Walker deals with double dose of bad economic news

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Associated Press
Friday, August 29, 2014

MADISON — Gov. Scott Walker tried to put a positive spin Friday on the one-two punch of lackluster jobs numbers and a drop in tax collections that will likely put the budget in the red next year.

Walker's administration reported Thursday that tax collections were $281 million less than anticipated for the fiscal year that ended in June. That puts the two-year budget on pace to be at a $115 million shortfall by June 30.

Adding to the bad news, the state Department of Workforce Development reported late Thursday that private-sector jobs grew just 1.3 percent during the 12-month period ending in March. State-by-state comparisons won't be available until Sept. 18, but the slow growth is on par with Wisconsin's last quarterly report when the state ranked 37th nationwide for 2013.

The weak economic news came on the heels of a Marquette University Law School poll on Wednesday that showed Walker and Democratic challenger Mary Burke in a dead heat. It was the third Marquette poll since May showing the race as essentially tied.

Walker downplayed the scope of the disappointing tax collections in an interview Friday morning on a WTMJ-AM conservative talk radio show, saying it could be rectified by controlling expenditures and continued economic growth.

"We believe going into next year healthier things will happen in the economy and we will continue to grow," Walker said.

Walker and the Republican Legislature have cut taxes by about $2 billion since he took office, a move Democrats have criticized as irresponsible and leading to the looming budget shortfall. Walker says that will be a defining issue in the governor's race.

Burke, a former state Commerce Department secretary under Democratic Gov. Jim Doyle, seized on the weak jobs numbers and tax collections, calling it evidence that Walker's policies aren't working and "underscores how badly we need a new direction."

Democratic state Rep. Jon Richards, of Milwaukee, said the shortfall could have been avoided if Republicans would have accepted a more modest tax cut proposal put forward by Democrats that focused on lowering property taxes.

"Everyone wants to see more money in the hands of hardworking Wisconsin families, but Scott Walker and his allies in the Legislature don't know how to do that in a fiscally responsible way," Richards said.

Economic issues have been front and center in the governor's race, including whether Walker can meet his signature 2010 campaign promise, repeated during his 2012 recall, that he would oversee the creation of 250,000 private-sector jobs during his first term. To date, only about 103,000 jobs have been added, making it virtually certain Walker won't meet his promise in the next five months.

But Walker contrasts the job growth over the past three years with a loss of 133,000 jobs during Doyle's second term. Walker also points to the state's improving unemployment rate, which at 5.8 percent is the lowest it's been since 2008.

The latest preliminary job-growth numbers reported by the state Department of Workforce Development on Thursday show the state added 28,653 jobs from March 2013 to March 2014.

"The latest 12-month actual jobs data available shows Wisconsin's economy is continuing to grow and add jobs for Wisconsin's working families," said department secretary Reggie Newson in a prepared statement. "We will continue to do everything we can to develop our state's workforce and ensure that every Wisconsin worker who wants a job can find a job."

In the Bureau of Labor Statistics last comparative report covering 2013, Wisconsin's job growth was 1.2 percent. The national job growth rate was 2.1 percent.

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