Tuesday, May 23, 2017

Trump/Ryan Medicaid cuts would destroy Wisconsin budget

There are two huge releases in DC relating to health care policy and spending. The first will be the Congressional Budget Office's release of the updated Trump-Ryancare bill, which was blasted through the House of Representatives without an analysis of how many people would lose health care under the amended bill, or even an indication of what it would do to the US budget. In fact, there is a real possibility that the CBO score will show that so many people will take subsidies for crap insurance under the new bill that it would add to the deficit, which may require Paul Ryan to take the bill back and not officially send it over to the Senate.

Another big story is today's release of the austerity-driven Trump budget for the Fiscal Year that begins on October 1. This features massive cuts to domestic programs, with some of the largest declines coming in Medicaid.
The Trump administration's 2018 budget proposal released Tuesday included massive cuts to Medicaid, the government-run health program that provides insurance primarily to pregnant women, single parents, people with disabilities, and seniors with low incomes.

The plan calls for cuts amounting to $627 billion over the next 10 years.

That number does not include the roughly $880 billion in proposed cuts to the program through the American Health Care Act, the GOP leadership's plan to repeal and replace the Affordable Care Act, which the administration supports.

The plan has already received near-universal pushback in Congress, as even members of President Donald Trump's own party expressed skepticism over its provisions. The drastic cuts to Medicaid, among other programs, have drawn blowback from lawmakers in districts whose constituents would stand to be affected by the slashes.
Interestingly, the Wisconsin Joint Finance Committee is scheduled to discuss the Medicaid budget in their meeting on Thursday. The Legislative Fiscal Bureau says that lower-than-expected enrollments and costs for Medicaid will give over $95 million in breathing room for Governor Walker's 2017-19 budget, but that cushion may be put at major risk if Trump-Ryancare or the proposed Trump budget ever becomes law.
Another significant risk is potential changes in federal policy as it relates to Medicaid or broader healthcare policy. A potential decision to not renew CHIP allocations was already mentioned, but other changes to federal policy could also affect the state's MA spending. Discussions in Congress on the potential repeal of the Affordable Care Act are ongoing. The elimination of or reduction to income-based premium tax credits for the purchase of health insurance could reduce opportunities to obtain coverage for households near the poverty line, which may push some, who would otherwise purchase commercial insurance with these subsidies, to seek or retain MA coverage.
And today, Wisconsin's Survival Coalition sent a letter to Wisconsin's Joint Finance Committee, laying out the major problems the state might face in funding Medicaid if Trumpcare becomes law.
As you are aware, the federal government currently funds about 60% of Wisconsin’s Medicaid costs, bringing roughly $5 billion to Wisconsin. These federal matching funds are the largest funding source for Wisconsin’s Medicaid programs and help to ensure that state GPR can be used for other essential purposes.

In March the Congressional Budget Office projected impacts on states that would be forced to operate undera per capita cap or block grant: “With less federal reimbursement for Medicaid, states would need to decide whether to commit more of their own resources to finance the program at current-law levels or whether to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment, or (to the extent feasible) arriving at more efficient methods for delivering services.”

Our analysis of the proposed cuts shows it will be difficult for Wisconsin to meet current and future enrollment needs in a block grant or per capita cap scenario. Wisconsin has already achieved significant cost savings compared to other states, specifically related to long-term care populations which are among the most expensive to serve. The clear majority of long-term care participants are enrolled in managed care while other states are just now making the switch from fee-for-service to managed care. This shift alone has already resulted in savings of approximately $300 million per year compared to the legacy waiver programs it replaced.

Rough estimates provided by the Urban Institute project a $1 billion loss in Medicaid funds for Wisconsin under the AHCA.
And that $1 billion would have to be made up with a sizable increase in state spending using money that we don't have available in the state budget. The other option is having tens of thousands of Wisconsinites cut off of medical assistance and losing stability, with our economy suffering from the inevitable trade-offs that would result.

It makes me wonder if the Joint Finance Committee might want to take a step back on the Medicaid budget for a bit, to get an idea about how much federal funding they can count on (or not count on). At the very least, perhaps some additional money should be set aside as a hedge against Congressional action, even if that makes other Wisconsin budget initiatives impossible. Because if that doesn't happen, and if some kind of GOP health care bill ever goes through that cuts Medicaid funding from DC, then the state ends up at significant risk of having to have a repair bill to fill in the massive holes in the health services budget that would result.

Monday, May 22, 2017

Not just the UW budget- financial aid and UW salaries are also underfunded

There are a number of items at tomorrow's Joint Finance Committee that deal with financial aid for higher education, UW tuition for the next 2 years, and potential UW pay raises. I wanted to rapid fire them, and explain the price tags involved, because all 3 items are going to require more money than Governor Walker set aside in the 2017-19 budget.

First of all, in order to fully fund Governor Walker's plans to expand veterans remission to children and the spouses of deceased or disabled Veterans. This will allow UW students to claim remissions as long as those people have lived in the state for at least 5 straight years (not necessarily a “resident” when that person entered the service, but the problem is that the funding is insufficient in the budget bill, and so $6.47 million is needed the full pay for the remissions for children and spouses of deceased or disabled Veterans, ).

Side note, the amount budgeted for remissions hasn’t been changed since 2009, just under $6.5 million a year.

Second, Turns out that Gov Walker's proposed 5% cut of tuition is more costly than what Scotty anticipated.
2.The Governor's budget would provide $35 million GPR in 2018-19 to fund the proposed tuition reduction. Based on data provided by the UW System, it is estimated that a 1% reduction in resident undergraduate tuition could result in a decrease in tuition revenues of $8.4 million. Based on this estimate, a 5% reduction in resident undergraduate tuition in 2018-19 could reduce UW System tuition revenues by $42 million in that year.

3. If the Committee approves the reduction in resident undergraduate tuition and wishes to fully fund that reduction, the Committee could increase the GPR funding provided to the UW System in 2018-19 by $7.5 million. Alternatively, the Committee could reduce the amount by which resident undergraduate tuition would be decreased such that it would be fully funded by the $35 million provided in the bill. It is estimated that $35 million would offset the estimated decrease in tuition revenues resulting from a 4.2% reduction in resident undergraduate tuition.
Also, remember that Walker's self-insurance scheme was going to get so much savings that it would pay for much of a 2% increase for UW employees in 2018 and 2019. Now that the Joint Finance Committee has indicated they won't go along with self-insurance, there needs to be nearly $30 million added to the budget to make up the difference.
DOA has estimated that the GPR-funded fringe benefit costs for UW employees could increase by $9,979,500 in 2017-18 and $15,429,300 in 2018-19. In addition, the Governor has proposed providing 2% salary increases for all state employees, including UW System employees, on September 30, 2018, and May 26, 2019. It is estimated that the GPR portion of these salary increases for UW System employees would total $15,794,500 in 2018-19. The bill would specify that the Board of Regents could not request any funds from the state's compensation reserve during the 2017-19 biennium to fund compensation and fringe benefit costs. Instead, the bill would provide $126,500 GPR in 2017-18 and $11,517,900 GPR in 2018-19 through the UW System's GPR general program operations appropriation to fund these costs. These amounts are equal to the estimated cost of the GPR portion of salary and fringe benefit increases less the estimated GPR savings to the UW System of the state self-insuring for employee health benefits ($9,853,000 in 2017-18 and $19,705,900 in 2018-19).
Seems like a sensible trade to get rid of the $35 mil (under)budgeted for the 5% tuition decrease and pay for the proposed UW salary increases, doesn’t it? Let's see if that's carried out.

And lastly, state grants for financial aid are also underfunded. Walker wants a minor increase, but it’s not enough. The LFB says that increasing the Wisconsin Grants back to 2009 levels would be an increase of $2.76 million above the budget. And if the Joint Finance Committee turnsdown the 5% tuition decrease and then puts in the difference to Wisconsin Grants, that’s $9.72 million.

Keep an eye on a number of these items tomorrow, in addition to the regular UW budget. Looks like we need to find some place for extra money, or we will see more students left out.

Why improve the state when you can save $26, right Scotty?

It’s obvious that Governor Walker is in full-on campaign mode with his latest PR assault- trying to portray himself as a tax-cutting champion that’s made Wisconsin better off (your reality may vary). This culminated in another Twitter meltdown that included Walker threatening to throw the whole state budget out the window.
Gov. Scott Walker, in another sign of escalating tension with fellow Republicans who control the Legislature, vowed Monday to take the unprecedented step of vetoing the entire $76 billion state budget if it raises property taxes on homeowners.

Walker issued the unusual warning publicly on Twitter in one of a series of messages defending his budget priorities. Republicans are considering breaking with Walker in several key areas on the budget, including property taxes, as they continue to debate changes to his two-year spending plan.
Of course, Walker's act has little to do with good governance and everything to do with Walker posing for voters ahead of his inevitable 2018 campaign for re-election (along with trying to stay in the good graces of DC lobbyist Grover Norquist). While Walker's claim that he's reduced property taxes on the typical homeowner is generally true, as the LFB says the property tax bill on the average Wisconsin home would drop from $2,943 in 2013 to $2,831 in 2019 under Walker’s proposed budget (again, your reality may vary), that has come at a great price to Wisconsinites and has hamstrung the state budget.

Much of that reduction in property taxes is the result of Act 10 benefit cuts that took thousands of dollars out of the pockets of many Wisconsin workers (and has not been made up over time), or is because of gimmicks like a $406 million increase in aid to the state’s Technical Colleges which has never been offset with taxes to pay for it, nor has the money been allowed to be used in the classroom. And Scotty's latest pre-election year stunt to lower property taxes is to remove the state portion of the property tax, which is goes directly to the Wisconsin Department of Natural Resources to fund Forestry operations. Instead, Walker wants to use general tax dollars to pay for that, which has a price tag of just over $180 million in this budget.
The Governor recommends repealing the state-levied portion of the property tax beginning with the 2017-18 property tax year. The Governor also recommends creating a GPR sum sufficient appropriation equal to 0.1697 mills multiplied by the total state equalized value that will be transferred to the forestry account in the conservation fund. The amount of this appropriation is projected to be $88,759,300 in FY18 and $91,695,600 in FY19.
The idea of replacing property taxes with General Fund money might seem OK on the surface as a structural change, but many people who care about the state’s environment see the problems that will happen in the future from getting rid of a dedicated funding source for conservation services.
"This would mean that forestry would have to line up with schools and with transportation and with health care and all the other important needs that are funded with general revenue," said (former State Rep.) Fred Clark, executive director of the Forest Stewards Guild.

The programs are fully funded in the 2017-19 proposal from the governor, but Clark expressed concern they could be cut in future budgets.

"There's no guarantee that the level of funding that's provided today would be sustained," Clark said.
Given the $1 billion shortfall we are already looking at in 2019-21 if this proposed budget goes through, I think Fred has a point. It doesn’t take much imagination to think that this new money that’s supposed to go to Forestry would be one of the first targets to cut to fill in a future Walker-caused budget hole.

In addition to the conservation angle, why would any responsible legislator choose a $26 property tax cut gimmick over $180 million that could be used to reduce that future deficit, and/or fix the pothole-covered roads in Fitzwalkerstan without borrowing ourselves into oblivion? Yes, this is a tight budget, but a big reason it is such a mess is because Walker designed it as a Christmas tree filled with pre-election talking points.

And it goes to a bigger theme. In WalkerWorld, there’s no concept of caring about what happens to Wisconsin after 2018, because Scotty’s onto the next grift after that anyway (especially if we’re looking at a different GOP president by then). He just thinks the average Wisconsin voter is so shallow that all he/she cares about is paying $1 a week less on their taxes and the ability to knock down “others” that they resent, instead of demanding better wages, a higher quality of life and a state that people want to live in for the rest of their lives.

Sadly, Scotty's been able to get 52-53% of voters to fall for it in past elections, but after a certain point, the jig is up and the bills need to be paid. This property tax gimmick should be shot down and the $180 million used for a better purpose- whether that’s savings from current and future budget cuts, or better investments like roads, schools and maintaining local services.

Yet again, the wisdom of Marge Gunderson comes through.

Sunday, May 21, 2017

Numbers showing that WisGOP gerrymander getting worse over time

Bruce Thompson's Data Wonk column in Urban Milwaukee is back with another excellent analysis, this time about the Wisconsin GOP's gerrymandering of the State Assembly. To review, this gerrymander was ruled to be illegally one-sided by an Appeals Court in November, and that court came back in January and ordered the maps to be redrawn.

GOP hack/Attorney General Brad Schimel has appealed the case to the US Supreme Court to try to maintain the GOP's electoral advantage, but unless SCOTUS rules in the GOP's favor and overturns the Appeals Court, the State Legislature will need to draw new maps and have them in place in November 2017. One of the arguments that WisGOPs and Bradley Foundation front groups have argued is that Wisconsin has a unique electoral population where Democrats are heavily concentrated into urban areas, and so there will be a "natural gerrymander" that favors Republicans no matter how you draw the maps.

What Thompson points out in the article is that any "Big Sort" that may cluster Democrats together doesn't explain the distortion of Wisconsin's results, where a near-even split of votes for the Legislature has resulted in Republicans having overwhelming majorities in the State Assembly throughout the 2010s. A central argument behind the case that got WisGOP's gerrymander overrules was the usage of statistic called the "efficiency gap", where it was calculated how far away the results of the State Assembly's elections differed from what a fair map would have given.

Thompson includes the following graphic to show just badly this was skewed in 2016, where Donald Trump only got 47% of the state's presidential votes, but Republicans won 64 or the 99 Assembly races. In fact, Thompson notes that an already-bad gerrymander in 2012 has gotten increasingly worse as the decade has gone on.

Now compare that figure to 2008's outcome, which were under maps drawn by a federal court. In this instance, a 50-50 split would give the Republicans an advantage in about 52 Assembly seats, not 64.

Thompson also brings up the work of University of Michigan political scientist Jowei Chen, who did 200 computer simulations drawing up Wisconsin's 99 Assembly districts, and overlayed it with Wisconsin's 2012 vote. What he found was that the GOP's gerrymander created an efficiency gap well beyond anything that could be explained by "The Big Sort." In his analysis, a - number indicates districting that favors Republicans, and a + indicates districting that favors Democrats.
Figure 3 reveals that the simulated districting plans are reasonably neutral with respect to electoral bias. About 72% of the simulated plans exhibit an efficiency gap within 3% of zero, indicating de minimis electoral bias in favor of either party. In fact, 23% of the simulations produce an efficiency gap between -1.0% and +1.0%. These patterns illustrate that a non-partisan districting process following traditional criteria very commonly produces a neutral Assembly plan in Wisconsin with minimal electoral bias.

It is important to note that the simulations produce plans with both positive and negative efficiency gaps. Although the efficiency gap of every simulated plan is relatively small in magnitude, 90% of plans exhibit a negative efficiency gap, indicating slightly more wasted Democratic votes than wasted Republican votes. But 10% of the plans exhibit a positive efficiency gap, reflecting more wasted Republican votes. Hence, it is not extraordinary for Wisconsin’s political geography, combined with traditional redistricting criteria, to naturally produce a districting plan that somewhat favors Republicans.

The blue star in the lower left corner of Figure 3 represents the Assembly plan enacted by Act 43. (I can't figure out how to link the picture fromm the PDF, sorry.) This blue star depicts the enacted plan’s efficiency gap of -15.1%, reflecting significantly more wasted Democratic votes than wasted Republican votes. Thus, the level of electoral bias in the Act 43 Assembly plan is not only entirely outside of the range produced by the simulated plans, the enacted plan’s efficiency gap is well over twice as biased as the most biased of the two-hundred simulated plans. The improbable nature of the Act 43 efficiency gap allows us to conclude with high statistical certainty that neutral, non-partisan districting criteria, combined with Wisconsin’s natural political geography, would not have produced a districting plan as electorally skewed as the Act 43 Assembly plan.
One of the ways Chen notes that GOPs pulled as part of their extreme gerrymander was to split up counties that didn't have to be split up. Only 14 counties are kept together in one district under the current WisGOP maps, while Chen's computer simulations kept between 18 and 25 counties intact, which could make for more uniform interests in a district and likely less skewed outcomes.

Given the unpopularity of Republicans in DC along with a lagging economy in Wisconsin, it seems possible a Dem wave will hit in 2018. And if so, no wonder why Republicans in Wisconsin want to keep their rigged maps to give themselves as much of a cushion against such a wave, and get a free pass on backing legislation that a majority of Wisconsinites disapprove of. What Chen's and Thompson's work shows is that the lengths that WisGOP have gone to protect themselves from the will of the people is obscene, and should be ruled illegal based on the numbers.

Just because WisGOPs have rigged the maps, it doesn't mean that Wisconsin Dems don't have a lot of problems of their own to fix, as evidenced by the large amount of rural counties that flipped from Barack Obama to Donald Trump in 2016. But banning the gerrymander might be an important first step that would alert the average Wisconsin voter to how badly WisGOPs have acted, and lead them to understand a big reason why their elected officials seem to be doing things in Madison that the voters back home didn't ask for.

Saturday, May 20, 2017

Chris Cornell, RIP. More brilliance that's gone away

The suicide of singer Chris Cornell hit me pretty hard when I found out about it on Thursday morning. Cornell is near the top of my list as a rock singer, and could be as soulful or screaming as the song required. Soundgarden was a band from the '90s who stands up over the years, and if anything is underrated for that era (or any era).

Don't believe me, check out one of my favorites of Cornell and Soundgarden, from 1991. A song that perfectly describes the whiny victim complex of the GOP, both back then, and even more so today. Plus, it's one of the best 2 minute intros for a song EVER. (video could be a bit disturbing to some of you. Oh well).

I'd also love to be "driving the nails" into the wood on some of these Jesus Christ Posers.

Cornell was a giant, and this is another hit to us Gen Xers where giants of our musical upbringing keep being taken from us. Kurt, Layne, Weiland, now Cornell. Too much self-destruction, and too much brilliance being taken away from the stage.

And if you're not familiar with the soulful, sensitive side of Cornell, watch how he took a Prince song last year and gave it new life after the Purple One went away.

UW budgets cuts from state and feds = more "help" from Kochs and Bradleys

On Tuesday, the Joint Finance Committee will discuss the 2017-19 budget for the University of Wisconsin System. While it doesn’t include massive cuts in state funding like the 2011-13 and 2015-17 budgets did, there still are some troubling trends that emerge when you dig into the Legislative Fiscal Bureau’s analysis.

Some of this involves the reliance of any state funding increases for the UW to rely on certain performance measures that could change the focus of how the UW delivers its education services. But I'm going to focus on another place in the UW budget, where the LFB discovered an error in Governor Walker’s budget that gives a clearer idea what the real, underlying numbers are.

Basically, the error involves mis-budgeting what the UW gets and spends from a variety of outside sources. This can include things such as tuition payments, self-sustaining operations like dorms and food services, and federal grants and aids. And the LFB says that it is time to clean up the numbers and make them more accurately reflect what the UW actually has and has been spending.

9. In addition to the PR general program operations appropriation, the UW System has eight other all-moneys-received appropriations. The UW System may spend any and all funds deposited in these appropriations and the amounts shown in the appropriation schedule for these appropriations do not affect the UW System's ability to spend these funds. However, to the extent that the amounts shown in the appropriation schedule are used as a measure of state spending in various areas, it may be beneficial to include reasonable estimates for these appropriations in the schedule….

11. … the expenditure estimates proposed under the Governor's budget are significantly different than actual 2015-16 expenditures for a number of these appropriations. As an alternative, the Committee could reestimate expenditures for these appropriations based on actual 2015-16 expenditures. This would result in an increase in estimated PR expenditures of $52,159,800 annually, a decrease in estimated federal revenue expenditures of $149,232,700 annually, and a decrease in estimated segregated revenue expenditures of $4,221,800 annually. (This assumes that the VDL appropriation for moneys received from other state agencies, which has had negative expenditures on the two most recent years, would be reestimated at $0.) It should be noted that the UW System would continue to have the authority to expend all funds received through these appropriations under both this alternative and the Governor's proposed budget.
In addition, tuition revenues are slated to be $7.1 million less than what Walker assumes, even before we discuss the proposed 5% in-state tuition cut and $35 million backfill that JFC is unlikely to approve of. So if the figures are accepted by the Joint Finance Commission, combined with lower-than-budgeted tuition revenues, means that the total UW budget could show nearly $210 million less in spending than what Walker originally proposed in those areas.

In theory, that could mean there is a $210 million shortfall at the UW System under the Governor’s proposal, if the UW planned to spend all of those funds that the Governor had in his budget. But more likely it means that the Governor overestimated expenses that never happened in the first place, and all this will do is reduce the number of a dishonest Walker/WisGOP talking point of “the UW spends $6 billion +, so it’s fine if the state supports it less.”

But even if it's not necessarily a budget cut, we should still be more than a bit worried at this trend.

Federal aid expenditures at UW System
2013-14 $1.697 billion
2014-15 $1.682 billion
2015-16 $1.668 billion

That’s a drop of $29 million on top of the Walker/WisGOP cut of $250 million in General Fund tax dollars in the 2015-17 budget. And given the anti-science, anti-intellectual group in the White House and in the GOP Congress, along with an anti-UW attitude that is causing researchers to leave and take better offers at other schools (and taking their federal grants with them) we should be concerned that this may drop further. So there’s declining support from two big areas of the UW’s funding.

Add in the in-state tuition freeze over the same time period, and there’s little help there either. So one of the few ways the UW System has stayed somewhat afloat in recent years is due to increasing help out of the private sector and other resources.

Gifts, non-federal grants + contracts, UW
2013-14 $517.3 million
2014-15 $541.5 million
2015-16 $575.4 million

But there’s a second side to that type of assistance, and it’s related to who is donating that funding and handing out the contracts. We’ve touched on this a couple of times, particularly when discussing the absurd, right-wing “research” promoted by UW-Madison’s Noah Williams, who is funded through the Juli Plant (“wife of the CEO of W.W.”) Grainger Institute for Economic Research, and in the Bradley Foundation’s sizable amount of “donations” to the UW.

Matt Rothschild of the Wisconsin Democracy Campaign mentioned another player in the privatization of UW funding, both politicially, and in outside funding- the Charles Koch Foundation. In addition to their recent 4-year, $1.7 million grant to UW-Stout to “facilitate civil and rational debate and research in the state and beyond on important civil liberty issues guaranteed in the U.S. Constitution: freedom of religion, speech, press, assembly and petitioning the government, and how these liberties relate to institutions and innovation in government, civic, business, social, scientific and religious settings,” Rothschild notes that the Kochs have also given over $311,000 to UW-Madison since 2007, and nearly $50,000 to other UW schools.

And don’t believe for a second that the Kochs and the Bradleys and other oligarchs are giving this money out of the goodness of their hearts with no strings attached. As the UW System gets defunded from other sources, it means the private oligarchs’ voices become more important, and they can slant curriculum and areas of research in directions that they prefer (or not have certain issues be researched, like climate change).

Let’s see if that’s part of the debate that arises in Tuesday’s JFC meeting on the UW System budget. Sure, there aren’t state aid cuts in it (yet), but these new expenditure figures that show the sources of funds indicates the increasing reliance on the private sector and big-money donors is a way to take the UW away from “sifting and winnowing” for society, and instead asking its paymasters “What would you like to see, boss?”

Which is exactly how the ALEC crew wants “education” to work.

Friday, May 19, 2017

April's Wisconsin income taxes fall again. Budget could be endangered

Late this afternoon, the Wisconsin Department of Revenue dumped their April revenue figures. I hadn't figured on this being very significant, given that the Legislative Fiscal Bureau had already given us a preview of the numbers with last week's estimates that said there would be no additional revenue in this budget.

But then I looked at the April revenue numbers, and they weren't as predictable as I thought. In particular, the fact that income taxes were DOWN 2.65% ($26.9 million) compared to April 2016. That's the second straight month that income taxes had a year-over-year decline after March's income taxes were down by 8.8%, which is especially bad given that March and April are two of the months that have the most tax returns, and they indicate more tax refunds than expected. It also should give you an extra level of skepticism for April's "booming" Wisconsin jobs numbers (and I already didn't trust them), as we should have seen higher income tax revenues if that was true.

Also concerning is that those tax returns aren't translating into higher consumption, as year-over-year sales taxes were only up 3.3% in March and 3.9% in April. Excise taxes are even worse- with losses of 10.6% in March, and 11.9% in April. The only thing that saved this April report, and what prevented the LFB from causing major turmoil with the state budget due to downward revenue revisions, is that corporate revenues had a major leap of nearly $40 million vs April 2016. This put corporate revenues back on track with LFB estimates after being down over 13% through March, which had it in line to fall short by $64 million.

In looking at where we stand at the end of April vs the LFB estimates, we are now pretty much in line with what LFB put out in January and stuck with in May, except for one area. Income taxes were projected to be up 3.99% year-over-year, and right now are only up 3.24%. That doesn't sound like a lot, but a 0.75% shortfall in income taxes would add up to $58 million overall. And in a General Fund budget that only has $12 million in breathing room and a $1 billion deficit in 2017-19, starting $58 million in the hole would likely require bigger adjustments over the next two years.

There are still two months left to report in the 2017 Fiscal Year, so there is still time to catch up....or fall further behind. With the bad weather this week, it sure seems like the upcoming Holiday Weekend and Summer hiring season is going to be a big factor in figuring out if we start Fiscal Year 2018 in decent shape, or if our house-of-cards budget already starts to tumble.

Thursday, May 18, 2017

Homestead credit move means Republicans vote to raise taxes on the poorest

Every tax season, you may see flyers or messages from the Wisconsin Department of Revenue saying "GET HOMESTEAD CREDIT." This is a writeoff for low-income Wisconsinites designed to help them pay their property taxes and/or rent. Well, in light of Governor Walker's budget and action by Republicans on the Joint Finance Committee, less Wisconsinites will be able to follow the DOR's advice and get that Homestead Credit.

Here's how the Legislative Fiscal Bureau describes one of the many adjustments Walker was planning to make to the Homestead Credit, including cutting off 11,500 people from getting it at all, and this one involving a change in what type of income is counted when deciding who is eligible for the credit, and how he planned to reduce the credit for many others who make very little.
Currently, homestead credit claimants must report their household income in order to receive the credit. For the purposes of calculating the credit, household income is broadly defined to reflect most cash resources available to claimants. Claimant income starts with Wisconsin adjusted gross income (WAGI). Claimants are then required to report a number of statutorily-specified household income "addbacks" to WAGI, such as unemployment compensation, capital gains, business losses, contributions to IRAs, and child support. Some claimants who do not file an income tax return file a homestead only tax form, on which claimants must report components of WAGI that would have otherwise been reported on the income tax form, along with the same "addbacks" to income.

The Governor's proposed modified credit formula would reduce homestead credits for claimants with earned income below $7,300. Any claimant with $7,300 or more in earned income would receive the same credit as they would under current law. As mentioned earlier, the total number of claimants who would receive a reduced credit under the modified credit is estimated to be 10,800.

17. Under current law, the homestead credit erodes for claimants with household income greater than $8,060 as income approaches the maximum level of $24,680. Through this method, the formula is more generous to claimants with lower household incomes. The following table demonstrates the change in credits between the current law credit and the modified credit for eligible claimants under hypothetical combinations of household income, earned income, and property taxes. As shown, there would be no change in credit amounts for claimants with earned incomes greater than $7,300. However, claimants with earned income below $7,300 would receive reductions that would become greater as earned income declines from the $7,300 level.
That table showed that this could mean that individuals could face a tax hike up to $1,168, if an individual had no earned income and paid $1,600 or more in property taxes, with the biggest damage being done to people on the lowest ends of the income scale.

These changes come after moves in previous years that led to fewer people using the Homestead Credit, dropping from over 250,000 in 2011 to just over 191,000 in 2016. In addition, the credit doesn't go as far, as the Wisconsin Budget Project made this chart in 2015, and this number is even lower in the 2017-19 budget, going below $100 million.

So what did the GOPs on the Joint Finance Committee decide to do today? They made a number of changes to the Governor's proposal, some of which reduced the higher taxes on poorer Wisconsinites, and some of which may make it worse than the Governor's bill indicated. Here's a look at what the Joint Finance-approved proposal did.

1. It got rid of the sliding scale for poorer Wisconsinites that Walker wanted, which would have reduced the Homestead Credit over certain income levels. Instead, the credit is basically an all-or-none situation for those 10,800 people, and their income taxes won't go up as a result. This cost $5.2 million to maintain, but that number is more than offset by...

2. Not following Walker's recommendation to restore indexing in the Homestead Credit for inflation, which the Budget Project has noted is a major reason for the loss of the Homestead Credit's usage and value in recent years.

3. Requiring "disqualified losses" on businesses to be part of the income that determines whether someone can claim the Homestead Credit...which means that fewer people will get it.

4. A recalculation of how many people will use the Homestead Credit- which calculates that the Homestead Credit will pay $1.5 million less than the Walker Administration originally thought.

In addition, the JFC agreed with Walker's plan to limit the Homestead Credit to people (or their spouses) that are age 62 and over, or disabled, and to people who earned income. So younger low-income people or unemployed people who might be currently getting the Homestead Credit are going to be out of luck in the future, and paying higher taxes.

OH, but apparently we can't ask oligarchs Diane Hendricks or John Menard to pay extra income taxes to pay for free tuition at the state's tech colleges (this was a Dem motion that was turned down by WisGOP Joint Finance members today). Funny how these things work, eh?

Great April jobs report for Wisconsin...if it's real

The Wisconsin Department of Workforce Development came out with its monthly jobs report relatively early in the day, which means the numbers were likely to be good. And they were.
Place of residence data: A preliminary seasonally adjusted unemployment rate of 3.2 percent in April 2017, down a significant 0.2 percent from March and at its lowest rate since February 2000. The rate remains lower than the national unemployment rate, which was 4.4 percent in April 2017. Wisconsin's labor force participation rate increased 0.2 percentage points to 68.6 percent and continues to outpace the U.S. rate which decreased to 62.9 percent in April. Both total labor force and employment in Wisconsin remained at all-time high in April, while the number of unemployed individuals was its lowest point since April 2000.

·Place of work data: Based on preliminary data, the state added a significant 37,600 total non-farm jobs and a significant 29,300 private-sector jobs from April 2016 to April 2017. Wisconsin also added 7,500 private sector jobs and a significant 14,800 total non-farm jobs from March 2017 to April 2017. Other significant month-over-month gains include 5,100 jobs in Manufacturing.
Very strong all around, and the drop in unemployment featured good gains in both “employment” and the “labor force”. So according to these numbers, Wisconsin is booming, growing, and near full employment, and I’m sure you’ll hear more of Governor Walker and the WisGOPs running around saying “3.2% unemployment” for the next month.

(Side note, if this 3.2% unemployment and high participation rate is accurate, then why are Scott Walker and other Republicans still using the ugly "hammock" language that implies there are large amounts of lazy black people that don't want to work?)

However, there are a few items in that report that don’t exactly add up to me. In particular, I did some comparing with what Walker’s DWD was saying about Wisconsin’s 2016 job market at this point, and noted that the “great gains” that they were touting 12 months ago didn’t turn out so great once we got more information.

Jan 2016- Apr 2016 Wisconsin jobs change
All jobs
Original DWD estimate +19,500
Benchmark re-estimate +16,100

Private jobs
Original DWD estimate +19,500
Benchmark re-estimate +14,900

There’s also an odd seasonal adjustment for April 2017 compared to what was reported at this time last year. The difference in raw (non-seasonally adjusted) jobs between the 2 years became much higher when it was seasonally adjusted, and I find that…interesting.

Raw vs seasonal change in jobs, Apr 2016 vs Apr 2017
All jobs
Apr 2016 raw +21,800
Apr 2016 seasonally-adj. -12,600

Apr 2017 raw +39,600 (+17,800)
Apr 2017 seasonally-adj +14,800 (+27,400)

Private sector
Apr 2016 raw +19,400
Apr 2016 seasonally-adj. -11,500

Apr 2017 raw +31,000 (+11,600)
Apr 2017 seasonally-adj +7,500 (+19,000)

Apr 2016 raw -2,900
Apr 2016 seasonally-adj. -4,200

Apr 2017 raw +4,700 (+7,600)
Apr 2017 seasonally-adj +5,100 (+9,300)

I’m not saying the reports are BS. I just see some weird numbers and reserve the right to be skeptical that they’ll hold up under further examination.

Another reason I am skeptical is that unlike the April 2016 jobs report, the April 2017 report doesn’t include the preliminary figures from the “gold standard” Quarterly Census on Employment and Wages (QCEW). This next report will be released nationwide in 3 weeks, and the Walker DWD has traditionally pre-released those numbers with the previous jobs report.

This latest QCEW would cover all of 2016, which would give us 6 full years of data during the Age of Fitzwalkerstan. The benchmarked monthly numbers of 2016 suck enough- private sector growth of a measly +17,200 (the worst in 7 years), and overall job growth of less than 1% (26,400). If the QCEW figures are equally bad, it would not only counteract all the happy talk in this jobs report, but it would also cement Wisconsin’s status in the bottom of half of US states for job growth for the 22nd straight quarter.

Add in today’s report from the Kaufmann Foundation saying Wisconsin is again dead last for entrepreneurship, and no wonder why the Walker Administration is doing whatever they can to convince Wisconsinites that things are finally turning around economically in 2017. They know they can’t run on their failed record, so they have to pull the Mary Sunshine “future is bright” routine to try to trick people into believing it’s working.

On a related note, the long form of “con” is “confidence game.” Let’s see if the Walker DWD’s claim of 3.2% unemployment and a booming job market claim holds up. Maybe things really are that good statewide, but I find these numbers quite convenient and a fortunate deflection for the WisGOPs.

Wednesday, May 17, 2017

WEDC still losing money, can't track jobs

Yeah, the headlines may indicate that things are “better” at the Wisconsin Economic Development Corporation. But it still doesn’t sound like things are all that great.
The Wisconsin Economic Development Corp. has taken strides to improve its handling of state taxpayer dollars, but it still can't pinpoint how many jobs it has created.

Also, the agency's uncollectable loan balance has grown from $1.3 million in December 2014 to $11 million as of December 2016, another sign of the poor awards management in the early years of the agency….

Those are some of the findings in the Legislative Audit Bureau's latest review of the nearly six-year-old agency.

"WEDC cannot be certain about the numbers of jobs created or retained as a result of its awards," the LAB reported Wednesday. "Additional actions need to be taken to improve the accuracy of the numbers that WEDC reports in its online data regarding jobs that were created or retained as a result of the awards it made."
Digging further into the full audit, we can see more detail on where the mess-ups are still occurring (and in fairness, where they are not). The LAB says that WEDC has improved its record-keeping and accuracy on some levels after it adopted new procedures in 2016, but prior incompetence and the GOP slush-fund nature of this organization helps to explain the large increase in uncollectible loans.
As shown in Table 5, WEDC’s two loan delinquency rates increased considerably from December 31, 2014, to December 31, 2016. The increases in the two rates occurred largely because new loans became 90 days or more past due during this two-year period. The total outstanding loan balance for WEDC’s loan portfolio was $78.5 million on December 31, 2016.On that date, the payment delinquency rate was based on $1.4 million of loan repayments that were 90 days or more past due, and the principal delinquency rate was based on an $11.0 million total balance for loans with repayments 90 days or more past due.
The LAB adds that these loans are now considered “potentially uncollectible”, meaning that these funds are likely lost, though not listed as “written off.” Written off is what another combined $3.4 million in loans for Fiscal Years 2015 and 2016. The LAB adds that another $16.4 million in loans had its contracts changed to defer payments and try to get something back from a delinquent business.

Another item of concern in the LAB audit dealt with WEDC holding onto money when they did claw back some of their handouts after it was determined the business didn’t live up to their end of the bargain, instead of refunding that money to the State Treasury. And LAB says part of that problem is due to the way WEDC was set up by the Walker Administration in 2011.
If a tax credit recipient does not comply with the terms of its contract with WEDC, it may be required to repay the State for tax credits it had previously claimed. If a recipient instead repays WEDC, then WEDC must repay these funds to the State. WEDC’s information indicates that recipients repaid $5.3 million to WEDC from July 2016 through November 2016. In response to our questions, WEDC indicated on March 16, 2017, that it had not yet deposited the $5.3 million with the State and that DOA had verbally agreed to allow it to retain the $5.3 million until DOA requested these funds. On March 23, 2017, WEDC deposited $5.3 million with DOA. (oops!)

Unless otherwise provided by law, statutes typically require state agencies to deposit into the State Treasury within one week any funds received on behalf of the State, and these funds are generally credited as GPR to the General Fund. However, this provision does not apply to WEDC because WEDC is not a state agency, and statutes do not stipulate how frequently WEDC is required to deposit repaid tax credits with the State. Therefore, the Legislature could consider modifying statutes to require WEDC to deposit all tax credits repaid to it with DOA within one week.
The audit also notes that WEDC is not updating its website on the progress of its awards after they are given, including less-than-advertised amounts of jobs created/retained.
Assessing the effectiveness of WEDC’s awards involves determining the extent to which recipients met their contractual obligations. WEDC indicated that 192 awards it had made since July 2011 ended through September 2016, including 24 awards (12.5 percent of the total) for which WEDC indicated that job creation or retention was an expected result. We found that recipients of 3 of the 24 awards were not actually contractually required to create or retain any jobs. Thirteen of the 24 awards ended before the contractually specified completion dates and, as a result, the recipients were no longer contractually required to create 183 jobs and retain 1,082 jobs. Eight of the 24 awards reached their contractually specified completion dates.

We also found that WEDC’s online data contained inaccuracies for certain awards, including 1,265 jobs associated with recipients that sold their operations in Wisconsin, ceased their operations in Wisconsin, or had withdrawn from their contracts before the contractually specified completiondates. In addition, at least 699 jobs were double-counted in the online data.
But hey, the Walker Administration got a nice headline at the time of the award, so who cares how things actually ended up, right?

The same goes for those “building expansion” announcements WEDC is so fond of sending out.
Award recipients submitted documentation showing how they spent the funds that WEDC awarded them for capital investments, but they typically did not submit documentation for the remaining capital investments that they reported to WEDC. Although WEDC did not receive documentation for the total amounts of capital investments, it included the total amounts in its online data in January 2017. For example, the online data indicated that one recipient made $23.4 million in capital investments as a result of a $3.4 million loan from WEDC. This recipient submitted documentation for $3.4 million in capital investments but submitted no documentation for $20.0 million. The online data indicated that a second recipient made $21.1 million in capital investments as a result of a $1.5 million loan from WEDC. This recipient submitted documentation for $2.5 million in capital investments but submitted no documentation for $18.6 million.
Now here’s the question- now that we see there are still deficiencies will anything more be done about it by the GOP-run State Legislature? Let’s keep in mind that the Joint Finance Committee just signed off on reinstating WEDC’s loan program last week, and the GOP donors at Johnsonville Sausage just got up to $10 million in WEDC tax breaks for an expansion project that MAY add 100 jobs over the next 5 years.

So is the money-funnel that is part and parcel of WEDC’s method of doing “business” too sweet to prevent the Legislature from stepping up and stopping these guys from wasting more tax dollars? Stay tuned.

Will WisGOP neglect of local government continue tomorrow?

Tomorrow’s Joint Finance Committee meeting will deal with several issues that’ll help determine what your property tax bill will look like over the next couple of years, and whether you can expect more potholes on your town’s roads. It deals with the arcane-sounding shared revenue program for counties and local communities, but these are items where we often see the effects close-up.

The County and Municipal Aid amounts have not been raised once in the last 14 years, and has fallen by over 20% in that time ($949.7 million in 2003, $753.1 million in 2017), and Walker’s budget offers no additional money for the 2017-19 biennium. Now WisGOPs can prop Act 10’s tools all they want, but there is no way they will make up for a total of over $613 million in cuts to shared revenues to counties, cities, villages and towns over those 8 years.

In addition, Walker and the WisGOPs decided to impose strict limits on property taxes, only allowing them to be increased by the amount of net new construction in the municipality, with some exceptions. This may enable Scotty to have a talking point of “look at how much I lowered your property taxes” (your personal situation may vary), but the Legislative Fiscal Bureau says there has definitely been a cost to those cuts, and unlike schools, local governments haven’t been using referenda to get that funding. Instead the local governments are borrowing money in increasing amounts.
In recent years, a significant percentage of school district referenda have been approved. According to the Department of Public Instruction, in calendar year 2016, school district voters approved 38 (81%) non-recurring (operations) referenda, 20 (83%) recurring (operations) referenda, and 64 (77%) of debt-related referenda. In comparison, according to the Department of Revenue, only 14 county and municipal referenda passed between 2006 and 2015 (information on 2016 referenda is not yet available). Approving a municipal levy increase through a vote of electors may be more difficult than passing similar referenda for facility improvements at the school district level. For example, asking for a levy increase at referendum to fund a needed road, street, or related capital improvement may have only limited appeal to voters. This difficulty may occur because unlike improvements to school district facilities, which are typically used by, or associated with, the overall community, municipal and county capital improvements, such as improvements to specific sections of local roads, often affect only voters benefiting most from the improvement. As a result, support for the improvement and the related referendum may be more limited.

11. Typically, municipalities and counties use tax levy (cash) or issue general obligation bonds to fund capital improvements. Given the limitations of local fiscal controls and absent a referendum to use current levy to fund significant capital improvements, local governments (municipalities and counties) have often looked to borrowing to fund such projects. Because local governments are allowed to exclude from the local levy limit any amounts levied to pay for general obligation debt issued after 2005, issuing such debt for transportation-related capital improvements is another way that local governments can fund those projects without violating the levy limit restrictions. Local governments have taken on increasing levels of debt to fund such capital improvements. Between 2005 and 2015, total outstanding general obligation debt for all local governments has increased by 30.7% and at an average annual rate of 3.1% for counties and 2.6% for municipalities. Annual debt service payments on those obligations increased by 56.8% for all local governments and at an average annual rate of 3.1% for counties and 5.0% for municipalities. In comparison, the Consumer Price Index has increased by 21.4% in total and at an average annual rate of 2.0% over the same period. Providing an increase in county and municipal aid could provide local governments needed financial assistance, which could be used by local governments to assist in funding their operations or in funding capital projects in lieu of additional borrowing.
Interestingly, Walker’s budget includes a provision (explained in this paper) where if the amount used to pay off debt issued before 2005 is “lower in the year of the levy than in the prior year, the local government would be required to reduce its levy authority by the amount of the decrease.” In other words, they have to “give back” the extra amount of property taxes they were able to collect. Yes, this would lower property taxes on the median-valued Wisconsin home by $7 this year and $11 next year, but it also would put already-tight local budgets under even more stress, likely leading to more potholes and budget cuts.

And that gimmick, along with a stupid plan to use $180 million in General tax dollars to eliminate the state’s Forestry Property tax and $87 million more to pay for a bigger School Tax Levy, means that Walker can claim his budget will cut property taxes for the typical homeowner by $21 over the next 2 years. However, all that would do is reverse the recent property tax increases that have been caused by his lack of funding of local governments. Even with the extra borrowing and levy limits, the LFB says property tax levies have gone up since 2015 by nearly $139 million on the municipal level, and over $85 million at the county level.

That’s not even counting something else Wisconsinites are increasingly paying to local governments in the Age of Fitzwalkerstan - wheel taxes.
Local governments also have another revenue option to meet their transportation infrastructure needs. Since 1967 municipalities have had the authority to impose a local vehicle registration fee or "wheel tax", which is imposed on automobiles and trucks of not more than 8,000 pounds that are registered in the state. Since 1979, counties have had similar authority. There is no limit on the amount of the local registration fee that can be imposed. Any county or municipality that imposes a wheel tax must use the revenues for transportation-related purposes. Since 1967, 23 local governments have imposed or adopted an ordinance to impose a wheel tax. However, 14 of those local governments have adopted an ordinance to impose a wheel tax in just the last two years. In 2015, revenues from the wheel tax totaled 2.8% of the total gross property tax levies of all local government imposing the fee that year.
Yes, Walker’s budget did offer an increase of nearly $76 million in local transportation aids, which in theory might mitigate the need for more wheel taxes. But that funding is limited to a specific purpose, so it won’t do much to help local communities pay for cops or libraries or other services. And with Joint Finance deciding last month to rip up Walker’s DOT budget and start from 2017’s base, there’s no guarantee that the proposed increase in Transportation aids will survive.

This doesn't even take into account the costs of damage that have resulted from yesterday's deadly tornado in Barron County and other problems associated with this severe weather outbreak.

That's usually a supplemental appropriation in a budget that doesn't have much extra money available. And yes, Governor Walker has declared a State of Emergency already, but it'll take a while for the money to flow its way down to the already-strapped local governments to start to pick up the pieces.

The LFB notes that the Legislature could stop the bleeding at the local government level in a couple of ways. One involves giving an increase to local government aids starting in 2018, with every 1% raise costing a little over $7.5 million. Another possibility comes from allowing the levy limits to be raised, which LFB discusses in the “debt rule change” paper. This could allow for a “minimum allowable increase” in tax levies that could be 1% OR net new construction, depending on which is larger. The LFB estimates that every 1% change would increase tax bills by $14, but also might prevent more cutbacks at the local level in case this mini-housing bubble pops.

It seems to be logical for the Joint Finance Committee to get rid of some of those Walker gimmicks where general taxes are paying for property tax breaks, and instead give back some of the flexibility to local government by giving them their first raise in 14 years, and by allowing them to set a property tax level that they feel is appropriate. Oh, who am I kidding? This is the 2010s GOP. They stopped being the “party of local control” several years ago.

Tuesday, May 16, 2017

Time for rules to apply to Republicans too

This tweet aged well.

Strangely, we haven't heard much from Scotty over the last couple of days during this most recent Trump implosion. Well, except for a lame resentment play about a Tim Allen show that I and probably Scotty didn't know about till last week.

Then again, Scotty is Republican, and we know the way they roll.

"Our rules don't apply to us."
-21st Century GOP motto

If GOPs won't DO THEIR CONSTITUTIONAL JOB and demand oversight and an independent investigation into Trump's dealings with Russia, and in getting a subpoena of Trump's taxes and holdings to determine just how much the Russians own this guy, then Tammy Baldwin and the rest of the Senate Dems have no choice but to follow the words of Chuck D and Flava Flav.

Playing nice with these traitorous thugs will not win, and will not be respected by the average dope voter. You have to lay the hammer on them, and stop defaulting to "the system will work out." The system only works if the good guys constantly work to make sure politicians and officials are not allowed to mess them up.

Take it from a Wisconsinite, these sleazebuckets will cheat as much as they can for as long as they can, and will try to rig things as much as they can to duck the justice they have coming to them. That cannot be allowed to happen anymore. And if it takes screwing up the economy to scare the oligarchs, then maybe that is the step that has to be done.

Monday, May 15, 2017

More money shuffling, this time on Child Care

There's a relatively small, arcane maneuver in tomorrow's Joint Finance meeting that gives a bigger indication of how this governor (and he's far from the only one) tries to pull budget tricks to allow for short-term funding of an initiative before an election, but nothing after it.

In this case, the Walker Administration tried to sneak through $3.3 million using federal block grant money last month. Those funds were intended to be used to make mandated changes to the state’s Child Care Development Fund (CCDF) and putting in a new system for its Wisconsin Shares child care program, where benefits can be automatically deducted using methods such as telephone system and a swipe card.

That request just happened to be around the same time that the Joint Finance Committee was going to be considering the Department of Children and Families’ budget for 2017-19, so the JFC will consider both requests together. The problem is that the state’s block grant to counties (known as Children and Family Aids (CFA)) is barely any more than it was 8 years ago ($68.3 million in 2016-17 vs $67.5 million in 2009-09), while needs for child-related services has continued to increase.

To help counties deal with the tight budgets that have inevitably resulted from pushing the burdens of services down to them, the Walker Administration plans to use more Federal money in this budget.
The [Governor’s budget] bill would increase the CFA allocations to counties by providing $1.25 million FED in 2017-18 and $5.00 million FED in 2018-19. Increased funding would allow counties to hire additional staff, thereby reducing caseloads and improving turnover rates. Further, additional funding could alleviate the increased costs associated with the abuse of opioids and other drugs. Therefore, the Committee may wish to approve the Governor's recommendation without modification.
One problem (and nod if you’ve heard this one before). The Federal money is not slated to be around later, which would leave either the state or the counties on the hook for picking up the rest after the 2018 elections.
12.DCF indicates that the federal funding provided under the bill would not be an ongoing source of revenue, and would instead spend down the opening balance of one-time Title IV-E reimbursement funds previously received for the cost of providing out-of-home care services. Thus, the estimated ending balance of Title IV-E funds ($3.3 million) in 2018-19 would likely not be sufficient to fund the proposed CFA increase in future years without additional state funding. Compared to 2018-19, it is estimated that an additional $5.0 million GPR would be required in each year of the 2019-21 biennium. [This annual $5.0 million amount is reflected as a 2019-21 general fund commitment in the Fiscal Bureau's March 23, 2017 memorandum to the Legislature.] Because the proposed funding source is not ongoing, the Committee may wish to provide GPR funding for a portion of the increase to the CFA in 2018-19 in order to avoid an unfunded commitment in the next biennium (Alternative 2).
In other words, it may be wise to use more state money now to avoid having to shell out $10 million to maintain this higher amount in the next budget (you know, the one with the $1 billion structural deficit?).

This may be where the $3.3 million in block grant funds may come in. Since it’s a block grant, might this be a source of funds that takes care of two problems at once? The $3.3 million could be used to help pay for the increased county aids, and save some federal Title IV-E money so state taxpayers don’t get socked with $10 million in extra spending just to keep funding at the same level in 2019-21.

Sure, these things are kind of wonky, but keep your eyes on how all of this federal and state money interacts. Because you can bet Gov Walker will try to use that extra federal money as proof that he “made a bigger investment” in services, even when it takes legislative action to actually divvy up the money in a responsible way that doesn’t cause us fiscal problems later.

Walker trying to cut Elections Commission staffing. Not an accident

We’re still in the early stages, but more Wisconsin budget votes are set for tomorrow. One of the biggest items involves the funding for the state’s relatively-new Elections Commission, which was created after the WisGOP Legislature and Governor Walker passed a law in 2015 ending the non-partisan Government Accountability Board.

Well, it turns out that the first full budget for the Elections Commission is running into some problems. The Elections Commission said they needed 22 positions in places ahead of 2018’s midterms and Governor’s election, and Governor Walker’s budget only allows for staffing and funding of 16 positions. Why did Walker cut 6 positions off of that request? Here’s what the Legislative Fiscal Bureau says.
The administration indicates the reason for providing 16.0 positions annually rather than 22.0 positions is that HAVA [Help America Vote Act]-funded positions have had a high vacancy rate in recent years and that the agency has been able to manage its workload using temporary staff through contractual services. At the time the budget bill was introduced (February 8, 2017), 8.0 of the 22.0 positions were vacant. The Governor's recommended budget provided authority for two of the eight vacancies…All of the agency's HAVA-funded positions were reauthorized in 2015-16 under 2015 Act 55. The first three positions listed in Table 1 had not been filled since the date of their reauthorization. Five of the eight positions, which had been vacant seven months or less, could be considered short-term vacancies. As noted in the table, one additional position was vacated in April, 2017, and three positions have been or will be filled in April or May. Therefore, accounting for the most recent vacancy and newly hired staff, six positions would remain vacant.
There’s a problem with the Walker Administration’s argument that temporary staffing can handle the rest of the workload. There’s no money given to the Elections Commission to do that. These temporary contractors cost $53,800 before the 2016 elections, and usually involve answering voting-related questions and helping to do post-election audits. And if the Walker Administration wants to cut these 6 positions, you’d think the least they can do is pay for the part-time workers that are required to make up some of the difference.

But the Elections Commission is insisting they need full staffing, and have received the backing of several local officials in their argument, as local governments have to carry out increasingly complicated elections laws and haven’t had the money to back up those mandates.
10. In a February 28, 2017, communication to local election officials, the Commission's administrator expressed the agency's concern regarding the level of position authority recommended for the 2017-19 biennium. The following potential effects of reduced position authority were indicated: (a) delays and reduced capacity for reviewing nomination papers, assisting candidates and challengers, certifying candidates, and reviewing and approving ballot formats; (b) reduced capacity to implement legislative changes in a timely and consistent manner through statewide training and support for local election officials; (c) limited ability to maintain the state's voter registration system, including municipal boundary changes, list maintenance relating to identifying ineligible voters, and assistance to local election officials; and (d) an overall reduction in accuracy and efficiency in completing agency tasks that require a team-based approach such as testing new functions in the voter registration system, reviewing and certifying election results and other data from local election officials, testing and auditing voting equipment, and compiling election data into federal and state reports.

11. In February and March, 2017, five local governments wrote to the Elections Commission to express support for providing the 6.0 positions that were not included in the recommended budget. The local officials provided several reasons in support of the agency's request. In the correspondence submitted to the Commission, local officials stated that they believe the Commission has been short-staffed in recent years, and that the agency's level of staffing has a "direct effect on all phases of elections" including training of 1,854 municipal clerks and 72 county clerks, answering questions and concerns, maintenance of current procedures and policies, legal advice, database development, statistical data collection, and research. Additionally, the local officials wrote that the work of the Commission assists clerks and other elections staff in complying with the latest legal requirements and administering elections with accuracy and integrity. They observed that elections-related duties for clerks and other staff at the local level have also increased significantly over time, such that in some cases elections work now requires more than twice as many hours and staff, in comparison to the local workload 15 years ago. Elections officials are concerned that the recommended level of position authority would result in reduced services to locals that could lead to: compliance issues if clerks misinterpret law changes; errors in various elections processes; slower response times; and lower overall quality of service.
But I don’t think having elections be screwed up is an item of major concern in the Governor’s office. After all, he has signed on to numerous election law changes that helped lead to the results in 2016 that favored Walker’s Republicans. Some of that information just came to light last week, as the Nation magazine printed the results of a survey from Dem SuperPAC Priorities USA.
 While states with no change to voter identification laws witnessed an average increased turnout of +1.3% from 2012 to 2016, Wisconsin’s turnout (where voter ID laws changed to strict) dropped by -3.3%. If turnout had instead increased by the national no-change average, we estimate that over 200,000 more voters would have voted in Wisconsin in 2016….

The lost voters skewed more African-American and more Democrat. For example, Wisconsin’s 2016 electorate was 6.1% more Republican, and 5.7% less Democrat, than the group of ‘lost voters’. Furthermore, the WI electorate was 3.7% more White and 3.8% less African American than the group of ‘lost voters.’ This analysis suggests that the 200,000 lost voters would have both been more racially diverse and have voted more Democratic.
The article also includes this chart, which shows only 2 of Wisconsin's 72 counties had an increase in turnout in 2016 compared to 2012, while non-voter ID state Minnesota had several counties exceed their 2012 totals. It also showed that Wisconsin counties with higher African-American populations were likely to have larger drops in turnout.

In a state where Donald Trump won by less 0.8%, this difference in turnout seems pretty decisive. And since it isn’t in the GOP’s interest to have more marginal, Dem-leaning voters turn out, why would they want to staff up the Elections Commission to clear up confusion and help more people go to the polls?

It also seems odd to be reducing the staffing at the Elections Commission in a time when voting rights and other election-related laws are being disputed more than ever, particularly in ALEC states like Wisconsin where GOPs try to pass laws to cement their advantage in the Legislature. Just today, the US Supreme Court refused to hear a case after a lower court had struck down a vote suppression measure in North Carolina, meaning that the law was now invalid.

You’d have to think that Wisconsin might be one of those states due for more court cases with their recent ALEC-infused voting changes, and that combined with the potential for court-ordered redistricting in the next 6 months, would make you think that the Elections Commission should be at full strength just in case there is a need to make significant adjustments ahead of the several elections in 2018.

So while the question of 6 positions and $730,000 split 50-50 with the Feds may not seem like a big deal on the surface when you’re talking about a $70 billion + Wisconsin state budget, the underlying point that Scott Walker and his fellow ALEC Republicans are using this budget to further distort and mess up the state’s elections needs to be brought into the light, especially after the recent news which shows that GOP hijinks may have made the difference in last year’s close election.

They’re not going to stop until the courts and the people make them stop. KNOW THIS.

Sunday, May 14, 2017

Sorry Charlie Sykes. You built that, you OWN IT

This is an excellent article from the Driftglass blog responding to Charlie Sykes' recent commentary in the New York Times, where Sykes said that all today's Trump supporters care about is opposing and trolling liberals.

While Sykes' theory seems to be mostly true these days (after all, how can the average blue-collar "America First" Trump supporter actually approve of what this guy is doing?), Driftglass reminds us that's because Charlie-tan Sykes and numerous other GOPper-gandists spent years creating that monster. And that us on the left told thse rubes that fact well before people like Sykes joined the party after Trump was nominated.
We were also, of course, right, Completely right about the Right all along. Over and over again. And the worst hell on Earth for a Conservative is to be shown up and humiliated by us dirty Libtards, because, as Thomas More noted over four-and-a-half centuries ago, , "The devil...the prowde spirite...cannot endure to be mocked."

Every day of these people's lives, their own leaders, their own words and Reality itself humiliates them by slapping yesterday's lies out of their mouths right in front of God and everybody. And because they have been rendered incapable of admitting error or self-reflection, every day for your basic American wingnut is like chugging salt water: the exercise only leave them ever more frantic for even Bigger and Better lies to slake their thirst and hide their shame.

This is why the Right's hatred of us grows exponentially more berserk, more unhinged. This is also why they have reached a point where they will eagerly follow anyone who will look them in the eye and tell them the gigantic lies the want the hear.

And, for the record, it's also why Both Siderism is the worst crime against truth of all: because "Both Sides Do It" is always the the universal, inexhaustible "Get Out of Accountability Free" card every wingnut has been trained to play when he or she does not have the next Fox-approved lie or excuse readily at-hand.

And now that the hellscape we warned them about for decades has finally arrived?

Well, that just so happens to circle us right back to Mr. Charlie Sykes who, like so many of his Conservative media confederates that were finally cast out of the Conservative freak-show they created, have found an equally rewarding second career just plain ripping off the very Liberals who Mr. Charlie Sykes spent his first career mocking and demonizing.

Maybe he thinks he can still trick out-of-staters

And why did Charlie-tan perform this about-face? Let's go back to Bruce Murphy's excellent Urban Milwaukee column from a Feburary titled "The Many Faces of Charlie Sykes."
I can only imagine how hard it must have been for someone like Charlie, always deeply cynical and Mencken-like about the intelligence level of the great unwashed masses, spending day after day — for 24 years — stoking the anger and wing-nut conspiracy theories of his listeners.

But the paychecks were great. Between his radio gig and right wing dollars for his books from conservative groups, Sykes did very well. And he had the power to help elect and defeat candidates, and make friendships with heavyweights like Gov. Scott Walker, House Speaker Paul Ryan and the conservative Bradley Foundation’s president Mike Grebe.

By 2016, however, Sykes must have gotten sick of it all. Sources tell me he applied for the position of president of the Bradley Foundation after Grebe announced his resignation, and Sykes was never seriously considered for the job. After all he had done for the right-wing cause. That had to be infuriating. (And yes, there has always been some anger fueling Charlie’s views.)

So Sykes fell back on his well-practiced turn as the enlightened political turncoat who has suddenly — and ruefully, wittily, quotably — seen the error of his former ways. Rather than become king of the nation’s biggest conservative foundation, Sykes maneuvered to become the titan of talk radio traitors, getting coverage in the Politico and National Public Radio, and winning a position as contributor to MSNBC.
Lastly, let's remember this clip from just a few years ago, where now-White House Chief of Staff Reince Priebus gave Sykes a sloppy wet kiss about how Charlie was a big part of the GOP's "success in Wisconsin."

I'd love some enterprising reporter to ask Reince and Charlie how their relationship is going these days, and whether anything's changed in how they get along, and how they view world. It probably hasn't, in real life. After all, Sykes and Reince are just two grifters doing different things as a means to cash in on the disaster known as the Trump Administration.

Saturday, May 13, 2017

Stewardship/UW scholarship scheme doesn't add up

Earlier this week, State Sen. Steve Nass, State Rep. Tyler August and State Treasurer Matt Adamczyk released an idea on how to help students afford tuition at UW campuses, through a new program called the Wisconsin Merit Scholarship.

The scholarships would be “merit-based” using test scores and high school GPA, and would give out $5,000 apiece to 1,000 students. And taxpayers allegedly wouldn’t have to pay for it. How?
The funding for the scholarship bill comes from the sale of Board of Commissioners of Public Lands (BCPL) lands to the Department of Natural Resources (DNR). Constitutionally, the BCPL is tasked with selling all lands given to it by the federal government at statehood. The BCPL has already sold 98% of the land and this bill would sell the remaining 2% of land to the DNR. The land, almost entirely located in northern Wisconsin, is estimated to be worth around $80 million dollars. Specifically, the bill directs $10 million per year from the Stewardship Program to be transferred to the Normal School Fund (NSF) at the BCPL to purchase the land over 8 years. The NSF is constitutionally required to distribute any earnings from the fund to the UW System.

“As a commissioner of the BCPL, this plan finally allows us to fulfill our constitutional duty to sell our lands to benefit the UW System” said Adamczyk. “This is a no-brainer as we create a $5 million annual scholarship not only by selling our lands as constitutionally required, but also by doing so without making the taxpayers pay for it.”

When fully implemented, the NSF would have over $100 million dollars in it. Assuming a conservative 5% rate of return on the fund, there would be $5 million available annually for scholarships to be awarded by the UW System. In comparison, the NSF is only returning $300,000 to the UW System – this would grow that amount 15 times larger. With scholarships set at $5,000 it [is] estimated that over 1,000 students will be able to take advantage of these scholarships.
So basically, the plan orders $10 million in Stewardship funds (money used by the DNR to preserve land throughout the state) to be used to buy up the remaining BCPL lands, and then the BCPL invests the money, using the returns to pay for the scholarships.

That seems sketchy, and not just because we shouldn’t be gambling stewardship money in the stock market. But there’s a bigger reason to not buy into this “no-brainer”, and those who care about the state’s natural beauty caught it immediately.
Conservation groups blasted their plan, which would immediately divert one-third of stewardship funding and spend it on land already owned by the state that nobody else has been willing to buy.

“What this bill does is to reduce the funds available for grants that are used to increase public access and land conservation,” Mike Carlson, executive director of Gathering Waters, a nonprofit alliance of Wisconsin conservation land trusts.

“This bill is not in the best interests of the people of Wisconsin,” Carlson said. “It is fiscally imprudent, it literally is using money that is allocated for land acquisition grants to counties and nonprofit conservation organizations to buy land that is already state-owned.”

Why would we sell this back to ourselves?

I’m also skeptical that this move would work out in reality. It’s bad enough that funding for Stewardship purchases has been cut from $86 million to $33.25 million during Scott Walker’s 6 years in office, but now $10 million of that $33.25 million is going to this scheme to get land the state already owns.

And the fact that it’s coming from anti-UW and anti-environment regressives like nASS, August and Matt (“I tried to silence Tia Nelson on climate change”) Adamczyk should make you all the more skeptical.

If we want to come up with a way to help students pay for college, there are much better ways than having the scholarships not be related to financial need and selling off the people’s lands to do it.

No one's liking this latest Koo-Koo tax plan

As we get more time to digest the "flat-tax" plan from State Rep. Dale (Koo-Koo) Kooyenga, we see what a regressive giveaway it is. You may have seen the top-line numbers to the LFB’s memo, which were reflected in news stories like this one in the Wisconsin State Journal.
The plan’s tax cuts would be spread across income levels in its first year, tax year 2018, the analysis shows. Of the state’s 3.1 million tax filers, more than 2 million would see a tax cut averaging $80.

Many of the tax credits eliminated under the plan disappear in tax year 2019, causing more than 740,000 tax filers to see a tax increase that year averaging $248, according to the analysis. About 1.5 million filers would see a tax cut averaging $262.

By 2029, when the flat-tax proposal would be fully implemented, the wealthiest Wisconsinites would reap a tax-savings windfall.

By then, more than $2 billion of the roughly $2.7 billion in tax cuts the proposal would make in that year alone would go to taxpayers earning $100,000 or more. More than $519 million in tax cuts would go to those making $1 million or more.

Taxpayers earning $1 million or more also would see the biggest percentage tax cut under the plan — a 49 percent decrease.
I think Mark Sommerhauser is misreading the memo. It seems to be describing the cumulative effect of these tax cuts, basically saying that total income tax revenues would be $2.7 billion below what would otherwise be the number in 2029. All the changes don’t hit at once (as the article hints at), but it’s more an adjustment over time.

And it is noteworthy in how the distribution of benefits and tax increases changes, in particular in how many members of Wisconsin’s middle class get socked with a tax hike after the 2018 elections. In 2019 alone, the number of Wisconsinites who will be paying higher income taxes under this plan than they would under current law rises from just over 172,000 to more than 743,000. This includes over 27% of Wisconsinites making between $15,000 and $70,000, and 44% of tax filers making between $70,000 and $150,000, and the average tax hike ranges between $125 and $215.

This is where I’ll remind you that the Institute of Taxation and Policy says that the richest Wisconsinites already pay the lowest percentage of their income in state and local taxes, while the middle class pays the most.

This Koo-Koo tax plan would put that disparity on steroids. Even though the tax giveaways start off relatively tepid and even in 2018, beginning in 2019, the benefits start sliding increasingly to the rich, with that trend accelerating in the out years. Tamarine Cornelius has a good rundown of just how much this income Koo-Koo tax plan would help the rich at the Wisconsin Budget Project website.

(insert charts)

And by the time we get to 2029, that tax cut would greatly handcuff the state’s finances, and would further harm state services that have already taken on major damage in the Age of Fitzwalkerstan.
The extremely slanted nature of this proposed income tax cut is a significant drawback to the new tax proposal. But it is not the only drawback: the tax package also comes with an alarmingly high price tag of $2.7 billion a year once it is fully phased in. To put that amount in context, it is more than the state spends on the University of Wisconsin System, the state’s technical college system, and the state’s prison system, combined. Such a large tax cut, targeted at people who are already doing well, would make it much more difficult for Wisconsin to make the investments in schools, health care, and the state’s workforce that help build a strong economy.
The LFB admits that the tax plan is so complex and with interacting parts that it can’t get an exact estimate on many of the proposed provisions.
Other provisions of the tax and transportation proposals are not reflected in the attachments because they cannot be simulated reliably. These relate to state and local sales taxes, the motor fuel tax, a fee on hybrid vehicles, the excise tax on little cigars, property tax credits, the historic rehabilitation credit, the income tax credit for taxes paid to other states, and contributions from individual retirement accounts to charitable organizations.
And most of those provisions would raise taxes the most on middle and lower-class Wisconsinites, while giving extra tax breaks to richer Wisconsinites. In other words, the extra benefits that the rich get over everyone else would likely be even larger than the LFB’s numbers indicate.

Even more intriguing is this hit job analysis from Scott Walker’s own Department of Revenue, which was relayed by Wispolitics.com, and it seems to lay the smack down on the Koo-Koo plan as much as any Democrats have. Not only does it repeat many of the items on how unequal this tax cut plan is, but it seems to take particular aim at measures that would raise property taxes by reducing certain write-offs.
•The plan eliminates the First Dollar Credit on property tax bills. This would result in a property tax increase for homeowners and other property owners. This would raise property taxes statewide by $150 million. The impact on the median-valued home would be a property tax increase of $67.

•The plan reduces the amount appropriated for the School Levy Credit by $40 million compared with your 2017-19 budget proposal. This increases property taxes by $12 on a median-valued home.

•In total, when these two provisions are fully phased in, property taxes would be $79 higher on a median-valued home compared with your budget proposal.
Well sure, those increased property taxes are one of the many trade-offs for lower tax rates under the Koo-Koo plans. And it’s the only way that the numbers can balance in 2017-19, along with retaining $81 million that has been going to the Transportation Fund, and $43 million that is generated from county sales taxes on gasoline (which the counties don’t get to keep, which seems borderline illegal).

The DOR analysis also derides the added gasoline taxes that go toward fixing the roads, claiming that the driver of a sedan would pay $39 in additional gas taxes and an SUV driver would pay $54. The memo adds that it is unknown whether any money would be made up by paying lower prices on gasoline due to a reduction in the minimum markup, but it’s quite clear that the Walker Administration is trying to stick to a “no tax increase, lower property tax” pose, no matter how badly it messes up the rest of the budget.

Nowadays, Kooyenga is mumbling that his tax plan is only a “conversation starter”, but it seems to be attracting plenty of criticism for its crippling price tag and offsets that clearly seem to shift the tax burden from the rich down to the middle and lower classes.

There’s a lot more to come on this, and given the tightness of the current budget there won’t be much of this that becomes law anyway. But it’s very noteworthy to see how much Koo-Koo’s plans are being ripped apart from all parties, which is one of the few things that people are agreeing on when it comes to this gimmicky house-of-cards budget.