What happened in Wisconsin signals a shift in political mood and assumption. Public employee unions were beaten back and defeated in a state with a long progressive tradition. The unions and their allies put everything they had into “one of their most aggressive grass-roots campaigns ever,” as the Washington Post’s Peter Whoriskey and Dan Balz reported in a day-after piece. Fifty thousand volunteers made phone calls and knocked on 1.4 million doors to get out the vote against Gov. Scott Walker. Mr. Walker’s supporters, less deeply organized on the ground, had a considerable advantage in money.

But organization and money aren’t the headline. The shift in mood and assumption is. The vote was a blow to the power and prestige not only of the unions but of the blue-state budgetary model, which for two generations has been: Public-employee unions with their manpower, money and clout, get what they want. If you move against them, you will be crushed. 

Mr. Walker was not crushed. He was buoyed, winning by a solid seven points in a high-turnout race.

Governors and local leaders will now have help in controlling budgets. Down the road there will be fewer contracts in which you work for, say, 23 years for a city, then retire with full salary and free health care for the rest of your life—paid for by taxpayers who cannot afford such plans for themselves, and who sometimes have no pension at all. The big meaning of Wisconsin is that a public injustice is in the process of being righted because a public mood is changing.

Political professionals now lay down lines even before a story happens. They used to wait to do the honest, desperate, last-minute spin of yesteryear. Now it’s strategized in advance, which makes things tidier but less raggedly fun. The line laid down by the Democrats weeks before the vote was that it’s all about money: The Walker forces outspent the unions so they won, end of story.

Money is important, as all but children know. But the line wasn’t very flattering to Wisconsin’s voters, implying that they were automatons drooling in front of the TV waiting to be told who to back. It was also demonstrably incorrect. Most voters, according to surveys, had made up their minds well before the heavy spending of the closing weeks.

Mr. Walker didn’t win because of his charm—he’s not charming. It wasn’t because he is compelling on the campaign trail—he’s not, especially. Even his victory speech on that epic night was, except for its opening sentence—”First of all, I want to thank God for his abundant grace,” which, amazingly enough, seemed to be wholly sincere—meandering, unable to name and put forward what had really happened.

But on the big question—getting control of the budget by taking actions resisted by public unions—he was essentially right, and he won.

Associated PressWisconsin Gov. Scott Walker. (more…)

In his January 2011 inaugural address, California Gov. Jerry Brown declared it a “time to honestly assess our financial condition and make the tough choices.” Plainly the choices weren’t tough enough: Mr. Brown has just announced that he faces a state budget deficit of $16 billion—nearly twice the $9.2 billion he predicted in January. In Sacramento Monday, he coupled a new round of spending cuts with a call for some hefty new tax hikes.

In his own inaugural address back in January 2010, New Jersey Gov. Chris Christie also spoke of making tough choices for the people of his state. For his first full budget, Mr. Christie faced a deficit of $10.7 billion—one-third of projected revenues. Not only did Mr. Christie close that deficit without raising taxes, he is now plumping for a 10% across-the-board tax cut. 

It’s not just looks that make Mr. Brown Laurel to Mr. Christie’s Hardy. It’s also their political choices.

Governors of both parties have promoted education reform, but so far no one has delivered more than Louisiana’s Bobby Jindal. This week he’ll sign two bills that offer a national model for competition and parental choice.

Louisiana’s new laws will essentially give all parents an average of $8,500 to use for their child’s education as they see fit. They can keep their child in their local public school, but they can also try to get Johnny into a more demanding charter school, or a virtual school, or into special language or career-training courses, among other options.

Nearly 400,000 low-income children—a bit more than half of all students—will also be eligible for vouchers to attend private schools. State officials estimate that about 2,000 students will use vouchers this September given private-school capacity limits, but that tens of thousands will do so over time. (more…)

By ALLYSIA FINLEY

Providence, R.I.

So this is Gina Raimondo? The state treasurer who single-handedly overhauled Rhode Island’s pension system and has unions screaming bloody murder? I had imagined her a bit, well, bigger. If not larger than life like New Jersey Gov. Chris Christie, then at least life-size. Ms. Raimondo couldn’t be much taller than five feet, which may have caused some to underestimate her. That isn’t the only thing that may have surprised people.

The former venture capitalist is a Democrat, which means that she believes in government as a force for good. But “a government that doesn’t work is in no one’s interest,” she says. “Budgets that don’t balance, public programs that aren’t funded, pension funds that are running out of money, schools that aren’t funded—How does that help anyone? I don’t really care if you’re a Republican or Democrat or you want to fight about the size of government. How about a government that just works? Put your tax dollar in and get a return out the other end.”

Yes, that would be nice. Unfortunately, public pensions all over the country are gobbling up more and more taxpayer money and producing nothing in return but huge deficits. It’s not even certain whether employees in their 20s and 30s will retire with a pension, since many state and municipal pension systems are projected to run dry in the next two to three decades.

That included Rhode Island’s system until last year, when Ms. Raimondo drove perhaps the boldest pension reform of the last decade through the state’s Democratic-controlled General Assembly. The new law shifts all workers from defined-benefit pensions into hybrid plans, which include a modest annuity and a defined-contribution component. It also increases the retirement age to 67 from 62 for all workers and suspends cost-of-living adjustments for retirees until the pension system, which is only about 50% funded, reaches a more healthy state. (more…)

The clock’s running out on Detroit. City leaders are up against a $200 million deficit driven by exploding labor costs and may not be able to pay the bills come May. The state of Michigan has just swept in with a deux ex machina. Trouble is, city pols don’t like the strings attached.

Governor Rick Snyder is offering Detroit a “consent agreement,” which includes $100 million of state-backed bonds that would tide the city over until labor agreements can be restructured. The catch: Labor agreements will have to be restructured. The compact between the state and the city would turn over financial decision-making to a nine-member financial advisory board of state and city appointees who would have the authority to amend labor contracts.

Legacy costs are bankrupting Detroit just as they crushed its automakers. Firefighters can retire at 55 and earn 70% of their highest salary plus a 2.25% annual cost-of-living inflator in perpetuity. The result? Employee benefits alone now make up about half of the city’s general fund. Health costs have grown by more than 60% since 2008 while the city’s pension bill has quadrupled to $200 million. (more…)

By MICHAEL J. BOSKIN and JOHN F. COGAN

Long a harbinger of national trends and an incubator of innovation, cash-strapped California eagerly awaits a temporary revenue surge from Facebook IPO stock options and capital gains. Meanwhile, Stockton may soon become the state’s largest city to go bust. Call it the agony and ecstasy of contemporary California.

California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility. But then something went radically wrong as California legislatures and governors built a welfare state on high tax rates, liberal entitlement benefits, and excessive regulation. The results, though predictable, are nonetheless striking. From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

California’s economy, which used to outperform the rest of the country, now substantially underperforms. The unemployment rate, at 10.9%, is higher than every other state except Nevada and Rhode Island. With 12% of America’s population, California has one third of the nation’s welfare recipients. (more…)

By STEPHEN MOORE

Williston, N.D.

In his speech last week responding to high gas prices, President Barack Obama insisted that “we can’t just drill our way out of” our energy woes. Actually, we can—and if the president wants proof, he should travel to boomtown USA: Williston, North Dakota.

Williston sits atop the Bakken Shale, which will later this year be producing more oil than any other site in the country, surpassing even Alaska’s Prudhoe Bay, the longtime leader in domestic output. This once-sleepy town is what the Gold Rush might have looked like had it happened in the time of McDonald’s, Wal-Mart and Home Depot. And the oil rush is making Dakotans rich in a hurry, with farmers and other landowners becoming overnight millionaires from lucrative royalties and leases. One retired farmer tells me that, thanks to oil rigs churning on his property, he suddenly has a net worth north of $30 million.