Extremist 'business friendly' governors destroying their states' economies

Sluggish job growth and lower wages are the result of state government cuts to corporate taxes and public services, according to new data.

We've already noted that two states with extreme governors, Kansas and Wisconsin, are hurting economically. Talking Points Memo noticed it too. In a story today, TPM points out that Gov. Sam Brownback has been like a baby with a nail gun on Kansas' economy:

His biggest experiment in his laboratory has been a series of major tax bills that shift the impact of taxes down the income spectrum, cutting income taxes and corporate taxes and leaning more heavily on sales taxes. 

The only problem? The fiscal disaster his changes created: 

“Kansas is now hundreds of millions of dollars short in revenue collection, its job growth has lagged the rest of the nation, and Moody's has cut the state's bond rating. ‘Governor Brownback came in here with an agenda to reduce the size of government, reduce taxes, and create a great economic boom,’ says University of Kansas professor Burdett Loomis. ‘Now there's been a dramatic decline in revenues, no great increase in economic activity, and we've got red ink until the cows come home.’”

Gov. Rick Perry claims a 'Texas Miracle' results from low taxes, low regulation, tort reform, and “don’t spend all the money.” Some miracle. According to Washington Monthly,

The state may offer low housing prices compared to California and an unemployment rate below the national average, but it also has low rates of economic mobility, minimal public services, and, unless you are rich, taxes that are as high or higher than most anywhere else in America. And worse, despite all the oil money sloshing around, Texas is no longer gaining on the richest states in its per capita income, but rather getting comparatively poorer and poorer.

And then there's Wisconsin. TPM notes,

Finally, no description of the failed experiments of conservative governors is complete without noting the sad record of Wisconsin’s Scott Walker, who went to great and campaign-finance-law-stretching lengths to gain and hold his office. He promised that his agenda would deliver economic growth and bountiful new jobs; the reality has fallen far short. As Marc Levine writes, not only have Walker’s policies not delivered the 250,000 jobs he claimed they would, they may have actually held back job growth in the state, as Wisconsin’s economy falls behind those of its neighbors.

The GOP's plan to wipe out the middle class in your state

Where the red-state model is headed. 

Billionaire-backed Republicans are turning their weapons of mass economic destruction on the states, since they failed to win the presidency and control of the Senate.

The GOP would have even lost control of the House of Representatives had it not been for the magic of gerrymandering. After all, 1.1 million more Americans voted for Democratic House candidates than Republicans.

Extremist Republicans have a problem: Most Americans don't want to wipe out the middle class the way they do. So the GOP has come up with a message that the way to make people rich is to first make them poor.

Most people don't buy that either. But enough people buy it that Republicans can win control of state governments through a combination of gerrymandering, voter suppression and vast amounts of corporate-funded propaganda.

And once these extremists do take control of state government, watch out.

Wisconsin Job-killer Gov. Scott Walker  is perhaps the poster boy for what's called the red-state strategy. With the help of a Republican (i.e., gerrymandered) Legislature, Walker slashed public investment, weakened collective bargaining rights, gave corporations more power to harm consumers without redress and fired thousands of workers. Business activity in Wisconsin is sputtering, the Center for Media and Democracy reports. Wisconsin lags the rest of the nation in job creation, incomes are falling and corruption scandals are engulfing the government. (But hey, the Koch brothers are happy.)

It's known as the red-state model.It's also known as austerity, and it's destroying Europe's economy right now.

The Center on Budget and Policy Priorities points out that since the Great Recession began in 2008, states cut billions from their budgets and hundreds of thousands from their payrolls:

States have been forced to close enormous budget shortfalls totaling nearly $600 billion since the 2009 fiscal year.  The actions that states have taken to close these budget gaps, primarily spending cuts, have imposed a significant drag on the economic recovery.  Since the recession took hold in August 2008, state and local governments have shed 675,000 jobs.

Raising revenue from the rich is off the table. From the poor, not so much. In state after state, GOP governors want to end income and corporate taxes (which helps the rich) and raise the sales tax (which hurts the poor):

• Louisiana Gov. Bobby Jindal wants to raise taxes on the bottom 80 percent of the state and lower them for the top 1 percent by repealing corporate and income taxes and raising the sales tax. 
• Ohio Gov. John Kasich has already cut the estate tax for the top 7 percent of Ohioans. Now he wants to tax all services, including haircuts and funerals; such taxes will fall disproportionately on poor and working families. 
• Nebraska Gov. Dave Heineman of Nebraska wants to end individual and corporate income taxes while eliminating nearly all the state's 84 sales tax exemptions. 
• Gov. Sam Brownback of Kansas wants to make permanent a temporary increase in the state sales tax so he can lower and eventually end his state’s income tax.

Lynn Parramore describes the red-state model in a recent Alternet article:

... it’s called Mississippi. Or Texas. Or any number of states characterized by low public investment, worker abuse, environmental degradation, educational backwardness, high rates of unwanted pregnancy, poor health, and so on... 

In Kansas, the Wall Street Journal reports that Governor Sam Brownback is aiming to up his profile “by turning Kansas into what he calls Exhibit A for how sharp cuts in taxes and government spending can generate jobs, wean residents off public aid and spur economic growth.” In remarks quoted in the same article, Brownback announced that "My focus is to create a red-state model that allows the Republican ticket to say, 'See, we've got a different way, and it works.’ "

Speaking of Mississippi, a bill passed the House to preempt local laws requiring higher minimum or living wages as well as paid sick days. Louisiana last year passed a bill to ban local laws requiring paid sick days.

Those two perennial outlier states aren't the only ones. Maine's Tea Party Gov. Paul LePage signed a bill that rolled back child labor laws. Last year Florida lawmakers unsuccessfully tried to make laws preventing wage theft illegal. And Michigan and Indiana passed No Rights At Work laws in 2012.

Parramore describes a grim future unless the red-state model is crushed:

Red-state model proponents claim that their maneuvers will spark economic growth. But that was basically what George W. Bush had in mind when he supported a similar program for cutting taxes on the rich. That didn’t work out so well, and increased the very deficits Republicans decry. 

But here’s the really scary part. Slashing taxes, squeezing workers and throwing out environmental protections can indeed lure businesses to states where they won’t have to pay their fair share and can get away with all sorts of abuse. If a state like North Carolina promotes such policies, businesses from nearby states like Virginia may indeed move their operations down the road. ... what results is simply trade diversion, not genuine growth. In other words, one state’s gain is another state’s loss. The result is a headlong race-to-the-bottom whereby the states losing business will be pressured to slash their taxes and burden their workers and ordinary citizens, too. Nobody wins in that game -- except the 1 percent. 

The blue-state model, evident in high-income states like Massachusetts, has long been associated with high levels of state investments in education, transportation and other public goods. And guess what? It's also associated with economic strength.

Be very, very afraid.

Now the election is over, War on Worker battles begin in the states

Extreme, anti-worker Republicans will be especially dangerous this year in the 24 states where the GOP controls the governor's office and both legislative chambers. Working families fought hard against the attacks on them last year and will continue to fight in 2013. They'll have to. Brother Kenneth Quinnel at the AFL-CIO posted a blog that outlines the upcoming battlefields: 

Budget Cuts (likely to be proposed in as many as 29 states): ...the top targets for cuts are likely to be government programs, services and the state employees who deliver the services. Example: Alaska Gov. Sean Parnell (R) proposed a budget for this year that cut total spending by $800 million...

Paycheck Deception/Restrictions on Public Sector Payroll Deduction (20 states): These misleading proposals would prohibit any use of payroll-deducted dues for purposes deemed to be "political" by conservatives. Workers are already protected in every state from being forced to have their money support political activities, so these laws are little more than an attempt to weaken the voice of working families... Example: While California voters defeated paycheck deception for the third time in 14 years by voting down Prop. 32 in November, few believe that the proposals backers are done trying to get it passed.

Project Labor Agreements (19 states): Despite the evidence ... conservatives are trying to weaken or ban them as a way to increase profits for their allies in the construction business. Example: Conservatives in North Dakota are pushing to ban PLAs.

Prevailing Wage (22 states): As a way to placate the contractors who give to their campaigns, conservatives are looking to curtail prevailing wage laws, which would mean contractors could pay workers substandard wages. Example: In Michigan, the same Mackinac Center that championed the recently passed "right to work" for less law is pushing for repeal of all local prevailing wage laws.

Privatization (31 states): Evidence is clear that privatization of government services frequently increases costs and lowers the quality of services while it also shifts government funding to private interests and weakens accountability for the provision of those services. Example: While the November elections might stop the push to create privatized prisons in New Hampshire, Gov. Tom Corbett (R) of Pennsylvania is looking to privatize the state's lottery.

Public Education (37 states): Education is one of the largest budget items that states deal with and it is a goldmine for private interests looking to profit off of public funding. ... Example: Tennessee Gov. Bill Haslam (R) created a task force to craft a plan to implement school vouchers.

Public-Sector Benefits (31 states): More and more often, public-sector benefits, such as pensions, are falsely blamed for budget deficits that are caused by Republican policies and a bad economy. Rather than finding ways to increase revenue, a growing tactic is to break promises made to working families. Example: Activists in California are actively seeking to cut government employee pensions, saying that the "crisis" in pensions is a "tsunami."

Public-Sector Collective Bargaining (22 states): Government employees are an easy target for conservative lawmakers and the fewer rights those workers have, the easier it is for politicians to cut their benefits and pay, or fire them altogether. Example: The Illinois Senate passed a measure last week that would prevent some government employees from joining collective bargaining units and Gov. Pat Quinn (D) has expressed willingness to support the bill.

Public-Sector Layoffs (16 states): Rather than investing taxpayer money wisely or raising revenue, conservatives are choosing to lay off public-sector workers, one of the key reasons the jobs recovery is slow. Example: Despite evidence that previous layoffs haven't helped North Carolina's economy, more job cuts are being pushed for in 2013.

"Right to Work" for Less (15 states): Based entirely on the false premise that workers are forced to join unions, "right to work" laws do little but make it easier for employers to pay their workers less. Example: After "right to work" legislation was sneaked through by Gov. Rick Snyder (R) in a special session in Michigan last month, supporters of the anti-worker laws are looking for the next state where they could have success ...

Tax Issues (17 states): Right-wing antitax ideology has led to a series of proposals such as the misnamed "taxpayer bill of rights" and requirements for supermajorities in order to raise tax rates that cripple state and local governments and increase the likelihood that public-sector workers will be fired ... Example: For the second year in a row, Pennsylvania Republicans are pushing a bill modeled after the taxpayer bill of rights.

Teacher Tenure (20 states): Proposals to eliminate teacher tenure are thinly veiled attempts to weaken the rights of educators and allow states to pay them less. Example: Missouri teachers are gearing up to fight legislative proposals that might weaken or eliminate tenure.

Unemployment Insurance (20 states): Despite the fact that unemployment insurance is paid for by employers as part of their compensation to workers, states are trying to weaken the system and make it harder for struggling families to collect the benefits they've earned. This allows them to redirect UI funds towardother purposes. Example: North Carolina Republicans introduced a bill that would cut benefits for jobless residents.

Voter Suppression (19 states): Despite the fact that there is little to no evidence that voter fraud is a significant problem in any state, conservatives are pushing laws that make it harder for law-abiding, registered voters to participate in the democratic process. ... Example: West Virginia Republicans are attempting to require voters to show a photo ID at the polls.

Workers' Compensation (26 states): The all-out assault on the rights of working families goes as far as to threaten Workers' Compensation, which is already a compromise that allows employers to avoid lawsuits when their workers get hurt on the job. Example: Oklahoma Senate President Pro Tem Brian Bingman (R) recently said that "reforming" the workers' compensation system was one of his top priorities, which in all likelihood points to the reduction of benefits if he is successful.