Bruce Murphy
Murphy’s Law

Tommy the Taxer

The old tax-and-spend governor Republican may be far too moderate to win the Republican Senate primary.

By - Jul 16th, 2012 08:13 am
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Tommy Thompson

Tommy Thompson

These are not the easiest days for Tommy Thompson. Long known for his super-energetic style, he is now 70 and gets worn out toward the end of campaign days. Once considered a leading conservative in the Republican party, he’s been targeted by attack ads from right-wing groups decrying him as a liberal on issues like Obama’s health care plan. Proclaimed the obvious front-runner in the race for U.S. Senate, he suddenly looks vulnerable after two recent polls showing businessman Eric Hovde catching up to Thompson in the polls. This could turn out to be Tommy’s last hurrah.

As governor, Thompson gave speech after speech touting his tax cuts.  “91 times I cut taxes…never raised taxes,” he once declared. But these were minor measures with little impact. The truth is that Thompson was a longtime fan of government who loved spending money. In the late 1990s, I wrote a story for Milwaukee Magazine dubbing him “Tommy the Taxer.” A study by the Legislative Fiscal Bureau found that in his first 12 years of office, state spending rose by 101 percent — more than twice the rate of inflation. The rate of increase was really without parallel during this period: the City of Milwaukee’s spending increase actually trailed the rate of inflation, while the federal government and even profligate Milwaukee County upped spending slightly faster than inflation.

During Thompson’s first 12 years in office, the average Wisconsin citizen’s income tax payments rose by 127 percent — more than two-and-a-half times faster than inflation. Sales taxes rose by 90 percent, nearly twice as fast as inflation. As a study back then by the Wisconsin Taxpayers Alliance found, income taxes had soared because in 1986 the state stopped “indexing” the income tax rates to account for inflation. The federal government adjusts its rates, and so did Wisconsin prior to 1986 (in the years prior to this, state income tax collections rose only at the rate of inflation).

Given all the money flowing into Tommy’s coffers, you might think he’d have cut back the state debt. Nope. It increased by 44 percent during these 12 years.

The number of state employees increased by more than 7,000 during this period, as Thompson increased employment faster than 35 states, as a study by Governing Magazine found. He was so friendly to the state employees union it did the unthinkable and endorsed him over the Democratic opponent on his last two runs for governor.

The orgy of spending ended in 1999, when a bipartisan law took effect indexing the income tax and ending the problem of “bracket creep,” as it was dubbed. By then, after 12 years of bracket creep, 80 percent of state taxpayers had moved into the top tax bracket.

The indexing bill was not championed by Thompson, but by the undistinguished state representative Carol Owens (R-Oshkosh), who had twice been voted one of the worst legislators in a media survey, and seemed to have only one issue, ending bracket creep. Her constant pushing on this issue helped prod GOP legislative leaders to embrace tax reform.

Thompson crowned his tenure as a tax-and-spend governor with the passage of an outrageous 1999 law that sweetened the state pension system’s payoff for Thompson and other veterans. The law was championed by union leaders and Thompson and passed by a bipartisan legislature, sweetening an already generous state pension plan at a long-term cost of $5.5 billion.

As with the infamous Milwaukee County pension plan, Thompson’s was skewed to deliver the big benefits to the insiders, the employees with the biggest salaries and longest tenure.  The lifetime value of Thompson’s already generous pension, for instance, grew by $111,000. Numerous high officials in the UW System gained a $7,000 to $12,000 sweetener in their annual retirement payment.

Back in the 1990s, Thompson proclaimed himself the true heir to Wisconsin Progressives like Fighting Bob LaFollette. That seemed a stretch, and not just ideologically; La Follette was surely a more frugal governor. But it speaks volumes about the way he tried to position himself back then, as opposed to today.

In January, not long after announcing his campaign for U.S. Senator, Thompson declared that,  “if you want a conservative, follow me.” He’s “way over on the right,” he told a Tea Party group. “I am a true conservative and make no bones about it,” he told the Huffington Post.

Thompson is still a good politician, but I doubt that even the most skilled tactician could pull off that big a change in image. Tommy’s record, and all the voluminous data on his big-government, big-spending style of leadership, is there for everyone to see.

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6 thoughts on “Murphy’s Law: Tommy the Taxer”

  1. Tyrell Track Master says:

    Well, I plan to vote democrat most likely, but if I had to vote Republican I’d still support Thompson as one of the only republicans who understands the importance of high speed rail!

  2. Garrick Jannene says:

    It’s almost as if the Republican has changed radically since the 2008 election and Thompson is a living relic of a bygone GOP… 😛

  3. Dave Reid says:

    @Tyrell Track Master Not anymore.

  4. David Blaska says:

    You make 2 mistakes: You measure only state taxes. Yet most states, and especially Wisconsin, have a yin/yang relationship with local governments. State government can offload duties to localities and stick them with the bill. Therefore, a governor’s effect on taxes should measure the impact on both state and local taxes.

    2) Best measure of taxes is the tax burden. The concept of tax burden is probably the most useful because it correlates the amount of taxes to personal income – that is, the ability to pay.

    When Tommy Thompson was elected governor in 1986, Wisconsin had the second-highest state and local tax burden in the U.S. When Thompson left office in 2001, Wisconsin had fallen to seventh highest. This is the conclusion of the nationally respected Tax Foundation.

    More, here: http://www.ibwisconsin.com/Blogs/Right-On/July-2012/Tony-was-the-taxer-not-Tommy/

  5. I do not remembeer of the Tommy tax cuts but the two I do were in the income tax but most important when he took over 2/3 of school funding my property taxes went way down.
    Thank you Tommy

    Interesting Bruce, when were you against spending?

  6. Bruce Murphy says:

    To Wisconsin Conservative Digest: I favored many of the things Thompson spent money on and opposed others. I don’t have a unilateral stand for or against spending. My point here is that Thompson simply wasn’t a fiscal conservative. And to David Blaska: if you look at local governments, the picture doesn’t change much: school aide increased greatly under Thompson but local governments (through revenue sharing) were starved.

    Finally, the Tax Foundation is not the best measure of relative state tax burden. Its reports are shallow. The WI Taxpayer’s Alllance (which uses Census data) shows Wisconsin’s tax burden rose under Thompson and finally dropped out of the top ten among the 50 states under Jim Doyle.

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