Thursday, October 23, 2014

Transportation Fund- looking up for now, lot worse later

One item that's lurking under the surface in the 2014 elections in Wisconsin deals with how to handle the state's issues in funding transportation. And that was part of the news that was buried within the state's Annual Fiscal Report that was released last month. The major news relating to the AFR was the General Fund situation (click here for a rundown on that and the looming General Fund deficits over the next 3 years), but the Transportation Fund’s condition statement is also in Page 4 and 5 of the Appendix, and let's take a look at it to see what it says for the 2013-14 July 1- June 30 fiscal year.

Starting balance +$153.48 million
Ending balance +$101.49 million
CHANGE -$51.99 million

This would seem worrysome to be $52 million in the hole for last year, but it’s actually better than the $120.7 million decrease that was projected, based on the Transportation Fund’s projections when the budget was passed in 2013, as well as a $43.0 in additional highway repair that was passed over the winter (and now you know why you've seen orange cones everywhere the last few months- who says Republicans don’t believe in stimulus?).

A big reason for the better numbers is because of a surprising increase in fuel taxes (up $32.4 million from the prior fiscal year, and $27.6 million over projections) and in net vehicle registration fees (up $29.8 million). Expenses also were slightly below projections (by about $39.7 million), which allowed the Transportation Fund to get by without $25.75 million in expected transfers from the General Fund. I mentioned that delay last week, and it was done in no small part by the Walker Administration to artificially prop up the state’s year-end General Fund in time for the AFR report, but they also could get away with holding that money back given the large carryover balance.

That extra payment is coming in for this fiscal year, and it’ll boost up Transportation Fund revenues accordingly (hurting the General Fund in the process). Combine that with an assumption that fuel tax and vehicle registration fees will stay at the high level they were at in the last fiscal year, along with expenses staying within budget (which would be a 2.34% increase, not unreasonable) and you get a year where the Transportation Fund would take in more than they spend out by around $46.82 million.

So plug those numbers in, and we get this for the 2014-15 fiscal year.

Starting balance: +$101.49 million
Change in FY 2014-15: +$46.82 million
Projected ending balance: +$148.31 million

Now, this doesn’t fix the long-term problems of added debt and unfunded future projects, which still means there would be a budget hole in the Transportation Fund of somewhere between $530 million and $1 billion to fill in the next budget, if we use the estimation of a $680 million- $1.1 billion deficit from before. And unlike the $689 million of General Fund taxes and borrowing that's been put into the Transportation Fund over the last 4 years, the upcoming deficit-riddled budget should not be relied upon for similar moves to bail out the Transportation Fund in 2015-17. with the amount of highway funding from Congress yet to be determined, since their money only runs through May 2015, the possibility of an extra $100 million cushion will be a welcome sight.

The question of where the Transportation Fund stands is different than asking what it should be used for. This part of the issue came to the forefront again earlier this week when numerous community and pro-transit groups came together at the Capitol to complain about priorities on what state government is using its Transportation funds for.
“Instead of spending billions on new mega-highway expansion projects that we can’t afford, don’t want and don’t need – and especially before considering new transportation taxes – we should focus transportation funds on fixing what we have first,” said Bruce Speight, WISPIRG Director....

Four dubious highway expansion projects, including the double-decker expansion of I-94 in Milwaukee, would cost taxpayers nearly $3 billion. For just a third of that, we could repair local roads, upgrade transit, bicycle and pedestrian infrastructure, and finance the urgent rehabilitation of state-owned roads – for the next 10 years.

“Let’s be clear: We don’t have a revenue problem, we have a spending problem,” concluded Speight. “We are here today to call on Governor Walker to tell us why he is talking about taxes when we are wasting precious transportation dollars on wasteful highway expansions, AND our local roads and transit systems are crumbling. Governor Walker, will you cancel wasteful and unneeded highway boondoggles, and get our transportation priorities right?”
And that question will face whoever the new governor is. Because regardless of whether the Road Builders get their amendment passed on November 4 preventing transfers into the General Fund from the Transportation Fund (I am a big HELL NO on that one due to its one-sided nature), the Legislature and Governor will still have to decide which items to fund from those monies...and which items not to fund. Identifying those priorities will prove every bit as important as coming up with the funding to take care of those needs.

School vouchers- straight cash to those who didn't need it, homey!

This story shouldn't surprise you, but it's still absurd and disgusting all the same.
The vast majority of students receiving a taxpayer-subsidized voucher to attend private school this year did not go to a Wisconsin public school last year.

Data released Thursday by the state Department of Public Instruction shows that just over 19 percent of the 538 students who entered the statewide program this year attended a public school last year.

Over the two years of the program, just under 20 percent of those receiving a voucher came from a public school.
This relates to the expanded voucher program that was taken statewide starting in 2013-14, and you can take a look at the report from the Department of Public Instruction yourself. It gives a good summary of the figures from the last two years, and it's also worth noting that while the number of vouchers in this program were expanded by 500 for this year, but in both years less than 1 in 5 students that received vouchers attended public schools the prior year.

In other words, this program is largely using taxpayer dollars to subsidize the private educations of students who are already in these schools. That applies for both the student's families, and the religious organizations that run these schools. And it's being done at the expense of public schools throughout the state that could use those millions of dollars to defray property tax increases and keep the lights on.

I listen to Sly's show online on occasion, and I noticed the voucher lobby is constantly running ads propping up Howard Marklein for Senate and (drunk as hell) Todd Novak for State Assembly. But the commercials feature nothing but lame GOP pablum about "taxes," and never mention they're promoting this candidate because that guy will vote to give more taxpayer money to these unaccountable schools. Now why do you think the voucher people are trying to hide what they're REALLY about in these rural Wisconsin districts? Couldn't have something to do with their role in creating the red and beige in this map, could it?

And never forget, the number one money-funneler for these voucher ads? None other than convicted criminal Scott Jensen, who was let off the hook from serving serious jail time in Waukesha County by... GOP Attorney General candidate Brad Schimel. Funny how things work out that way in the WisGOP machine, doesn't it?

Wednesday, October 22, 2014

Journal-Sentinel shirks its responsibility, blows off Walker's failure

James Rowen wrote a great blog post at the Political Environment calling out the latest disgrace that was placed on the Journal-Sentinel's editorial page, thought he is far from the only one. First off, Rowen reminds us what the Journal-Sentinel said when it endorsed Scott Walker for governor in 2010.
Scott Walker has said repeatedly during his campaign for governor that he will develop strategies to create 250,000 new jobs during his first term.

It's a big promise - one that has been derided by his critics. But for the sake of Wisconsin, Walker had better be right.
Well now we know that we will be lucky if we even end up halfway to Walker's goal by the end of his term. And the J-S made that endorsement without knowing the corruption, divisiveness, and massive budget deficits that have resulted from Walker's policies as governor. So you'd have to think they'd be back before the 2014 to scald Walker's failures, and say "You've had your chance, you failed, and you must go."

Well, not exactly. The headline in yesterday's newspaper reads: "Gov Walker's false promise of jobs growth not that big of a deal."
The Walker critics argue you should care about this. But you shouldn't. It's just not that important. Walker's promise was always more rhetoric than reality, a nice sound bite.

Here's a fact: There isn't that much a governor can do in one term to bend the arc of fortune. It takes more than shoe polish, a grin and a few tax cuts.

What governors do matters, of course — whether they maintain the schools, the roads and the social safety net. And tax incentives, tort reform, reasonable regulation and incentives to raise risk capital all can help create jobs, especially if married to a disciplined strategy that recognizes the state's strengths and deploys scarce public dollars efficiently.
ARE YOU SHITTING ME WITH THAT LINE OF CRAP? The J-S goes from "Walker'd better be right" in 2010 to "Oh, that was just idle talk and it shouldn't have been taken seriously." What a cynical cop-out by David Haynes and company.

Let's not forget what the Walker jobs gap shows- that Wisconsin would have added 190,000 private sector jobs during Walker's time in office if we had merely kept up with the national rate of growth during this Obama Recovery. How can he NOT be held to account for it?

And if there "isn't that much a governor can do in one term to bend the arc of fortune," then explain to me how Wisconsin taking up the rear in this chart?

And why shouldn't the economic geniuses at the J-S editorial page be asked to explain to me how our neighbors in Minnesota can have a lower population base and similar climate to ours, but ended up adding nearly 52,000 more jobs in the same time period, and has an unemployment rate 1.4% below ours? That's not a normal result. And Walker has not "maintained the schools, the roads and the social safety net", as he has presided shared revenues to all of these services, causing the quality of local services to be cut.

Now, the J-S deserves minor credit in the editorial for ripping into Walker's belief in failed supply-side philosophies and tax cuts that do nothing help job growth, but do drive up the deficits that are in the process of exploding in state government. But it's buried late in the editorial, and it further makes their excusing of his failures all the more pathetic, because THEY KNOW HE'S NOT DOING IT RIGHT, but won't hold him accountable for being misguided. While the editorial board says they agree with Mary Burke's thoughts on improving the level of education and start-up of new businesses, they then pull a false equivalence by throwing in a sentence saying her "record at the Commerce Department is less than impressive." And naturally, the J-S editorial doesn't say why it was "less than impressive," other than showing an acceptance of right-wing framing of Burke's 2 1/2 years there.

I have little doubt that Haynes and company are operating under orders of the Journal-Sentinel's corporate owners. It cannot be pointed out enough that Journal Communications CEO Steven Smith sits on the Board of Directors of the Walker-supporting Metropolitan Milwaukee Association of Commerce, and there is little doubt that the newspaper identifies and is in constant contact with the Milwaukee corporate oligarchy that is Walker's go-to constituency.

But even with the J-S's pro-Walker bias in mind, to blow off his failures as merely "a nice sound bite" after endorsing him because of his "bold plans" is hypocritical weak sauce, and transparent garbage. It exposes yet another reason why the state's largest newspaper is crumbling before our eyes, both in its subscriber base, the quality and experience of their writers, and in its reputation among people who have been paying attention. I don't give it a dime, and I recommend you don't either.

Tuesday, October 21, 2014

Sorry, WisGOP. Still DEAD LAST for jobs

It wouldn’t be a monthly release of the Bureau of Labor Statistics' state-by-state jobs numbers without another taxpayer-funded cheerleading job from Gov Scott Walker’s Department of Workforce Development. Here are some of the stats they prop in their release.
· Wisconsin ranked third in the Midwest for rate of private sector job growth year-over-year.
· Wisconsin's 12-month gain in [rate of] total nonfarm jobs ranked ahead of Iowa, Illinois, Michigan and Ohio.
· Wisconsin's rate of year-over-year manufacturing job growth ranked 15th highest in the country, ahead of Iowa, Illinois and Michigan.
And Wisconsin is indeed third out of the 7 Midwestern states when it comes to these stats since September 2013. Total private sector job growth in September 2014 looks great on the surface Wisconsin added 8,400 jobs private sector jobs in the month, allowing us to rank third in the Midwest for the month as well. But then look at the two blue states bordering us, who both had blowout numbers.

Private sector job change, Sept 2014
Ill. +18,400
Minn +11,400
Wis. +8,400
Mich +5,300
Ohio +3,000
Iowa -200
Ind. -1,900

The same pattern expands when you look at the last two months combined, as Minnesota has added 14,700 more private sector jobs than Wisconsin since July, and Illinois 33,700 more jobs! Despite only gaining 4,800 private sector jobs over that time period, Wisconsin still stands as third in the Midwest here, because the 3 other states that are completely run by Republicans (Indiana, Michigan and Ohio) have actually lost jobs in that same time frame.

Moving out to all of 2014, Wisconsin still rates third for private sector job growth in the Midwest, but it is still less than half the national rate of job growth of 1.72%, and behind our more progressive friends to the west.

Private sector job growth, Midwest, Jan-Sept 2014
Ind. +1.03%
Minn +0.91%
Wis. +0.74%
Ill. +0.63%
Mich +0.55%
Ohio +0.53%
Iowa +0.27%

And what can’t be left out is just how lousy Wisconsin’s numbers were before the start of this year. In fact, we can now use the “gold standard” Quarterly Census on Employment and Wages numbers from the end of 2010 to the end of 2013, and add in these 9-months of seasonally-adjusted data, and likely get a good idea just which Midwestern states have done best since the gubernatorial elections of 2010, which featured many changes as to who ran a state’s government.

Oh hey, look at that. Wisconsin is still DEAD LAST for jobs in the last 45 months. Even with many of these other states backing up in recent months, Scott Walker’s policies put Wisconsin in such a ditch for job growth, that we still are behind everyone else in the Midwest, 2 weeks before the 2014 elections.

This is where we are, and no matter how much the Walker Administration wants to spin it, or narrow the timeframe of the Governor’s performance, what happened in those first 3 years matters. That underperformance is also likely to be the pattern that would continue if the voters of this state were foolish enough to give this wrecking crew another 4 years in power.

You know WisGOP and their allies at Politi-“fact” are going to try to change dates or provide some other excuse for this, but the bottom line is that they have only themselves to blame for their punishing, austerity policies, and failed, trickle-down mentality. Maybe we need someone who realizes that job growth begins by investing in items that attract TALENT, such as a high quality of life, and strong public schools that gives everyone a chance to get ahead, and is willing to be flexible enough to adjust to the realities on the ground if things aren’t working.

That sounds a whole lot more like what you'd get under Governor Mary Burke than Governor Scott Walker, doesn’t it?

Monday, October 20, 2014

Johnny Rotten's right- step up and VOTE

This is great stuff from John Lydon (aka Johnny Rotten of the Sex Pistols and Public Image Ltd.), emphasizing the importance of voting and getting involved. He's talking about British politics, but it's scarily accurate for our situation today.

"You have to vote. You have to make a change. You’re given lousy options, yes. But better that than nothing at all. Vote. Stand up and be counted. My advice to any member of the working class is to get smart, read as much as you can, and find out who’s using you. I did. What’s wrong with you?"
- John Lydon
100% correct. The oligarchs want us in 99%-land to be 1. misdirected, so we take out our resentments to "others" instead of the people who have been screwing us (what Lydon says about UKIP could easily be translated over to young, working-class men in America that vote Republican). And then the owners of the country hope years of people being let down by the system leads to 2. Cynicism and hopelessness, which shows in non-voting.

I say let's all vote out the scumbags and Koch-suckers instead. There's a whole lot more of us than them, so why not use that power of numbers to make them fear us? There's a reason they want to suppress our votes, because they can't win on their own. Unlike Going to non-voting and/or revolution should only happen when there are no other legal options left. We're close to that point, but we're not there yet, and we can start turning the tide back in 15 days.

Walker tries zombie lie to deflect from exploding deficit

It is remarkable to see our Governor desperately trying to convince people that his policies are somehow working, particularly involving his deficit-ridden budget. Check out this whopper from a press release trying to sell how “Wisconsin’s Economy is on a Comeback Under Governor Scott Walker." Among the list of "accomplishments" (most of which is due to the Obama Recovery, by the way), is this gem.

· Wisconsin is estimated to have a $535 million surplus in the 2015-17 state budget. Governor Walker has also built a rainy day fund that is the largest in state history ($279 million). (LFB, 2013-15 and 2015-17 General Fund, 9/18/14).

This links to the list of “what ifs” that GOP Joint Finance Co-Chairs Alberta Darling and John Nygren tried to throw at the Legislative Fiscal Bureau last month. The problem is that those numbers are based on BS that has little to no connection to reality, something I pointed out at the time.

But for the sake of argument, let’s go over those figures again, in light of last week’s releases of the state’s Annual Fiscal Report and the first three months of revenue figures for the fiscal year that started on July 1.

1. From the AFR, we know the year-end balance was $516.9 million, after the Walker Admin held back $25.75 million in payments to the Transportation Fund to beef up this balance, so plug that number in (this is $35.9 million better than what we had on revenues only).

2. Once you adjust for lower withholdings that are now in effect, the first three months of revenues are basically in line for the 3.5% revenue growth that LFB is projecting for Fiscal Year 2014-15. If that number were to hold up, we would be at $14.436 billion in tax revenues, or $289 million short of what the first assumption in that paper says.

3. If this is the case, then the balance that would have to be made up by “reducing appropriations” to the level of $0 would be $371 million, not $116 million. And this includes that extra $25.75 million that has to go in the Transportation Fund. This is also past the $279 million in the Rainy Day Fund, so Walker and WisGOP need to NAME THE CUTS.

4. 2.9% revenue growth on $14.436 billion in taxes with no change in expenses means the following balances for the 2015-17 budget (starting from $0)

a.2015-16 balance -$196.4 million
b.2016-17 balance +$144.4 million
c.TOTAL -$52.0 million + $65 million = $117 million deficit.

5. But that’s definitely not all, because it is only in Fantasyland that we won’t spend more money on our current programs. Don’t forget that budget requests for 2015-17 have now come in, which total over $1.1 billion in new spending required just to keep doing what we’re currently doing ($760 million for Medicaid alone). So that now makes the deficit in the next budget reach $1.217 billion.

6. And then you have at least $680 million in deficit for the Transportation Fund, and more likely $1 billion that'll have to be taken care of. But we’ll be kind and only add in the $680 million for now.

7. Put it together and the TOTAL DEFICITS IN NEXT BUDGET ARE $1.897 BILLION.

For Scott Walker to even try to pull that “we have a budget surplus” talk when the numbers have already been debunked, and with new information in the last week making that scenario even less likely, it shows a level of cynicism that is sickening. And for Walker to be allowed to pull this zombie lie out in Friday’s debate, in his press releases, and likely in his scripted interviews with AM radio shows how pathetic our state’s political media is when it comes to discussing economic issues.

So if any of your media types are reading this, learn something from these posts, and challenge Walker whenever he tries to BS his way around the huge budget hole he and his WisGOP have put this state into.

Sunday, October 19, 2014

Wisconsinites moving West, and not always to warmth

Jud Lounsbury at Uppity Wisconsin observed an interesting number in the recently released figures from the U.S. Census Bureau on net migration. If you click on the report, you will see where people that move from one state to the other goes to, and what the trends are over the last several years. As Lounsbury points out, a sizable amount of Wisconsinites moved across the St. Croix River to Minnesota last year, home of a 4.1% unemployment rate and more progressive politics.
According to the latest U.S. Census state-to-state migration report, 9,352 more people moved out of Wisconsin than moved into Wisconsin and a large share of those leaving-- 1,972 to be exact-- are going to our next door neighbor, Minnesota.

Most people in Wisconsin would hate to suffer the embarassment of becoming a Gopher and this bucks a national trend of people moving from colder to warmer states. In other words, people in Wisconsin are so hard-up that they're willing to move to Minnesota!
In fact, Wisconsin and Minnesota trade people quite a bit, with Wisconsin losing more people to the Land of 10,000 Lakes more than any other state, including our neighbors to the south in Illinois. As these stats will show, Wisconsin loses people to the three less-populated Midwestern states, while gaining from the higher-population states (which makes some sense- there's more people that could potentially move in the bigger states than the smaller ones).

Wisconsin vs. neighboring states
Minnesota- 15,722 IN, 17,649 OUT (-1,927)
Iowa- 4,172 IN, 5,219 OUT (-1,047)
Indiana- 1,515 IN, 2,490 OUT (-975)
Michigan- 5,920 IN, 5,297 OUT (+693)
Ohio- 3,331 IN, 2,390 OUT (+941)
Illinois- 25,364 IN, 15,844 OUT (+9,520)

Of course, the Midwest has been losing in net migration for several years. Some of it due to struggles in the post-industrial economy, but also many of the losses have been to places with warmer climates (think retirees). One state in particular is losing more than others (Illinois), in levels far beyond what you would expect from the most populous state in the Midwest. Also interesting is that Minnesota's relatively high net migration is largely due to movement to the oil boom states of the Dakotas, which is something the other Midwestern states have generally not had.

Net migration for Midwest
Iowa- 77,470 OUT, 75,650 IN (-1,820)
Indiana- 135,472 OUT, 133,508 IN (-1,964)
Wisconsin – 110,198 OUT, 100,846 IN (-9,352)
Minnesota- 119,221 OUT, 104,825 IN (-14,396) (-8,096 to Dakotas)
Ohio- 201,515 OUT, 185,749 IN (-15,766)
Michigan- 166,996 OUT, 144,091 IN (-22,905)
Illinois- 304,644 OUT, 223,605 IN (-81,039)

Lastly, here's a look at other popular destinations for Wisconsinities to move to, or for people to come from when they move to Wisconsin. Not surprisingly, most are warm, with one notable exception.

Top 5 other states for Wisconsin-related migration
Florida- 4,423 IN, 7,321 OUT (-2,898)
Texas- 3,799 IN, 6,646 OUT (-2,647)
Arizona- 3,749 IN, 5,694 OUT (-1,945)
California- 5,149 IN, 4,704 OUT (+445)
Washington- 1,616 IN, 4,190 OUT (-2,574)

Climate may explain the first 4 on that list, but it does not explain why Minnesota and Washington should be gaining thousands of Wisconsinites, which leads back to Lounsbury's theory about higher quality of life and a stronger economy being reasons for certain states to attract talent from Wisconsin. And it's also worth mentioning that both states have higher minimum wages than Wisconsin, and were ahead of us in instituting progressive policies such as strong public transit and marriage equality.

Maybe we should look into bringing that mentality back to Wisconsin, and elect the governor that'll promote those items, instead of playing "divide and conquer" and denigrating the progressive policies and high quality of life that attracts talent. Makes sense, doesn't it?