Sunday, September 25, 2016

Solution to false "benefit crisis" isn't cuts- it's better fiscal policies

Jason Stein and Haley Henschel released an interesting, in-depth article in this Sunday's Milwaukee Journal-Sentinel titled "Wisconsin Faces Billions in Retiree Obligations." It's a discussion of pensions and Other Post-Employee Retirement Benefits (OPEB in the budget world), and here is a taste of some of the gaps between the money coming in to a community, and the cost of those benefits for those employees after they retire.
Today, a year of health insurance for just one City of Beloit worker and his or her family costs about $22,500. Keeping just one 52-year-old city police officer who retires today insured until 2029 — the first year the officer would be eligible for Medicare — would cost taxpayers at least $200,000, said David Osterndorf, the chief actuary at the Glendale consulting firm Health Exchange Resources.

"It wouldn't at all surprise me if you're seeing a $250,000 obligation," Osterndorf said. "It's really that kind of a number."..

Over the coming decades, the City of Racine owes a projected $417.5 million in health care and life insurance obligations to its retired and active workers and has nothing set aside to pay them. That works out to more than $5,300 for every person in the city, or three times as much as the city government spends in a year.

Meanwhile, Racine County expects to pay $193.4 million for its retiree health care. The Racine Unified School District projects $70.9 million in unfunded retiree health costs and $3.8 million more for a supplemental pension in addition to the state retirement system.
And this is where you see deficit scolds and other right-wing oligarchs try to claim "Public employee benefits are too expensive, we'll go broke!" Then that "crisis" is used as an excuse to stir up resentment against public sector workers, and pass Act 10-like measures to "level the field" with private sector workers who may not have such benefits.

But there are many problems with this analysis, and I'll start with one simple statement. There is no new fiscal crisis due to public employee benefits. The reality is buried in that first paragraph about workers in the City of Beloit- the "$250,000 obligation" is over the course of 13 years. These huge numbers of "unfunded liabilities" that are frequently quoted make the assumption that they would be paid out to all workers at one time, and that's ridiculous. It's like saying "you owe $200,000 on your mortgage", but doesn't mention that you're paying $1,400 a months for 30 years to pay it off.

Look, I'm not saying the annual payments for these benefits aren't important to keep in mind or that it's not causing a small amount of taxes to go up or crowding out other services that could be funded better. But we've been paying for these bills for decades and will continue to pay these bills for decades, and it's no different than what we've done for Social Security and Medicare at the federal level (and I'll talk more in a minute about how the solution to those fake "problems" are similar). And I'll freely admit that Act 10 provisions helped the bottom line for local governments by shifting the burden off of the government and shoving it onto the workers.

But let's not forget that Act 10 provisions have been imposed on workers without negotiation, has hampered the ability of local and state govermments to get quality employees, and then turned the "savings" into tax cuts and shared revenue cuts destroyed that any fiscal benefits that Act 10 may have given. And that's the real problem here in Wisconsin. It's not that these future liabilities exist in state and local government, it's one part demographics (BOOMERS) but mostly it points back to fiscal constraints put onto local governments by the WisGOP Legislature.
The strategy worked well for these local officials, pushing the bills off until the leaders were long gone. But as baby boomers retire, more of these costs are coming due, pressuring both taxpayers and the citizens who depend on the government for services....

Still, solutions will be a struggle in Wisconsin, where local tax levies are under a state freeze, aging infrastructure is demanding more investment and governments are finding it harder to compete for employees.
With WisGOP legislators continually preventing local governments from being able to raise their own revenues, it encourages those local governments to find "efficiencies" by cutting workers through vacancies and automation. With less workers paying in, it means there is less money coming in to pay for the benefits of these retiring Boomers. Then combine it with the ALEC/GOPs who chose tax cuts and cut shared aids to school districts and local governments, and now you have a real crunch that could have been avoided (and yes, I think many of the ALEC/GOPs are doing this intentionally).

And the solution is relatively simple- FREE LOCAL GOVERNMENTS. Allow them to raise the taxes necessary to pay for these services, if they so desire. This could include reversing the decision of WisGOP legislators to kill the bill that would have allowed local sales taxes to be designated for roads. This also could include cities of a certain size to impose their own sales taxes to pay for police and fire services, not only due to some of these communities having higher crime rates, but also because those bigger communities have events that attract people from outside the city that require more use of services than some bedroom suburb or unincorporated area. We already allow this second option in Wisconsin for tourist towns like Eagle River, Bayfield and Wisconsin Dells under the premier resort tax, so it's not a major change- it's just allowing larger blue-voting cities the same flexibilities that those small towns have.

We also need to get rid of the stupid property tax caps (a typical WisGOP "pose over policy" move that hasn't improved things one damn bit in this state), and allow local governments and their residents to decide the levels of property taxation that they think is adequate. If the state legislature doesn't like the idea of higher property taxes, then combine the caps with adequate shared revenues, but stop the "no-tax and no funding" mentality that is leading to the chronic deficits and continual cuts to services that keep driving away talent from the state. And while you're at it, WisGOP, end the anti-public worker policies that make it difficult to attract qualified people for those jobs (and perversely, drives up the cost of salaries to get those workers).

And there's one other simple option that should be used at all three levels of government - STOP GIVING RICH PEOPLE AND CORPORATIONS TAX CUTS, AND MAKE TAXATION FAIRER.

At the local level- end the ridiculous amount of TIFs and other preferential treatment to corporations that allow them to avoid paying for the city services that they use and benefit from. These costs are increasingly pushed onto everyday homeowners and renters, and the payoff of higher property tax base (which lowers tax rate) doesn't seem to happen nearly enough for this to be a worthwhile strategy for the typical Wisconsinite.

At the state level- Increase fairness in taxation and get rid of exemptions that overwhelmingly favor the rich and corporate. This includes the absurd "Manufacturers and Agriculture" tax credit that has resulted in 11 mega-millionaires getting a tax break of nearly $2 million a year EACH, with no action required to get that write-off. Wisconsin has had 3 straight years of revenue shortfalls, which became an excuse for the lack of shared revenues, which then makes it more difficult to pay for retirees, keading to this false OPEB "crisis".

By the way, these OPEB concerns at the state and local level mirror the garbage we hear in DC about the "trillions in future cost" of Social Security. Let me show you this clip, narrated by a certain former presidential candidate, and remind you how those lies are spread, and how dishonest they are.



And the way you stabilize Social Security and its sister program of Medicare can also be done in a way that would make many of these state and local retirement benefit "concerns" go away.

1. MEDICARE FOR ALL- The biggest costs with these OPEB benefits comes from those bridge years for employees that are between retirement, and not at the 65-year-old limit of Medicare. Not only are those employees not working and taking those benefits, but they're also at an older age where they cost more to insure. Well, if you have Medicare for all, these local and state governments don't have to pay for these bills, now do they?

And even if you phased in Medicare for all to start at age 55, that covers almost all of the health insurance costs for those retirees. It would be a massive tax shift away from state and local government, and would be a huge stabilizer for communities. Oh, and for those workers, who don't have to face the prospect of being screwed out of the benefits they've counted on for decades.

2. SCRAP THE CAP AND EXPAND SOCIAL SECURITY- When I see GOP Congressmen like (mo)Ron Johnson shed crocodile tears about how the government faces a financial crisis due to the future costs resulting from Boomers retiring, I want to scream "PAY THE SAME TAXES AS WE DO, ASSHOLE!" That's all it takes, making rich people pay the same 6.2% Social Security tax that you and I do. In fact, if you expand Social Security to Age 55 (which could be afforded quite easily, if we chose), it increases the options for older workers, and keeps them from being locked into a job well past the time that want to or can work. And if you do it right, this also means public employees don't have to rely their pensions as much, and therefore the future promises don't have to be so high, reducing future liabilities.

So while I appreciate Stein and Henschel's article in Sunday's Journal-Sentinel, as the post-retirement benefits costs are an ongoing issue that needs to be monitored, I also reject the right-wing framing of this being some "scary crisis." It is anything but, and the solutions are relatively easy, they just require a rejection of ALEC "starve the beast" mentality, and actually require an understanding that taxes do indeed have to pay for stuff. Do it right, and communities can stay stable and continue as places with a high quality of life that attracts talent.

I prefer that instead of seeing cities and other places decline, and become places where children, workers and retirees are fighting it out for a dwindling amount of resources, while the rich and corporate steal away and hoard what they have taken from those people. That's the road we're on if we buy into the BS that the Koch/ALEC Axis wants us to believe.

Saturday, September 24, 2016

Floods could also drown local, state road budgets

This week’s massive rains in Western Wisconsin has led to widescale flooding and two deaths in Vernon County, and many communities are trying to deal with the effects. These include damaged roads and public buildings that led to several school closings, and you can click on this Ready Wisconsin summary from Friday afternoon to see how widespread the damage is, and which detours you might have to take in the coming days if you’re in that part of the state.

The Wisconsin State Journal's Rob Schultz also had a good summary of the damage to roads and crops in the area,
and here's a sample.
There have been two weather-related deaths in Vernon County, where officials put damage to roads and bridges at between $2 million and $3 million. Flood warnings continue there as well as in Crawford and Richland counties due to heavy rainfall earlier this week on already saturated ground. The latest fatality was Joseph Menne, 79, of rural Viroqua, who drowned Thursday after his cattle truck jackknifed on a flooded road in Vernon County and he couldn’t get out of the cab in the rising water, the Vernon County Sheriff’s Office said....

As of Friday evening, Vernon County officials were reporting that about 60 roads were either closed or partially closed due to high water. That included Highway 35 near Victory, where Michael McDonald, 53, died Thursday morning when a mudslide sent his home down a bluff and onto the highway. Two other vehicles were struck by mudslide debris on the highway in the same area and one person suffered minor injuries, according to the state Emergency Operations Center.

In Crawford County, crews from Burlington Northern Santa Fe Railway and elsewhere were repairing tracks alongside Highway 35 where an apparent washout caused two locomotives and five railroad cars to derail near Ferryville. Roads also were closed in and around Gays Mills, Soldiers Grove and Steuben.

In Richland County, preliminary reports showed one house destroyed and three with major damage due to the floods, and 40 other homes reported minor damage, according to the Emergency Operations Center. Damage to homes was estimated at $300,000. Roads were closed around Viola and Rockbridge.


Governor Walker has already sent in a State of Emergency request for this week’s floods in Western Wisconsin, which gets emergency officials and the National Guard ready to help communities stem the tide from the damage. And the state is also poised to give financial help to communities to fix the damages from major storms like we’ve seen this week, as noted under State Statute 86.34. And here's a different statute to describe how the reimbursement system works for local communities who wish to get state assistance.
When any highway is damaged by a disaster, the county highway committee, or the governing body of the municipality having jurisdiction over the maintenance of the highway, may adopt a petition for aid under this section and file a certified copy of the petition with the department. To be eligible for aid the petition shall be filed not later than 2 months after the occurrence of the disaster damage, except as provided in par. (b). All such petitions shall state the dates on which the disaster damage occurred and as nearly as practical state the location, nature, and extent of the damage.

(b) The department may extend the filing deadline under par. (a) if it appears reasonably likely that federal disaster aid may be forthcoming or when widespread or continuous disaster damage makes an evaluation of damage difficult. …

(2) The department shall make such investigation as it deems necessary and within 6 months from the date of filing the petition shall make its determination as to the granting of aid, the amount thereof, and the conditions under which it is granted. In making its determination the department shall cause an estimate to be made of the cost of repairing or replacing the facilities damaged or destroyed to standards and efficiency similar to those existing immediately before the damage or destruction, and also an estimate of the cost of reconstructing the facilities to a higher type or improving any such facilities if determined to be warranted and advisable. Except as provided in [small or large damages] the amount of aid payable for damage caused by a [tornado, flood or similar natural disaster] shall be 75 percent of the cost of repair or replacement to standards similar to those existing immediately before the damage or destruction, plus 50 percent of the increased cost of the reconstruction to a higher type or the improvement of any of the facilities. Except as provided in [small and large damages] , the amount of aid payable for damage caused by [damage as a result of the response to the natural disaster] shall be 70 percent of the cost of repair or replacement to standards similar to those existing immediately before the damage or destruction. The department may revise estimates on the basis of additional facts. The county, town, village, or city shall pay the remainder of the cost not allowed as aid, but this shall not invalidate any other provision of the statutes whereby the cost may be shared by the county and the town, village, or city.
There is $1 million set aside in the Transportation Fund to handle the relatively smaller repairs that are needed for various weather events. But once we get past $1 million, and especially in the case of large-scale disasters, there is a different fund that is tapped, and this uses General Fund money to make up the difference.
Beginning in the 2nd fiscal year of the 2013-15 fiscal biennium, and in the 2nd fiscal year of each fiscal biennium thereafter, the department shall calculate the amount of aid paid under this section, during the biennium, in excess of $1,000,000, in connection with disaster damage resulting from a single disaster. The amount calculated under this subsection shall be transferred under s. 20.855 (4) (fr) from the general fund to the transportation fund in the 2nd fiscal year of each fiscal biennium.
$6.5 million in General Fund money is budgeted for this fiscal year, but because the fund is “sum-sufficient”, it means that any amount over that has to be paid out. So if these large-scale floods result in damages that run well over that $6.5 million, and we don’t get federal aid to make up some of that difference, that’ll cause more strain on the General Fund budget. And it’s not like there’s that much breathing room to begin with.

The Feds did step up to offer assistance for the storms up North in July, as President Obama signed a disaster declaration on August 9, which allows for the affected areas to ask for FEMA reimbursement for their damaged facilities and roads. This also takes the state off the hook for much of the cost, which helps quite a bit. But we haven’t seen the same for the floods earlier this month near the Mississippi River, and we are obviously tallying up the totals from this week’s massive storms (hopefully there isn’t more to come, with more rain forecast this weekend).

In addition, one complication is that the local communities have to get the washed-out roads repaired first, then send the state the bill for reimbursement. This is with those communities often being small, rural places without much in terms of cash or annual spending, and without knowing exactly when the state will send money to them. This problem was illustrated in an article from a couple of weeks ago where a Buffalo County town chairman mentioned how his area was cleaning up from the massive downpours in early September.
The Town of Gilmanton completed temporary repairs to four flood-damaged roads. Some washed-out paved roads were replaced with gravel, for instance. Three more roads are still closed to traffic.

“They’re not permanent repairs, but they’re passable,” explained Meier. “Permanent repairs — I don’t know how long that will take, maybe years.” The cost of flood repairs dwarf the spending township governments such as the Town of Gilmanton normally take on, and the way state and federal disaster assistance works, local governments must first pay for repairs themselves and then get reimbursement for the majority of the costs. Meier said his township does not have enough money on hand right now to pay for more substantial repairs. On one dead end road that is the only way in and out for its residents, the township did enough work so residents could get by, but full repairs may cost around $100,000. “I could name any one of these roads [that would] would eat up our budget,” Meier said. “Our only avenue I see is borrowing the money, setting up loans,” he added. The Town Board has not yet discussed whether to do that, and if it decides to take out loans, that process will take time, too. “Some roads we may never reopen because the costs are just too prohibitive,” Meier said, speaking his personal opinion. “People want things settled and cleaned up quickly, but some of these things can’t be cleaned up quickly,” he continued.
Adding to this strain is that local governments in Wisconsin are finalizing their budgets over the next 6-8 weeks, and there’s either going to be a lot of hoping and praying that these bills are paid back by the state and the feds, or plans for what is repaired in 2017 may need major changes because of new needs and/or reserves being drained to clean up the flood damage.

Obviously, there is no good time for floods like this, and I wish these areas the best as they deal with this horrible disruption. But with local road funding already squeezed and communities barely able to keep up with regular maintenance, this is especially problematic. Keep your eyes on this going ahead, because well after the water recedes, the fiscal problems could continue and multiply, especially if the State of Wisconsin has to shell out money in the coming months for the repair for the majority of this damage (or worse, if they don’t or won’t).

Friday, September 23, 2016

No good options left to pay (or not pay) for the Wisconsin roads

Wisconsin's transportation funding jumped back into the spotlight on Thursday, with Republicans on all levels squabbling with one another on how to solve the $1 billion deficit that exists in the next budget. It started with Governor Walker sending a letter to GOP Assembly leadership, and if you can get by Walker’s partisan poses and non-reality bullcrap about the state’s economy and budget, you’ll notice this ending paragraph, where he basically says "Come up with something that I don't have to take ownership of"
On transportation, we have more work to do. I have responded to legislative concerns on bonding, supported audits of the agency to protect the taxpayer, and put forth a plan with our priorities for a full discussion. I am willing to consider any specific alternatives from Assembly leadership that live within taxpayer means and I look forward to hearing such alternatives in the coming weeks ahead.
Later in the day, Assembly GOP leadership responded by saying Walker wasn’t following the DOT’s own recommendations, and wasn’t dealing with fiscal reality.
In 2013, your special commission, the Wisconsin Commission on Transportation Finance and Policy, estimated the state needs an annual increase in revenue of $1.35 billion in each year until 2013 just to maintain current conditions. Without additional highway funding, the percentage of the system in poor or worse condition will go from 20 percent in 2014 to 42 percent in 2023. The commission also pointed out “the state’s decades—old transportation funding model is not keeping pace with current or future needs.”

Further, consider the relationship between our fuel tax, the main funding source for our highways, and the construction cost index. Since 2008, the cumulative change for the fuel tax was 2.8 percent; for the construction cost index, it was 46.5 percent. Clearly, the fuel tax is not keeping up.

Assembly leaders believe it is more conservative to pay for projects today than it is to borrow the money and let future generations deal with the debt. Our state has relied too heavily on bonding. Debt payments have doubled in the last ten years and 20-cents on every transportation dollar now goes back to pay transportation debt. The Legislative Fiscal Bureau estimates that percentage will increase a penny ( (sic!) ) each year under the DOT Agency Budget Request and may increase to a quarter of the transportation budget in a few years. While, as you pointed out, debt service levels remain in line with recommendations from the Transportation Finance and Policy Commission, that doesn’t mean it’s the right choice for Wisconsin’s taxpayers, especially with the fact that the budget also delays important projects that will cost more in the future.
Not a bad plan, and it at least admits that revenue needs to be part of the equation, but it’s still vague on just how that revenue will be found (tolling? More gas tax? Hybrid fees?). And the other side of the plans for Robbin’ Vos and others seems to include trying to remove prevailing wage requirements for highway construction workers (notice that GOPs ALWAYS try to cut wages wherever they can?), and with the state already lacking for skilled workers because of low wages, I can’t see how increasing the wage gap more would help GAIN jobs.

And then Senate GOP Leader Scott Fitzgerald chimed in on the transportation issue yesterday (in the same press conference where he lied about not being a part of the John Doe scheme) and Fitz seemed to back away from the tax and fee increases that the Assembly seemed to be considered.
Fitzgerald, speaking Thursday to reporters in the halls of the Capitol, acknowledged that the issue has divided his caucus. But he ruled out passing a budget that raises taxes for roads because Walker would veto it.

"How is that productive?" Fitzgerald said. "You're going to have to work with the governor."

The budget proposal put forward last week by the Department of Transportation calls for borrowing $500 million and cutting $447 million by delaying a number of major projects, including work on the final phase of Milwaukee's Zoo Interchange rebuild and Madison's Beltline.
You gotta wonder if vulnerable GOP Senators are going to go along with that “no-tax" doctrine from Fitz over the next 6 ½ weeks, since we’re already seeing wheel taxes getting passed in numerous Wisconsin communities of all sizes because the state hasn’t kept up their share of the costs of local road repair. If I was a Dem running against those senators, I’d definitely ask my opponent if he/she thought that was a good idea.

Speaking of Wisconsin Democrats, isn’t it odd that they’re not being asked for input in this issues, especially since they may well have control in the Senate and will likely have a larger contingent in the Assembly in a few months? Dem Senator Kathleen Vinehout recently published her thoughts what to do on the DOT budget, and advocated for smarter ways to conserve spending, while also knocking Walker’s shortsighted poses on the revenue side.
I strongly support the move to fund our local roads along with smarter transportation spending. Let’s look for efficiencies in-house. An easy first step is passing my bill to repeal the 2011 law forbidding local governments from collaborating on transportation projects.

No one can deny the money funneling into our Transportation Fund, largely gas tax and motor vehicle registration fees, has not kept up with the cost of maintaining our roads and bridges.

Governor Walker is ideologically opposed to raising taxes or fees, yet knows our transportation budget lacks the revenue needed. The prudent executive should not let ideology cloud important financial decisions. Some road delays may be in order, but cutting back on construction already in progress comes with a price tag.

User fees acknowledge the cost to maintain and improve services. For example, the state owns, or is a substantial owner of, over 700 miles of freight rail. In a previous budget, Secretary Gottlieb proposed charging a $10-a-rail-car fee for use of taxpayer-funded rail lines. The Governor failed to take up this modest charge. Taxpayers – you and me – continue to subsidize railroads use of our state-owned lines.
You can see what a mess the state’s transportation budget is in, and how many different ideas are up in the air. And we’re not even talking about the extra costs that the state is going to have to take on to repair the damage from washed-out main roads due to the numerous floods over the last 2 months.

Just like a lot of other things in Fitzwlkerstan, the refusal to responsibly fund the state’s needs leads to bigger problems in later years. Maybe it’s time we stop allowing the current crew to keep messing it up, and call in a new set of leaders that might be real with what has to be done, whaddya say?

Fitz gets caught lying his ass off about John Doe

I saw the headline yesterday about how WisGOP Senate leader Scott Fitzgerald tried to claim he wasn’t a part of the money-laundering scheme that was outlined in the John Doe documents which leaked to the Guardian last week (click here to read the docs and refresh your memories). That operation funneled millions of dollars into supporting 6 GOP Senators who voted for Act 10 and were summarily recalled in 2011, and when Fitz claimed he knew nothing about it, my immediate reaction was "That's literally unbelievable."

Why did I say that? Because I immediate remembered emails from Club for Growth bagman/slimeball RJ Johnson bragging about his group’s work in making sure Republican retained enough seats in the recall elections to continue to hold their majority in the Legislature, and I couldn’t buy that Fitz wasn’t aware of that. And to their credit, Milwaukee Journal-Sentinel reporters Patrick Marley and Jason Stein performed a rare act of journalism and came up with the actual John Doe emails to call bullshit on Fitzgerald’s statements.

The J-S writers referred to a part of the John Doe docs which showed that Fitzgerald wanted Walker to attend a March 2011 meeting of the Republican State Leadership Committee, so Scotty could ask for money to help the WisGOP Senators facing recall. Johnson said he had a better plan for how to offer “assistance.”
"Fitz is putting the hard press on this," Gilkes wrote to Johnson. "We have not done a lot to help Fitz so far so this is his big ask at the moment and I have a hard time saying no."

Gilkes ran Walker's 2010 and 2012 campaigns and at the time of the email was the governor's chief of staff. Johnson was a key adviser to both the governor's campaign and the Wisconsin Club for Growth.

Johnson responded to Gilkes by saying political spending needed to be centrally controlled, rather than overseen by groups like the Republican State Leadership Committee.

"As far as Fitzgerald, I would tell him the Governor will be raising 5 million plus under Wisconsin control," Johnson told Gilkes.

In a follow-up email, Johnson wrote to Gilkes, "Also, to remind you and Fitz, all the positive radio and TV was from Scott (Walker) through the club. Also the negative against the three (Democrats). He needs to know that."
Now do any of you think Fitz DIDN’T end up knowing that, after the millions of dollars that Club for Growth and other RW oligarchs dumped in the Summer of 2011 to allow the GOPs to hang onto their Senate majority through the recalls? Give me a fucking break. Hell, Fitz himself was recalled in 2012 and had to fend off a challenge from Lori Compas, and you think he didn’t ask for a few bits of help from Club for Growth and the rest of the GOP groups helping Walker and other GOPs that year?

After Fitz and Walker were retained in the 2012 recalls, Wisconsin Manufacturers and Commerce and other GOP front groups dumped large amounts of dark money to regain a GOP majority in the Senate in November 2012. This enabled Fitz to get back to work helping his friends. Marley and Stein’s JS article provides a link to a 2013 document that was discovered as part of a lawsuit against NL Industries and other lead paint makers. That document was sent to Fitzgerald from NL Industries lobbyist Eric Petersen with the words “NL Language” on them, with recommendations on how the language should be phrased to give the paint-makers retroactive immunity from lawsuits. That language was later part of a late-night “999” motion jammed into the budget by the WisGOP-controlled Joint Finance Committee in June 2013 with no prior publication or discussion, a law that was found to be unconstitutional by an Appeals Court the following year.

Then again, it’s not like Fitz is very good at this lying and deception thing, as was proven during the height of 2011’s Wisconsin Uprising, when he gave away the fact that Act 10 wasn’t about stabilizing the budget, but instead was a political move to hurt unions and Democrats.



And the Senate GOP caucus thinks this crooked, partisan a-hole is worthy of leading their group? That alone should be considered a disqualifying measure for any GOP running for State Senate this Fall. Next to giving Fitz an orange jumpsuit for his part in this pay-to-play corruption and money laundering, making him and his fellow GOPs fall out of power this November needs to be the goal for those of us that have a shred of decency in this state.

Wednesday, September 21, 2016

WisGOP John Doe arguments of "free speech" are complete BS

I just want to use this post to give you a link to some good articles explaining the issues in John Doe- and the non-issues that scared righties are trying to throw against the wall to claim that their money-laundering operation was legal.

Here’s the Shepherd Express’s Lisa Kaiser with a very good overview of how Scott Walker and WisGOP’s setup worked during the recall fevers of 2011 and 2012, and how the money that was raised to fight those recall was funneled into one centralized body.
While Walker was the one who went begging for donations in corporate boardrooms and exclusive retreat centers, the individual apparently running the operation for Walker was his longtime political advisor, R.J. Johnson, who just happened to also be the “spokesman” for Wisconsin Club for Growth. Walker even went so far as to call Johnson “my Karl Rove,” referring to George W. Bush’s longtime political advisor and operative.

But this blurring of lines between Johnson’s work for Walker’s campaign and other candidates, and his work for an allegedly independent group, is likely not legal.

“In all the years that I was a practitioner, everyone understood that this kind of coordination was illegal,” said Bill Christofferson, who had worked on the campaigns of Democrat Jim Doyle and the Greater Wisconsin Committee—although never at the same time.

Up until last year, Wisconsin’s campaign finance laws prohibited coordination between a candidate’s campaign and independent groups. That’s because candidates must disclose all of their contributions, those contributions have dollar limits, and they cannot come from corporations. In contrast, dark-money groups can take unlimited donations, don’t disclose their donors and accept checks from corporations.

When you link the two entities, you get the worst of both worlds: candidates taking huge sums of money from corporations and not disclosing any of that to the public, so the public has no idea that, for example, checks from Menard Inc., a lead paint manufacturer or Wall Street billionaires were sent in secret and potentially influenced state laws and regulations.
Adding to this, the Madison-based Center for Media and Democracy released a statement today that not only reiterated that this type of campaign coordination was illegal under state law, but also that the 4 “WMC judges” that made up the ruling stopping the John Doe investigation ruled wrong. The CMD said the right-wing Wisconsin Court majority was incorrect in claiming that because Club for Growth (and their laundering partners) didn’t use the magic words “vote for” or “vote against”, it meant they weren’t electioneering, aka “express advocacy.”
"The Wisconsin court was wrong to say that coordination between a candidate and outside groups only matters if there's express advocacy,” said Donald Simon, a Washington, D.C. attorney with over 30 years’ experience in campaign finance litigation, and former general counsel of Common Cause. “But even so, it's clear that many of the ads run by the groups involved in the John Doe investigation qualified as express advocacy under U.S. Supreme Court precedent."…

The leading U.S. Supreme Court case on the matter, Wisconsin Right to Life v. FEC, held that an ad is considered the “functional equivalent” of express advocacy “if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.” 551 U.S. 449 (2007) The ads considered in that case were held to be “genuine issue ad[s]” ads because,

[T]heir content lacks indicia of express advocacy: The ads do not mention an election, candidacy, political party, or challenger; and they do not take a position on a candidate’s character, qualifications, or fitness for office. (emphasis mine)

The ads at issue in the John Doe investigation, on the other hand, focus on praise or criticism of candidates’ character, track record, and qualifications for office. Some then attempt to disguise their political purpose by throwing in a visual or verbal appeal to voters to contact the candidate in the last few seconds.
The CMD also included a list of some of these ads, and not only are they remarkably similar in theme regardless of the groups involved (reminding us that Walker is shown in the John Doe documents to be signing off on what the ads should look like- a big no-no when the group is supposed to be “independent”), but all of them are candidate-focused, with no specific issue mentioned.

This is an important point, because not only is it a lie to assume that coordination was EVER OK across these different organizations, either as a tactic or as a method to hide campaign donors, WisGOPs are also lying by claiming “It was OK because these were “issue ads” that never said to vote for anyone.” That is NOT the standard, and GOPs know it, but they think they can muddy the waters and confuse the average rube into thinking this is somehow their own “free expression” and that it is exempt from campaign finance and disclosure laws.

Which goes to the last article I want to forward you to. It’s from Joel McNally, also at the Shepherd Express, and it includes what should be everyone’s response the next time Walker and Robbin’ Vos and other GOP slime try to claim “courts have found what was done to be legal and stopped the John Doe as a result” The trick is that those WisGOPs don’t mention that the courts who did so were tainted and illegitimate.
The real reason the state court shut down the John Doe was itself brazenly corrupt. The so-called independent groups at the heart of the case—Wisconsin Club for Growth and Wisconsin Manufacturers & Commerce—had spent between $8 and $10 million to elect all four of the majority justices. Although two justices—Michael Gableman and David Prosser—were challenged to recuse themselves because of the clear conflict of interest, they refused.

Prosecutors have appealed the decision to the U.S. Supreme Court. Republican refusal to fill a vacancy on the court could prevent it from addressing Wisconsin’s widespread political corruption. But exposing the breathtaking magnitude of that corruption to the nation by publishing leaked documents is not a serious crime. It’s a public service.
The last part about “public service” is completely true. The RW oligarchs were gaming the whole John Doe investigation, and not just because the Wisconsin Supreme Court is bought off by those same elite bastards. Eric O’Keefe and his well-connected buddies were leaking information and documents about the investigation that they could spin into their absurd “free speech” or “prosecutor abuse” arguments, but we never have been able to see the full documents, what led the prosecutors to expand the probe, and how everything fit together.

Now that we do see how John Doe worked, and the amount of laundering, pay-for-play and debasing of state government was done as part of the scheme, it becomes quite obvious that SCOTUS has to take this case. And just because it would let these scumbags walk after the leaked documents indicate they are blatantly guilty of fraud (“tax-exempt social welfare group” my ass), money-laundering, and quid pro quo corruption (as shown in the lead paint issue and Walker using “return on investment” as a reason to give to him).

SCOTUS also has to take up the John Doe case because the Wisconsin Supreme Court made up a giant loophole that never existed under Citizens United or Buckley v. Valeo , which may have allowed for money to be speech in certain ways, but also said that “speech” had to be separate from a candidate, and couldn’t hide or misrepresent who the speaker was. That’s clearly what happened here, and there is no better case for SCOTUS to draw the line (and show there is a line) than John Doe.

Tuesday, September 20, 2016

Walker debt shuffle eases next budget, but screws future ones?

I was digging into the topline numbers for the recently-submitted budget requests from agencies in the state of Wisconsin, to see what kind of budget hill we’re going to have to climb for 2017-19. And some of the requests include sizable jumps in cost, despite orders from Gov Walker’s office to try to keep to a zero-increase request, and despite the fact that the Department of Public Instruction’s request for additional teacher retention funds won’t come in until after November.

Largest proposed GPR increases from Wis agencies
Health Services +$455.5 million
Corrections +$122.1 million
UW System +$42.5 million
District Attorneys +22.5 million
Wis Tech College System +$20.6 million

These added increases total just over $700 million over the 2-year budget….until you get to one last department, the Department of Administration. And this number put my jaw on the floor.

DOA Budget Request, GPR funding
2016-17 adjusted base doubled $1,559.05 million
2017-19 budget request $802.63 million
Change- DOWN $756.42 MILLION

The obvious question is “What the hell is happening at DOA asking where their budget is cut almost in half?” And most of the answer can be found back in page 206.

The department requests a decrease of $(382,960,200) in the first year and $(355,140,300) in the second year to adjust the annual appropriation bond authority to the amount required for State of Wisconsin General Fund Annual Appropriation (Pension Obligation) Bonds debt service.
So how do we get $738 million reduced off of our pension bonds over the next 2 years? That goes back to something I noticed a few weeks ago, when the state sold nearly $600 million in new debt designed to avoid a huge balloon payment from previously-sold bonds that were due to mature in 2018. The move is nice if you’re concerned with taking pressure off of the next 2-year budget, but obviously you have to pay more in future years to make up the difference.

And if you look at Page 2 of that debt document, you see that a lot of that debt wasn’t put off for too long.

Date of maturity for Wis debt sold Aug 2016
2020 $49.855 million
2021 $74.175 million
2022 $77.875 million
2023 $75.705 million
TOTAL MATURING 2020-2023 $277.61 MILLION

So why might the Governor’s Office and WisGOP want to go this route? Well, those added payments just so happen to coincide with the next 4-year term of governor in Wisconsin, which means those funds are tied up, and can’t be used for other means, or for avoiding cuts elsewhere in the budget. I’m not saying that was done maliciously to increase the chances that the austerity errors in the Age of Fitzwalkerstan could be reversed….but it’d be a nice way to get to that outcome.

So keep your eyes open if Republicans try to claim the 2017-19 budget is “just fine” even with the added money for agency budget requests. Any breathing room that may exist will be a one-budget item largely coming from this debt shuffle, and it’ll literally be getting paid back with interest right afterwards. But if the next (Dem) Governor and Legislature have to clean up that mess, the GOP won’t care. In fact, it puts GOPs in their favorite position- bitching about Dems and Dem groups without taking any responsibility for the bad tax, spend, and borrow decisions they made that led to the situation requiring tougher choices.

Wisconsin jobs going in reverse while Minnesota still thriving

Today had the jobs release from the Bureau of Labor Statistics for all 50 states, and I figured Wisconsin’s job-losing August referenced in this post, although oddly not mentioned in much of the state’s media) would render it pretty low compared to the rest of the country. But what was intriguing was that many of our Midwestern neighbors also struggled last month, at least on a seasonally-adjusted basis.

Private sector job change, August 2016
Ind. +5,600
Iowa +4,000
Minn -2,100
Ohio -5,000
Wis. -6,200
Ill. -7,800
Mich -12,400

Now maybe some of this may be fluky, because August has become notorious for low jobs reading in the initial BLS report, due to seasonal adjustment reasons such as the start of the school year. But what’s different for Wisconsin is that most other Midwestern states weren’t struggling like we were in the time before this August report came out. As I and UW’s Menzie Chinn have each noted, the last 3 months have all featured downward revisions for our state’s jobs numbers, meaning there was basically no job growth in the quarter before August.

So while it’s been hard to pinpoint Wisconsin as an awful performer in the individual jobs reports for most of the warm-weather months, when you step back and look at how the state has fared since March (ironically, the last month measured by the “gold standard” Quarterly Census on Employment and Wages), we have been noticeably worse than everywhere else in our part of the country. And look who’s topping that same list.

Change in private-sector jobs March-Aug 2016
Minn +22,200
Ind. +16,700
Iowa +10,900
Ill. +6,600
Mich +4,800
Ohio +3,400
Wis. -6,700

Change in total jobs March-Aug 2016
Minn +25,200
Iowa +14,100
Ind. +12,900
Ohio +12,000
Ill. +2,000
Mich -300
Wis. -5,500

The trend of Minnesota’s economic performance putting Wisconsin’s to shame since Dem Mark Dayton (in Minnesota) and GOP Scott Walker (in Wisconsin) continues, and it’s something that shouldn’t be accepted by Cheesheads who should be asking hard questions about why after 5 ½ years of GOP control, we continue to fall behind the neighbors to the west.

And those aren’t just entry-level jobs that Wisconsinites are losing out to Minnesota in. Take a look at this article from the University of Minnesota’s student newspaper today, which interviews several faculty members who went to Minnesota from the UW System in the last year. And they point the finger directly at Gov Walker and his fellow regressives in the Wisconsin GOP. Here is a sampling.
Changes to policies adopted by the Wisconsin Board of Regents weren’t just about tenure, [chemical engineering professor Mahesh] Mahanthappa said, but also about what departments may be discontinued.

Similar concerns were also expressed by other science faculty members due to political pressure from the Wisconsin Legislature to avoid topics such as climate change, he said.

“Their jobs could potentially be at stake … if someone is doing something unpopular. Even in the sciences, those rules could lead to serious ramifications,” Mahanthappa said.

Chris Terry, a journalism professor who came to Minnesota from UW’s Milwaukee campus this fall, said the lack of resources in Wisconsin was a driving factor in his decision to leave.

“It was hard to get any sort of movement towards a better contract,” Terry said. “Promotions were almost unheard of.”



I can’t see Packer fans accepting this picture and staying second-best to the Vikings, but yah-hey-deres in NE Wisconsin and other parts of the state need to care just as much about getting our ass kicked by the ‘Sotans when it comes to adding jobs, paying an adequate wage, and in quality of life. And unlike with the Packers, I don’t see where things settle down from the bad things we saw the past week and reverse themselves in the near future. At least as long as the current crews are in charge of both places.