How Big Are Wisconsin's Problems?

So how big is Wisconsin's budget problem? And did Gov. Scott Walker help create it? Politifact takes a look at the numbers here and tells us.

Nickel version: the projections from the legislative analyst are necessarily subject to a bit of guesswork, but he estimates that Wisconsin will probably have a modest shortfall in the current fiscal year, amounting to about 1% of the total budget. In the two-year cycle after that, the legislative analyst estimates that tax collections will run $190 million below previous estimates. Nearly two-thirds of this revenue deterioration is due to legislation supported and signed by Walker during a special session he called last month.

Bottom line: Wisconsin's budget problems are fairly modest this year, but substantially larger in the two years after that despite the fact that tax revenues are projected to increase about 4% in both 2012 and 2013. However, whatever the size of the future deficit (which is still a point of dispute), revenues for 2012 are about 1% less than previously estimated thanks to Walker's special session bills. Walker isn't at fault for the current year's shortfall, but he is at fault for making the shortfall worse over the next two-year cycle.

Wisconsin's public sector workers have already taken a 3% cut in wages over the past two years. Maybe that's enough, maybe it isn't. But Walker has taken an already pressing problem, made it incrementally worse, and then used it not just as an excuse to bargain hard on wages and benefits, but as an excuse to gut Wisconsin's public unions entirely. (The Democratic-leaning ones, anyway.) It's just not a good faith exercise.

For more, check out Andy Kroll's explainer here, and be sure to scroll down for the updates. Andy's on the ground in Madison right now and you can follow his Twitter feed here.

UPDATE: The original draft of this post underestimated the size of Wisconsin's future deficits. I've corrected the text to more accurately reflect the legislative analyst's estimates. The most recent estimates from the state budget director are here.

Teaching Art

Michael O'Hare weighs in today on the value of public funding for the arts, and although I think we're still talking past each other to some extent, he concludes with a passage that I thoroughly endorse:

Probably the most costly program of government support for the arts, and in my view the most important and the one whose ongoing collapse is the most pernicious, is arts education in the schools. Parental introduction to the arts is the largest correlate of lifetime consumption, but government obviously isn’t in that business. Engagement in school is next. Hands-on and historical education in the arts — both are important — is critical to lifetime access to the cultural patrimony of a country or the whole world, and it’s another real market failure, information asymmetry.

People who can enjoy different, challenging experiences that make them smarter instead of dumber and alert instead of bored, have better lives than people who don’t. But the arts require some investment (though they tend to be beneficially addictive if you just step on the escalator) and pay off richly for accumulated experience. “I’m glad I don’t like opera, because if I did, I’d listen to it, and I hate the stuff!” is the suboptimal stable state a society can help its citizens get out of, and school is the place where it can happen.

I don't know how deeply arts education has been slashed in our public schools, but anecdotal evidence suggests it's been slashed pretty deeply on the twin altars of budget cuts and high-stakes testing. This is, I think, a tremendous loss for society, and it's a loss regardless of whether government agencies should overtly subsidize any particular medium or form of art in the adult sphere. If kids don't learn to appreciate art, then art will inevitably decline, and that makes us all poorer. After all, who wants to live in a world without art?

Friday Cat Blogging - 18 February 2011

I'd like to be able to say that Inkblot and Domino are firm supporters of the labor action currently unfolding in Wisconsin, but I'm afraid that would be a bit of a stretch. As you can see, they've already negotiated a pretty good deal for themselves, and collective action isn't really in their nature. So we humans are on our own.

But speaking of cats, I'm pleased to report that 10 Downing Street once again has an official cat. Why? Because, it turns out, 10 Downing Street also has a few official rats. So they brought in Larry. Picture and story here.

Wisconsin and the Bigger Picture

Speaking of my upcoming piece for the magazine, one of its major themes is the postwar decline of private-sector unions in America, culminating in the annus horribilis of 1978, which one business historian called "Waterloo" for organized labor. (Why? You'll have to read the story to learn more! It'll be online Tuesday and it comes with lots of nifty charts and illustrations, like the one on the right.) Today, Greg Sargent says 2011 could be much the same for public sector unions:

As I laid out here yesterday, this is only one of many national proposals being pushed by state governments across the country designed to achieve similarly transformative changes in that relationship between public workers and government.

Pro-labor and anti-labor people I've spoken with in recent days both agree that a defeat in Wisconsin could make it easier for other similar initiatives to advance. One anti-union activist I spoke to yesterday made it clear that if labor loses here, anti-union forces will point to the defeat to stiffen the spines of other GOP-controlled governments who are eyeing similarly transformative efforts but might be wary of a battle on the scale of the one unfolding in Wisconsin. This is just the beginning.

I won't pretend to be the world's most full-throated defender of public sector unions. If I could trade ten points of union density in the private sector for ten points in the public sector, I'd take the trade in a heartbeat. But that is, obviously, not the trade on offer. Nor is what's happening in Wisconsin merely hard bargaining during tough economic times. That would be understandable. Rather, it's an effort to destroy one of the few institutions left that fights relentlessly for the economic interests of the middle class. That's why conservatives oppose unions of all kinds, both public and private, and regardless of their faults, that's why they deserve our support.

Keeping it Short

Paul Krugman writes today about one of the difficulties of being a columnist:

One of the hardest things about writing the column, as opposed to blogging, is the length constraint. It’s really, really hard to say something meaningful in a limited space. And yet, that constraint has its virtues: it forces you to be concise, to figure out what you really need to say and skip the rest, to find turns of phrase that are shorter and usually plainer. And my experience is that the process of doing all that almost always makes the thing read better.

If I had my way, we’d require students to write 800-word essays, just for writing and reasoning practice. And at the risk of sounding like an old fuddy-duddy, this is something we’ll lose when dead-tree newspapers go the way of vinyl records.

Maybe. But keep in mind that for most high school kids, 800 words is a lot. For someone like Krugman, who has a tremendous store of knowledge, the challenge is picking and choosing what to say, and then figuring out how to say it cogently in a small space. For most students, whose store of knowledge is small, it would be just the opposite: tell them to write 800 words and the challenge would be padding it enough to fill up the space.

When I write for the magazine, I routinely underestimate how much space I need. Back in December, I told my editor that I planned for my piece in the upcoming issue to be about 2,000 words, "not some sort of long, definitive take on things." And it wasn't! But it still ran 4,000 words or so because I couldn't shut myself up. But back when I was in high school, 4,000 words would have been a pretty massive undertaking. With a 2,000 word target I probably would have ended up at 1,500 words, desperately searching around for something extra to toss in to bring it up to snuff.

On the other hand, maybe you could solve this by having kids write about stuff they know a tremendous amount about. If the assignment were to write about "Call of Duty" strategies, maybe boiling things down to 800 words really would be a challenge.

Manufacturing a Crisis

Regardless of what you think about public sector unions, it's important to understand what's really going on in Wisconsin right now. Were they facing an unsustainable, existential budget crisis when Gov. Scott Walker took office earlier this year? No. Are they facing an unsustainable, existential budget crisis now? No. They're facing a genuine budget problem, but it's one that was made even worse by Walker's own actions:

In English: The governor called a special session of the legislature and signed two business tax breaks and a conservative health-care policy experiment that lowers overall tax revenues (among other things). The new legislation was not offset, and it turned a surplus into a deficit. [See update below.] As Brian Beutler writes, "public workers are being asked to pick up the tab for this agenda."

That's from fellow California native Ezra Klein, and this brings back painful memories. In 2003, pissed off at Gov. Gray Davis over an energy crisis that we later learned had been deliberately manufactured by Enron and wasn't his fault at all, we followed Rep. Darrell Issa down a rabbit hole and recalled Davis. He was, famously, replaced by Arnold Schwarzenegger, who campaigned specifically on a promise to "end the crazy deficit spending." So what did he do once he was in office? He reduced the vehicle license fee, costing the state about $4 billion per year, and then made up for it by passing a $15 billion bond issue. Together, those two things produced a hole in the budget of about $7 billion per year once the bond money had been spent and annual payments started up. That hole accounted for a huge chunk of California's later fiscal crisis, and it was neither inherited from his predecessor nor was it the inevitable result of public policy. It was created.

Walker, like Schwarzenegger, has deliberately aggravated a crisis so he could take advantage of it to attack his political enemies:

That's how you keep a crisis from going to waste: You take a complicated problem that requires the apparent need for bold action and use it to achieve a longtime ideological objective. In this case, permanently weakening public-employee unions, a group much-loathed by Republicans in general and by the Republican legislators who have to battle them in elections in particular.

....If all Walker was doing was reforming public employee benefits, I'd have little problem with it....But that's not what Walker is doing. He's attacking the right to bargain collectively — which is to say, he's attacking the very foundation of labor unions, and of worker power — and using an economic crisis unions didn't cause, and a budget reversal that Walker himself helped create, to justify it.

This is, in a way, not unexpected. Republicans hate public sector unions. The Koch brothers and their allies, who contributed mountains of money to Walker and the Wisconsin GOP, hate public sector unions. Of course Walker and his fellow Republicans would like to dismantle public sector unions. But deliberately exacerbating a budget crisis to help them do it? Even by movement conservative standards that's outlandishly reckless and cynical. And yet, that's what's happening.

UPDATE: Actually, Walker's special session tax cuts didn't affect Wisconsin's budget for the current year. They affect the budget over the next two years. More details here.

Chart of the Day: Sham Budget Cutting

Via one of Ryan Avent's colleagues, here's a chart showing the trajectory of non-defense discretionary spending over the past 50 years. This is basically the spending that's left over after you take out Social Security, Medicare, Medicaid, the Pentagon, and interest on the national debt.

This is the part of the budget that Republicans are trying to slash. It's small, it's decidedly not a long-term problem, and it's focused largely on the neediest people in the country. Going after it is a sham, but it's a sham that the Republican base of old people, rich people, and corporations all support. It's a disgrace.

No More Hospitals, Please

NPR reports on New Hampshire governor John Lynch's call for hospitals to rein in their building boom in his state. The problem, he says, is that all the new construction isn't leading to better care:

Governor Lynch: “Instead of using that excess cash to reduce health care costs, hospitals spend it on advertising, trying to attract market share from each other; on buying physician and laboratory practices across the state and increasing overhead charges to patients.”

....Paul Spiess chairs a legislative study committee on hospital cost containment. He says hospitals have spent close to a billion dollars in the last decade on new facilities and amenities — from fancy lobbies to color MRIs.

Paul Spiess, former chair, Citizens Health Initiative and chair, SB 505 Hospital Cost Containment Commission: “It’s sort of developed into an arms race.”

....Former State Senator Kathy Sgambati: “You will get extra referrals to an MRI machine because it’s there. There are studies at Dartmouth that show when you have more surgeons, the more surgeries will be performed...so more supply means higher health care costs.”

It will be interesting to see how this plays out. The issue of supply creating its own demand is a real one, but politically it just has to be dangerous to be against having the latest and greatest toys in every hospital. After all, as we're told over and over and over, America has the best healthcare in the world, and we often convince ourselves of that by pointing to the number of MRI machines we have. This should be an interesting showdown.

Targeting Social Security

Republicans want to slash a billion dollars out of Social Security's administrative budget? Seriously? Whatever you happen to think of Social Security as a program, even conservatives have always acknowledged that it's a very efficient bit of bureaucracy with extremely low administrative costs. But not anymore, I guess:

Democrats warn this will lead to furloughs and other service interruptions that could delay checks and prevent new retirees from enrolling....In a statement, Rep. Xavier Becerra (D-CA), who chairs the Social Security subcommittee under Levin, says, "[T]his Republican plan would close down Social Security offices for an entire month this year. That means half a million American seniors, disabled workers and surviving family members--working people who have earned their Social Security benefits--will find themselves placed into a backlog of unprocessed claims. It means phones going unanswered, claims going unprocessed and a ripple effect of backlogged cases that will continue well beyond this year."

Republicans are really skating on thin ice here. If they don't rein in their famous freshman class soon, they're going to end up pretty quickly as the most hated party in American political history.

Our Warmer, Wetter, Wilder World

My friend the geophysicist emailed the other day to tell me his house in Connecticut was still snowed in. "The main hypotheses for why we have so much snow," he explained, "involve heat coming out of the now-open Arctic ocean in early winter. Once the ice cap freezes over temporarily, the wild weather calms down."

In other words, it's caused by global warming. Not global warming next year. Not global warming 50 years from now. Global warming today. And according to a new study published in Nature, the entire continent of North America is affected:

"Human influence on the climate system has the effect of intensifying precipitation extremes," said Francis Zwiers, a climate researcher at Environment Canada in Toronto and lead researcher on the first study....The study found that observed increase in deluges "cannot be explained by natural internal fluctuations of the climate system alone," said Zwiers. In other words, only the addition of greenhouse gases to the atmosphere explains why the United States and Canada have experienced a dramatic increase in heavy downpours.

....The explanation is simple physics: Warmer air holds more water vapor. That means when rainfall gets triggered, the air contributing to the storm is holding more water than it did in the cooler pre-industrial world.

And it's not just North America. Another new study looked at the epic floods in England and Wales in 2000 and concluded that they likely resulted from a warmer world:

In nine out of ten cases our model results indicate that twentieth-century anthropogenic greenhouse gas emissions increased the risk of floods occurring in England and Wales in autumn 2000 by more than 20%, and in two out of three cases by more than 90%.

And the even scarier part? These studies only go through the year 2000, so they miss the entire last decade, which was the warmest on record. And needless to say, England and North America are far from being the areas worst affected by climate change. What we're seeing here is just a small taste of what's to come in the future and in other parts of the globe. Buckle up.

Front page illustration by Celine Nadeau.