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The Whole Truth in Wisconsin Air Wars
Sorting out the facts in the recall election for governor.
by FactCheck
Posted on April 26, 2012
If using partial truths in political advertising is an art, then ads in the Wisconsin recall election for governor should be in a museum. Former Dane County Executive Kathleen Falk and Milwaukee Mayor Tom Barrett are among the Democrats seeking to unseat Republican Gov. Scott Walker in a race that has attracted national attention. And Wisconsin’s airwaves have been filled with political ads largely funded by out-of-state money. But viewers who want the whole truth are advised to ask themselves, “What am I not being told?”
Partial Truth: “Since the start of the year, Wisconsin has added thousands of new jobs.” – Gov. Scott Walker in a TV ad.
What’s Left Out: In addition to being governor of Wisconsin this year, Walker was also governor last year. It’s true that Wisconsin has added several thousand net jobs in the first few months of this year. But when you look at Walker’s entire time in office, including last year, Wisconsin has lost 14,200 jobs, and ranks dead last among the states in job creation.
Partial Truth: “During tough times, Falk brought in 26,000 new jobs.” — Wisconsin for Falk TV ad.
What’s Left Out: The number of jobs in the county grew 11.3 percent during Falk’s 14-year tenure. But that didn’t keep pace with the county’s population growth of 21 percent. So unemployment rose.
Partial Truth: Under Mayor Barrett, “Milwaukee has had one of the worst job creation records of any big city.” — Friends of Scott Walker TV ad.
What’s Left Out: The Bureau of Labor Statistics ranked Milwaukee 40th for unemployment among the 50 largest cities in the U.S. in 2010. But under Barrett, Milwaukee’s unemployment rate has gone up less than the national average.
Partial Truth: Falk “raised property taxes every single year, an increase of over 80 percent.” — Friends of Scott Walker TV ad.
What’s Left Out: While true in terms of tax revenues, it’s not true of tax rates. Most years, Falk capped taxes based on a formula that accounted for the county’s population growth and inflation. Nearly four out of five counties in Wisconsin increased property taxes at a higher rate than Dane County during Falk’s 14 years as county executive.
Partial Truth: Under Falk, in Dane County “the unemployment rate tripled.” — Friends of Scott Walker TV ad.
What’s Left Out: The unemployment rate in Dane County tracked state and national trends on unemployment through the great recession. Dane County’s unemployment rate was 2.1 percentage points below the state unemployment rate when Falk became county executive, and it was 2.6 percentage points below the state unemployment rate when she left.
Partial Truth: “Barrett’s city has one of the worst graduation rates in the country.” — Friends of Scott Walker TV ad.
What’s Left Out: It’s true that in 2008, an education research center ranked Milwaukee’s graduation rate 42nd out of the 50 largest districts in the country. But it’s also true that the city’s graduation rate has improved significantly during Barrett’s years as mayor.
Partial Truth: “We wiped out a $3.6 billion deficit.” — Walker in a campaign ad.
What’s Left Out: That’s true if you use the cash accounting method. However, using Generally Accepted Accounting Principles (GAAP) accrual accounting methods, there is a $3 billion deficit in Wisconsin’s budget in each of the next two years. While it’s perfectly legitimate for Walker to cite the cash accounting figure, that may confuse some folks who may remember that Walker used the GAAP figures to argue for cuts in state health programs.
Partial Truth: Walker says he balanced the budget “without raising taxes.” — Walker in a campaign ad.
What’s Left Out: Walker did reduce taxes overall, but his budget included reductions to two tax credits. Walker does not consider those tax increases, but the state’s nonpartisan Legislative Fiscal Bureau does.
Analysis
Riding a wave of Tea Party-fueled conservative momentum in the 2010 midterm elections, Republican Scott Walker defeated Democrat Tom Barrett to become Wisconsin’s 45th governor, which comes with a four-year term.
But Walker’s efforts to eliminate most collective bargaining rights for government employees sparked a national debate, and opponents collected enough votes for a recall election, which will be held on June 5. The race has drawn national attention and out-of-state money is pouring in for both Walker and the Democrats.
While collective bargaining rights may have fueled the recall effort, many of the political ads have been dominated by claims and counter claims — many of them seemingly contradictory — about jobs gained or lost and unemployment rates.
But before we dig further into these numbers, we want to note up front that many economists warn that while governors, and to a lesser extent county executives and mayors, can have marginal impact on job creation, job trends are largely driven by national economic factors.
“It’s fairly absurd for politicians to take credit or to be blamed for national economic trends over which they have zero impact,” said Andrew Reschovsky, a professor of public affairs and applied economics at the University of Wisconsin-Madison.
Still, studies show voters tend to punish politicians when times are tough, regardless of their culpability. And with all sides pushing jobs numbers to make their point, we think it’s important to point out where the statistics are being massaged.
Falk and Barrett are joined in the May 8 Democratic primary by two “long-shot” candidates, as described by the Milwaukee Journal-Sentinel: state Sen. Kathleen Vinehout and Secretary of State Doug La Follette. But Walker is already targeting Falk and Barrett, assuming one of them will be his likely opponent in the final balloting June 5.
Walker on Walker
Let’s start with an ad from the Walker campaign in which Walker boasts that he has produced results for Wisconsin and urges voters to “keep moving Wisconsin forward.”
⬐ Click to expand/collapse the full transcript ⬏
In his ad, Walker says in the three years before he took office, “Wisconsin lost 150,000 jobs” but that now, “employer confidence is up” and “since the start of the year, Wisconsin has added thousands of new jobs.”
It’s true that Wisconsin lost nearly 150,000 jobs in the three years before he took office. More precisely, Wisconsin lost 145,000 between January 2008 and December 2010, the month before Walker took office. The entire country was reeling from the recession, and the percentage of jobs lost in Wisconsin mirrored the percentage of jobs lost nationally (both losing a little more than 5 percent).
Now, for the second part of Walker’s claim, that “since the start of the year, Wisconsin has added thousands of new jobs.” Do you see what he’s done there? Walker has skipped entirely over 2011, his first year in office, and instead referenced job statistics for the first two months of 2012. Even so, the ad was barely true when it came out, and less so today after some unfavorable data for March. Between January and February, Wisconsin added 10,100 jobs. But then the Bureau of Labor Statistics reported that Wisconsin lost 4,500 jobs in March. So now, there’s been a net gain of 5,600 jobs in 2012.
But if you look at the jobs picture since Walker took office, Wisconsin has lost a net 14,200 jobs. In fact, Wisconsin has lagged behind the rest of the country in the recovery. While Wisconsin has lost jobs during Walker’s time in office, the country as a whole saw jobs increase by 1.8 percent.
Needless to say, Wisconsin is not on track for Walker to keep his campaign promise to bring the state 250,000 new jobs by 2015.
As the Greater Wisconsin Political Fund correctly pointed out in a recent ad, in 2011, “Wisconsin lost more jobs than any other state. Dead last.” That fact was also featured in an ad from the Barrett campaign. From January 2011 to January 2012, Wisconsin lost a net 12,700 jobs. According to a review by the Milwaukee Journal-Sentinel, that was the worst performance among all 50 states.
Walker: “We wiped out a $3.6 billion deficit without raising taxes.”
Walker’s claim that “we wiped out a $3.6 billion deficit without raising taxes” is also dubious. The state Constitution requires a balanced budget. And it’s true that Walker offered a balanced budget using the cash accounting method. However, using Generally Accepted Accounting Principles (GAAP) accrual accounting methods, there is a $3 billion deficit in each of the next two years. We won’t bore you with the differences in accounting methods. It’s perfectly legitimate for Walker to cite the cash accounting figure in his ad, but that may confuse some folks who may remember that Walker cited figures using an accrual accounting method when he argued for cuts in state health programs, because that made future deficits look worse.
Next, did Walker balance the budget without raising taxes? Walker did not propose any general tax increases, and he implemented several corporate tax reductions. But his claim that he didn’t raise taxes is not entirely true. The nonpartisan Legislative Fiscal Bureau labelled two tax credit reductions as tax increases. One measure reduced the earned income tax credit for people with two or more children, a change projected to net the state an added $56.2 million over two years. Another reduced the homestead tax credit, bringing the state $13.6 million over two years. Walker argued those were spending cuts, not tax increases. But suffice to say, those who got those credits before, and don’t now, probably consider them to be tax increases. Walker also raised tens of millions of dollars by increasing a number of fees.
Walker Attacks Falk
In early April, Walker unveiled two new attack ads, one targeting Falk, the other Barrett. We’ll start with the ad attacking Falk.
⬐ Click to expand/collapse the full transcript ⬏
Portraying Falk as a tax and spend liberal, the ad claims Falk “raised property taxes every single year, an increase of over 80 percent.” That’s only true as measured by total tax revenue, which included a boost from population growth. It’s not true of the tax rates paid by individual homeowners. According to data from the nonpartisan Wisconsin Taxpayers Alliance, Dane County property tax levies went from $73,705,637 in 1996-1997, the year before her first budget, to $133,068,833 in 2010-2011, her last budget. That’s an increase of just over 80 percent.
That doesn’t sound as bad if you consider Dane County’s population grew by about 85,000 people, a 21 percent increase, during Falk’s time. One would expect spending to increase to keep pace not only with inflation but also with population growth. And, in fact, spending went from $284 million in 1997 to $500 million in 2011, a $216 million increase, or roughly 76 percent.
For most of Falk’s 14 years as county executive, she held to a self-imposed cap on property taxes tied to inflation and population growth. One glaring exception was in 2010, when the property tax rate rose by 7.6 percent (when the formula would have capped it at 1.19 percent). That was the second highest county hike in Wisconsin that year. The higher rate was necessary, Falk said at the time, to cope with the recession. The recession greatly reduced revenues due to a drop in sales tax from weak consumer spending, a decline in real estate sales and reduced income from county investments. Sticking to her self-imposed cap “would have resulted in painful cuts to public safety and human services that are unacceptable to me,” Falk said in a press release at the time.
Overall, during the years Falk served, property tax levies in Dane County increased less than they did in most counties in Wisconsin. On average, county tax levies in Wisconsin increased nearly 92 percent over that same time frame (again, they rose about 80 percent in Dane). According to data from the Wisconsin Taxpayers Alliance, nearly four out of five counties in Wisconsin increased property taxes at a higher rate than Dane.
The property tax rate in Dane County actually dropped from $3.63 to $2.73 per thousand of assessed value. The average tax rate in the state was $4.18.
Differing Governing Styles
This is a good point to note the very distinct governing approaches of Falk and Walker, who also served as a county executive, for Milwaukee County from 2002 to 2010.
While Falk mostly stuck to her self-imposed cap based on growth and inflation, Walker proposed no tax levy increases every year and vetoed attempts by the county board to increase it. However, as our fact-checking colleagues at PolitiFact Wisconsin noted, “the County Board almost always overrode him, complaining his budgets were unrealistic.”
While Walker each year proposed to keep the tax levy constant at the current year’s level, he did not propose that it go back to the level he had proposed the year before. Therefore, in his final year, Walker proposed a tax levy well above what it was when he took office.
Indeed, both counties raised property taxes: Dane’s levy went up $59 million in Falk’s 14 years, while Milwaukee’s rose $51 million over Walker’s nine years. Both increases would be due partly to population growth.
Unemployment Under Falk
The ad also claims unemployment tripled when Falk served as Dane County executive.
According to data from the Bureau of Labor Statistics, the unemployment rate in Dane County went from 1.6 percent in April 1997, when Falk took office, to 5.0 percent in April 2011, when she left office. That’s close, but not quite triple. More important, though, it’s in line with the rise in the unemployment rate statewide. Over the same period, unemployment rose from 3.8 percent to 7.5 percent statewide.
This can be viewed two ways. It’s true that while Falk was county executive, the Dane County unemployment rate rose 188 percent while the state unemployment rate rose 97 percent. But it’s also true that Dane County’s unemployment rate was 2.1 percentage points below the state unemployment rate when Falk took office, and it was 2.6 percentage points below the state unemployment rate when she left.
Falk Brought Jobs?
An ad from Wisconsin for Falk boasts that “during tough times, Falk brought in 26,000 new jobs.”
⬐ Click to expand/collapse the full transcript ⬏
The unemployment rate nearly tripled during Falk’s tenure at the same time Dane County added 29,000 jobs? Is that possible? Actually, it is. Dane County’s population grew by about 85,000 people, a 21 percent increase, during Falk’s time.
Dane County added 29,032 jobs between April 1997 and April 2011, according to data from the state’s Workforce Information Database and Wisconsin’s WORKnet database, even as the unemployment rate went up. The ad says Falk “brought in” these jobs “during tough times.” To be sure, there were tough times with the recession near the end of Falk’s tenure as Dane County executive. But there were good economic times too over her 14 years.
An ad from the Falk campaign didn’t put a hard number on the employment gains, but it did boast that under Falk, the county’s employment gains were tops in the state.
⬐ Click to expand/collapse the full transcript ⬏
In the ad, Falk says, “Together we added more jobs than any other area while holding taxes down.” It’s true that Dane County added more jobs than any other county in Wisconsin during Falk’s time as county executive. But there’s a matter of scale. Dane is the second most populous county in the state. Looking at employment gains on a percentage basis, there was an 11.3 percent increase in the number of jobs in Dane County under Falk. That was the 12th highest percentage increase among the state’s 72 counties.
Walker Attacks Barrett on Jobs & Schools
An ad from Walker’s campaign accuses Democrat Barrett of leading Milwaukee backward, with a poor record on both jobs and high-school graduation rates.
⬐ Click to expand/collapse the full transcript ⬏
It claims that “under Barrett, Milwaukee has had one of the worst job creation records of any big city in the U.S.” That’s true, but by no means the whole story.
Walker campaign officials told us they based that statement in part on a two-year-old quote from a university-based development expert, but that expert told us his remark was being misused, and is out of date.
The quote is from Marc Levine, executive director of the Center for Economic Development at the University of Wisconsin-Milwaukee, in a Sept. 28, 2010, story by the Milwaukee Journal-Sentinel: “Our analysis of employment data shows that Milwaukee has had among the worst job creation records of any big city in the U.S. for over a decade.”
But when we reached out to Levine via email, he said the situation has now changed for the better, and that in any case, Walker himself shares some responsibility for Milwaukee’s economy.
Levine’s figures show that throughout the decade of the 2000s, Milwaukee consistently ranked in the bottom seven or eight among the 50 largest cities based on an indicator measuring employment growth. Sometimes the city was second or third from the bottom. However, he said, “as Milwaukee came out of the recession by 2010, that had changed, and Milwaukee’s ranking had slightly improved.” In the most recent report from January 2011, Milwaukee ranked 36th out of 50.
“In addition,” Levin wrote to us in an email, “it should be pointed out that whatever Milwaukee’s employment performance during this period, Scott Walker was a decision-maker in the region as was Tom Barrett: so, whatever Milwaukee’s ranking, Walker can’t absent himself from the results.” [Walker was the Milwaukee County executive from 2002 through 2010.]
The Walker campaign also pointed us to annual charts from the Bureau of Labor Statistics that rank the unemployment rates for the 50 largest cities in the U.S. In 2005, 2006 and 2007, the unemployment rate for Milwaukee was sixth highest. It was 16th highest in 2008; 10th highest in 2009; and 11th highest in 2010.
That’s not great. But Milwaukee’s struggles began long before Barrett took office. Among the biggest cities, Milwaukee’s unemployment rate was 7th highest in 2004, 6th highest in 2003 and 9th highest in 2002.
The last piece of evidence cited by the Walker campaign is that Milwaukee’s unemployment rate went from 8.1 percent when Barrett took office, and was at 10.5 percent in February. That’s a nearly 30 percent increase, Walker’s campaign noted. Using that same time period, the national unemployment rate actually rose at a faster clip, by 45 percent. Or put another way, Milwaukee’s unemployment rate was 2.5 percentage points higher than the national average when Barrett took office, and it’s 2.3 percentage points higher now.
Graduation Rates
The ad also claims that “Barrett’s city has one of the worst graduation rates in the country.” As backup, the Walker campaign pointed us to a report from the EPE Research Center, a division of the nonprofit organization that publishes Education Week. That report ranked Milwaukee’s graduation rate 42nd out of the 50 largest districts in the country.
According to the center’s formula, Milwaukee had a graduation rate of 50.9 percent in 2008, the latest year for which the data are available. That’s far below the national average, which was 71.7 percent that year.
But it’s not the whole truth. As historical data from the EPE Research Center also shows, Milwaukee’s graduation rate has been gradually improving. It was 43.1 percent in 2003, the year before Barrett took office.
– by Robert Farley, with Dave Bloom and Wendy Zhao
Sources
Dennis, LaToya. “Outside Money Expected to Fuel Gubernatorial Recall Election.” WUWM News. 2 Apr 2012.
Associated Press. “Wisconsin Governor Fights Recall with Out-of-State Cash.” 24 Jan 2012.
Stein, Jason. “Labor group to spend half million more for Falk.” Milwaukee Journal Sentinel. 12 Apr 2012.
Stevenson, Betsey and Wolfers, Justin. “Trust in Public Institutions over the Business Cycle.” American Economic Review. 2011
Stein, Jason and Marley, Patrick. “Falk, Barrett won’t say what they’d spend to restore Walker cuts.” Milwaukee Journal Sentinel. 22 Apr 2012.
Project Vote Smart. “Walker Outlines Blueprint to Bring 250,000 Jobs to Wisconsin.” Press release: Scott Walker. 16 Sep 2010.
YouTube. Greater Wisconsin Political Fund TV ad: “Scott Walker’s Wisconsin, dead last in job creation: Recall Scott Walker.” 21 Apr 2012.
YouTube. Barrett for Governor TV ad: “Civil.” 11 Apr 2012.
Gilbert, Craig. “The politics of Wisconsin’s sluggish job growth.” Milwaukee Journal Sentinel. 15 Mar 2012.
Kaiser, Lisa. “Scott Walker v. Reality.” Express Milwaukee.com. 01 Feb 2012.
ABC WBAY. “Cash vs. accrual accounting.” 03 May 2010.
Lang, Bob. Letter to Wisconsin Legislature: “State Tax and Fee Modifications Included in 2011 Act 32.” 05 Jul 2011.
Wisconsin Taxpayers Alliance. “County Property Tax Levies, 1989-90 to 2011-12.”
Dane County website. Historical Table: Dane County Population.
Dane County website. 2010 Adopted Budget.
Dane County website. Press release: “County Executive Falk Introduces ‘Shared Sacrifices.’ 2010 Budget.” 01 Oct 2009.
Umhoefer, Dave. “Lt. Gov. Rebecca Kleefisch says Kathleen Falk raised taxes by millions every year as Dane County executive.” PolitiFact Wisconsin. 03 Feb 2012.
Wisconsin’s WORKNet database. Local Area Unemployment Statistics (LAUS).
Glauber, Bill and Poston, Ben. “Milwaukee now fourth poorest city in nation.” Milwaukee Journal Sentinel. 28 Sep 2010.
University of Wisconsin, Milwaukee, Center for Economic Development. “Monthly Employment Watch: Milwaukee and the Nation’s Largest Cities.” January 2011.
Bureau of Labor Statistics. Unemployment Rates for the 50 Largest Cities, 2008.
Education Week. Graduation rates in the nation’s 50 largest districts for the class of 2008. EPE Research Center. 2011.
EPE Research Center. School District Graduation Report, Milwaukee School District.
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