February 24, 2011
STEPHEN STROMBERG
Gov. Walker's fiscal straitjacket

Wisconsin Gov. Scott Walker says that concern over his state's relatively modest budget crisis motivates his drive to strip public-sector employees of their ability to bargain collectively. Yet he decided to put Wisconsin into a fiscal straitjacket, signing a bill Tuesday that would require a two-thirds supermajority in the state legislature or a statewide referendum to raise a range of taxes. This is not the sign of a serious budget hawk, whatever you think of Walker's policies on public-sector unions.

If Walker believes that the state is spending too much and should cut outlays to balance its books now, fine. He won his election, and he has the votes in the legislature to pass his solution. But he's attempting to force every governor after him to choose the same course, even if future state governments face drastically different budgetary circumstances.

Politicians have incentives to lower taxes when times are good. If taxes require a two-thirds vote or a referendum to pass, it's exceptionally difficult to raise them again. Even a rump conservative opposition in the state legislature can block tax increases. A referendum, meanwhile, divorces approval of unpopular tax increases from that of any larger - and more appealing - budget compromise that they would undergird, stacking the deck against passage. When inevitable budget crises happen, these provisions reduce lawmakers' ability to compromise, since lawmakers don't have a full range of policy options from which to choose. State politics fossilize; Democrats see little reason to give up the spending they like if enough Republicans won't meet them anywhere close to the middle. This is what happened after a similar measure passed in California, which now lurches from one fiscal crisis to the next. At least in Wisconsin, a future legislature might choose to repeal its law.

Against this cautionary history, Walker claims that the supermajority requirement will "help government operate within its means." But removing budgetary flexibility - on either the spending or the taxing side - is almost never a good idea, and doing so in the name of fiscal sanity is beyond daft. This problem isn't limited to Wisconsin. As Matt Miller pointed out on washingtonpost.com Wednesday, it is this sort of "budget discipline" - in which making "hard choices" means the other side's priorities suffer - that GOP lawmakers in the House of Representatives are taking toward the federal budget. This supermajority rule or a no-new-taxes pledge might satisfy Republicans' ideological imperatives. But they're not conducive to serious budget balancing.