Clearing up some budget confusion

I wanted to follow up on this week's revelation of the state's revenue shortfall of $281 million, and clear up a few conflicting items reported in the last few days.

The first tries to answer the question of "how much are we in the hole in Wisconsin? Here's what One Wisconsin Now put up on their whiteboard when the revenue numbers dumped on Thursday.



The Wisconsin State Journal story claimed the deficit was really $115 million, and even really smart dudes like UW Professor Menzie Chinn quoted the "$115 million deficit" figure. I replied in that Econbrowser article of Prof. Chinn's that I believe the real deficit for the 2015 fiscal year should be figured at $472 million based on the revenue shortfall, and here's my explanation for that (follow along with One Wisconsin Now's whiteboard if it helps you with the numbers).

When the LFB made their updated revenue projections in May 2014, after the latest round of Walker/WisGOP tax cuts was put in place, they figured we would end the 2014 fiscal year on June 30 with $14,229 million in tax revenues. Then they figured tax revenues would grow by 3.5% in FY 2015, based on the economy, inflation, and numerous other factors. Well, we haven't changed any laws that would change the rate of revenue growth in Wisconsin since then, so wouldn't it be logical to still assume a 3.5% increase in tax revenue, all other things being equal?

So we now know actual tax revenues came in at $13,948 ($281 million below what was predicted), and that would make the ending cash balance for FY 2014 at +$443 million, not the $724 that was originally projected.

A 3.5% increase from $13,948 = $14,436 in tax revenues FY 2015.

The old LFB prediction was 14,725 million for FY 2015

$14,725 - $14,436 = $291 million shortfall in FY 2015

If you plug that into the OWN whiteboard, it drops the total available for FY15 from $15,727 to $15,436.

$15,436 avail. - $15,843 appropriations = $407 million deficit

$407 million + $65 million in reserve = $472 million to be made up by June 30.

This is how one revenue miss compounds into further revenue misses, because you're starting from a lower number. This is also an explanation as to why I predicted this would balloon the 2015-17 structural deficit past $1.3 billion, if you plug the new revenue figures into other LFB calculations.

By the way, one other interesting note to bring up, courtesy of frequent blog commentator GeoffT. The two states run by Dems that border Wisconsin actually had revenue surpluses for the recently-completed fiscal year.

Minnesota was $168 million to the upside compared to its February projections, and $235 million better than what they predicted in April. The higher-than-expected revenues are noteworthy, because our neighbors to the west already had a projected $1.23 billion budget surplus BEFORE the higher revenues were known. This was mostly based on Minnesota's booming economy in 2013, the first year Dems resumed control of both houses of its Legislature (by comparison, Wisconsin had its lowest job growth of any of Walker's first 3 years in office in 2013, based on the Quarterly Census of Employment and Wages).

Illinois was $43 million to the upside in FY14 compared to what it thought it'd have this Spring, Income and sales taxes both beat expectations, and Illinois ended up with $1.3 BILLION in surplus revenues compared to what their budget bill planned for Fiscal Year 2014. However, the FIBs still have a backlog of bills worth billions of dollars, and got downgraded by S&P last month not because of excessive spending, but because their state Legislature decided to roll back tax increases put in place in 2011 to cut into that backlog of bills. When even the banks are saying "you really shouldn't follow the ways of Koch-sas Kansas and cut taxes", both FIBs and cheeseheads should keep it in mind.

Keep those realities in mind when the Walker folks try to argue that their way is superior to the way things are done in "Democrat states." Because the two closest blue state governments outperformed deficit-ridden Wisconsin in 2014 when it came to bringing in tax revenues. And Wisconsin's path under Scott Walker seems a whole lot closer to "broke" Illinois' than surplus-laden Minnesota's.

No, it's not working. Not at all.

Labor Day- we need to turn the tables of the last 40 years

As we celebrate our 3-day weekend, let's take a moment to realize why we should celebrate Labor in America, and why we need the balance of power in this country to shift back toward the people who actually work. The numbers over the last 40+ years tell an obvious story.

Here’s a look at worker productivity, which has increased strongly and steadily since 1992.

Change in productivity, U.S.
1970Q2 - 1979Q2 +19.2%
1979Q2 – 1989Q2 +15.4%
1989Q2 – 1999Q2 +21.7%
1999Q2 – 2009Q2 +29.1%
2009Q2 – 2014Q2 +6.6%

But real incomes haven’t kept the same path, despite the theory of marginal product of labor, which says one should be paid in direct proportion to their increased productivity. Table B-15 of this year’s Economic Report of the President has this information

Change in real average hourly earnings, private sector U.S.
1970 - 1979 -0.5%
1979 - 1989 -7.8%
1989 - 1999 +3.5%
1999 – 2009 +7.4%
2009 – Dec 2013 -0.7%

Also, note that real average hourly earnings were down every month between March and May, and haven't risen since February. Only a slightly longer average work week has allowed real average weekly earnings to nudge up by 0.3% in the last 12 months. (don't spend it all in one place).

This flies in the face of the Marginal Revenue Productivity Theory of Wages, which says if you are able to crank out 10% more items and sell it at the same price, you should be paid 10% more. That hasn't even come close to happening.

On a related note, look at the decline in wages as a % of Gross Domestic Income since 1970 (scroll across to get the full info).



Now, compare it to the amount of corporate profits in the same time period (again, scroll across).



I don't think inflation has caused profits to go up to 23 times the amount that we had in 1970. Those changes didn’t happen in a vacuum. And neither did this.

% of workforce that were members of unions
1970 27.8%
1984 19.1%
1998 13.9%
2013 11.3%

There is a direct link to the lower rates of unionization, the lower share of wages going to workers, and the higher levels of corporate profits. And no, it hasn’t trickled down and made us all millionaires through Wall Street magic. This was a STRATEGY by corporate oligarchs to take away workers' power through union-busting and other "race to the bottom" maneuvers such as deregulation and outsourcing.

And it needs to change. NOW. There are far too many owners of businesses these days that resemble the Wanek family, who owns Ashley Furniture. These people claim they "can't compete" with other furniture businesses, get a $6 million tax write-off from the state for promising ONLY to lay off half of their workers, and then they kick back $20,000 to Scott Walker’s campaign for governor. All while the average worker at Ashley’s facility in Arcadia makes $10.88 an hour!

And oh yeah, the stock market keeps going up to record levels, as “job creators” decide they would rather gamble the money in the market. And the "free market" is manipulated, as the 30 companies that make up the Dow Jones Industrial Average chose to spend to spend $211 billion in 2013 to buy back their own stock, in order to encourage other people to buy in. These choices are what our tax code and oligarchs encourage over actually paying the people that made those profits possible, and hiring more to increase production.

There are a few promising signs for 2014 so far, as wages and salaries were up 3.76% over the first seven months of the year (before inflation), but it’s not enough to kick the economy up to the next level. Increasing the minimum wage is far overdue, particularly given the lack of increases in wages from the “free market” over the last 5 years, a development that has helped to keep an economy reliant on consumption from returning to full employment.

We also need more workers to stand up and demand that they get back what they have put into their everyday work. Waiting for the corporate bosses to trickle-down a reward for you doing the right thing has not helped the vast majority of this country for the better part of two generations. So why not band together to receive what you have earned? It sure beats the way we’re going.

As the bell rings, why are there all these kids in the classroom?

Tuesday starts a new school year in Wisconsin, and the fallout from Act 10 and related Walker/WisGOP policies still reverberates today. The always-good State Sen. Kathleen Vinehout has an excellent column discussing the numerous funding and staffing issues that schools throughout her Western Wisconsin district are facing this year.

Many public schools are forced to do more with less because lawmakers who voted for the last state budget increased state tax dollars to private schools. Nearly half of Wisconsin’s public schools will receive less aid this school year than the last – including many of our local schools.

Eau Claire received the largest dollar amount cut statewide – over $2.3 million while Pepin and Alma received the largest local percentage cuts - over 15%. At the same time, state aid per pupil going to private ‘voucher’ schools reached its highest point in state history.

In his letter, [Pepin Area School] Superintendent [Bruce] Quinton noted the difference between amounts of state aid for Pepin to that of private schools: for the 2014-15 school year Pepin receives $1,667 per student; public tax dollars to private ‘voucher’ schools are $7,856 per high school student and $7,210 per K-8 student.

“Pepin Area School District taxpayers will pay an additional $70,119 in taxes to educate children in other districts this school year,” Mr. Quinton wrote. “I cannot comprehend why taxpayers are willing to subsidize a private voucher school education system, especially when research indicates that private voucher schools perform at best as well as the public school system and in many cases below their public school peers.”

Vinehout also mentions that several districts in Western Wisconsin are facing school referenda that force citizens to choose between large property tax increases and the closing of schools and reduction in other education services.

The culprit in this is Scott Walker's education policies, which began by cutting state aids to public schools in 2011 and 2012, and continued by expanding the state's voucher program statewide. And the "tools" of Act 10 have not come close to offsetting these cuts, particularly in the smaller districts in rural Wisconsin.

Take a look at this map that shows the changes in state funding for 2014-15. Nearly half the districts in Wisconsin will have reductions in state aid for this year- more than 3 years after Act 10 took place.



Notice all the districts in red that are up North? Those districts are each looking at state aid cuts of more than 10% for this year, and will need to raise property taxes to make up for that difference. The beige-colored districts are also disproportionately away from the big cities, meaning that rural districts are facing the lion's share of funding difficulties for the upcoming year. Sure makes you wonder if that reality will sink into those areas before the November election, and if they'll realize that there's no payoff to denigrating teachers and destroying one of the few reasons to stay in these communities- strong public schools that develop strong communities.

And this is coming on the heels of public school services already being stressed. The Wisconsin Budget Project notes average class size increased 8% from 2004-05 to 2011-12, from 14.3 to 15.5, and Wisconsin teaching positions were reduced by 4,300 FTE in the sme time period. In the two years since, the DPI indicates that 500 FTE teachers have been hired back (meaning we're "only" down 3,800), but class sizes have stayed high, and the replacement of teachers has often been at the cost of numerous years of experience.

Some districts continue to bleed teachers as the teachers' current agreements run out, and they lose their voice over pay and work conditions. This was recently shown in the case of West Allis-West Milwaukee English teacher Eric Zentner, who was one of 139 teachers in the district to leave this Summer. Zentner quit after 18 years, and wrote a four page letter that described an administration that he felt was too busy trying to micromanage teachers after Act 10 took effect, instead of leaving it up to the judgment of the pros in the classroom.

He said new behavior policies that emphasize keeping kids in the classroom rather than sending them outside class when they disrupt the learning environment is difficult for teachers.

Teachers are also undermined by interesting content children can access on their iPads, and he said, they're limited in their ability to take away the devices.

Teachers are also urged to give students as many tries as necessary to complete assignments, and pass students even if they're not ready, he said.

Zentner said there appear to be more administrators in the building at a time when teachers are asked to attend more meetings, limiting their time for meaningful interactions with students.

As we start the 2014-15 school year, I'd ask you to treat your teacher with respect. They're underappreciated while being worked as hard as ever, likely taking home less pay than they did 4 years ago, and their districts are being squeezed by budget cuts from an ALEC-beholden Republican Party, who would love nothing more than to screw up public schools so they could justify funneling even more taxpayer dollars to corporate and religious private school operators. And despite the claims of Gov Walker and company, these policies will likely jack up your property taxes over the next two years.

So tell me, is it working?

Jon Stewart, Kos Poster nail it on the white-wing bubble

This is one of the better Jon Stewart segments I've seen. It centers on the uprising over the last 3 weeks in Ferguson, Missouri, and the issues that have been brought to the surface as a result. Jon perfectly lays out both the double-standards on race and complete cluelessness about white privilege that apparently is part and parcel of being on Faux News.



(after white guys on Faux complain that black people don't deal with black-on-black violence and "take care of their own communities)

"Oh, that's right, because African-American leaders did hold a summit about that in November. And have met at least three times in the city just in the last 13 months. Which is not to say it's been effective, but taken along with the President's My Brother's Keeper initiative, which attempts to address this violence, and the countless vigils and marches within these violence-torn communities means they are trying, actually, to do something. You see, you being ignorant of those attempts doesn't mean the issue itself is being ignored. The same way that when it snows where you live doesn't mean the world isn't getting hotter."

And the ending thought is an amazing statement.

"I guarantee you that every person of color in this country has faced an indignity from the ridiculous, to the grotesque, to the sometimes fatal, at some point in their — I'm gonna say — last couple of hours. Because of their skin color.

Quick story. So we live in New York City, a liberal bastion. (Let me finish.) Recently, we sent a correspondent and a producer to a building in this liberal bastion, where we were going to tape an interview. The producer — white — dressed in what can only be described as homeless elf attire, and a pretty strong 5-o'clock-from-the-previous-week shadow, strode confidently into the building preceding our humble correspondent — a gentleman of color — dressed resplendently in a tailored suit. Who do you think was stopped? Let me give you a hint: the black guy.

And that shit happens all the time. All the time. Race is there, and it is a constant. You're tired of hearing about it? Imagine how fucking exhausting it is living it.

And calling the divide in opinion over the events and fallout of things in Ferguson a black-white thing is being simplistic. An excellent Daily Kos column by a poster named "Vyan" lays out what the real separation is on the issues in Ferguson.

When 80% of Black people all tend to feel the same way, that's called being in agreement. When 37% of White people also feel that same way, that's an extension of that agreement. The Divide here is with the other 47% of White people who feel the other way about it.

And yes, most of those on one side tend to be Democrats while the others are Conservative Republicans. This isn't White vs Black. It's not even Left vs Right. It's provable Facts vs Deluded Bullshit.

PRECISELY. Seriously, read that whole thing- it's filled with some amazing stats on disparities and other facts of life for black people that white righties refuse to understand.

And it's part of the biggest problem in this country, where far too many people are literally in different existences, without a care of what happens with others. If you spend all your time listening to angry man radio and watching Faux News and don't talk to or know any people of color, you have no idea about how minorities are often picked up and put under suspicion for no reason other than their appearance, and have never had a similar experience yourself. Which allows you to be suckered into accepting the cops' side of the story, no matter how implausible, and resent those minorities and liberals who say these disparities are the result of racism.

When these white right-wingers start shooting off their mouths about race in America, they need to heed the great words of former New Orleans Saints head coach Jim Mora: "You think you know, but you don't know. And you never will."

We really need to puncture the angry white-guy bubble, and make them realize the world is bigger and more complex than what they have been told to believe. Because this state and this country cannot continue with such a divide in the Reality-Based community, and the Faux-AM Radio Bubble.

Verified- a massive budget deficit in Wisconsin. Who'da thought?

Well, those Wisconsin revenue numbers we’d been waiting on finally dropped today. And as predicted, we’re now looking at a real and growing budget deficit in Wisconsin.

Wisconsin tax collections are more than $281 million short of estimates, nearly 2 percent less than anticipated.

The state Department of Revenue on Thursday released the figures for the fiscal year that ended in June. Those figures show the state collected $281.2 million less than was anticipated by the nonpartisan Legislative Fiscal Bureau in January.

Huh, who could have predicted something like that?

You can check out the details on this shortfall for yourself by clicking this link. How did we get here? The big culprit is the Koo-Koo tax cuts of 2013 and further cuts passed at the start of this year, which not only reduced tax rates, but also changed the withholding tables, meaning that less money came to the DOR from people’s paychecks. The cynical idea is that this would make voters more likely to back the Republicans this November with a few more dollars in their pockets (key word- few), and much of these withholding table changes will be counteracted by what you don’t get in tax refunds over the next 2 years (basically, your refund will be less, so the state “keeps” more. Conveniently, this doesn’t happen until after the November elections).

What does this do for our budget situation? Well, the State Journal rundown has one side of the story.

However, the budget was expected to have a roughly $724 million cushion by July 1, making emergency action now unlikely.

Gov. Scott Walker's spokeswoman Laurel Patrick says the state will finish the two-year budget cycle with a positive balance. She says, "As we have done in the last several years, we will continue to manage the Wisconsin taxpayers' money well and keep the state's fiscal house in order.”

BUUUUUT, there’s another side of that ledger. I will assume all other expenses and revenues remain the same, and the rate of revenue growth in 2014-15 to stay the same - even with the reality of a shortfall in Medicaid due to Walker’s TeaBagging of Obamacare, and the $25 million that the Potawatomi refused to pay the state in response to Walker’s shakedown of the tribes regarding the Kenosha casino. These are based on the LFB’s May projections, after the Koo-Koo tax cuts were passed into law.

Wisconsin Gen Fund budget after revenue shortfall

2013-14
Opening balance +$759 million
Taxes and other revenues +$14,529 million
Net Appropriations -$14,865 million
2014 ENDING BALANCE +$443 MILLION

2014-15
Opening balance +$443 million
Taxes (3.49% growth) and other revenues +$14,994 million
Net Appropriations -$15,843 million
ENDING BALANCE -$406 MILLION
Required reserves -$65 million
TOTAL TO BE MADE UP BY 6/30/15 $471 MILLION

Sorry, Laurel Patrick, but we are far from on pace to finishing this budget with “our fiscal house in order.” I understand honesty isn’t a Walker Admin official’s top priority, but couldn’t you at least run the math before you try to BS people?

And the revenue shortfall means things get significantly worse in the next budget. I’ll continue to use the LFB projections from May, including their assumptions of no changes of revenue or spending through growth, just current law.

2015-16
Taxes and other revenues +$15,116 million
Net Appropriations -$15,732 million
ENDING BALANCE -$616 MILLION

2016-17
Taxes and other revenues +15,038 million
Net Appropriations -$15,744 million
ENDING BALANCE -$706 MILLION

This means a budget deficit of $1.322 BILLION lying in wait for the next 2-year cycle. And if we see any more slippage in this year (very possible with low job growth and higher expenses being revealed by the day), this number grows higher.

So we’ve now seen a repeat of the Tommy Thompson and George Bush idiocy of 2001, where a one-time surplus has been blown by short-sighted tax cuts, and now we have a widening budget deficit as a result. It also blows apart a major theme Gov Walker has tried to repeat during this campaign- that his austerity budget moves and tax cutting has left the state better off fiscally. It has not, and in fact, our hands are tied much more than they were when Walker took office in 2011.

That reality has yet to sink in to many Wisconsin voters, as shown in yesterday’s Marquette Law School Poll. Check out the responses of Registered Voters to this question.

Would you say the state's budget is in better shape now than it was a few years ago, about the same or in worse shape now?
Better shape 44.9%
About the same 26.4%
Worse shape 22.5%
Don’t Know/Refused 6.1%

Interestingly, 48% of that same poll’s respondents correctly noted that Wisconsin is growing jobs slower than the rest of the nation, a higher number than in previous Marquette polls. Somehow I’m thinking if the Dems and Mary Burke gave them this budget information in an ad blitz similar to their recent “last in the Midwest for jobs” meme, that 45% who wrongly think our budget is in better shape would be reduced significantly. And that would be especially true of the low-info or “mis-info” types that would be the most likely to desert Walker over the next 10 weeks if they could find out that it really isn’t working.

So there are your numbers. Pass em on and TELL THE TRUTH.

Did Walker just admit to a massive budget deficit?

Another day, another Walker screw-up, and it’s not for the reason you might think.

A top story in today’s Milwaukee Journal-Sentinel discussed a letter Gov Walker and Department of Administration Secretary Mike Huebsch released relating to the proposed casino in Kenosha. In typical “Unintimidated” fashion, Walker and Huebsch released the letter 1 day before Racine and Kenosha-area Dem legislators were going to hold a press conference calling Walker out for not approving the Menominee Nation’s casino (funny how those things work with this crew).

In between a bunch of “blame Jim Doyle” whining (as if the terms of gaming compacts had been somehow changed in the year that Walker’s administration has been reviewing the casino proposal), there was this startling revelation.

The Potawatomi has failed to make its annual revenue sharing payment that was due June 30, 2014. This had already had a significant revenue impact on the State of Wisconsin.

It is still unclear how the compacts negotiated by Governor Doyle with the Potawatomi will play out. It appears the complicated provisions may have been designed to block a Kenosha casino. It is possible the impact of the Doyle compact provisions will not be fully known until early January. We do know the proposed Kenosha casino project is very likely to impact out State budget. This proposed project has already caused significant short-term revenue losses due to Potawatomi’s failure to make its revenue sharing payment. As we continue to evaluate the long-term effects on our State budget and Wisconsin’s economy as a whole, one thing is clear – taking action on the proposed Kenosha casino project prior to following the processes laid out in the Doyle compacts could cost taxpayers hundreds of millions of dollars.

Part of the reason the state and the Potawatomi are at loggerheads is because a Kenosha-based casino would likely cut into the business of Potawatomi’s casino and new hotel near downtown Milwaukee (less than 40 miles away), and they want some reimbursement as a result. As the Potawatomi noted in their own statement

According to the terms of the Forest County Potawatomi Community’s compact, the Tribe may get a reduction in, or refund of, the payments made to the State of Wisconsin should the State approve another casino within 50 miles of the Potawatomi Hotel & Casino in Milwaukee.The State may end up owing Potawatomi money should the Kenosha casino be approved. Consequently, Potawatomi put its 2014 state compact payment into a segregated / reserve account.

In other words, the tribe feels it’s pointless to send the state a payment (estimated by the Journal-Sentinel to be around $25 million) when the state would likely be paying it back to them anyway if the Kenosha casino is approved.

This is also a good example of the tribe calling Walker’s bluff, as there is little doubt in my mind that Walker held off on making a decision about the Kenosha casino in no small part because it allowed him to raise campaign funds from groups in support and opposition to the facility being built. The Potwatomi is now using their leverage by refusing to pony up to the state for Fiscal Year 2014, and Scotty and company were caught with their pants down.

But there’s a bigger issue here. How would the Potawatomi’s skipping of a year of payments to the state cause any sort of budget crisis? A quick look at the Legislative Fiscal Bureau’s information on Indian gaming shows that the state’s tribes were set to pay the state just over $53.25 million to the state in fiscal year 2013-14. Of that amount, $27.3 million goes to other state agencies (for tribal-related programs and other assistance), and $26.26 million gets sent to the state’s General Fund. So if you assume the agencies still get their money, the state has a revenue shortfall of $25 million.

But in the big picture, so what? The current budget (post-tax cuts) has a $100 million surplus already built into it, and is supposed to start fiscal year 2014-15 $724 million ahead. This $25 million short-term loss might be an inconvenience, but it’s a miniscule amount of the overall General Fund budget that’s over $30 BILLION. Heck, we’re at least $93 million in the hole for Medicaid right now, and Walker and WisGOP are tossing away $206 million in savings this year by refusing to use the ACA’s provision to expand Medicaid. How does this $25 million all of a sudden put us over the edge and in danger?

The only way this is true is if the budget was already blown up before the missed Potawatomi payment came to light. The problem is that we don’t know how much the budget may be screwed up, because the Department of Revenue has refused to release the end-of-the-year collections for Fiscal Year 2014. 4 Dem Senators needled the DOA Secretary Huebsch this week for the delay, noting that the numbers were already out this time last year, when the revenue numbers looked good for Gov Walker and the Wisconsin GOP. These Senators followed up today with a note to their Senate Dem colleagues, predicting the Walker Administration would dump the revenue numbers on Friday, ahead of the Labor Day holiday, in an attempt to bury the bad news.

The Wisconsin Budget Project was a little more sanguine, noting that a similar delay happened two years ago, but adding that the DOR has left out some data they usually provide.

Although the Senators’ letter was correct that the tax collection figures for FY 2012-13 were released sooner last year, that hasn’t been the case every year. For example, the FY 2011-12 numbers were released on September 5, 2012. For me, the bigger disappointment this year was that DOR didn’t release tax collection numbers specifically for June, as it did the prior year (in this July 12, 2012 press release). Although DOR hasn’t always issued a comparable set of June tax figures, the revenue trends this year have made it frustrating not to have any update since the May tax collection numbers.

That said, I think any questions about the timing of the revenue numbers for the last fiscal year will soon be inconsequential – once those numbers are released. I applaud the Senators for drawing attention to the fact that these are important figures to be watching for, and for asking the DOA Secretary what the state will do if there is indeed a revenue shortfall.

There definitely seems to have been some kind of budgetary shortfall for Fiscal Year 2014, and I’ve noted that the cash balance for the end of that fiscal year was nearly $546 million below what was estimated in March. Now that doesn’t necessarily correspond to what the General Fund totals might be, but if Scott Walker is claming that the Potawatomi’s missed payment of approximately $25 million is throwing the budget into turmoil, then we may be in much worse shape than we knew, and the General Fund budget holes to be closed might be much more than the $1.1 billion I’ve previously estimated.

As usual with the Walker boys, it's not the immediate issue (a missed Potawatomi payment of $25 million), but is instead the underlying issue (budget deficit) that's the real problem.

Hey GOPs, when you're lying and hiding, you losing

Two classic examples of the exceeding levels of cynicism that define today's Wisconsin Republican Party. Both of these claims are in reaction to a failing and flailing Walker Administration, and both can be easily blown up based on what we already know.

The first is a tired rehash of a Walker campaign talking point. The press release is titled Backward Burke: Wisconsin Ranked 42nd in the Nation for Job Growth When Mary Burke Was Commerce Secretary." This is an argument dating back to numbers from the Quarterly Census on Employment and Wages from 2005-2007, and I showed how cynical and BS this claim was when they first tried it out 2 months ago.

..... the Bush years were brutal for the Midwest economy, in no small part due to massive offshoring of jobs in the previously-industrial Midwest, as well as lower population growth than the rest of the nation. In every one of the years between 2003 and 2007, more than half of the 7 Midwestern states had job rankings below 30th, so it's not that surprising that Wisconsin struggled in that same period.

Walker has been lucky enough to have his 3 years of office coincide with the jobs recovery under President Obama, and the new growth in the Midwest that has happened in the wake of the auto bailout and other measures that have helped reverse the decline under Dubya.

What Walker and campaign bubblehead spokesperson Alleigh Marre conveniently leave out is that Wisconsin was solidly middle-of-the-pack in the 3 years Mary Burke was at Commerce, ranging between 3rd and 5th in the Midwest. By comparison, Wisconsin has never been better than 6th place for job growth in any year since Walker took office, and was dead last for job growth in Walker's first two years, as well as 2011-2013 combined. These guys are truly out of ideas if they're trying tho slip that weak sauce by the media again.

Speaking of weak sauce, Ashley Furniture is now comically backtracking on the revelations over the weekend that they were slated to receive $6 million in WEDC corporate welfare, and still allowed to lay off over 1,900 of their employees in western Wisconsin. Instead, they're claiming, the Wisconsin State Journal misread the memo, and that they really didn't mean it when they said they might have to going lay people off.

Company lawyer Bill Koslo said in a statement that the job guarantee number "just sets the base line of the risk Ashley was willing to accept as a good Samaritan to the City of Arcadia."

"It is Ashley's intent to add jobs at all of its locations," Koslo's statement said.

Wisconsin Manufacturers & Commerce, the state's business lobby, shared the statement Monday with the Wisconsin State Journal. The newspaper reported Sunday that the Wisconsin Economic Development Corp. board in January approved the tax credits in a 9-2 vote. The award had not been made public because WEDC and the company have not reached a final agreement....

The State Journal contacted the company multiple times last week, and on Friday afternoon it confirmed the conditions of the credits. But that statement made no reference to the company adding jobs. Rather, it warned that "Wisconsin will lose a significant number of jobs" if the tax credits — to be used to reroute a creek, allowing for the company's expansion — are not granted.

The Ashley officials are claiming now that the 50% job loss figure was merely a worst-case scenario that would allow them to stay open in case something happened involving the wetland that the company's factory resides on, and the corporate welfare would help to reroute a creek in order to reduce the potential damage). They weren't really planning on laying off all those employees, NOOOOOOO. They just need some help to reduce the chances of a certain disaster happening (instead of, you know, paying for it themselves or going through the civil servants at the DNR). And the $20,000 kicked back donated to Walker by Ashley's top executives 2 weeks later was totally unrelated to this as well. Tell me another fairy tale.

And it's hilarious that Ashley won't directly talk to reporter Matt DuFour, but instead handed out a statement through the right-wing oligarchs at WMC, who apparently are better at bullshitting about backroom boodle with their boys in the Wisconsin GOP. You can tell DuFour and company aren't buying what Ashley's trying to sell- mostly because they weren't born last night.

As a former high school teacher, I've also developed a pretty good idea when less-than-savory people are caught, but still think they can sneak stuff over on folks. And given that the average WisGOP seems to have the maturity and intellect of a snotty teenager these days, it was a good insight into how these guys roll. If the Wisconsin GOP can't tell the truth about jobs numbers or future business plans, you can bet it's nothing they think will help them at the polls in November. I guess we'll find out in tomorrow's Marquette Law School poll if the damage is already sinking in from these deceptions and swindles, or if that fallout happens later. Because the problem with constantly lying and deceiving is that at some point, you don't remember what you claimed or tried to pull over on someone, enough people call "BULLSHIT", and the whole thing unravels.

Walker tries to pick more jobs cherries

Apparently Governor Walker is going to try blow smoke up the Wisconsin voters' backsides and tell them things aren't so bad ahead of the November elections. How else can you explain his latest ad propping up that the state is “3rd in the Midwest” for jobs added since July 2013? It's lame enough that the governor is trying to prop up mediocrity to counteract the Burke campaign's hammering on the jobs issue, ("We're middle of the pack!" doesn't really say "Give me another term."), but it also is yet another example of the Governor cherry-picking stats to hide the failures of his tenure in office.

Now on the surface, the numbers Walker is propping are correct. Even though we lag the national rate of growth, last week's state-by-state jobs numbers from the Bureau of Labor Statistics lists Wisconsin above all but 2 Midwestern states for private sector job growth.

Private sector job growth, July 2013-July 2014
Ind. +2.65%
U.S. +2.16%
Mich +1.66%
Wis. +1.50%
Minn +1.30%
Iowa +1.19%
Ohio +0.66%
Ill. +0.60%

And even though we already know those jobs figures are inflated by more than 11,000 based on the final QCEW figures for 2013, and we'd drop to 5th place if we deflated those numbers accordingly, let's allow Scotty his moment at this time.

What Walker's leaving out is the 2 ½ years before July 2013, which were awful. Even if you use the inflated monthly numbers, Wisconsin is 6th out of 7 in the Midwest for private sector jobs gained since Walker took office in January 2011 (both in percentage and in total increased jobs). And the updated Walker jobs gap shows we’re more than 67,000 behind what we’d have if we just kept up with the rest of the nation.



It must also be mentioned that job growth for the 7 months of 2014 has Wisconsin on pace to have its worst job growth of any of Walker’s 4 years. The monthly surveys show that we’ve gained a total of 11,000 private sector jobs and 10,900 overall in 2014. This is barely more than 1,500 a month, and a pace of less than 19,000 for the year. That would be a significant drop from the growth that the QCEW reported for 2011, 2012, and 2013,

QCEW private sector job growth, Wisconsin
2011 +29,800
2012 +33,872
2013 +28,141
2014 pace through July- +18,857
Projected total +110,670

This means we wouldn't even go halfway to Walker’s “floor” of 250,000 jobs. It’s only because so many Midwestern states were set back by the polar vortex winter that 2014's subpar number can look OK compared to other places.

Even before this lame “comeback” ad came out, Jud Lounsbury at Uppity Wisconsin noted that Walker’s Department of Workforce Development refused to release the preliminary numbers for the QCEW for Q1 2014.

To try to mitigate the early-release of QCEW as being labeled as purely political, the WDWD developed an official policy that they would begin releasing QCEW data on their own, approximately one month before the BLS. So, for example, the first quarter of 2012 and 2013 were both released on the third Thursday in August.

Given this past release date pattern, I was eagerly awaiting the first quarter of 2014 to be released last Thursday-- the third Thursday in August. When no data was released, I wrote to WDWD communications director John Dipko to ask when the the QCEW for the first quarter would be released. He responded that Wisconsin's first quarter QCEW would be released by the BLS on September 18, 2014.

So they're hiding the numbers, and I have little doubt it’s because those numbers would show another bad stretch of mediocre jobs figures. They would likely be similar to the 28,000 number that we saw at the end of 2013, which placed Wisconsin 37th in the nation for job growth, and with job growth starting to pick up nationwide in early 2014, it may be similarly poor. It almost makes me wonder if Mr. Lounsbury or someone else should send an open records request to the DWD to see if there was a Club for Growth-style bit of “message coordination” going on there.

But that’s OK, those numbers will be out nationwide in just over 3 weeks, and we’ll have plenty of time to jump all over these guys when that happens. In the meantime, it's important to call out the cynicism that the Walker Administration is trying with this "comeback" meme, because the only thing this state would be coming back from is the mess Walker's own divisive policies put us in. I prefer governors who don't screw up in the first place. Crazy, I know.

Ashley Furniture and WEDC- two connections of WisGOP crookedness

Today's headline in the Wisconsin State Journal, and following story by Matt DuFour is bad enough on its face. "WEDC board OK'd Ashley Furniture getting $6 million tax credit, cutting 1,900 jobs." Yes, that's right. We're giving taxpayer dollars to a company that will lay off massive amounts of Wisconsinites.

As approved by the Wisconsin Economic Development Corp. board, the award would allow the Arcadia-based global furniture maker to move ahead with a $35 million expansion of its headquarters and keep 1,924 jobs in the state.

But it wouldn’t require Ashley to create any new jobs, instead granting the company license to lay off half of its current 3,848 Wisconsin-based workers in exchange for an enterprise zone tax credit, one of the most valuable and coveted state subsidies.

The board’s decision has not been made public because a contract with the company has not been finalized. But in a statement Friday, in response to questions from the State Journal, Ashley Furniture confirmed it is seeking state subsidies that include terms allowing for job reductions.

The tax "incentives" ask Ashley to only lay off 30% of its employees this year, and no more than 50% by 2016. Cool deal, huh? DuFour's story mentions that the only 2 members of the WEDC Board to vote against this giveaway were the two Dem legislators- Sen. Julie Lassa and Rep. Peter Barca.

In the story, Ashley Furniture indicates that the layoffs incentives are needed in order to stay in the Trempealeau County Village in Arcadia because of the high transportation costs involved in being away from major markets. At least, it seems to be the transportation costs, because it sure isn't because of high wages.

According to the WEDC memo, 56 percent of Ashley employees make less than $10.88 per hour, which is the wage standard WEDC uses when determining if a company is meeting job creation goals. [WEDC Board member Paul] Radspinner said the board was not happy with the wages. But he said the company deserves credit for its health insurance benefits, which the memo said cover 76 percent of an employees’ premiums.

And now here's the REALLY BAD PART. And no, it's not only because it adds to last month's revelations about WEDC giving tax breaks to other Wisconsin companies that outsourced and laid off workers.

Last March, Gov Walker appeared at Ashley Furniture in a thinly-disguised campaign event, and the company sure wasn't talking about layoffs then.

With 22,000 employees at plants and stores worldwide, Ashley could have expanded elsewhere, said founder and board chairman Ron Wanek. If not for Walker, he said, “we probably wouldn’t have done it here.”

“We like the direction that Wisconsin is going,” he said.

CEO Todd Wanek said the $13 million expansion allowed the company to boost the plant’s payroll from about 400 to 518 workers since its completion.

Back at the time of the March event, I noted that Wanek had given large donations to Walker in recent years, and that Walker had pulled the same "photo op at a contributor" routine right before the 2012 recall election. Given that his company had just been offered massive tax write-offs in exchange for his threats to shut down (and past contributions?), I imagine Todd Wanek would like this arrangement.

I usually don't like to toot my own horn, but I saw this coming back in March, well before we knew about the WEDC write-offs given to outsourcers and how these tax breaks disproportionately go to Walker donators. That's not necessarily because I'm that smart, but more because our media is just that gutless.

....when we see Walker showing up at Ashley Furniture for his 2014 campaign like he did his 2012 campaign, you gotta ask- what's the payback that's expected this time? Both from the Wanek family and other Ashley execs when it comes to contributing to Walker's campaign, as well as what kind of legislation is Walker thinking of cooking up if he slips by both John Doe Deux and Mary Burke and gets re-elected. You know it can't be anything that helps us 99%-ers.

And it's also yet another indictment of the Wisconsin media. Yes, Chris Hubbuch of the La Crosse Tribune deserves some credit for giving context of Ashley Furniture's favoritism, and in relaying Ron Wanek's TeaBagging speech (even more disgraceful is that Wanek did this in front of a captive audience of employees). However, it wasn't nearly good enough, and if we had a real media in this state, they'd ask "Gov. Walker, given that you've already had sketchy dealings with Ashley Furniture, why did you decide to show up at this event? Was something promised?"

Now we know that there was a promise of millions in tax breaks already offered by the WEDC Board (and Chairman Scott Walker) 6 weeks before this event. It also shows exactly why the Walker Administration announced last month that they would hide this type of information from the public, to keep us in the dark on any future giveaways until our money is already in the crony/campaign contributor business owner's pockets.

There's a whole lot more where this story came from, Mr. DuFour. You and the State Journal should go after it. We know the Journal-Sentinel won't do it, since they take ad money from the corrupt oligarch handout known as WEDC, so you won't have much competition.

And oh yeah, don't buy any furniture from Ashley, because we now see where that money is going- right into Scott Walker's campaign fund.

Money-laundering and hiding from the light- John Doe's real story

In a typical Friday afternoon news dump, numerous documents were released relating to the John Doe investigation into Gov Walker and right-wing oligarch front groups. And the top-of-the-fold headline and story from the pro-Walker Milwaukee Journal-Sentinel was damning.

Gov. Scott Walker prodded outside groups and individuals to funnel millions of dollars into Wisconsin Club for Growth — a pro-Walker group directed by his campaign adviser — during the recall elections in 2011 and 2012, according to court documents unsealed for a short time Friday afternoon.

The documents form much of the basis for prosecutors' theory that Walker's campaign and conservative groups illegally cooperated to help him and other Republicans. Walker and the groups deny they broke any laws, noting two judges have sided with them.

Among the funds that flowed into the Wisconsin Club for Growth was $700,000 from a company trying to build a massive open-pit iron mine in northern Wisconsin. Soon after the 2012 recall and general elections, Walker and Republicans eased environmental regulations, helping the firm.

The idea behind this scheme was that Walker could kiss up to prospective donors, but instead of directly giving their money to Walker's campaign, and having their names revealed (and also not be able to write off the donations on their taxes), they were allegedly told by Walker and his "inner circle" to launder the money through a third party- the Wisconsin Club for Growth (CfG). You can click on the whole 24 pages of the release here, but pages 4-6 is some of the really good stuff.

During 2011 and 2012, R.J. Johnson, Governor Scott Walker, Keith Gilkes, and others, conspired to use WiCFG to coordinate political activity in response to recall elections against Wisconsin state senators, as well as Governor Walker. . . . Because WiCFG is a social welfare organization organized under Title 2 U.S.C. 501(c)(4); it can involve itself in limited political activity, provided that “supporting or opposing candidates” does not become the organization’s primary purpose. Corporations could lawfully contribute to the “501(c)(4) organization so long as the expenditures were not coordinated or made with the cooperation, consultation or at the request of a candidate or political party. However, during 2011 and 2012, WiCFG became the means for coordinating political campaign activities of the 501(c)(4) organization with personal political campaign committee of Governor Walker, in particular coordinating activities of FOSW [Friends of Scott Walker] with WiCFG with respect to the recall of Governor Scott Walker.

Contributions were personally solicited by Governor Scott Walker to WiCFG, a “501(c)(4)” organization in order to circumvent the reporting and contributions provisions of Wisconsin Stats. secs. 11.10(4), 11.06(1), and 11.27(1) that would constitute a violation of Wisconsin Stats. Sec. 11.26, 11.27 and 11.61(1)(b). The contributions to WiCFG solicited by Governor Walker in opposition to his recall provided donors with a means to support Governor Walker through anonymous contributions and corporate contributions to WiCFG without any contribution limits.

This is the real story with John Doe, how the Walker Administration ran as a "pay-for-play" operation, as shown by Gogebic's contributions to Walker and paying off in the mining bill that was passed as the first act of the 2013-15 legislature. This type of backscratching was emphasized as a reason the Walker folks encouraged the donations to Club for Growth.

An April 28, 2011, email from [Club for Growth aide] Kate Doner to [Walker advisor and Club for Growth official] R.J. Johnson that states: “As the Governor discussed . . . he wants all the issue advocacy efforts run thru one group to ensure correct messaging. We had some past problems with multiple groups doing work on ‘behalf’ of Gov. Walker and it caused some issues. In Wisconsin, a 501(c)(4) is the legal vehicle that runs the media/outreach/GOTV campaign. The Governor is encouraging all to invest in the Wisconsin Club for Growth. Wisconsin Club for Growth can accept Corporate and Personal donations without limitations and no donors disclosure.” (emphasis added)



[Id. at ¶¶ 13-15; Exhibit 3] A June 20, 2011, email from Kelly Rindfleisch to Scott Walker that forwards an itinerary for a fundraising trip that provides background on donors Scott Walker was scheduled to meet. Among the talking points related to these scheduled meetings are the following: “Stress that donations to WiCFG are not disclosed and can accept corporate donations without limits”; and “Let them know that you can accept corporate contributions and it is not reported.” The talking points also encourage Scott Walker to request contributions for “your 501c4.”

In addition to the coordination of message (illegal itself), the term "INVEST" in Club for Growth would seem to define "quid pro quo" corruption, which is defined as

something that is given to you or done for you in return for something you have given to or done for someone else.

Quick note, Walker aide Kelly Rindfleisch was already under investigation for campaign violations in Milwaukee County that she would plead guilty to under John Doe 1 a year later, and was within a month of receiving a ghost job from mega-GOP donor Michael Eisenga as hush money she was nudged out of Walker's "inner circle".

Now last I checked, an INVESTMENT implies that something is going to be returned to the donors that have given money to the Club for Growth. And even the Supreme Court justices that backed the hideous Citizens United decision said was quid pro quo was the only type of corruption that could be prosecuted.

And it's not like Walker and company were ignorant of the law. As Rindfleisch's email indicates, this Club for Growth money-funneling was intended to go around the state's disclosure laws and contribution limits (which were still in place until November 2011, when the Walker recall petition process started). Heck, these right-wing oligarch groups were more than willing to use that law to try to push out legislators opposed to their agenda. Check out this from Page 19 in the recent document dump.

That such circumvention is illegal is certainly well known to Wisconsin’s politicians and political community. This past week, for instance, a recording was released in which Wisconsin state Senator Mike Ellis discusses setting up an illegal political action committee to attack his challenger.

Oh yeah! The "Walker is for Walker" tape, which was likely set up by ALEC-associated voucher supporters to get the anti-voucher Ellis out of the way.



That's convicted criminal and right-wing ratfucker James O'Keefe using hidden cameras to claim Ellis was trying to break state law through coordination. And who did Ellis say would set up his fake superPAC? Judi Rhodes-Engels, who gave Kelly Rindfleisch her second ghost job while she was being questioned under John Doe 1.

This type of deception and circumventing campaign finance laws also explains why Congressional GOPs tried to hard to hammer the IRS for investigating the "social welfare" status of 501-c-4's like Wisconsin Club for Growth- their didn't want the schemes of their puppetmasters to be revealed to the public. And that's why I think this John Doe case involves people that go far beyond just Scott Walker and the 2011-2012 recalls in Wisconsin. This baby goes up to the top of the GOP food chain, which is why right-wing oligarchs got the Wall Street Journal to warn against Walker taking a plea deal 3 months ago- they want to be able to give unlimited money to candidates with no disclosure to the public, and Walker throwing them under the bus means disclosure laws and campaign limits are legitimate.

Mr. "Unintimidated" has backed off of a plea deal for the time being, which means Gov Walker should be asked if he thinks the oligarchs' goal of "all the freedom of giving money without the accountability" is an acceptable way for the state to do business. The John Doe documents indicate he sure didn't seem to think that in 2011 and 2012, which is why they allegedly went through all the money-laundering and efforts to "coordinate message" in the first place.

Stay tuned folks, this could get REALLY big.

U.S. economic reports look good- and refute Wisconsin's "comeback"

There have been a number of indications that the U.S. macro-economy is doing rather well this Summer. Let’s start with news today about the housing market.

Americans resold their homes in July at the fastest pace in almost a year, a sign the housing market was gaining steam again after a year-long slump.

The National Association of Realtors said on Thursday existing home sales increased 2.4 percent to an annual rate of 5.15 million units.

That was above analysts' expectations and marked the fourth straight month the pace of home resales accelerated.

But not here in Wisconsin, as home sales were down year-over-year in July for the 6th time in 7 months, according to the Wisconsin Realtors Association, and 4.2% for the year.

In another economic area, manufacturing is booming as well.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index rose to 58 in August, which was its highest since April 2010, from 55.8 in July. Economists polled by Reuters expected a reading of 55.7.

A reading above 50 signals expansion in economic activity.

The output subindex jumped to 60.2 from last month's 59.7.

And considering Wisconsin has the 2nd-largest percentage of jobs in manufacturing in the country, you’d think that would translate into major job and wage growth in the state. But instead, Wisconsin has consistently been at or near the bottom in the Midwest for weekly manufacturing wages (as shown by the Quarterly Census on Employment and Wages). In addition, job growth for the first 7 months of 2014 was the worst of Scott Walker’s 4 years- with only 11,000 jobs added, it’s less than half the number the state gained in 2011- before the full effect of Act 10 and other Walker austerity measures was put in place.




Layoffs are also going down in America.

Initial claims for state unemployment benefits declined 14,000 to a seasonally adjusted 298,000 for the week ended Aug. 16, the Labor Department said on Thursday.

Claims for the prior week were revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims slipping to 300,000 last week. A Labor Department analyst said there were no special factors influencing the state level data.

The four-week average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 4,750 to 300,750. But at that level, it remains consistent with solid job growth and claims are back at their pre-recession levels.

Fortunately, this is one area Wisconsin has joined in the national trend, with recent unemployment claims being lower than in recent years. But as mentioned previously, Wisconsin’s big problem has been its stagnant job market, with employers refusing to take chances, raise wages and hire people. In no small part because we have policymakers in Madison more concerned with letting corporate campaign contributors maximize profits instead of encouraging innovation, rewarding workers, and offering a high quality of life that attracts TALENT and improves productivity.

This is what makes the Walker Administration’s lame attempts at trying a “Wisconsin’s comeback” meme so disingenuous- the only reason the state’s economy is growing at all is because it’s being pulled ahead by a strong national economy. Which means, any Wisconsin “comeback” is mostly due to two simple words.

“THANKS OBAMA!”

We deserve to be so much better off than we are today in Scott Walker’s Wisconsin. And if the Burke campaign and the Democratic Party of Wisconsin aren’t saying that message constantly over the next 2 ½ months, then they deserve to lose.

Not saying the Wisconsin budget is blown, but.....

It's been a bit quiet on the fiscal front in the last couple of months here in Wisconsin, mostly because the fiscal year ended on June 30, and they're still cleaning up any accruals and other year-end items before they release it to the public. This is itself isn't unusual, and shouldn't be cause for suspicion.

But I've been looking for clues as to what those numbers will show for the 2014 fiscal year, and from what I can tell, it doesn't look very good at all. If you take a look at what was forecast for the state's General Fund cash balance in March (after the last round of tax cuts were passed), here's what they thought was going to be the status for April, May and June.

Projected starting cash balance, April 1- July 1, 2014
Apr 1- $2.0676 billion
May 1- $2.4245 billion
June 1- $2.5256 billion
July 1- $2.0465 billion

Now look at what the reality ended up being, with the same cash balance report from last month. I'll include the differences in there.

Apr 1- $2.0694 billion (+$1.8million)
May 1- $2.1190 billion (-$305.5 million)
June 1- $2.0619 billion (-$463.7 million)
July 1- $1.5006 billion (-$545.9 million)

And the main culprits seem to be lower-than-normal receipts for the state in April (perhaps due to Koo-Koo tax cuts lowering the amount of payments coming in when people did their 2013 taxes?), and higher disbursements in May and June (related to the higher-than-expected enrollments in Medicaid that have led to the $93 million deficit we have to close?). With that in mind, would it be illogical if we're coming in over a half-billion below what we budgeted?

Now, I'm not going to claim that's what we'll see when the annual revenue numbers are released (likely on the Friday before Labor Day, since the numbers will suck), or when the state's CAFR is released in October showing the year-end numbers for both revenues and expenses. But if we are $546 million below expectations, let's go to the LFB's current projections, and see here's how that would affect the budget picture for this budget and the next one.

Budget outlook if FY 2014 is $546 million below expectations
FY 2014- Ending balance +$178 million (original plan, $724 million)
FY 2015- Ending balance -$381 million
FY 2016- Ending balance -$707 million
FY 2017- Ending balance -$1.058 billion

That's a helluva lot to make up, and means there would be a significant budget deficit to be filled for by June 30, 2015, and another billion or so to fix the 2-year budget following that (add $381 million to all those years, assuming 2015 gets filled).

What I'm saying is that you shouldn't be surprised if an exploding budget deficit emerges as an issue as the November elections get closer. Which will be the final nail in the coffin of any debate as to whether Scott Walker fiscal policies have left us any better off in any way- they haven't.

Walker, WisGOP fail on Medicaid expansion grows even larger

I've documented for the last two years how fiscally stupid Scott Walker's decisions have been on health care, but we have new evidence that shows it's even dumber than we thought.

Democratic Senators such as Jennifer Shilling and Kathleen Vinehout asked the Legislative Fiscal Bureau to give updated numbers regarding what would happen if the state chose to take the expanded Medicaid funding that is available to states in the Affordable Care Act (aka Obamacare). The LFB responded by saying the decision by Governor Walker and the GOP-led Legislature to turn down Medicaid expansion had cost Wisconsin taxpayers huge amounts of money.

You asked what the difference in spending would have been, compared to current law,if Wisconsin had implemented a full Medicaid expansion, effective April 1, 2014….The estimated total biennial spending for parents and childless adults in BadgerCare Plus would have been $355 million higher over the biennium, which is the net effect of a decrease in state general purpose revenue (GPR) spending of $206 million, and an increase in federal spending (FED) of $561 million. The estimated average monthly enrollment in Medicaid for parents and childless adults would have been 87,000 higher in fiscal year 2014-15 under a full expansion.

So we would have saved $206 million in state taxpayer dollars and covered 87,000 more people- an even higher cost than the $119 million in extra cost projected in February 2013.

But wait, there’s more! The LFB then projected ahead, and showed that even in a conservative, “low-enrollment” scenario, Wisconsin taxpayers would be shelling out another $261 million in order to TeaBag Obamacare. That number stretches to $315 million in a “high-enrollment case- similar to the high enrollment that has caused our current $93 million Medicaid deficit.

Of course, Walker is still trying to spin his way out of the situation (because adjusting to reality would be wrong). Check out these comments that he made Monday.

"Anybody that's been paying attention to the Federal government knows it has about a $17 trillion debt," Walker said. "They've reneged many times in the past, whether on medicaid or special education funding."

Anyone who believes the federal government will keep up its end of the bargain, Walker said, is "living in a bit of a fantasy."

GOP Joint Finance Chairs Alberta Darling and John Nygren gave similar excuses, claiming that because the 90-100% federal coverage of expanded Medicaid expenses was only temporary, and therefore it wasn't a good idea to take advantage of it now. But a quick look at the state budget and the Wisconsin GOP's own policies in recent years shows who's really "living in a bit of fantasy"- anyone who buys into what Walker and company is trying to sell them.

First, why is Obamacare’s expanded Medicaid singled out as the place where we have to be careful about the future flow of funds from D.C.? Obviously, WisGOP isn’t too concerned about getting Medicaid and other federal health funding in other areas, as the Department of Health Services is projected to take more than $10 billion in Medicaid funds over the two-year budget. This includes counting on $1.17 billion in federal dollars to help pay for Walker’s and WisGOP’s anti-Obamacare plan, from the same source as the 100% full funding they'd get from taking Obamacare's Medicaid expansion. The only difference is that the feds are only chipping in 58% of the cost instead of all 100%. So are the Walker folks also saying they won’t include a projected $1.35 billion dollars in Medicaid assistance, which the LFB estimates they need in federal Medicaid money in 2015-17 to continue their plan, since that’s “not promised” either? OF COURSE NOT!

That doesn’t even bring up the other departments. The state budgeted $19.7 billion in federal aid for 2013-15, over 28% of all the funds to be spent. If WisGOP is so scared about future federal funding, why did we set aside $183 million in federal funding to start work on the Zoo Interchange and other SouthEastern Wisconsin Mega-projects, especially since the Zoo project isn’t scheduled to be complete till 2018? Using Walker’s Obamacare “logic”, it's "a bit of fantasy" to assume those funds will still be there, and we shouldn’t be taking any federal funds if we can’t finish that project, riiiight?

And why did we set aside nearly $977 million in other federal road aid when no money had been allocated for highway funding had been allocated for the final year of the state’s budget cycle? And does anyone think the DOT isn’t counting on more than $1 billion to be there for the next go-around in 2015-17, even though federal highway funds are only available through May 2015? OF COURSE THEY PLAN ON GETTING THAT MONEY.

What about the $3.7 billion that the UW System receives that goes a long way toward paying for things such as research and financial aid? For example, the 2013-14 annual budget shows that the UW System was slated to receive $622 million in federal research aids (Fund 144), $839 million in student loans (Funds 147 and 149) and nearly $91 million in indirect cost reimbursements from the feds (fund 150). That’s for only 1 year of the two-year budget cycle. Are we going to take those billions of “uncertain” dollars out, because we don’t have a long-term budget deal in Congress, and then project these items to be replaced dollar-for-dollar with state funding in the next budget? HELL NO.

Of course, this crew would probably count on replacing any lost federal funding with some private party who might be more interested in getting a certain conclusion out of the “research” instead of legitimate information and conclusions that can solve problems (cough- Charles Koch running Florida State’s economics program- cough). But the point stands- why is it only Obama-backed programs such as high-speed rail, rural broadband and Medicaid expansion that get these crocodile tears of “Oh, we don’t know if the debt-ridden federal government will keep paying for this!”, while a whole lot more federal money is expected to be there for the next 2 years and in many future years after that? It shows why the stance of Scott Walker, Alberta Darling and John Nygren is absurd. These guys know better than to be this selective with their concerns about future federal funding, but they think the people of Wisconsin are stupid enough to fall for it.

But if you want the greatest guarantee that the funding will be there, you could make sure that Democrats are put in charge of both houses of Congress, to avoid any Tea Party-related defunding of Obamacare or other Koch-backed bubble-world tactics. And if you value Wisconsin tax dollars, then elect Mary Burke governor, as she will gladly take the expanded Medicaid funding for as long as it’s available to us, and that move will go a long way toward alleviating the $1 billion budget deficit that Gov Walker has shoved off onto us for the next budget.

As a final note, when the Walker-endorsing Journal-Sentinel is ripping Walker and WisGOP for turning down the Medicaid funds, calling it a "phantom argument" , you know the WisGOP position on this issue is an EPIC FAIL, and the debate is over outside of the right-wing bubble.

Wisconsin jobs record still bad- no matter how they try to spin it

Well, we had more monthly jobs reports come out in recent days, first from the Wisconsin Department of Workforce Development on Thursday, and then the state-by-state report from BLS this morning. And naturally what follows is me having to shoot down another lame attempt by DWD to say “it’s working” for Governor Scott Walker.

Wisconsin Department of Workforce Development (DWD) Secretary Reggie Newson today released the following statement on the latest U.S. Bureau of Labor Statistics (BLS) monthly rankings of employment and unemployment estimates. The report noted Wisconsin’s year-over-year unemployment rate declined from 6.8 to 5.8 percent, a full percentage point.

This doesn’t mean much. The national unemployment rate has fallen from 7.3% to 6.2% in the same time period, and Wisconsin’s 0.4% “advantage” over the U.S. is far smaller than the 1.4% advantage we had when Scott Walker took office in January 2011

In addition, the data show Wisconsin year over year gains of 36,100 private sector jobs ranked 20th highest nationally in number of jobs gained. Wisconsin ranked higher in manufacturing job growth, 5th nationally in year over year growth and growth since December 2010 in production jobs, which on average pay $10,000 more annually than all Wisconsin jobs.

Sounds good, but means nothing. Wisconsin is 20th in U.S. population, so being 20th in jobs is where they should be. And as I’ve analogized in the past, taking credit for Wisconsin manufacturing growth in an expansion is like us bragging about consuming more brandy than other states- Wisconsin is Number 2 in the nation for proportion of jobs in manufacturing, so naturally they’ll be doing well in this stat in a time period when 178,000 manufacturing jobs have been added in the U.S. over the last 12 months. The real subtext to this statement is “THANKS OBAMA!”

Highlights of today's Bureau of Labor Statistics (BLS) report of state-by-state employment and unemployment estimates include:
· Wisconsin's unemployment rate declined a full percentage point between July 2013 and July 2014, from 6.8 percent to 5.8 percent, and below the national rate of 6.2 percent and below other leading manufacturing states of Indiana and Michigan.

Not mentioned, Wisconsin has had equal or lower unemployment than both Michigan and Indiana in every month since 2007, and Indiana’s unemployment rate has dropped by 1.7%, and Michigan’s by 1.3% in the last 12 months, both larger decreases than Wisconsin.

· Wisconsin has a statistically significant private-sector job (Current Employment Statistics) increase between July 2013 and June 2014 at 36,100, which ranked 20rd nationally, improving on its 23rd place ranking in the previous BLS report.

As mentioned before - "Whoop-de-fuckin-do!"

· Wisconsin had a statistically significant total nonfarm job (CES) increase between July 2013 and July 2014 at 45,000, which ranked 17th nationally in net change.

This is a good number, except that you look at the release of the “gold standard” Quarterly Census on Employment and Wages, and see that the monthly survey overestimated job growth by more than 10,000 jobs in the second half of 2013 vs. the QCEW,which means this 45,000 number should also be deflated down toward 35,000.

Lastly, all the spinning press releases in the world doesn’t change the fact that 3,200 private sector jobs added in Wisconsin is still below the national rate of growth for July (we needed 4,300 jobs just to keep up). Combine that with the downward revision of 2,600 total jobs in June, (700 in the private sector), and the Walker jobs gap keeps getting bigger, now up past 67,700 private-sector jobs, and nearly 60,000 jobs overall.





Hey, I get why the Walker folks are desperate to use taxpayer resources to spin their horrible record via the DWD- if I was a well-known incumbent that couldn’t break above 48% in any legitimate poll with 11 weeks to go, I’d be freaked out, too. Especially when the Burke campaign is putting those subpar stats in hard-hitting, straight-talk ads like this on the air.



I can't see Walker's argument of "Wisconsin's comeback story" meme working outside the right-wing bubble, in no small part because even the meager amount of jobs that have come back are paying approximately 25% less than the jobs that were lost in the Great Recession. Combine that with the division and coming massive budget deficits, and there is no way you can say that "it's working" in Wisconsin.

Robert Reich explains the war on the poor in 2:15

Thanks to Andy at Wisconsin Soapbox for re-finding this piece from former U.S. Labor Secretary Robert Reich, which explains how the rich and politically connected want to make the rest of us indentured servants.



No worker's right, no bargaining power, no increase in wages, and no government stabilizers to keep you from falling into the abyss. If these protections are taken away, you have to take whatever they choose to give you, which makes you and others even more desperate, and makes the destructive "race to the bottom" cycle continue.

Keep this in mind when you read today's Journal-Sentinel article that shows Gov Walker has already thrown away hundreds of millions of dollars by failing to accept the Medicaid expansion in Obamacare. In fact, the price tag that Wisconsin taxpayers are paying for that idiotic pose has now gone up even more than we previously knew.

Wisconsin taxpayers would have saved $206 million over two years — 73% more than previously estimated — if officials had fully expanded its main health care program for the poor under the federal Affordable Care Act, a new nonpartisan report shows.

If officials decide to change course and expand the program in the next state budget, state taxpayers would save another $261 million to $315 million through June 2017, according to the Legislative Fiscal Bureau. The bureau serves the Legislature and is widely respected by lawmakers from both sides of the aisle.

In all, the state could have saved more than $500 million over 3 1/2 years, the report shows. That would have allowed Gov. Scott Walker and legislators to put more money toward schools or roads or cut taxes more deeply than they did over the last year.

And this fiscally reckless move isn't being done not just doing it to gain points with idiot TeaBaggers at the expense of the other 80% of people in this state. Robert Reich notes that Scott Walker may also be choosing to do it to make sure a large number of us don't have the strength to challenge the other thefts that his corporatist, pro-oligarch policies are hoisting on the working people of the state.

Disgusting on every level.

Walker, Clarke would follow the failed policies of Ferguson Police Chief

Like many others, I've been watching the events in Ferguson, Missouri with interest this week. And I've been disgusted with the response of Ferguson Police Chief Thomas Jackson, who could have responded by listening to citizens outraged by last weekend's shooting of an unarmed black teenager that was to start college the following week. Instead, Jackson escalated the situation by arming his troops to the teeth, and shooting off tear gas and rubber bullets at protestors and bystanders. Rembert Browne of ESPN's Grantland has a great rundown of how the cops started firing on the mostly peaceful crowd to "gain control of the situation", which naturally led to chaos on Wednesday night.



With that in mind, let's flash back to February 2011, when another group of outraged citizens started to gather in Madison and in other places around Wisconsin. Remember this?

[Gov] Walker’s proposal, which he said would quickly pass in the state legislature, drastically limits collective bargaining, removing the right of unions to negotiate pensions, retirement and benefits. It further bars union dues check-offs for government workers, meaning that workers will have to pay dues individually

When asked by a reporter what will happen if workers resist, Walker replied that he would call out the National Guard. He said that the National Guard is “prepared ... for whatever the governor, their commander-in-chief, might call for ... I am fully prepared for whatever may happen.”

Walker’s proposal allows state authorities to arbitrarily fire workers who “participate in an organized action to stop or slow work,” or who “are absent for three days without approval of the employer,” according to the governor’s press release.

These were actions deliberately done by Scott Walker to try to provoke rioting and tension, and get the media to portray the protestors as "dangerous union thugs" who deserved to be put down. It also led to months and years of irresponsible demonization and outright lies about state workers by Walker, WisGOP leaders, and their spokespeople AM talk radio hosts.

But it didn't lead to the escalation Walker and the WisGOPs and their puppet-masters wanted, as the protestors remained remarkable peaceful despite their huge numbers (I know, I was there). So Scotty had another plan, which you may recall him discussing to a caller that he thought was David Koch.

Walker: The other thing is more long-term, and that is, after this, um, you know the coming days and weeks and months ahead, particulary in some of these, uh, more swing areas, a lot of these guys are gonna need, they don’t necessarily need ads for them, but they’re gonna need a message out reinforcing why this was a good thing to do for the economy and a good thing to do for the state. So to the extent that that message is out over and over again, that’s obviously a good thing. (Note that Walker is requesting "Koch" to coordinate strategy and "message", which is illegal under state law if it's not disclosed, and exactly what John Doe Deux is all about.)

Murphy: Right, right. Well, we’ll back you any way we can. But, uh, what we were thinking about the crowds was, uh, was planting some troublemakers.

Walker: You know, the, well, the only problem with that — because we thought about that. The problem — the, my only gut reaction to that is right now the lawmakers I’ve talked to have just completely had it with them, the public is not really fond of this. The teachers union did some polling of focus groups, I think, and found out that the public turned on ’em the minute they closed school down for a couple days. The guys we’ve got left are largely from out of state, and I keep dismissing it in all my press conferences saying, ‘Eh, they’re mostly from out of state.’ My only fear would be is if there was a ruckus caused is that that would scare the public into thinking maybe the governor has gotta settle to avoid all these problems. You know, whereas, I’ve said, ‘Hey, you know, we can handle this, people can protest. This is Madison, you know, full of the ’60s liberals. Let ’em protest.’ It’s not gonna affect us. And as long as we go back to our homes and the majority of the people are telling us we’re doing the right thing, let ’em protest all they want. Um, so that’s my gut reaction, is that I think it’s actually good if they’re constant, they’re noisy, but they’re quiet, nothing happens, ’cause sooner or later the media stops finding ’em interesting.

There is no doubt that Walker would have planted "troublemakers" in crowds of tens of thousands of people in Winter, 2011 if he thought it would have given him a few more percentage points of support. And notice that there's no concept of discussing the problem with the unions or the Democrats- it's just top-down authoritarian imposing of something that we now know did little to balance the budget (since any surplus was promptly thrown away by tax cuts) but instead was done as a "divide and conquer" power play. It's no surprise we're dead last in job and income growth in the Midwest with guys like that in charge.

And then look at the words from another big-mouthed creation of Milwaukee talk radio - Sheriff David Clarke. Clarke is using his 4% win in Tuesday's Dem primary (a win due in no small part to crossover voting by tens of thousands of suburban Republicans) as a mandate for more taxpayer money going to his troops.

Fresh from an election night battle where big money was a focus, Milwaukee County Sheriff David A. Clarke Jr. talked tough Wednesday, saying he's "back in the saddle" and ready to challenge other politicians whom he called "imperial leaders." (the projection, it BURNS!)

"People in this city decided they wanted me to lead the office on public safety and not the city fathers," he said, citing County Executive Chris Abele, Mayor Tom Barrett and others whom he called "soft on crime."

His first order of business, he said, will be to fight for a 2015 budget for more resources to provide for public safety because in recent years his budget has been cut.

And given that this is a guy who used taxpayer dollars to tell citizens to "get in the game" and arm themselves, I'm guessing those extra funds aren't going to go to the type of stabilizing, community policing that calmed the frayed nerves in Ferguson on Thursday night. I'm figuring the NRA's poster boy will now ask for even more of the militarized equipment that we've seen on the streets of Ferguson- as Clarke thinks poser shows of force that look cool to shrivel-dicked suburbanites are more effective than strategies which reduce tensions and are shown to reduce violence.

With that in mind, I think we have an answer as to how Scott Walker and David Clarke would respond to an outbreak of anger at an incident similar to the one in Ferguson, Missouri. They'd roll out the tanks and the big guns and raise the tension, in the hopes that it ignites racial hatred and gains them a political advantage with the suburbanites and rural folks who don't have a clue about the underlying issue of racial disparities in treatment and punishment by police and other law enforcement (disparities that are worse in Wisconsin than almost anywhere else in America). Dealing with that problem and trying to keep stability? Walker and Clarke could care less about that- they'd be more concerned with talking to Sykes or Belling or Icki in order to get their side of the story out over the people that pay their salary.

And that's a huge reason why these people must be removed from power as soon as possible. Milwaukee County may be stuck with David Clarke for the short term (at least until he quits to get his wingnut welfare check or some other promotion- and we all know that's coming), but we can remove Scott Walker's "divide and conquer" mentality and "toxic racial politics" in 2 1/2 months. And we better do it, before we get these guys get a chance to pour fire on a Ferguson-type situation of our own in Wisconsin.