Looking ahead at what promises to be a tough election year for Republicans, Gov. Walker’s state of the state address last week was as important for what it didn’t say as for what it did.
The headline coming out of his speech was $100 in tax credits or cash going to parents for each child. This tax gift is an election year piece of cotton candy, a one-timer that will have little strategic impact on the state.
Looked at another way, Gov. Walker is pre-empting the Democratic 2018 issues. They have been critical of his previous budgets that short-changed education, so he upped K-12 spending in his recent budget, continued the tuition freeze at the University of Wisconsin System and then followed with per-child crowd pleaser.
Think of his tactics like those used in competeive sailing. A skipper in the lead just matches every move by the top follower. It’s called “covering.”
The governor has also “covered” the Democrats on health care. As premiums continue to soar on the Obamacare exchanges, a Democratic vulnerability, Walker appropriated that issue by proposing a $200 million infusion into health care reinsurance, with the intent of moderating premiums.
Side note: At my company, the reinsurance premium to cover catastrophic health cases runs about $400,000 on a total health care bill of $5 million, or only about 8%. The Walker subsidy, a small bite out of the 8%, will be a boon to the Medical Industrial Complex (MIC), but will do nothing to address the screaming issue in health care, the out-of-control costs.
In fairness to the governor, he pushed for self-insurance for state employees in his 2016 state-of-state address and subsequent budget, which would cut costs. His fellow Republicans in the legislature yielded to MIC lobbyists and shot it down.
At any rate, don’t get your hopes up for premium reductions. The reinsurance move is unlikely to trickle down.
The 2016 and 2018 addresses bragged up the Governor’s two-term track record on the economy, making a positive comparison to his predecessor, Democrat Jim Doyle. The comparison is more political than valid, because Doyle had to weather the biggest recession in U.S. history, while Walker has enjoyed one of the longest expansions in U. S. history.
Governors have something to do with the long-term prosperity in a state, but national trends almost always trump state dynamics.
Nonetheless, Gov. Walker can brandish some nice numbers, mainly the very low jobless rate of 3% and high labor participation.
Further, the money flowing from the strong economy into the state treasury has enabled funding of a wide range of workforce training programs for veterans, handicapped people, youth and adult apprentices, the mentally disabled and the under-skilled. It had been blessedly bipartisan as the rising tide lifts boats.
The surplus of open jobs gives the governor an opening for tougher work rules as a condition for government subsidies. He played that card in his address.
The new tax revenues have allowed modest reductions in property and income taxes, which is a Walker highlight at every campaign stop.
Those are the issues he will stress. Here’s a partial list of major issues he is ducking:
* A Conservation Message. How can Republicans look past the invasive species threat to the Great Lakes? Asian carp are at the door. There is a dead zone in the middle of Green Bay.
* The Startup Imperative. The Wisconsin economy can no longer rely on manufacturing and agri-business for job creation; they have become uber-efficient. Entrepreneurs and their ventures reinvent the economy and add most new jobs. Walker is on the sidelines on this dimension of the economy.
* Other Strategic Clusters. In the same vein, state economic strategy, if there is one, needs to focus on job champions like insurance, investment management, information technology in many dimensions, education innovation, energy management and new models for health care delivery.
* Reorganization of Higher Education. The University of Wisconsin System faces enormous challenges in affordability and access, declining enrollments, lower state support, rising student debt and on-line courses and degrees. Is there a plan?
* Health Issues. These include lead in Milwaukee drinking water, high levels on unintended pregnancies to single mothers, the resulting poverty for mother and child, and a fall-off in immunizations.
Note that the playbook for the 2018 campaign has not been fully written. The battalion of Democratic candidates has yet to spell out compelling messages beyond a call for more education and infrastructure and opposition to Walker’s Foxconn subsidies and lack of environmental impact statements.
Recall that candidate Walker does not always follow script when he becomes Gov. Walker. There is usually a submerged big agenda, often a big one, such as Act 10 to undercut public unions in 2011 and Right-to-Work in 2015. Neither got airtime in the preceding campaigns.
Conclusion: regard the state-of-state address and campaign rhetoric to date as only a partial map of what lies ahead for public policy in Wisconsin. It is certain, though, that the campaign will be more about politics than policy.