You kind of seem to think that the fact a corporation has a role in drafting a piece of legislation is "News." Pardon me, but it is well known that corporations are people, my friend. Corporations originate, direct and monitor every single piece of legislation in our new, improved, exciting system. "Citizens United" ensured and enshrined this role for them. Were you aware that making laws is the single most profitable line item, in terms of net annual ROI, on any corporation's list of assets?
Of COURSE Gogebic Taconite has a "role" in drafting the legislation that, nominally, would "regulate" it. Hahahahahaha. My goodness, haven't you been paying attention? While we're on this sort of topic, and I'm taking the time to shine a light on a few items for you, I wonder if you've made the acquaintance of our new best friend, ALEC? ALEC is a helpful sort who provides the new crop of mouth-breathing ideologue legislators, governors and their boards of director with handy paint-by-numbers "laws" drafted by Corporations for the benefit of, well, Corporations.
Ordinarily you're at least somewhat alert, Journal Sentinel. Perhaps you missed all of this, somehow, while you were busily writing editorials indicating your support for Scott Walker.
Sincerely,
A Faithful Reader
Thank you sir. Those of us in the know can see how the Journal-Sentinel is willfully ignorant of this clear pattern of cronyism over the last 2 years, and that they're not on our side. But it never hurts to remind others.
It is quite rich how the Journal-Sentinel is shocked, SHOCKED that the Wisconsin GOP would be this openly corrupt. Especially when Senate Majority Leader Scott Fitzgerald admitted Gogebic and WMC wrote a similar failed mining bill last year!
I love our how state's media only decides to dig into these things this late in the game. It gives them the out of "well, we reported on it," when the inevitable failure seeps in, but it's done in such a half-assed way that it usually doesn't stop the bad actions from being passed. Sort of the best of both worlds for JournalComm, they don't take on risk and involvement of breaking a story and pissing people (and their advertisers) off. But they still can say they "did their job," even when they really didn't.
Just when you think this administration can't do things more tone-deaf, they manage to surprise you. After sending thousands of taxpayer dollars to a private company to put on a nationwide search and getting down to 3 outside candidates, the Wisconsin Economic Development Corporation decided their next CEO should be....the guy who was laready there and wasn't interviewed. That's right, Gov. Walker, acting as WEDC's Board Chair, announced Reed Hall would stay as the WEDC CEO. The statement released by Walker in the job announcement is quite funny, and I'll add notes to explain why.
“Reed brings a fresh perspective and strong leadership to the WEDC,” said Governor Scott Walker (um Scotty, he's been in charge for a few months now). “Reed’s experience at the Marshfield Clinic, in numerous civic organizations, and involvement in creating private sector jobs in Wisconsin makes him a perfect fit for this position. He will be guided by years of experience and a record of effective management in the private sector." (the Marshfield Clinic is actually a "not-for-profit" that makes $1.1 billion in revenue but pays little to no taxes ....which probably makes him perfectly understanding of WEDC's tax-giveaway goal.)
So not only are they doubling down on the failed, cronyist WEDC model, they're going to rely on the same guy to try to drag them out of the unaccountable, money-losing abyss they're currently in. Don't worry, NOW it'll be different.
If those guys like the hire, you know it's bad news for those of us who give a damn about transparency and healthy job creation. Nope, things haven't changed a bit at WEDC, and we'd better keep our eyes and ears open in the next few months, because I have zero confidence things will get cleaned up with this crew in charge. Seriously, do you believe the $67 million they got in the last budget, or the $63 million in taxpayer funding they are slated to get for the next 2 years is going to be used responsibly and fairly? C'mon man!
I noticed that Scott Walker decided to give a shout-out this week to one of his biggest benefactors, the school voucher lobby, signing an executive proclamation declaring this week to be "School Choice Week" in Wisconsin. And the Astroturf groups the voucher lobby represents are going to use this week to try to pour in their propaganda, including an event in Milwaukee this Wedensday. Check out some of the sponsors of that event- the Walker-donating Metropolitan Milwaukee Association of Commerce, "Democrats" for Education Reform (many of whom were replaced by real Dems in the Legislature in 2012), and the Association of American Educators ("The Non-Union Choice for Educators.")
But that's not good enough for the people who stand to make big bucks by selling their influence and the public schools off to their well-connected buddies. Which is why Michelle Rhee's Privatization Students First organization said Wisconsin schools got a D+ for its teacher evaluation methods, and recommended that the Milwaukee School Choice model be expanded throughout the state. You know who got the 2 highest grades? Florida and Louisiana, because Rhee and her acolytes liked that they evaluated teachers almost entirely on student performance.
Well let's look at these 2 states' performance and compare them to Wisconsin as well as the U.S. as a whole.
2009 HS graduation rates and 2012 ACT college readiness in all 4 main subjects
La. 67.3% graduation rate, 17% college readiness
Fla. 68.9% graduation rate, 18% college readiness U.S. 75.5% graduation rate, 25% college readiness Wis. 90.7% graduation rate, 31% college readiness
Looks like Wisconsin's teachers should be getting all the accolades, if we're grading on performance. But instead, it's the Confederate states that Rhee's organization likes, despite the much lower performance, because they say the right things and go out of their way to promote privatization and bust teachers unions. Talk about grading on a curve!
Of course, all of the difference in test scores doesn't just come from the teachers. Some of it can be explained through poverty rates (much higher in the low-service, low-education Confederacy) and on parental involvement (which makes the Milwaukee voucher schools underperforming all the more damning, since parents who'll try something like voucher schools are usually doing it because they think it gives their kids a better education, meaning they're involved). This is the ridiculous part about Rhee, Walker and other privatizers- their argument with school choice and union-busting is that it "frees up" kids to achieve, and that these outside influences like poverty and parental involvement don't matter. But these "performance first" types don't look at the obvious correlations between these factors and school/test performance, and Walker in particular seems to want to turn Wisconsin into a Confederate-like state with higher poverty and higher inequality, which then results in worse test scores and lower performance.
Then again, making Wisconsin's previously strong schools mediocre gives all the more reason to say "See, public schools don't work," and then use that as an excuse to funnel taxpayer dollars to your buddies in the voucher lobby. And that's a lobby that hires up in these parts, as they now have the last 3 former GOP Assembly Speakers working for them at the Capitol in Madison.
And like most Walker/WisGOP privatization schemes, selling off Wisconsin's schools isn't about improving performance or cost-effectiveness of education in Wisconsin. If that were the case, they wouldn't mess with what was working so well when the Age of Fitzwalkerstan began in 2011. Instead, it's nothing more than a giant grift, designed to throw money to the voucher lobby, who in turn contribute to puppet politicians who try to throw even more taxpayer dollars to the voucher lobby. And if done right, it even gives the grifters the bonus of not having to have their funding tied to test scores like the public schools might under Walker's plans.
Also like most privatization schemes, it's a pretty good deal if you're in the small, well-connected crowd getting the cash. But it sure sucks if you're in the 98% that are outside of that, and that's why we need to expose this voucher school grift, and work to get it out of our state before one of Wisconsin's great economic advantages is taken away for good.
I noticed the Wisconsin Association of Realtors did some crowing about the rebound in Wisconsin home sale prices, given that they were up 10% in December 2012 vs. 12 months ago, and that there were more than 20% more homes sold than in 2011.
Good on the surface, but as you'll see, Wisconsin's housing market had been in a slump until the last couple of months, and the end of 2012 isn't necessarily an indication of future growth. A chart of the last 6 years bears this out. The numbers are understandably bumpy, with higher prices of the median home sale in June vs. December (a typical pattern because bigger, higher-priced homes are more likely to sell in the Summer months, as children are out of school and families find it easier to move).
However, the general trend has certainly been downward.
Wisconsin median home sales price, 2007-2012
Narrowing it down to the age of Obama, let's now see how this trend compares to the rest of the U.S., and our Midwestern neighbors. Yes, there were large decreases in home prices much of the country from 2006-2008, and Wisconsin's drop wasn't as far as in other parts of the country like California, Nevada and Florida. But you'll see that much of the rest of the country has started to see home values go up, Wisconsin took quite a while to catch up. Throwing a 4-quarter moving average will help show the overall trend, and smooth out the seasonal ups and downs for prices. The U.S. is in red, Midwest in green, and Wisconsin in blue. Notice that Wisconsin largely tracked the drop in home values for the U.S. and the Midwest from 2009-2011. But look at how the gap starts to open up between the U.S. and (especially) the Midwest in early 2011, and the prices in the rest of the country were turning up ahead of Wisconsin.
Median sales prices 2008-2012
So Wisconsin's recent increase in home prices has little to do conditions unique to us, but instead it's the improving economy in the rest of the country that's dragging us off of the bottom. It is no coincidence that Wisconsin took several months to be part of the current housing price recovery that started in late 2011, because Act 10 and the school-cutting Walker/WisGOP budget was introduced in 2011, and the effects of these acts were still kicking in. Gee, you cut family's salaries and screw up a community's public schools, and property values start to lag. Amazing how that works, doesn't it?
And this is where the last chart comes in. Much like the other one, Wisconsin's drop in prices largely matched the one in the Midwest from September 2008 through the end of 2010, and neither part of the country had price drops as bad as we were seeing in the rest of the country. But starting with the passage of Act 10 in March 2011, you see how Wisconsin's home values went down, and the median home value drop in the last 4+ years is now more than the drop that's happened in the U.S. as a whole.
The chart shows that the median home sales price in Wisconsin is still more than 10% below the levels it was at in September 2008, and it's just influenced by the typically lower prices of the winter season. The $132,000 median price the Wisconsin Realtors reported in December 2012 is still lower than the $134,900 we had in December 2010- the month before Scott Walker took office. And that's in clear contrast to the other parts in the country have seen their home sales prices go up over the same time period.
Change in median home sales price, Dec 2010 vs. Dec 2012
U.S. +6.88%
Midwest +4.44% Wisconsin -2.15%
And it also explains why even if you've had a limited increase in property taxes over the last 2 years, it still isn't that helpful to you, because your TAX RATES have gone up due to the drop in home values. Even the president of the Realtors admits, “The slight upward movement in median home prices in 2012 will likely get some
potential buyers off the fence in 2013, but the key to ongoing growth in housing
is sustained employment growth in the state, which has been anemic at best this
past year." Ruh roh.
So despite the big talk from the pro-Walker Wisconsin Realtors, it still ain't working when it comes to the Wisconsin housing market, and don't let the spinsters from the Right-Wing Wisconsin tell you otherwise.
P.S. My significant other reminds me that the taxes on her home sure as hell didn't go down- they went up by more than 10% this past year. That's the double-whammy of living in one of the few areas of the state that is seeing home prices going up- you get the higher tax rates AND the higher assessment.
I understand that there's a certain baseline of Wisconsin Republican foolishness. Sometimes it's worthy of a minor laugh or annoyance, but often it's only at the beningn level. But this week was truly a special one, as not 1, not 2, but 3 Wisconsin Republican toolboxes found a way to make our great state look like a bunch of backwards, myopic fuckheads that belong in the Confederacy instead of the Upper Midwest.
1. Let's start at the top, with Governor Scott Walker. His miserable jobs record and long-term debt isn't good enough anymore, oh no. This time, Gov. Dropout repeated his common mistake of running smack when he really has no right to (a good example of which is here).
Look at that cross in early 2011 between the red (Wisconsin) and blue (Minnesota) lines. Right around the time of Act 10, and no it's not a coincidence. Oh, and need I mention that Minnesota has now passed us for total jobs, despite having 384,000 fewer people than Wisconsin only 2 years ago? Any leader who gave a fuck about results might look at why we're getting passed and learn something, but not Scotty. No sir. He's got that Dubya-style "cocksuredness in the face of absolute failure" down pat.
2. Speaking of cocksure bigmouths, how about the week Paul Ryan had? First, he gets ridiculed by Jon Stewart for his typical ass-clownery- this time about his whole "makers vs. takers" bullshit.
Of course, Ryan's act is doubly rich when it comes from a guy like Purty Mouth Paulie who's never had a real job outside of D.C.
“What is the evidence,” [Klein] asked, “be it historical or academic, underneath the idea that bringing another $600 billion or $700 billion out of tax expenditures — which some Republicans, like Alan Greenspan, think is properly classified as spending anyway — what is the evidence that makes you convinced that would have such a deleterious effect on the economy that it wouldn’t be worth taking it to get the debt deal?”
“I think rates matter,” Ryan replied. “I think the statutory rate matters at the end of the day.”
“But you could have the same or lower rate there,” [Klein] said. After all, if you’re closing loopholes, the top marginal tax rate doesn’t change.
“I don’t know about that,” said Ryan. “Remember, we have to write these things statically. We don’t use macroeconomic feedback on the Joint Tax Committee.”
“But if you capped deductions at $15,000,” I pressed, “that wouldn’t change rates.” (to anyone with a clue about taxes, you know these are 2 different things)
Ryan didn’t budge. “You have to decide where you want to cap deduction or which deductions stay or go, what will pass, and what the resulting rates will be. The other problem I’ve noticed — and this is just experience from my 15 years in Congress — every time you give a little revenue, it just goes to spending. The spending cuts are always later and the revenue gets pocketed. It’s one of those fool me once, shame on you, fool me twice, shame on me.”
He's avoiding the point and talking out of his ass. As a former high school teacher, you can spot someone trying to spew bullshit with terms and jargon while not having a clue what they're saying, and Pau-LIE defines it throughout this Klein article. What a fool.
3. But he isn't the biggest embarrassment from Wisconsin on Capitol Hill this week. Oh no, that clearly goes to Senator Ron Johnson, who earned his nickname of (mo)Ron this week in spectacular fashion.
Part 1 involves an amateur like Johnson being eviscerated by a true pro- Secretary of State Hillary Clinton, who exposed (mo)Ron as the inherited-wealth loudmouth no-talent that he is.
But (mo)Ron wasn't done for the week! He followed up that humiliation with another, where Clinton's probable successor, Senator John Kerry, showed Johnson was totally talking out of his clueless ass, revealing that Johnson ditched a meeting where he could have actually learned something about Benghazi (the good stuff starts around 1:26 here- "Were you at the briefing with the tapes?" (mo)Ron- "No.").
No, you don't know what happened in Benghazi you (mo)Ron, because YOU PASSED UP THE CHANCE TO SEE THE TAPES. As I said to others this week, Kerry had to be thinking "Dear God, Wisconsinites chose this ignorant fuckup over Russ Feingold? Are you kidding?"
So that's 3 pretty good candidates for "political Wisconsin embarrassment of the week." I'm even going to be charitable and leave out David (Get Yer Guns!) Clarke, as he's a small time loser, and not on the level of Gov. Dropout, Purty Mouth Pau-LIE or (mo)Ron. My choice in this category is for Johnson, for catapulting from nationwide obscurity to Allen West/ Michelle Bachmann levels of "Who could have voted for this dipshit?" But you are more than welcome to state your case in the comments.
All I know is that I'm tired of having to apologize for having these guys represent my state. NO MORE.
So how'd this $136 million increase in the surplus happen? Let's let the LFB tell you.
First, the estimated tax collections of this memorandum are $37.1 million above the administration's projections.
Second, net departmental revenues are projected to be $35.0 million above the amounts shown in the November 20 report.
Third, it is estimated that net appropriations will be $64.5 million below the amount reflected in the administration's report. Among the reasons for the difference are a reduction in estimated debt service payments ($25.5 million) (done by borrowing on the state's credit card and adding more debt and expense for later years) , a projected lapse in the SeniorCare program ($18.0 million) (cutting Senior Care, nice) , and an estimated reduction in the cost of various refundable tax credits ($19.0 million).
Oh, and the LFB also includes $584 million in lapses, which I haven't seen a lot of in reports as of yet, but that's how they get a "surplus". So not really much there for economic growth, and I'd rather be a lot higher than 42nd in the country for jobs and I'd like $3,600 a year in take-home pay back. But if these guys had a top goal of balancing the budget for 2011-2013, I suppose they succeeded, so give them the golf clap.
However, take a gander to the next budget and you'll see the picture isn't quite so rosy.
Compared to the November 20 [DOA] report, our analysis indicates that for the three-year period, aggregate general fund tax collections will be $259.1 million less than those reflected in the report ($37.1 million higher in 2012-13, $152.7 million lower in 2013 14, and $143.5 million lower in 2014-15).
The primary reason for the $259.1 million reduction is due to the enactment of the American Taxpayer Relief Act of 2012. At the time of the November 20 report, under state and federal law, Wisconsin's estate tax would have been restored for deaths occurring in 2013 and after (I touched on that in this article). It was estimated that this restoration would have increased tax collections for the state by $219.0 million ($94.0 million in 2013-14 and $125.0 million in 2014-15). The $219.0 million was included in the November report. However, Congress modified federal law so that this will not occur.
There are also lower estimates vs. the DOA for sales taxes along with cigarette and other tobacco taxes, and higher estimates for income taxes (because the LFB anticipates the Obama recovery to pick up). So let's add up the revenue estimates and put them together with the expenses estimated by the DOA, and see what kind of baseline we're in for the next budget, for 2013-2015.
Cash surplus, end of FY 2013 $484.7 million
Reduction in FY2014 revenues vs. DOA -$152.7 million
Estimated DOA revenues vs. expenses FY2014 -$91.4 million
Reduction in FY2015 revenues vs. DOA -$159.6 million
Estimated DOA revenues vs. expenses FY2015 -$80.0 million
Required "rainy day fund" balance, end of FY2015 -$65.0 million
New projected budget balance, 2013-2015 budget -64.0 million
That's right, we already need to make cuts or find new revenues for this next budget. And now let's throw in some adjustments that very well could happen.
2. Sequestration/ fiscal cliff concerns. Sure, Congress has voted to extend the debt ceiling for the next 3 months, but that still doesn't change the fact that there are huge budget cuts lurking for late March, and Walker's own DOA estimated
The fiscal tightening – also known as the fiscal cliff – compels a sequestration of funding streams that Wisconsin receives from the federal government, absent some other agreement. Medicaid and many other programs were exempted from thes equestration order. Initial reports indicate that Wisconsin has about $94 million at stake in fiscal year 2013-14 with the sequestration agreement. About one-half of this reduction would affect federal education transfers to Wisconsin and, therefore, would not be felt until next fall's school year and after passage of the [2013-2015] Biennial Budget.
So that's another $188 million that could go away over 2 years.
So now we're up to $332 million that has to be dealt with. Oh, and Walker and Assembly Speaker Vos are promising $300 to $350 million in income tax cuts as well when Walker's budget is released next month. Even if we don't have the money, and even if a former UW professor of mine points out
“The result is that the income tax cut will do almost nothing to spur economic growth in Wisconsin,” [Prof. Andy] Reschovsky said in an email to The Badger Herald. “The $300 to $350 million cost of the income tax cut will also mean that there are $300 to $350 million [in] fewer resources available to invest in education, health care, transportation and other state functions.”
Then again, that is the goal of Scott Walker and the Bradley/ Koch money men he fronts for (easier to FUBAR government services and sell them off if you do that).
So you can bet the Fitzwalkwerstanis will try to claim the 2011-2013 surplus somehow allows us enough cushion to cut taxes in 2013-2015. The LFB's report shows that is simply not true, and in fact, we're probably facing a budgetary deficit well into the hundreds of millions of dollars. In fact, what Scott Walker needs in order for his failing schemes to end up producing a balanced budget is for Obama's America to have its economy take off, without hinderance from Tea Bagger budget cuts. How's that for irony!
It's been a long weekend for me, going to Vegas and having Monday off and such. But I did keep my eyes on things, and noted this remarkable stat from Friday's state-by-state unemployment numbers. And the news is not that Wisconsin remains with the state with the lowest amount of jobs created in the Midwest over the last 12 months (a pathetic 9,100 in a country that created 1.8 million, as I broke down last week). No, the big news is shown in these numbers, which begin with the end of last year.
Total jobs, December 2011
Wisconsin 2,719,800 jobs
Minnesota 2,683,300 jobs
Private sector jobs, December 2011
Wisconsin 2,313,900 jobs
Minnesota 2,276,000 jobs
Now compare it to where we are now.
Total jobs, December 2012
Minnesota 2,735,200 jobs
Wisconsin 2,728,900 jobs
Private sector jobs, December 2012
Minnesota 2,324,100 jobs
Wisconsin 2,323,600 jobs
That's right, Minnesota now has passed Wisconsin for total jobs, despite having 384,000 fewer people in the 2010 Census. Needless to say, the Mud Ducks are kicking our asses all over the place, and you can't help but notice the clear contrast in state governments. Minnesota replaced GOP Tim Pawlenty with Mark Dayton in the Governor's chair, which allowed the state to avoid being subjected to the worst of its fluke-election TeaBagger legislature. And unlike too many Wisconsinites, the 'Sotans learned from their screw-up in 2010, and defeated a proposed ban on gay marriage at the polls and gave control of both houses of the State Legislature back to the Dems.
It sets up quite a contrast in states and governance for the next 2 years between Wisconsin and Minnesota. We've certainly been losing it so far in the age of Fitzwalkerstan, and I have a hard time believing we're going to do anything to attract young, intelligent, high-value-adeed workers to much of our anti-gay marriage, anti-education state to win them out over going to progressive, advancing areas like the Twin Cities. And even if these needed workers do come or stay here, it's only a few places they'll choose to live. You think it's coincidence that Madison continues to boom while much of the rest of the state retracts? It's not.
But enough of the depressing stuff, let's get to a positive number.
Sometimes, things fall your way in Vegas. Last weekend was one of those times. And it's probably the best chance I have of getting a big payday in Fitzwalkerstan.
Just gave a gander on the Tim Russell sentencing memo from the Milwaukee County DA's office. It's quite obvious other shoes are waiting to drop.
First, on Page 8, the complaint shows how Scott Walker unilaterally gave away control of Operation Freedom funds from a local American Legion Post in October 2009, with Walker claiming that "this new structure should allow the community to take ownership of it." And by "community", Walker meant his long-time buddy and political appointee Tim Russell.
Within months, Russell was using those funds to pay for trips to Jamaica and Hawaii, and as the sentencing memo brings up
...Russell set about the steal the charity's money wellbefore he did any significant work on Operation Freedom...Moreover, Michelle Gore of the Veterans Service Office (who served as the 2009 event coordinator) told investigators that alarmingly little had been done to prepare for Operation Freedom 2010 in the First Quarter of 2010, after contol of the event had been given over to Tim Russell.
It seems like the only work Russell did in this job was to name now-convicted Walkergate criminals Darlene Wink and Kelly Rindfleisch to serve as officers and fund-raisers for Operation Freedom. Oh, and he also was doing other Walker-campaign related work in 2010, coordinating strategy with a quite familiar name.
[Protecting America's Future] worked through a Limited Liability Corporation styled as Runner Media, which was organized by Tim Russell...Runner Media conducted "ad buys" in the media markets for the Kagen-Ribble congressional race and Lassa-Duffy congressional race. Bank records show that Russell wrote checks from PAF to Runner Media in a total amount of $39,000. Runner Media also did work with the Republican Party of Wisconsin (RPW), paying RPW $4,000 in September 2010.
With Russell's corporation, Strategic Outsourcing and Research Center, Inc. (Source), Russell actively engaged in opposition research. Source was a non-stock company formed by Tim Russell in October 2009. Keith Gilkes, the campaign manager for the Friends of Scott Walker, was a client. Source was used to hire and pay Brian Pierick and two legislative aides, Cameron Sholty and Dean Cady, for opposition research benefitting the friends of Scott Walker.
C'mon folks. If you think Scott Walker knew nothing about all of these things happening out of his office with people he chose to hire and constantly worked with during the 2010 campaign, you probably also believe Manti Te'o wasn't in on the "dead girlfriend" hoax that made him a household name (and here's 11 contradictions and lies by omission from Te'o to show how full of shit he is.)
Yep, this thing's going up the chain. Should be fun to see how far over the next few months.
And with that, it's time to go to Vegas. Hopefully I'm more ice-cold at the sports book than the weather I'll come back to on Monday. (and yes, that's self-satire)
Well, I just had a whole list of writing about the December Wisconsin jobs report and it got erased. So let me give a condensed version.
On a top-line basis, it looks like a good jobs report, with 4,500 private sector jobs added for the month. It's the 4th time in the last 5 months that Wisconsin has added jobs in this report, which is the first time the state has done that since the passage of Act 10 in March 2011.
However, that is damning with faint praise, as the U.S. has gained jobs each month for nearly 3 years, and the "gain" in Wisconsin is from a lower number than previously thought, as shown in the DWD's own jobs report.
Place of work data: Downward revision to seasonally adjusted private-sector job number in November by 4,000 to show an estimated gain of 6,300 jobs. Downward revision to seasonally adjusted total job number in November by 4,100 to show an estimated gain of 6,500 jobs.
So if you include those downward revisions for November, the private sector job gains in December are all of 500 jobs, and 2,800 JOBS WERE LOST comapred to November's original figures.
What this means is that Governor Walker's jobs gap has expanded again- now back to 99,000 jobs overall. And we have fewer jobs than we did before the recall elections, which Walker claimed would "open the floodgates" with jobs.
The same holds in the private sector stats. It's an especially bad record when you realize that if Wisconsin had only kept up with the growth in the rest of the country, the state would have added 51,000 private sector jobs last year. Instead, Fitzwalkerstan added a paltry 9,000 jobs in private sector for 2012.
And even worse, the December job "gains" aren't even a sign of job creation. Remember how Governor Walker said we should look at the "raw numbers" when he tried to get away with saying the state had added 100,000 jobs by this Summer, and was later exposed as a pants-on-fire liar for saying so? Well, the raw numbers also show that there were fewer actual jobs than there were in November, and even the sector with the largest job gains for December only did so because of fewer-than-normal seasonal layoffs.
Job change, Wisconsin, December 2012
Overall jobs -19,200 Non-seasonal adjusted, +1,300 seasonal adjusted
So don't be fooled by the Journal-Sentinel headline or spin from the AM620's and other WisGOP mouthpieces. December's Wisconsin job figures are mediocre at best, continue to lag the growing U.S. economy as a whole, and there is no indication that we are turning any kind of corner that'll have job creation take off. In fact, this report, and the expansion of the Walker jobs gap, is further proof that no, it ain't working.
Yep, same routine we've seen in the last several years from those guys.
UW 64, Number 2 Indiana 59. Hells to the fucking yeah!
In addition to the fact that it's an upset on the home floor of the Number 2 team in the nation, and that it puts Bucky all alone in first place in the best conference in America, beating IU has extra relevance to me, as I explained back here in 2008.
And oh yeah, Bucky hasn't lost to the Hoosiers since I wrote that 5 years ago. It also extends Bo Ryan's record vs. Tom Crean to 15-2, and if you check Marquette vs. UW history, it shows that Buzz Williams has more career wins over Bo than Tan Tommy does.
But then again, TAN TOMMY IS JUST LIKE SCOTT WALKER, a fraud who talks a big game, but delivers a small one. Even though both got a reprieve from losing their jobs in 2012, and the media is still fooled into thinking these guys are on the way up, people with a clue know better, and both will be crashing to earth soon enough.
Oh, and both are constantly abused and exposed by them crazy libruls from Madtown. Both beatings will continue until both Tan Tommy and Gov. Dropout are inevitably removed from power.
With tomorrow's State of the State address looming, you can bet there will be plenty of platitudes and stretching of the truth with our governor's speech. And you can equally bet that our state's bought-off media won't do much when it comes to analyzing these statements and calling out the inevitable deceptions and lies. Which is why I'm here.
1. "Wisconsin is Open for Business"- you'll probably hear some kind of variation of this now stomach-turning statement from Walker tomorrow. He'll probably mention as one of the ways this statement is being carried out is due to the state's "being a better place to do business."
The source of those claims? Surveys from such in-touch, unbiased sources as Chief Executive Magazine and Wisconsin Manufacturers and Commerce. And this will be followed by some equally nauseating tip of the cap to "job creators"- a role Scott Walker has never had in life (heck, he's barely been HIRED for a private sector job in his life), but somehow knows a whole lot about.
“The study came out and we’re 47th [in entrepreneurship]. We suck. We’re bad.”
And if Walker brings up the cost of doing business as a reason we suck, and how perhaps there should be some modifications to help "our job creators," I bring up another interesting stat from last week's QCEW report. Wisconsin had the 2nd-lowest average manufacturing wage in the Midwest in the 2nd Quarter of 2012, barely rose above the rate of inflation the last 12 months, and was in the bottom third of the U.S. Our wages in manufacturing (and many other fields) are plenty low enough, thank you. The real problem in this state are greedy business owners who would rather pay off the Scott Walkers of the world than pay Joe Sixpack another 10 cents an hour, not Joe Sixpack demanding to get paid for his hard work.
2. "We made some hard choices and our budget is balanced." Funny, I don't see Scott Walker's corporate contributors getting over $300 a month pulled out of their paychecks a month like hundreds of thousands of Wisconsin workers did. No, the corporates already have received tax breaks from the first 2 years of Fitzwalkerstan, and stand to collect hundreds of millions more in breaks for the next 2 years. And Republican politicos like Scotty and his legions have a whole lot of wingnut welfare to suck up any lower paycheck that they might have had. Us with real jobs in the real world? Not so much.
As I've mentioned many times, any claim that Walker's current or future budgets were balanced by merely "spending no more than what we took in" is absolute bunk, as evidenced by the $500 million in increased long-term borrowing and $2.2 billion GAAP deficit in year 1 of the Walker budget, as well as the next budget relying on $219 million in estate taxes when Walker's own DOA admits the Wisconsin estate tax will not exist.
3. "Wisconsin's unemployment rate is under 7%, and we are poised for growth and expansion for the next 2 years." Well you can thank President Obama and the Federal Reserve for that one, Scotty. With Walker in attendance, St. Louis Fed Governor Louis Bullard told the Wisconsin Bankers Association last Thursday that he anticipates 3.2% growth for U.S. GDP for each of the next two years. That would be some of the fastest growth in the 3 1/2 years we've been in this recovery, and would chop unemployment down even more (and it went down 0.7% in the U.S. in 2012).
By comparison, Wisconsin barely stayed above water for jobs in the last year, having its unemployment go down by 0.3% while the U.S. dropped 0.7%, and we only gained 12,300 jobs in the last 12 months measured, while the U.S. added 1.9 million. And I can surely bet that we won't hear a mention that the Walker jobs gap is still over 90,000 jobs in the two years he's been in office.
“Two years ago we got the same song and dance from Gov. Walker and the Republican legislative majorities, but they put raw politics and power grabs before all else at very step of the way. Their actions offer precious little reason to believe them this time," [Ross said.]
Ross noted that in his inaugural address, Gov. Walker promised to be a leader for “all of the people in this state of Wisconsin” and vowed to focus on jobs, improve public education and protect the state’s natural resources.
Yet, mere days later, Walker was caught on tape revealing his political strategy to “divide and conquer” to Beloit billionaire Diane Hendricks as he and the GOP legislature stripped 175,000 state and local employees of their rights in the workplace. They followed up with enacting the largest cuts to public education in state history in his biennial budget and narrowly failing in efforts to rewrite state environmental regulations and clean air and water protections on behalf of an out-of-state mining company wanting to develop a pit mine in an environmentally sensitive area of Northern Wisconsin.
But you can bet our uncritical media will shrug when our governor says obvious bullshit about wanting to work with the Democrats tomorrow. And if the Dems are smart, they'll take the advice of Scotty's "cousin" George.
I'm seeing a lot of the 2005 Bush in the 2013 Scott Walker, and much like the 2005 Bush, I'm done listening to any speech our state's executive is going to give. I'm going to watch the 3-0 Badgers as they go to Bloomington to take on the top 5 Hoosiers instead, and now that I've already given you the real State of the State speech, I'd recommend you watch Bucky as well.
If you're wondering how the Walker Administration could consider balancing its debt and deficit-ridden budget with a possible income tax cut, take a look at how the Wisconsin Department of Health Services allegedly balanced its budget, and the damage that was done in the process.
On a classic Friday news dump, DHS Secretary Dennis Smith informed the Legislature's Joint Finance Committee at the end of December that the projected Medicaid deficit for the state was going to disappear. And the way they did it was by tossing the working poor off of BadgerCare, and making those who stayed pay more out of pocket.
On July 1 [2012], non-disabled and non-pregnant adults with incomes at or above 133% of the federal poverty level (FPL) became subject to the same premium amounts that will be required of individuals eligible for federal tax credit subsidies through health insurance exchanges beginning January 2014. The premiums are based on a percentage of a family's income based on a sliding scale. Individuals that do not pay a premium are allowed a grace period to pay the premium, before they are subject to a 12-month restrictive re-enrollment period.
The Department has developed tracking tools to measure the impact of the premiums on enrollment. A total of 11,682 individuals or 23% of 48,835 individuals subject to premiums did not pay the required premiums in July, August, or September, and were disenrolled after the grace period was exhausted.
And of the 3,140 individuals that were on BadgerCare that made over 200% of the poverty level or more, 53% dropped off of BadgerCare. Now you can hope that this was because these individuals found a better job that paid health care benefits, but given the bad job performance in the state in the age of Fitzwalkerstan, I'd say it's more likely they ended up not getting insured whatsoever, and chose to spend their limited money on other necessities.
Sure, it got the Medicaid budget into balance (well, until Logisticare adds another $40 million to the cost when it's rebid in a month), but how many people got left out to do so. And for what? So insurance companies could get more clients and this administration could brag about "fiscal responsibility" (and they're still failing miserably). Hope you enjoyed Wisconsin being among the national leaders for having people be insured, because we're going to fall into mediocrity very soon under these guys with these policies.
This governor is stilll clinging to the delusional thought that he's some kind of contender for national GOP office, so you can bet he'll try some kind of "innovative" program that allegedly controls Medicaid costs while keeping taxes low in this upcoming budget. And for the "GOP bubble world" crowd, it'll probably also involve tweaking President Obama and done in a way to try to keep Obamacare from being effective or cost-efficient. Citizen Action of Wisconsin and Communtiy Advocates think one of the ways Walker's DHS may try to do this is by not going along with Obamcare's offer of increased federal funding for increased availability of Medicaid. They sent out a relase yesterday reminding the Governor that he could be screwing Wisconsin businesses if he chooses such a short-sighted, ideological policy.
On a Media Call Friday morning health advocates discussed new research that shows that Wisconsin businesses will pay $120 million more in federal taxes if Governor Scott Walker rejects increased federal Medicaid money offered by the Affordable Care Act, the national health care reform law.
The reason for this huge tax differential is that under the terms of the Affordable Care Act employers with over 50 employees who do not offer adequate health insurance pay an additional tax penalty if their employees enroll in the new health exchanges. (aka the "freeloader tax") They do not pay a tax penalty if employees enroll in Medicaid (BadgerCare).
“Another important reason the Governor and the Legislature should accept hundreds of millions in federal money to fill the gaps in BadgerCare is to protect Wisconsin employers from a massive federal tax increase,” said David Riemer, Senior Fellow at Community Advocates Public Policy Institute, and the author of the analysis.
Much like with the train, the DHS's messing with Wisconsin's previously-strong health care services will add nothing to the state's quality of life, and probably cost the state a whole lot of economic activity due to lost jobs and lost disposable income.
Caught this little tweet from AP writer Scott Bauer, who ran into RNC Chair Reince Priebus at Monday's inauguration of the Wisconsin State Assembly (Priebus was in town to watch fellow shameless scumbag SE Wisconsin Republican Robin Vos be sworn in as Assembly Speaker).
@sbauerAP- "RNC chair Reince Priebus says Wis. Gov. Scott Walker "leading the way" across country on making case for "fiscal responsibility."
As reported on a GAAP basis, and as shown on page 44 of the CAFR, the General Fund deficit decreased from $2.9 billion as of June 30, 2011, to $2.2 billion as of June 30, 2012. In its Management Discussion and Analysis on page 29, DOA attributes this change primarily to an increase of $129.2 million in General Fund revenues, a decrease of $498.7 million in expenditures, and a decrease of $133.3 million in other financing sources and uses, such as transfers to other funds. In FY 2011-12, the State also paid two previously reported liabilities, including $233.7 million to settle transfers previously made from the Injured Patients and Families Compensation Fund, and $59.9 million to the State of Minnesota for individual income tax reciprocity.
The CAFR also reports information on the State’s long-term debt. As shown on page 110, the State’s long-term debt issued for general government operations was $11.0 billion as of June 30, 2012, which is an increase of $453.3 million since June 30, 2011.
The raising of long-term debt is also alarming, bumping up the state general fund debt by another 4.5% in 1 fiscal year, and refinancings that require hundreds of millions of dollars in added debt payments in the coming years. Somehow that doesn't seem to square with the party that constantly whines about "Obama's debt" and how "they fear for their kids' and grandkids' futures." Another classic example of the GOP's Number 1 rule- "our rules don't apply to our guys."
But hey, those policies are all the more better to cause a huge budget deficit and FUBARing of services so the 2015 successor to Walker can't clean it up, and it'll clear the way for more privatization to Walker/WisGOP donors and other connected folks. Which is the REAL goal of these failed, unbalanced budgetary plans of Walker and company (along with getting a few more donations off of those tax breaks, which is a nice side effect).
"Fiscal responsibility"? Only in GOP bubble world are Walker's higher debt and destroying of needed services considered "fiscally responsible." Reince sounds as stupid as he did when he stumbled onto the set with Chris Matthews this summer.
Today the Baseball Writers Association of America refused to pick any players to be inducted into the Baseball Hall of Fame. Most notably, not one player widely suspected of using performance-enhancing drugs finished in the top 6 for votes, and all-time home run leader Barry Bonds and 300-game winner Roger Clemens didn't even appear on 40% of the ballots, let alone the 75% needed for induction.
It is obvious that the baseball writers do not want the Hall of Fame to be associated with the steroid era of the late '80s through the early 2000s. And it led me to think back to my recent reading of Chris Hayes' The Twilight of the Elites - America after Meritocracy, where Hayes discusses baseball's steroid era, and how it was symptomatic of where the game and this country was back then, and the mess that it's in today as a result. After discussing how trainers like Brian McNamee and Kirk Radomski pumped up their clients to the point that they earned hundreds of millions of dollars in free agent contracts, Hayes switches, and talks about how steroids affected the average player.
...Kelly Wunsch was a middle reliever for the Chicago White Sox and, somewhat unusually for a realtively new player like himself, the team's union representative. Wunsch was a member of what might be called baseball's forgotten middle class. While stars get the most attention, the majority of a major league roster is made up of players who will never make an all-star game. And though they're clearly well compensated, they tend to live their lives in a constant state of fear that their skills will diminish or they won't make the cut...
Wunsch recalls that during his early years in the league, his steroid suspicions were largely focused on pitchers of comparable skill. "The people...that organizations are holding up as comparable to me in contract talks: Joe Blow makes this much money and you're 6 mph less than him, same number of appearances, and smaller number of strikeouts. And when you begin to get a strong suspicion about those guys, it begins to dig at you."
So in the spring of 2003, as the first round of diagnostic testing was about to begin, Wunsch started discussing the drug testing policy with fellow players, and they happened upon a novel strategy. According to the rules set forth by the union and management, if a player refused to actually take the test, it would count as testing positive. Wunsch and a few teammates who weren't on performance-enhancing drugs realized that if enough of them refused the test, they'd push up the nuber of positive results and greatly increase the likelihodd that the 5 percent threshold would be met and automatically kick in a testing regime.
Not surprisingly, the players' union opposed this idea, figuring that the owners would use the news of positive tests against them. But let's be fair, the owners weren't fans of positive steroid tests either, as they wouldn't want the game to fall into disrepute (today's refusal to admit steroid-accused players into the Hall of Fame backs up how this era still lingers over the game). As Hayes goes on to note, owners were more than happy to allow drugs to be part of the game, as long as the money kept rolling in to see the roiders.
The report on steroids commissioned by Major Leage Baseball, produced by former senator George Mitchell, concluded..."There is validity to the assertion by the Players Association that, prior to 2002, the owners did not push hard for mandatory random drug testing because they were much more concerned about the serious economic issues facing baseball."
A 2003 postseason scouting assessment of Dodgers star pitcher Kevin Brown speculated about "what kind of mediciation he takes" and noted, "Steroids suspected by GM." Brown was never, apparently, confronted about this suspicion and was later traded to the Yankess, which continued to pay his annual salary of $15.7 million. One imagines there were quite a few similar memos written during that time.
The reason for the laissez-faire approach to drug use is blindingly clear: the steroids era was a lucrative time for baseball. In 2007, as the widespread steroid use was coming to the surface, MLB broke its attendance record for the fourth consecutive season. That same year, revenue for baseball's thirty teams went up by 7.7 percent, to $5.5 billion. In 2007, the average team was worth $472 million, up a whopping 143 percent since 1998...Like the peak years of the housing boom, the players and owners were all making far too much money to trouble themselves with the massive fraud that was driving the profits.
And as much as many writers try to ignore that reality, I still am reminded of this Sports Illustrated cover from the end of 1998, which still sits at my house as a wicked reminder of the era.
And outside of the emergence of Babe Ruth (in another asterisk time for the game- before players of color were allowed), no hitter has ever been more unstoppable than this guy was in the steroid era.
Look, a lot of guys were on roids in the early 2000s. None of them hit 73 home runs in a year or came close to OPS's of 1.378, 1.381 and 1.421 (Ryan Braun was at .994 in his 2011 MVP season and .986 last year, for comparison). No one was a better player of his time period, and to deny him the Hall of Fame because he was among a group of players that used PED's is TO DENY THE STEROID ERA EVER HAPPENED. I'm sorry writers, but it did happen, and it is a part of the legacy of the game whether we like it or not. I think what Barry Bonds and Roger Clemens and Mike Piazza and numerous others did in that time period was scummy and screwed over some players, but it was also legal under the rules of the time, and they were ingesting nothing different than a large percentage of their contemporaries did.
That doesn't change the fact that I can't stand Barry Bonds and I still recognize Hank Aaron as the all-time home run king, because steroids changed the game and blew stats out beyond recognition, and has put a large amount of players of that time under serious suspicion and disdain. But ignoring the steroid era as a part of the game is absurd, and a denial of existence. It's much like ignoring that banks defrauded homeowners and bank regulators and played a major role in bringing the economy to its knees, and we need to acknowledge it happened. There was another reminder of the frauds of the past this week when Bank of America agreed to pay an $11.6 billion settlement as part of the shady practices of Countrywide Finanical. And no matter how much the Rick Santellis of the world try to say otherwise, individuals were lied to and bank ponzi schemes and idiotc trades were a major part of the mortgage scam that led to millions of job losses and trillions in lost stock and home value.
Much like with a lot of things in this country, be it the steroid era, or the mortgage meltdown, or mass killings with guns, the bigger question isn't "What do we think about this bad thing?" The real questions are "WHAT DID WE LEARN FROM IT?" and "What kind of people would pull shenaningans like this, and why?" Americans kinda suck at that part, be it baseball writers or policymakers, and we need to do a whole lot better in finding a way forward. If we don't, we'll find ourselves falling back into the hole created by the past, and never be able to get out of the hole and become truly healthy.
Not surprisingly, Walker tried to hide this type of apples-to-apples comparison when he had his DWD release these figures last month, because when you put Wisconsin up against all of its Midwestern neighbors, we fall woefully short. I'll even stick with private sector job growth, because that's how Walker insists he should be judged (even if that doesn't give the full story), and I'll use the stats from BLS's handy interactive map.
Private sector jobs, Jun 2011- Jun 2012
Ind. +2.9%
Mich +2.9%
Ohio +2.6%
Iowa +2.0% U.S. +1.8%
Minn +1.8%
Ill. +1.6% Wis. +1.5%
And that 1.5% increase is down from the 1.7% increase in private sector jobs that we had this time a year ago. June 2011 also marked the end of the Doyle-Dem budget, and this report illustrates the first year of the Walker/WisGOP budget. In fact, if you look at the last 2 years of year-over-year job performance as measured by the QCEW, you can see the number peaked at 1.9% in March 2011- the same month that Act 10 passed the state Legislature.
And the wage story isn't much better, as Wisconsin ranks 31st in wage growth in the U.S.. Although we at least made like the Packers and beat the Mud Ducks.
Change in avg weekly wage, Jun 2011-Jun 2012
Ohio +2.8%
Iowa +2.5%
Ind. +1.9%
Mich +1.7%
Ill. +1.6% Wis. +1.4% U.S. +1.3%
Minn +1.1%
The wage story is even more scarier when you look at how Wisconsin's figures compare to the previous quarter- it dropped from $826 a week in Q1 2012 to $778, a drop of 5.8% in 3 months. Now, some of that is due to Summer jobs leading to more part-time work and driving the average wage down (see, unlike Scotty, I'll look past the "raw data" for context). But when you look at the time since Wisconsin bottomed out from the recession, the trend is not Scotty's friend, with the two worst marks in wage growth since the start of 2010 have been in the last 9 months.
So no, it ain't working. And these figures don't even count the mediocre July, August and September job reports, where Wisconsin gained a total of 800 private sector jobs while the nation was gaining over 140,000 a month. Expect more bad numbers in the months to come, and to have that reflected in a rougher-than-portrayed budget picture.
The fact that the J-S would go ahead with the "pants on fire" rating and give this huge headline on Walker's failures also makes me wonder something else. Maybe JournalComm knows how badly it's hurt that paper to carry the water of Walker and the Bradley Foundation/MMAC oligarchy the last several years, and they're trying to escape the inevitable crumbling that is going to happen to this Administration in the next 2 years. If they do it soon enough, they're hoping people will forget what the allowed to slip by (not unlike critics of the Iraq War who only started speaking up around 2005 and 2006).
Sorry guys, I'm not forgetting what you at JournalComm have condoned and allowed to happen to this state. But if you're willing to finally hold Scott Walker and WisGOP accountable for their awful record on jobs, the economy, and the budget, then I say "Welcome to the party!"
And the fun begins again with a new session of the Legislature in Fitzwalkerstan. Pathetically, the media is trying to go along with Gov. Walker's claims of "moderation" and bipartsanship in a classic case of how our media helps to allow the Overton Window gets moved to the right, where radical, failed policies gets to be considered the new "normal."
Fortunately, real Dems and lefties aren't being fooled by this act, nor are they going to fall for the fake version of "bipartisanship," which is this day far too often means "give legitimacy to moronic ideas and accept 'both sides do it' false equivalences." With that in mind, I loved reading Assembly Dem leader Peter Barca's Inauguration Day Message.
Throughout the fall campaigns, citizens of Wisconsin repeatedly heard the word bipartisanship - spoken as a promise. And it is important that all of us here use and define that word the same way as all other Wisconsinites outside the Capitol.
Here is what bipartisanship is:
Bipartisanship is working together with one another and the public from the start – not just a final vote tally.
Bipartisanship is wide consensus – not picking up a stray vote or two from the other side.
Bipartisanship is cooperation on thorny problems – not just passing easy, ceremonial bills on a unanimous vote.
Bipartisanship is not one side going along with the other side’s extreme ideas. Limiting public input to simply tweaking extreme proposals is not bipartisanship. Today needs to mark the end of extremism dominating Wisconsin politics.
The people of Wisconsin have the right to expect they will get what they were promised by each of us as candidates at their door.
This session we must bury the partisan hatchet that chopped away at our Wisconsin values and legislative traditions and poisoned Wisconsin politics. We must end the extremism that resulted in valuable legislation being ignored and rushed legislation tied up in court.
Scot Ross at One Wisconsin Now equally called out Walker, and also thinks that actions speak louder than empty words.
"Two years ago we got the same song and dance from Gov. Walker and the Republican legislative majorities, but they put raw politics and power grabs before all else at very step of the way." [Ross said] "Their actions offer precious little reason to believe them this time.”
Ross noted that in his inaugural address, Gov. Walker promised to be a leader for “all of the people in this state of Wisconsin” and vowed to focus on jobs, improve public education and protect the state’s natural resources.
Yet, mere days later, Walker was caught on tape revealing his political strategy to “divide and conquer” to Beloit billionaire Diane Hendricks as he and the GOP legislature stripped 175,000 state and local employees of their rights in the workplace. They followed up with enacting the largest cuts to public education in state history in his biennial budget and narrowly failing in efforts to rewrite state environmental regulations and clean air and water protections on behalf of an out-of-state mining company wanting to develop a pit mine in an environmentally sensitive area of Northern Wisconsin.
On his signature promise, creating 250,000 jobs over four years, Gov. Walker has made precious little progress. While the national economy staged a recovery, Wisconsin under Walker ranked as one of the worst states in the nation for new job creation adding a mere 37,000 (hey Scot, it's not even that good under most measures). In addition, Gov. Walker and Republican’s signature jobs initiative, creation of a quasi-private Wisconsin Economic Development Corporation (WEDC), has been mired in scandal and missteps, violating guidelines in issuing grants and loans, losing track of millions in state taxpayer funded loans and even failing to follow basic business practices like conducting a comprehensive audit...
"The record of the last two years clearly shows that Gov. Walker, his administration and lapdog legislative majorities are either not telling the truth or not competent enough to deliver on their promises. Neither alternative suggest their latest promises are anything but empty,” concluded Ross.
At some point, actions and results have to win out over spin, lies and propaganda, and it's our job to make sure that happens. And not to be nice about it.
As the Legislature gets back into session, you can bet the Wisconsin GOP will try to insist the state's budget is in balance and that there is room for tax cuts (incoming Assembly Speaker Robin Vos hinted as much over the past month). Well the real numbers tell otherwise - we have a budget deficit now and it's slated to grow in the next few years, with recent events confirming that trend.
The first problem comes from bills passed in the last GOP-run Legislative session- corporate tax cuts which will explode in cost for the coming years. Remarkably, the Walker DOA budget request projects corporate taxes to go UP during the 2013-2015 budget, despite these cuts. It says corporate tax revenues will rise from $865 million in FY2013 to $897.6 million in FY2014 and $887.1 million in FY2015. The Wisconsin Budget Project estimates the cost of 2013-2015 tax cuts at $439 million, with much of that coming from the corporate tax side, and they described some of the giveaways that will increase over the next two years.
The start of a nearly total phase-out of income taxes for manufacturers and agricultural producers, $102.2 million over two years.
This new credit is based on income derived from manufacturing or agricultural property, and can be claimed through the individual or corporate income tax. It phases in over four years -- starting at 1.9% of business income in 2013, and gradually increasing to 7.5% in 2016 and beyond.
The corporate income tax rate in Wisconsin is 7.9%, so when the credit is fully phased in, businesses receiving the credit would be paying an effective income tax rate of 0.4% on income that qualifies for the credit. A business with $1 million in taxable income could see its taxes drop from $79,000 to $4,000.
When the credit is fully phased in, businesses will be paying an estimated $129 million less in income tax each year. The cumulative ten-year cost of the credit is $874.5 million. The credit does not require businesses to create any jobs. In fact, even businesses that initiate massive worker layoffs could qualify for this tax break.
A deduction for child care expenses, $9.2 million over two years
In tax year 2012, individuals can deduct up to $3,000 in child and dependent care expenses, up from a maximum of $1,500 in 2011. For tax year 2013, the maximum deduction rises to $4,500. It was originally enacted as part of the 2007-09 budget, but the phase-in was later postponed.
Loosening restrictions on investments that qualify for angel investment credits, $9.1 million over two years
A law that went into effect in April 2012 made changes to the parameters for businesses that investors may invest in to get this income tax credit, and relaxed rules on how long investors must hold investments to qualify for the credit.
A credit for expanding a dairy farm, $4.4 million over two years
Corporations who expand or modernize a dairy farm are eligible to receive a credit for up to 10% of the cost of the activities. This credit was originally set to sunset at the end of 2011, but legislation was passed that extended the credit through the end of 2016. So THAT'S why all those huge farms had "Thanks Walker" signs along the interstate.
Allowing corporations located in multiple states to shift prior losses to the state with the most favorable tax treatment, $3.8 million over two years
Multi-state corporations can shift businesses losses incurred before 2009 to other states. Starting with tax years beginning in 2012, a corporation can use up to 5% of its business loss to offset its total income, for the next 20 years.
There are a few items that would help actual people, like the expansion of a write-off for people who pay for their health insurance premiums, and breaks for businesses that hire veterans and produce biofuels. But on the whole, these are tax cuts that will do little to nothing for Wisconsin small businesses, and will cost the state revenues that could be built into infrastructure and services that generate economic development.
Wisconsin corporate taxes are already off to a slow start in FY2013, down 8.5% for the first 5 months of the new fiscal year, while the Walker DOA only projects a 4.6% drop in their budget. A 4% shortfall in corporate taxes is about $35 million a year, not a lot in the big picture, but it also doesn't include the coming tax breaks that'll make that shortfall bigger.
The Walker DOA also built its budger request under another wrong assumption- that all aspects of the fiscal cliff would hit, and that Wisconsin's estate tax would fully kick in for 2013. Well the deal that was struck in Congress during New Year's takes that revenue out of the equation, as an article from the Wisconsin Reporter (!) explained
...Congress did, indeed, pass this week a deal to avert major tax increases for most Americans and spending cuts economists said would threaten the economic recovery.
In doing so, Congress kept about $219 million from coming to Wisconsin in the form of estate taxes, money the Department of Administration was counting on in projecting that tax revenues would grow by $1.5 billion over the coming biennium.
Already, however, the DOA said state agencies’ requests for funding exceed expected revenue for the biennium by $171.4 million, with the $219 million factored into the equation.
And the Wisconsin DOA concurred, saying the state estate tax is gone under the deal. So strike another $219 million from that "balanced budget." The other part of the fiscal deal Congress struck put off the mandatory spending cuts from the feds for another 2 months, but they are still looming for March. The DOA estimated the effect of this cut as follows:
The fiscal tightening – also known as the fiscal cliff – compels a sequestration of funding streams that Wisconsin receives from the federal government, absent some other agreement. Medicaid and many other programs were exempted from thes equestration order. Initial reports indicate that Wisconsin has about $94 million at stake in fiscal year 2013-14 with the sequestration agreement. About one-half of this reduction would affect federal education transfers to Wisconsin and, therefore, would not be felt until next fall's school year and after passage of the 2015-17 Biennial Budget.
I assume the DOA means the 2013-15 budget for school aids, but regardless, that's another $188 million you take away from the revenue estimates, though I'll take $16 million away from that for the 2 months that are funded through March. So combine the restoration of the estate tax credit and the drop in corporate taxes and the threats from Congress cutting state aids and you get.
Estate tax gone - $219 million
Sequestration - $172 million Corporate taxes down- $70 million Total revenue shortfall for biennium- $461 million
I'm not even figuring in the fact that revenue growth has slowed for the first 5 months of this fiscal year, which projects to revenue figures that would be below the DOA's estimates. I am also going to go with the DOA's assumption that the U.S. economy will continue to grow at its present pace - around 2 million jobs being added a year and growth of 1.8-2.8 % a year. If Baggers in Congress decide to crash the economy due to the debt ceiling, this obviously goes out the window. So ironically, for the Wisconsin GOP to claim a decent fiscal picture, they have to hope the Congressional GOP is prevented from screwing things up by installing austerity that would drive the economy in recession.
Needless to say, there's a whole lot of Fantasyland in WisGOP's claims of a balanced budget, and we'd better be ready to state these facts as the new legislative session begins, with the Republicans sure to be trying to continue inflicting destructive policies and tax breaks that would send the Wisconsin budget past the point of repair.
