TALE OF TWO STATES

Scott Walker Gets Schooled by His Neighbor

Minnesota Governor Mark Dayton is a classic tax-and-spend liberal. So why is his state walloping Scott Walker’s Wisconsin in terms of economic growth?

07.10.15 5:00 AM ET

Wisconsin and Minnesota share a common cultural heritage that until recently included a healthy Midwestern strain of progressive politics. Elected in 2010, Governor Scott Walker upended a hundred years of liberal populism, charting a conservative path for Wisconsin that made him a darling of the Republican Right, but left his state with a serious budget shortfall and disappointing job growth.

Meanwhile, across the border in neighboring Minnesota, Governor Mark Dayton has relentlessly pursued liberal policies, embodying the tax-and-spend Democrat that Republicans love to caricature. The result, surprising to many, is that the Minnesota economy is going gangbusters while Wisconsin’s job growth has fallen to 44th among the 50 states.

Dayton’s success steering his state’s progressive course has been a surprise. He was a middling senator at best, serving a single term from 2001 to 2007 before returning to Minnesota disillusioned with the way Washington operated. Time named him one of America’s “Five Worst Senators” in 2006, and he was known mainly for his inherited fortune as the great-grandson of the founder of Dayton’s department store, which became Target. As senator, he donated his salary to underwrite bus trips to Canada for senior citizens buying low-cost prescription drugs.

“Minnesota’s gains are not because Mark Dayton has overpowered the state with his political acumen,” says Lawrence Jacobs, a political science professor at the University of Minnesota. He describes the low-key Dayton as the “anti-politician,” someone the voters trust because he’s not smooth enough to fool them. “His skill is he has a clear agenda, and he’s unyielding. This is not pie-in-the-sky Great Society adventurism.”

Dayton has a majority Democratic legislature just as Walker has a Republican controlled legislature, bolstering the ongoing policy experiment in their states. The two governors have pursued agendas that mirror their respective party’s core beliefs, and the results so far suggest that the starve-the-government, tax-cutting credo of conservative orthodoxy has run its course.

Dayton has raised the minimum wage, and he’s significantly increased taxes on the top 2 percent of wage earners to close a budget shortfall and to raise money for investments in infrastructure and education. In the legislative session that just ended, some Democrats joined with Republicans to block his goal of expanding universal preschool. But he did get more scholarship money to educate 4-year-olds.

“This is the largest tax increase we’ve seen in Minnesota, over $2 billion,” says Jacobs. More than three-quarters of the new spending is on education, compared to Wisconsin, where education is on the chopping block, and Walker is at odds with professors and administrators alike at his state’s flagship university system.

Minnesota has also passed the state’s version of the Affordable Care Act (MNsure), and while its implementation has been rocky, it is in place and serving tens of thousands of people.

Dayton ran for governor in 2010 on an unapologetically liberal agenda, and won narrowly after a recount. He was reelected comfortably in 2014, and his approval rating in the latest Minneapolis Star Tribune poll is 54 percent. Contrast that with Walker’s 41 percent, and you’ve got a clear picture of how each is faring in the eyes of voters.

Dayton’s idiosyncratic style is in tune with the times, and at 68, he has no ambition for national office. Walker is running for president and touting hard-right policies that play well with Iowa caucusgoers. He opposed raising the minimum wage, has significantly weakened unions, reduced spending for education, cut taxes on the wealthy, and increased taxes on the middle class in part to pay for the tax cut. According to the nonpartisan Wisconsin Budget Project, Walker gave tax breaks that disproportionally favored upper-income earners while cutting $56 million in tax credits for working families.

Faced with a budget shortfall and no way to plug it without additional revenue, Republicans in the Wisconsin legislature are rebelling against additional spending cuts. But Walker shows no sign of softening his stance against raising taxes or fees. Other Republican governors, notably Louisiana’s Bobby Jindal, are in the same quandary.

“It seems like they’ve been backed into a corner and are just going forward with pure ideology and discounting any contradictory evidence,” says David Madland, author of Hollowed Out: Why the Economy Doesn’t Work without a Strong Middle Class.

As the director of the American Worker Project at the Center for American Progress, a liberal think tank, Madland in his book takes on the premise that inequality is good in the sense that helping the rich get richer is going to help everybody else, that a rising tide lifts all boats. Trickle-down economics has gotten a bad rap and is rarely invoked as a phrase anymore, but the belief that tax cuts are the engine of economic growth remains the core of GOP ideology.

That Minnesota’s economy rallied under progressive policies while Wisconsin’s has struggled is “one more data point proving that trickle down is wrong,” says Madland. While it’s tricky to attribute the well-being of a state’s economy solely to its political leadership, Minnesota is experiencing much stronger growth than its neighbor. Dayton has also proved responsive to the business community, easing early fears that his liberalism might go unchecked.

Walker, on the other hand, has doubled down to the detriment of his state on policies that are backfiring. And if voters in his home state aren’t buying what he’s selling anymore, that doesn’t bode well for his presidential campaign.