 billion in tax credits as a cash payment from Wisconsin taxpayers.

Before the state has even passed the 2017-’19 budget—and before the legislature has even approved up to $3 billion in taxpayer-funded incentives—Wisconsin faces a more than $1 billion deficit in the 2019-’21 budget. With national economic growth projections being lowered for the next few years, it can be expected that state growth will slow as well. 

Walker has left the state financially unprepared for slower economic times. Now he is pushing through the Foxconn package, which, under the best-case scenario, would not break even for a quarter-century. If you know Walker’s and Foxconn’s history of “overpromising and underperforming,” the best case is not likely to happen. 

There is an opportunity cost of not investing in transportation, the future education of our children and further incentivizing entrepreneurship. Just like public school and university cuts paid for massive tax cuts the past few years, you can assume that taxpayer funding for Foxconn will come at the expense of these programs again.

Gordon Hintz serves in the Wisconsin State Assembly as the representative for the 54th District.

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