Reality Check: Neumann's Tax Cut, Job Creation Claims
Updated On: Sep 09 2010 07:07:36 AM CDT
As WISC-TV continues with its We the People Wisconsin Fact Finder reports, it's looking at a claim by Republican candidate for governor Mark Neumann about cutting taxes and creating jobs.
Neumann has claimed he would cut taxes 24 percent and create 300,000 jobs.
He has tried to corner the market on business smarts in the gubernatorial campaign. In a recent ad, he explains his business plan for the state.
"I'm a business owner, and my no-gimmicks business plan shows how we will cut taxes 24 percent," Neumann says in the ad.
A WISC-TV analysis found this is misleading.
Neumann would not cut taxes 24 percent in one year. He's proposing a 3 percent cut per year for eight years, at the end of a hypothetical second term, WISC-TV reported.
Plus, he's assuming strong economic growth to do it. He assumes state revenues will grow about 5 percent a year, and he said he'll only increase spending by 2 percent. That leaves him with 3 percent left over in the budget each year, which he said he'd use to cut taxes, WISC-TV reported.
But a WISC-TV analysis found some problems with the scenario.
First, no one can guarantee 5 percent growth. In fact, last year the state saw a 7 percent drop in revenues, although growth is projected at 5.4 percent next year.
Second, this plan doesn't deal with a multibillion dollar structural deficit facing a new governor, WISC-TV reported.
Third, cutting state spending by this amount could cut aid to local governments or school districts, forcing them to drive up property taxes.
Finally, there's a question of whose taxes are getting cut. It won't be the average resident's taxes at first.
Neumann said he'd get rid of the hospital tax and other business taxes first that were passed during Gov. Jim Doyle's administration, then use a committee to decide where other tax cuts could be most helpful.
In short, WISC-TV found it's misleading to say he'll cut taxes 24 percent.
Then, Neumann goes on to say in the ad that he'll, "create 300,000 new jobs, and make sure our kids are the best educated in the world."
A WISC-TV analysis found this needs clarification. Neumann said he believes he can create 300,000 jobs from one concept -- research triangles. It's a program piloted in North Carolina where businesses partner with universities to share ideas, create jobs and bring new businesses to the area. The program there claims it has created 110,000 jobs in five years, and Neumann promises these jobs by 2020.
But can 30,000 jobs be created at each of 10 research parks in the state? Neumann's only proof it can be done is North Carolina, and he is counting "trickle-down" jobs too, like grocery store clerks and construction jobs needed to expand these areas.
As an example in Wisconsin, though, University of Wisconsin-Madison's Research Park has been open for 26 years and employs 3,500 people. There's no estimate for how many other jobs this has brought to the area.
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