Sunday, October 21, 2018

Ex-WEDC CEO reminds us of how failed, unfit Walker and WEDC are

Saturday's headline speaks volumes. STATE GOVERNMENT | EX-SECRETARY SAYS WALKER LIED

Paul Jadin: Scott Walker 'defamed' economic development agency to shift blame for failed jobs pledge.

Paul Jadin was the first CEO of the Wisconsin Economic Development Corporation (WEDC), which was created in one of Scott Walker's first acts upon taking office in 2011. Matt DeFour's in-depth, detailed story in the Wisconsin State Journal begins with Jadin telling Governor Scott Walker that he was considering leaving WEDC in 2012 to take a new position with a Madison-area economic development organization.

Originally, Jadin said that Walker wanted him to stay on, but Scotty had a change of heart when he realized how it could help the Governor avoid criticism.
But the next day, Jadin said, Walker’s chief of staff and then Walker himself called back with a surprising message: Jadin should take the job because WEDC and its secretary would be blamed for the state falling short of Walker’s campaign promise to create 250,000 jobs in his first term.

“I hope you understand that I cannot be accountable for the job numbers,” Walker said, according to Jadin.

Jadin said he told the governor it was foolish to blame an agency the governor had created to carry out his pledge and at the time led as board chairman, but Walker, Jadin recalled, didn’t respond to that concern.
But when has Scott Walker EVER taken responsibility for anything going wrong? This "Unintimidated" grifter always tries to pawn his many failures off on others while taking credit for good things he has little to nothing to do with, and never cares about any results beyond politics and campaign donations.

And by the way, more than 6 years after Jadin left WEDC, Wisconsin is STILL short of 250,000 jobs added in the Age of Fitzwalkerstan. If we had merely kept up with the rate of growth in the rest of the nation, Wisconsin would have added nearly 400,000 jobs in the last 92 months. And that gap has grown in every year.

The State Journal article also reminds us of a major WEDC corruption story which helped lead Jadin to want to get out of that crooked slush fund.
Jadin said friction with the governor’s office began after an internal dispute with then Department of Administration Secretary Mike Huebsch over what turned out to be a bad $500,000 loan made in late 2011 to a Walker donor, which the State Journal first reported in 2015.

Huebsch had originally urged the agency to give a $4.5 million loan to Building Committee Inc., whose owner had given $10,000 to Walker’s 2010 campaign. Jadin ultimately signed off on a half-million dollar loan to the company, which never paid it back and has since folded. Jadin said Huebsch ultimately pushed for an additional $1.5 million loan and didn’t drop it until Jadin said he would only agree to it if Walker himself signed the contract, which didn’t happen.
That's the loan to the infamous William Minahan, who had a scam where the money was allegedly designed to improve the energy efficiency certain commercial buildings. As we found out in 2015, that's not where the money went, but the Walker Administration wanted to keep giving Minahan money anyway.
Top officials in Gov. Scott Walker's administration pushed to get Building Committee the initial loan and worked to get more for the company. But the jobs agency had to pass on giving the company more funding from state taxpayers after finding numerous problems with the firm and being told that owner Bill Minahan was promising some of this second proposed loan to pay a leasing debt on cars such as a 2010 Maserati and a 2011 Nissan 370Z luxury sports car ....

WEDC officials' alarm didn't stop them from persuading three counties to allocate $4.5 million for Building Committee from a federal program meant to spur energy conservation, according to hundreds of pages of emails and other documents recently released under the state's open records law. Those federal incentives were never used because, even with the subsidies in hand, Building Committee was unable to get the financial backing it needed to proceed with its project.

WEDC officials never told those counties about the concerns that had made them email each other with statements like "Yikes!" and "I can't believe we are actually going to do this" about earlier proposed help for Building Committee.
Your tax dollars at work.

And does anyone believe WEDC isn't pulling a similar routine today, as it hands out tens of millions of dollars with little oversight or open discussion of the projects? Even more alarming, WEDC is actively promoting Foxconn while they are supposed to be verifying Foxconn is actually creating jobs and investments before they get their billions of tax dollars, and making sure Foxconn is living up to the terms of their contract.

But this cronyist sketchiness has always been the intelligence of WEDC's design. Go back to the September 2014 article at PR Watch that discussed WEDC's sleaziness and tax-funded failures at length, and recall the words of former WEDC Chief Compliance Office Molly Regan.
When she approached the WEDC vice president who approved the expenditures, she says the list of receipts was plucked from her hands: "I don’t know how you got this," the official said. "I am just going to take it and shred it." When she complained about this incident to WEDC legal counsel, she was chastised for not "trusting" her co-workers. Regan submitted her resignation that day.

Reflecting on what went wrong at WEDC, Regan points to the prevalent attitude there of serving Walker’s needs and the needs of his top lieutenant, Mike Huebsch.

As she explains:
I was once told by an administration higher up, 'We have one customer, and our job is to make him look good. . . . Huebsch is the prince, Walker is the king.'
This weekend's story with Paul Jadin is a stark reminder of the combination of pay-for-play corruption, awful results, and excuse-making that have defined Scott Walker's time in office. And we will continue to underperform and waste taxpayer dollars in the WEDC slush fund unless this incompetent grifter is tossed out of the Governor's Office in 16 days.

Saturday, October 20, 2018

Wisconsin gains international attention..for their costly, failed policy on Corrections

Just ahead of November’s elections The Economist looked at the Corrections policies of two Upper Midwest states with Governor’s seats up for election and noted “Wisconsin Is Twice as Likely to Imprison People as Minnesota”.

Why is this happening? The Economist notes that while both states have put more people in prison over the last 40 years, Wisconsin saw its population grow more than twice as fast as Minnesota’s, and Wisconsin taxpayers pay a lot of money as a result. This is especially true as inmates stay longer and get older behind bars.
The states diverged after the 1970s, when “liberals in Wisconsin saw ourselves as twinned with Minnesota”, says Kenneth Strait, a researcher in Wisconsin. Inmate populations (in prison and county-run jails) rose fast, partly because of hardening sentences in both states. Minnesota had locked away 132 inhabitants per 100,000 in 1978, which jumped to 434 people by 2015, says the Vera Institute of Justice. Wisconsin’s sentencing was tougher still: its inmate population leapt from 178 to 925 per 100,000 residents.

Wisconsin’s 35,000-strong jail and prison population now far exceeds Minnesota’s 16,000. Wisconsin’s prisons guzzle state funds at twice the rate of next door: $150 is spent for every Wisconsinite to $74 per Minnesotan. A growing body of elderly lifers with soaring medical bills will push costs much higher. At times, state funding for prisons—about $1.2bn, or $38,000 per prisoner yearly—exceed spending on Wisconsin’s university system.
Oh, it’s not “at times”. Every year since Walker took office that Corrections spending has exceeded the amount of state tax dollars that go into the UW System, including the Fiscal Year that just ended on June 30, and the one that we are currently in.

Even the Governor that presided over “lock em up” measures like Truth in Sentencing (promoted by a 30-something suburban legislator named Scott Walker) now admits that mentality hasn’t worked out well for Wisconsin.
Tommy Thompson, a Republican governor for 14 years, also regrets overseeing a boom in prisoners. “We warehouse them. Constantly building prisons is not the way to go. Minnesota is not, and their crime is no worse than ours”, he says. He is keen to lead a reform programme, but says state politicians “are afraid as hell” of change. Mr Walker won’t even visit his own prisons, declaring there’s “no value” in doing so.

What could reform include? Mr Thompson wants vocational studies and early release for perhaps one-third of current prisoners. Kelly Mitchell, of the Robina Institute at the University of Minnesota, says various combined efforts are needed. A start would be setting up an independent sentencing commission like one she used to run in Minnesota. It advises legislators on how any new law would affect prison numbers and its cost to taxpayers. Even tough-on-crime legislators soon turn more cautious when obliged to include such information in their bills, she says.

A rethink of sentencing also makes sense. Minnesota has reduced penalties for infractions such as drug offences, as it tries to cut revocations. The state also uses problem-solving courts that aim to correct non-violent offenders’ behaviour without recourse to jail time. The rewards such courts offer can be as cheap as cinema or bus tickets, or applause from judges, lawyers and parole officers, but they work.
But smart policy means that Republicans can’t pander to fearful suburba-trash who think that people (of color) who committed a crime are second-class citizens, and keeping "those people" second-class allows the suburba-trash to claim moral superiority for their mediocre lives.

The Republican Governors' Association is still trying this 20th Century playbook in their latest ad in Wisconsin.

The use of the Soccer Mom is a nice touch. And given that race-baiting talk radio is a major influence in WisGOP, Wisconsinites continue to have to pay big bills while the state’s largest metro area stagnates in no small part because of the economic apartheid that WisGOP policies promote.

The Economist also notes that Minnesota is more likely to have local governments handle smaller criminal cases, instead of locking up those criminals at the state level.
One of the biggest differences is that Minnesota sends only convicted felons to prison, giving counties and jails charge of those awaiting trial or whose offences are minor. Counties and jails turn out to be likelier to release offenders for (cheaper) community supervision. That only works, however, given enough funds for treating mental health and addiction, plus training for those who supervise offenders.

Wisconsin needs change there. Lower spending on its social services means addicts and the mentally ill are “consciously channelled into prison,” argues Ms [Pamela] Oliver, the [UW-Madison] sociologist. She says local authorities have a financial incentive to push patients off their own welfare budget and into state-funded prisons. That helps explain why so many mentally ill people are behind bars. The msdf, for example, reports that 62% of inmates have diagnosed mental-health problems. That no sunlight penetrates its double layer of walls and tinted windows may be a factor, too.
And part of the reason that those troubled individuals are “consciously channeled into prison” is because cash-starved local governments in Wisconsin often don’t have the resources to handle the increased social services that a Minnesota-style system would require. Instead, Wisconsin has strangled local governments in the Age of Fitzwalkerstan in order for Walker and WisGOP to have a talking point of “local property taxes”.

This has put some communities into desperate situations. Ashland County asked its citizens back in August whether they should raise their property taxes by $1 million to handle the extra costs that have resulted from a 150% increase in drug arrests in the last 6 years and spiraling costs to place children in out-of-home care. The referendum failed, but you can bet it won’t be the last time we’ll hear about local communities needing to come up with more money to handle addiction and mental health needs that seem to multiply by the year.

But in the absence of new thinking and investments at the state level, the cycle of costly Corrections and subpar social outcomes continues in Wisconsin. And it won’t stop until Walker and WisGOP are thrown out by the taxpayers that have had to shell out big bucks for the regressive policies that are now getting international attention….and derision.

Friday, October 19, 2018

Who pays in Wisconsin? Not the rich, unlike Minnesota.

With tonight's gubernatorial debate and election looming in 18 days, it seems worthy to give a look at the recently-released “Who Pays?” survey for 2017 from the Institute on Taxation and Economic Policy. This annual study goes into the tax structures of all 50 states and looks at which income groups pay which types of state and local taxes.

As the “Who Pays?” analysis of Wisconsin shows, 85% of Wisconsinites pay just over 10% of their income in state and local taxes, but the top 5% of taxpayers pay less.

Why is this? Because both the sales tax and property tax tends to take up a higher percentage of income among lower-income individuals, and the relatively progressive income tax doesn’t make up enough to even it out.

This makes Tony Evers’ idea of rolling back the M&A giveaway for people who make more than $300,000 all the more justifiable, as it evens up a Wisconsin tax structure that currently favors the rich. And given that the top chart shows a $200,000 family income to be in the top 5% of Wisconsinites, it’s really hard for Scott Walker and/or WMC to claim that move would mean “everyday people are having their taxes raised” – because they are not.

In addition, ITEP notes that the middle and upper classes have a higher burden in this year’s survey because of the GOP’s Tax Scam coming out of DC, which lessens the chances that those people in particular will write off those taxes next Spring.
The 6th edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.
This reality has brought up the ends of state taxes compared to where Wisconsin stood in the same survey 3 years ago, including the lowest income levels, the peak amount of people in the top 20-40% area of income, and even the highest incomes (of course, the richest people get the bigger Federal tax cut under the Tax Scam, so don't shed too many tears for them).

It’s sadly telling that even with the relatively regressive nature of Wisconsin’s state and local tax system, ITEP says there are 33 states more regressive than us. This is especially true of states like Washington, Texas and Florida that have no income tax, and states with flat income taxes like Illinois and Indiana (funny, GOPs never bring up Illinois’ regressive tax structure when they complain about what a fiscal wreck the state is).

We frequently compare Minnesota to Wisconsin on this page, and for good reason. Not only are the states similar in population and demographics, but Minnesota has consistently beaten Wisconsin in almost all measures of economic growth and quality of life since 2011.

And ITEP says that Minnesota has the 4th most progressive tax structure of any state in America, with the lowest percentages being paid by the poorest individuals, and the richest 1% pay the highest tax rates.

When you compare the Minnesota chart to Wisconsin’s, there are 2 items that stand out for me.

1. Wisconsinites in the bottom 95% of incomes pay a higher % in state and local taxes than the bottom 95% of Minnesotans do, but the top 5% pay notably less.
2. Minnesotan families make more money at every cutoff point on this chart, and generally enjoy a “premium” of 8-15% over Wisconsinites.

Bottom 20%
Minn Up to $25,400
Wis. Up to $22,100

Minn $25,400 to $43,600
Wis. $22,100 to $39,400

Minn $25,400 to $70,700
Wis. $39,400 to $65,000

Minn $70,700 to $115,300
Wis. $65,000 to $100,300

80% to 95%
Minn $115,300 to $227,900
Wis. $100,300 to $198,000

Top 5% to top 1%
Minn $227,900 to $573,500
Wis. $198,000 to $512,600

So there’s no proof that the higher taxes on the rich in Minnesota have done anything to hold their low-unemployment, growing state back, or limit salaries for anyone at any level. It makes it absurd for Scott Walker and WMC and other right-wing oligarchs to claim that doing so in Wisconsin will slow down the already-subpar growth that we’ve had the last 7 years.

Not that many of the ITEP's findings should surprise you, but it's another bit of evidence that perhaps the relatively regressive way we have been going across tax policy in Wisconsin isn't the way to continue. Maybe instead we should be encouraging investments and quality of life that attracts high-wage and high-level talent, and the success of Minnesota indicates that maybe we should stop giving the free ride to the rich and corporate that hasn't led to better job growth or wages.

Thursday, October 18, 2018

Hintz shows there's no highway money left under Scotty's shell game

Just ahead of tomorrow’s debate, Dem Assembly Leader Gordon Hintz has produced an LFB memo that lays out the ways Scott Walker and his DOT spokespeople (hi, Christian Schneider!) have deceived and covered up just how bad things are when it comes to paying for Wisconsin highway projects.

First of all, Walker’s WisDOT was claiming that they had saved a ton of money with lower-than-expected bids (aka “let savings”). But the LFB says the problem is that the current State Budget already counted on saving a lot of money for 2017-19, and cut funding accordingly.
DOT indicates it has realized $167.7 million in savings during the 2016-17 through 2018-19 period (to date). However, of this amount, $130.4 million of these Page 4 savings were already accounted for by the Legislature in establishing the program funding levels under 2017 Act 59. Therefore, while the $130.4 million in project savings did occur, over the three-year period no additional projects will be funded associated with these savings. Rather, these savings were used to reduce the funding levels needed under Act 59 necessary to fund the same level of program work over the three-year period. As a result, only $37.3 million ($167.7 million - $130.4 million) in program savings are available for advancement of project work in the biennium.
Even worse, the LFB notes that contract costs have come in $19.4 millon above budgeted amounts for the first 3 months of this Fiscal Year, and 2018’s savings total fell more than $11 million short of that goal. Which means that there won’t be the same level of savings to squeeze out when the next budget starts.

The same situation exists for the $70 million that Walker claimed was saved on I-39/90 south of Madison last month. Much of that money never existed in the first place, and unlike what Walker claimed at that press event, the project isn't going any faster than expected.
The Department indicates that it has advanced $70.0 million in major highway development project work on the I-39/90 project between Janesville and Edgerton in the 2017-19 biennium. Although DOT indicates it has realized $77.7 million in major highway development savings during the 2016-17 through 2018-19 period, the program's funding was reduced in 2017-19 during biennial budget deliberations to reflect $48.2 million of these anticipated savings in the biennium. Therefore, it appears that DOT could fund about $29.5 million of the $70.0 million advancement on the I-39/90 project using these the remainder of these savings (as reflected in Table 2, $77.7 million savings - $48.2 million in savings reflected in Act 59). It may be that the remaining $40.5 million required to fund such a schedule advancement ($70.0 million advancement - $29.5 million available) is explained by DOT's comparison of "base budget" project schedules to schedule of those projects Page 5 as funded. The Department also notes that the overall completion date of the mainline portion of the I-39/90 project (excluding the "beltline" interchange in the Dane County) remains late 2021.

Nice try Scotty, but not only do you have to find another $40 mil to pay for I-39/90 between Janesville and Edgerton by June 30, you dishonestly tried to claim those few miles meant the whole project was being sped up when it is not.

On the other side, the Walker Administration is also trying to claim that adding money internally to a project’s budget means savings later when spending comes in less than that amount. The problem is that the LFB says this extra money was never set aside in the State Budget in the first place, so it can’t be “saved.”
Of the $246 million figure referenced by the administration, it appears that the remaining $78.3 million ($246 million - $167.7 million) reflects the Department's reasoning that the "above base" funding level provided under Act 59 (and subsequent budget adjustments) may be used to advance projects as compared to a "base budget" project schedule. However, as discussed earlier, the Act 59 funding level establishes the baseline SHR and major highway development project schedules for the biennium and the use of these funds reflects the level of project work expected to be completed in the biennium.
One place that the state has been helped out in its DOT budget problems is through extra money coming down from DC. Not just in its heavy swapping of federal money for state funding to pay for highway projects last year (as I noted yesterday), but also in redistribution aid, where left-over money from other projects around the country got sent back to Wisconsin.
Subsequent to the passage of Act 59, additional federal funds have been made available to the state highway program. In June, 2018, under a s. 13.10 action, the Joint Committee on Finance approved supplemental program funding of $6.8 million for the SHR program due to the availability of additional federal highway aid in 2017-18. More recently, in August, 2018, DOT received $90.8 million in annual redistribution of federal highway aid (the state's share of any remaining federal highway moneys in federal fiscal year 2018).
Because the state had already budgeted $43.9 million of this amount in its state highway programs during the 2017-19 budget process, $46.9 million of this amount remains and is available to fund additional state highway project costs in 2018-19.
Bottom line- LFB says that most of the “extra money” WisDOT has to play with for highway funding isn’t nearly as much as the $246 million that Walker and WisGOP have been claiming.

Actual “play money”, WisDOT highways 2017-19
State highway savings not budgeted $37.3 million
Federal redistribution $53.7 million
MINUS $40.5 million to pay for new I-39/90 work
TOTAL “PLAY MONEY” $50.5 million

Oh, and LFB notes that the upgrading of several previously smaller, local roads near Foxconn isn’t accounted for in the project highway budget. The $134 million that the Walker Administration decided to dump into that project with no public discussion is on top of the $252 million being spent to upgrade I-94 near Foxconn, and Walker claimed it would come from that $50.5 million in play money.

Since there isn’t enough to take care of all the Foxconn work, it means at least $83 million is going to be cut elsewhere in the state over the next 9 months and/or not be available for when we need even more money for 2019-21. Hintz said that the Governor’s deceptions and foolishness on road funding has to end.
“If Governor Walker worked as hard at fixing our transportation funding crisis as he does covering it up through financial shell games, we may be in a different position today. Transportation used to be a priority that state leaders of both parties invested in because everyone understood the importance of good roads to our economy. No amount of excuses or deception is going to hide the consequences of Governor Walker’s transportation mismanagement. As Governor Walker faces the political fight of his life, his credibility on transportation funding is in worse shape than Wisconsin’s crumbling roads. It appears they just made up numbers.”

“If it wasn’t clear by now, as long as Governor Walker is in office we will never fix our transportation funding crisis. Every day, Wisconsinites drive on the 6th worst roads in the nation; facing extended delays, risking their safety and damage to their vehicles. No matter how many times the Governor holds a roadside press conference, he cannot change the fact that we’re postponing projects and spending nearly double the amount of revenue on debt service as when he took office in 2011 (a number that grew in 2018). This is the perfect representation of a governor more concerned with his political future than getting the job done.”
And as we found out today with a 4th former Walker Cabinet member criticizing Walker to be “politics first, reality second”, this type of flailing incompetence is the hallmark of a Grifter Governor who’s never tried to be responsible in dealing with the state’s problems.

Sept jobs report gives more proof of Fitzwalkerstan's decline

We had a closely-watched September Wisconsin jobs report come out this afternoon. I’ll spare you the Walker Administration’s spin and give you the numbers.

To the credit of those doing the report (who are not the Walker hacks that “interpret” the results), they played it straight, releasing a bad jobs report less than 20 days before the elections.

Change in jobs
All jobs
Oct 2018 -1,100
Sept -1,400

Private jobs
Oct 2018 change -900
Sept 2018 revision -1,600

Household survey
Employed -7,500
Labor Force -7,000

It was that drop in the labor force that kept unemployment from going higher, and reiterates that a lot of Wisconsin’s low unemployment rate is due to a lack of people wanting to live in a state run by corrupt regressives vs economic growth (unlike fellow low-unemployment states Minnesota and Colorado, as noted in this post).

The overall trend isn’t great either, as in their own monthly reports the Walker Administration has reported private sector job losses in 4 of the last 6 months, and less than 5,000 private sector jobs have been added since March. The overall numbers for the last 6 months are slightly better at 11,700 (6,800 new government jobs? SMALL GOVERNMENT CONSERVATISM).

It also gives a last look at the Walker jobs gap ahead of November’s election. It grew again by in September, and by quite a bit, as the US was adding jobs while the state was losing them. The Walker jobs gap is now just below 150,000, and has continued to rise in 2018.

Can anyone look at those charts and say “Oh yeah, this is a winning direction for the future”? Yet the Walker Administration keeps doubling down on this losing strategy, as they continue to use tax dollars to promote Foxconn in other parts of the state in a time when Main Street employers aren’t adding jobs and not enough people are coming here in the first place to continue the small amount of growth that we have had.

You can have all the fake photo ops at campaign contributors that you want, Scotty. The numbers tell the real story, and you are not worthy of a 4-year contract extension.

Minor budget "surplus" hides DOT shell games, exposes rising cost of Walker policies on vouchers, Medicaid

Monday featured the release of Wisconsin’s Annual Fiscal Report, and it got surprisingly little attention from both the media and the respective candidates for Governor. But I wanted to dig into a few items to see where we stand now, and what 2018’s figure portends down the pike.

Let’s start by going back to June, when the LFB gave us updated projections of what the 2017-19 budget would look like. It accounted for the post-budget, pre-election spending spree by Walker and WisGOP that included reinsurance subsidies for ACA, added funding for small, rural schools and one-time gimmicks like the sales tax holiday and the $100-per-child rebate (remember those poll-driven handouts? Sure changed things, didn’t they?).

I’ll also include the preliminary FY 2018 General Fund tax revenues from the Wisconsin DOR, which came out about 6 weeks ago.

Wisconsin budget balance 2017-19, LFB June projection
2017-18 beginning balance +$579.0 million
2017-18 projected ending balance +$547.3 million
PLUS 2017-18 actual revs vs. proj +$18.4 million

2018-19 beginning balance +$565.7 million
2018-19 projected ending balance $200.1 million

Interestingly, the LFB projected deficits for both FY 2018 and (especially) FY 2019.

So let’s compare to what the Annual Fiscal Report said this week. First of all, the final FY 2018 balance came in slightly above expectations, at $588.5 million, meaning there was an actual surplus of $9.5 million. At first glance, it looks like this is because transfers of excess fees and other revenues were $44 million above expectations, and was offset by slightly higher expenses of $21 million.

But the reason why those expenses were higher is the oddity. Back when the WisGOP Legislature and Walker pushed through the $100 Child Tax Credit in February, the money was allocated to the 2018-19 Fiscal Year because the money was to be paid out in September 2018, which is well after the July 1, 2018 start of FY 2019. But for some reason, the AFR has that one-time payment shown in the Fiscal Year that just ended. Is that because the Walker Administration wanted to put together a talking point of “look at how much we handed out to Wisconsin parents?”

Regardless, it really didn’t work out, not politically (because Evers has the same small lead he had before the checks were handed out), and because out of the $122.1 million that was set aside for that gimmick, only $93.6 million had been sent out, according to this report. Maybe they’re holding back the other $28.5 million for late claims, but it seems like an odd move to put that amount in this year’s report, as leaving it out would have made the bottom line appear to be $682 million instead of $588.5 million.

Sure, a lot of that left-over money is getting spent out in the next Fiscal Year (along with another $243 million of this alleged “surplus”), but you’d think it would make for a good talking point. The Walker Administration’s silence about this makes me think even they know the AFR’s numbers are shaky.

A few other line items in the “Sum Sufficient” expenses (ie., entitlements that have to get paid regardless of how much money is set aside in the budget) stood out.

1. The state spent $1.76 million in Special Counsel expenses for outside lawyers, almost double the $986,000 that was set aside. That’s on top of last year’s $1.03 million, which was overran its budget by more than $400,000. Hey, when WisGOPs like Brad Schimel, Robbin’ Vos and Scott Fitzgerald try to defend gerrymandering and wreck Obamacare, it has its costs!

2. The state spent nearly $336 million on voucher schools, charter schools, and “scholarships” so kids with special needs could have their voucher school pay for the extra services. In fact, that special needs scholarship program exceeded its budgeted amount, and ended up costing over $3 millon. Meanwhile, regular special ed aids for public schools haven’t been changed since Walker took office 7 years ago.

3. General Fund-supported debt payments dropped by more than $23 million compared to 2016-17, likely due to large-scale refinancing of debt by the Walker Administration that kicks the payoff for that debt into future years. On a related note, they’re refinancing another $362 million in debt this week, and repaying that amount over the next 10 ½ years.

I also want to look at Wisconsin’s Transportation Fund, especially given that “Say Anything Scotty” is now promising Wisconsin towns that he’ll give a huge increase in road aids to them if he gets re-elected.

Based on the topline numbers, you can see where that extra $53 million might be there for the towns, if everything else holds up.

Wis Transportation Fund
2017-18 beginning balance +$219.1 million
2017-18 ending balance +$350.9 million ($131.8 million)

Based on the original projections in the State Budget, the Transportation Fund was supposed to be losing around $65 million a year for this budget cycle, but instead it gained nearly $132 million. How did this miracle happen?

Simple. Walker’s DOT simply got other levels of government to pay the bills, particularly Uncle Sam.

2016-17 vs 2017-18 Transportation Fund expenses
2016-17 State Spending $1.714 billion
2016-17 Federal, Local, + Agency Spending $945.7 million

2017-18 State Spending $1.652 billion (-$62 million)
2017-18 Federal, Local, + Agency Spending $1.256 billion (+$311 mil)

In fact, WisDOT spent $124 million less on highway improvements in FY 2018 than they did in FY 2017, but let the Feds and others pay $135 million more to make up the difference. Pretty easy to have a better bottom line when you get someone else to pay for your bills.

If there's so much money for DOT, why is there so much of this?

It’s also funny how Scott Walker’s DOT has no problem with using Federal money when it comes to filling Scott-holes and dealing with other road projects. And relying on Federal money to avoid raising taxes and fees might have worked last year, but it doesn’t seem like much of a long-term solution when the Trump Administration wants to cut back the share of what it pays for road projects, leaving the states and locals to pick up the rest.

Ironically, Walker takes the exact opposite approach when it comes to expanding Medicaid. Scotty claims that federal money can’t be taken now because some time in the future the money (or 90%-100% share of funding) might go away. So instead Wisconsin has spent billions of dollars covering people on our own dime in the last 4 years instead of taking those funds from DC. And that cost went up by $850 million in Fiscal year 2018 compared to 5 years prior, with costs rising consistently in every year except for 2017.

And the Wisconsin Department of Health Services is projected to need another $623 million in the next budget, according to DHS's own budget request.

But despite the rising costs of vouchers, health care and the bigger shell games involving property taxes, there was enough money banked from prior austerity and our current debt-fueled Bubble that there was a decent amount of money left over on June 30, 2018. Unfortunately, most of that is likely to be gone by June 30, 2019, while the needs to fix the roads and fund our schools will still be there and the gap will continue to grow without a change in direction.

Wednesday, October 17, 2018

Foxconn already causing damage, while Walker Admin, UW help a company that deserves none

You may recall that one of the many reasons that the Foxconn deal is awful is because environmental and wetland regulations were waived as part of the incentive package, literally creating a special part of Foxconn-sin where other rules don’t apply.

And those environmental concerns have already come home to roost, even before one product has rolled off the line in the plant that is slated for Racine County.
The Wisconsin Department of Natural Resources has fined a Foxconn subsidiary almost $1,200 for failing to comply with its erosion control plan in the Village of Mount Pleasant, which led to runoff in the area over Labor Day weekend.

When heavy rain hit the construction area over the holiday weekend, an advocacy group that pushes for transparency in government, A Better Mount Pleasant, posted a video on Facebook that showed runoff from the site spilling into Lamparek Creek, which leads to the nearby Pike River.

Ooooh, $1,200! That’s almost as much as the kickback Foxconn will receive from Wisconsin taxpayers for hiring someone at $15 an hour….for 3 months.

But you still know it’s flagrant when Scott Walker’s Koched-up DNR has to give a slap on the wrist to their buddies at Foxconn, and it wasn’t only because the damage too obvious to ignore, but because Foxconn didn’t live up to their promises on what how they’d protect the surrounding community.
A notice of noncompliance from the DNR issued Friday against FEWI Development Corp. said the company was supposed to build a drainage basin before stripping the area’s topsoil or grading the site, instead only 30 percent of the basin was finished when said work began.

A DNR inspection made at the request of the village found the entire area had been disturbed and contributed to the discharge.

The DNR’s notice of noncompliance states Foxconn has addressed the issue but part of the changes being made to improve erosion control include the DNR’s presence at weekly site meetings that will evaluate the company’s erosion plan.
Yes, I’m sure that DNR action has shaken Foxconn to its core and that we’ll NEVER see flooding and runoff like this again as more excavation happens, acres of blacktop are put in, and snow melts this Spring.

There’s also been a disturbing trend where Foxconn continues to get free advertising from state government agencies that homegrown businesses in Wisconsin don’t. Take a look at this recent tweet from the Wisconsin Department of Revenue.

And look at Walker DOA Secretary Ellen Nowak doing a taxpayer-funded campaign stop last week in Portage to claim “Foxconn is a good business partner you should consider.” Why aren’t thousands of other businesses being recommended by this administration?

In addition, why is my alma mater hosting a “Foxconn Days” event this week?
During the two-day event, in addition to showcasing some of Foxconn’s cutting-edge global technology and innovations, Foxconn staff will be onsite to share more details about the Foxconn Institute for Research in Science and Technology (FIRST) and to discuss career opportunities with students.

“This event is a great opportunity for people on the Madison campus and in the broader community to learn more out about breakthroughs that are happening at Foxconn,” said Charles Hoslet, Vice Chancellor for University Relations, UW–Madison. “Students, faculty and staff, alumni, and community members can also learn about career opportunities, and the plans and opportunities for research collaborations between Foxconn and the campus.”

Foxconn is currently recruiting for several hundred positions in Wisconsin. Career opportunities cover a variety of areas and skillsets in human resources, hardware, software and firmware engineering, finance and accounting, legal, business analysis, graphics and interior design, construction management, and sales and marketing….

At Foxconn Days, attendees will hear more about Foxconn’s vision for its Wisconsin operations and the emerging technologies that will form much of Foxconn’s AI 8K+5G ecosystem. Attendees will also have an opportunity to learn about Foxconn’s Smart Cities – Smart Futures competition, which is open to all students, faculty and staff at any Wisconsin university or technological college. As part of that initiative, Foxconn will award up to $1 million in prizes to incentivize new technologies and concepts that are aimed for the development of smart, connected cities.

Why are you dragging Bucky into this?

This is nothing more than a PR BS event for Foxconn using UW-Madison’s good name. And you saw it coming when Foxconn announced its $100 million challenge grant a couple of months ago, where the company MIGHT give UW some research funds, as long as UW raises $100 million on its own to help them, and gives Foxconn a free labor supply.

There are more of these Foxconn job fair events coming in the next 2 weeks ahead of November election (what a coincidence!), including one in Milwaukee 4 days before voters go to the polls. All filled with job promises and gadgets that are not reality today, and are highly unlikely to meet those expectations after November 2018.

It is sickening, and blatantly transparent. Foxconn and the WisGOPs who signed off on that scam know the rest of the state sees through this boondoggle, and they are desperately trying to keep outraged voters from replacing these WisGOPs with politicians who will hold that sketchy company accountable, and end the scam if Foxconn doesn’t hold up its end of the bargain.

Aww heck, the Legislature should just give Foxconn a $100 million check and have them get out of our state for good, as it’ll be a much better deal than handing them nearly $500 million in the next state budget. Especially since any of the jobs and construction work for Foxconn will have little (if any) impact on overall state employment, wage growth or tax revenue, as many other places in the state will have business and resources taken away from them by the tax-advantaged Foxconn.

Tuesday, October 16, 2018

YES, the GOP Tax Scam exploded the deficit. And NO, more cuts aren't the answer

After a bit of a delay, the US Treasury finally released their year-end Statement for the 2018 Fiscal Year on Monday. And media relayed the Statement’s confirmation that the US’s budget deficit had blown back up to the highest levels in 6 years.
The U.S. budget deficit grew to $779 billion in Donald Trump’s first full fiscal year as president, the highest since 2012 amid tax cuts and spending increases.

The budget gap for the 12 months through September was 17 percent wider than the same 12-month period a year earlier, as spending rose 3.2 percent and revenue gained just 0.4 percent, according to a Treasury Department report released Monday. The deficit as a share of total economic output was 3.9 percent in fiscal 2018, up 0.4 percentage point from the prior year. The government’s fiscal year runs from Oct. 1 to Sept. 30.
What’s odd about this is that the final deficit figures aren’t as bad as the $898 million that we were in the hole at the end of August, and aren’t even as bad as the $849.1 billion deficit the Trump Administration projected 3 months ago.

So what happened at the end of the Federal Fiscal Year? Part of this is due to quarterly payments by corporations and individuals in September, which bumps up revenues, and as this month's report from the Congressional Budget Office noted, the calendar also worked to reduce the deficit for this year.
Outlays in September of both years were affected by shifts in the timing of certain federal payments that otherwise would have been due on a weekend or a holiday; those shifts reduced outlays in September 2018 by $71 billion but increased them in September 2017 by $44 billion. If not for those shifts, the surplus in September 2018 would have been just $44 billion—$7 billion less than the surplus in September 2017.
Add $71 billion to this year’s $779 billion deficit, and you come up with $850 billion, which would be 27.6% higher than last year’s $666 billion, and nearly 50% higher than what the CBO was projecting 16 months ago.

But I see that expenses went up by 3.2% in 2018, and exceeded $4.1 trillion, so is it high spending that caused the deficit to grow so much?

No. First of all, more than ½ of the 2018 increase in spending is due to taxpayers shelling out $64.6 billion more in interest on the debt during the first year of Trump/GOP control of DC.

And second of all, as “Budget Guy” Stan Collender notes in USA Today, the higher spending was expected in prior projections, but lower revenues were not.
The Congressional Budget Office estimated fiscal 2018 revenue would be $3.5 trillion under the laws that were in place before President Donald Trump signed the GOP tax cut bill. The actual amount Treasury reported Monday was $202 billion less. That $202 billion would have more than covered the $127 billion in extra spending in 2018.

This comparison, to tax revenues that were expected had the laws stayed the same, unambiguously shows that virtually all of the federal deficit increase that occurred from 2017 to 2018 was because of the new cuts in corporate and individual taxes. Had the tax changes not been enacted, the federal deficit in 2018 would have dropped to well below $600 billion, rather than rising to close to $800 billion.

….Compared with the CBO pre-tax bill baseline, 2019 revenues will be $263 billion below what they would have been if rates had stayed the same. Treasury’s projected 2019 deficit would be just above $800 billion rather than close to $1.1 trillion.
That reality is especially obvious when you compare the year-over-year numbers for 2017 and 2018, and do a “before and after” with the Tax Scam. This can be done by looking at Federal Fiscal Year 2018 into income tax withholdings before Feb 2018 (when the tables were changed to reflect the lower tax rates) and after then, and also comparing corporate taxes under the 35% rates in 2017 and the 21% rates in 2018.

Individual Income tax withholding, FFY 2018 vs FFY 2017
Oct 2016 – Jan 2017 $447.599 billion
Oct 2017 - Jan 2018 $496.984 billion (+11.0%)

Feb - Sept 2017 $861.667 billion
Feb – Sept 2018 $828.122 billion (-3.9%)

Corporate Income tax, FFY 2018 vs FFY 2017
Oct 2016 – Dec 2016 $75.731 billion
Oct 2017 – Dec 2017 $62.052 billion (-18.4%)

Jan - Sept 2017 $211.317 billion
Jan – Sept 2018 $142.681 billion (-32.5%)

Both types of taxes had significant declines once the Tax Scam hit, and that looks even worse when you consider that there’s been inflation and profit/job growth over those 12 months that should grow revenue even with nothing else changing.

So what did the top Senate Republican say in reaction to the final deficit numbers today? An out-and-out lie that gets the problem backward.
Senate Majority Leader Mitch McConnell blamed rising federal deficits and debt on a bipartisan unwillingness to contain spending on Medicare, Medicaid and Social Security, and said he sees little chance of a major deficit reduction deal while Republicans control Congress and the White House.

“It’s disappointing, but it’s not a Republican problem,” McConnell said Tuesday in an interview with Bloomberg News when asked about the rising deficits and debt. “It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.”

Go back to the Treasury Statement, and you’ll see that the amount spent by the Center for Medicare and Medicaid services only increased by $23.6 billion (1.6%), and while some of that is calendar-related, the increase as of the end of July was only 3.6%, so that’s hardly unsustainable. Likewise, Social Security only had its spending go up by 3.9% (just over $39 billion). The increases in those areas were less than the 5.6% increase we had in the military last year, or the 14.1% increase in interest on the debt. Blaming the higher deficit on earned benefits is a dog that won’t hunt.

The real reason we have the odd quandary of a growing deficit in a growing economy is because of the GOP’s Tax Scam that McConnell helped to shove through Congress despite significant public opposition. This has caused a significant revenue hole to appear that has not been filled by economic growth, like what’s happened in pretty much any GOP tax cut over the last 40 years.

Until the Tax Scam is buried and reversed, we will be racked with chronic budget deficits, higher debt expenses, and higher interest rates to encourage others to give Uncle Sam the money to keep paying the bills. Or we may be forced to cut things that actually work and help people - which was absolutely the long-range plan that Koch Boys like McConnell and Paul Ryan had in mind when they put in the Tax Scam. And if this country keeps those bagmen in power, you can bet there will be a regressive Tax Scam 2 to finish off the country’s fiscal health as we know it.

Monday, October 15, 2018

The "education governor" now wants 2/3 funding for K-12. But unlike Evers, it won't go to classrooms

For the second straight day, we’ve got a candidate for governor revealing new policy plans that go “against (stereo)type.”
Gov. Scott Walker is proposing to restore the state's commitment to fund two-thirds of public school costs and to increase state funding for local town roads.

The school-funding proposal matches one from his Democratic opponent, State Superintendent Tony Evers. It would increase the state's share of funding for local schools to a level not seen in more than a decade.
I guffawed like the rest of you did when I first saw it this morning, and it shows that Walker is losing badly on the education issue (and likely the overall election) if he feels a need to promise more education spending to keep pace with Tony Evers.

But oddly, Walker may not be too far off when he says that getting to 2/3 funding at this point isn’t a stretch. This Legislative Fiscal Bureau memo from last December says that state support is projected to rise from 63.6% to 65.8% between 2016-17 and this school year. Another 1% wouldn’t be as much of a reach as it seems on first reaction.

And we may be even closer now to 2/3 funding than we were in December, as Walker signed a bill earlier this year raising sparsity aids for small, rural districts by $6.45 million. Some of that may be offset by another part of the same bill, which raised the revenue limits for districts that were handcuffed by the lowest limits in the state, but you get the idea – we’re relatively close to 2/3 as we stand today.

Before we go further, let’s back up a bit and start with where this “two-thirds” statistic comes from. Using . the LFB’s Informational Paper on school funding for this recent state budget, the two-thirds figure was defined over 20 years ago as follows.
The statutes defined both the numerator and denominator of the two-thirds state funding calculation. The numerator was the sum of state general and categorical school aid appropriations and the school levy tax credit. The denominator, or partial school revenues, was the sum of state school aids and, with certain exceptions, property taxes levied for school districts. Under 2001 Act 16, the general program operations appropriation in the Department of Public Instruction (DPI) for the Educational Services Program for the Deaf and Hard of Hearing and the Center for the Blind and Visually Impaired was added to both the numerator and the denominator of the two-thirds funding calculation.

The school levy tax credit appropriation was statutorily included in the definition of state support when the state moved to two-thirds funding. The first dollar credit, created in 2007 Act 20, is funded through the same appropriation. The school levy tax credit is extended to all taxable property. The credit is distributed based on each municipality's share of statewide levies for school purposes during the preceding three years multiplied by the annual amount appropriated for the credit and allocated proportionately to reduce individual owners' property tax bills. The first dollar credit is extended to each taxable parcel of real estate on which improvements are located.
And given the large amount that we've seen get put into the School Levy and First Dollar credit, along with other property tax-related credits in the Age of Fitzwalkerstan, this helps to raise "state support" of schools, even if those dollars aren't going into the classroom. You may remember this chart that I produced when discussing the shell game that's been played with property taxes in recent years.

Also, when I checked back on the LFB “school coverage” memo from last December, something didn’t seem right about those figures to me. In particular, the non-state aid/property tax part of the “partial school revenues” slightly declined in each of the last 2 years. So I went to the Wisconsin Association of School Boards’ website and looked at the part that talked about property taxes that went to school districts in 2017-18.

Those numbers told a different story.
Of the various school district fund designations that are generally controlled by revenue limits, General Fund (Fund 10) levies increased statewide by the biggest amount—$54.8 million—due mainly to exceptions to revenue limits allowed under state law (see below). Fund 38 levies for non-referendum debt service increased by a statewide total of $18.0 million. Fund 41 levies for capital expansion increased by roughly $100,000 over last year.

The biggest portion of the increase in Fund 10 levies ($25 million) was attributable to the passage by local school district voters of operating referenda, followed by levy increases to offset the aid reductions used to fund the voucher payments under the Statewide and Racine voucher programs ($17.4 million). Increases due to energy efficiency projects totaled $13 million. Levies to offset the aid reductions used to fund the payments to private schools for Special Needs vouchers increased to roughly $3.0 million from essentially zero the previous year. All four of these increases occurred for purposes that are exceptions to revenue limits.

Statewide, General Fund (Fund 10) levies totaled just under $4.158 billion, while levies for Non-Referendum Debt (Fund 38) totaled $132.4 million.
The LFB report lists the non-state part of funding as $3.659 billion, basically $500 million less. WASB lists Referendum debt (usually for buildings) in a separate area, so perhaps the “two-thirds” figure is leaving out new taxes due to operating referenda and the property tax increases due to vouchers (if I’m off here, feel free to comment/explain).

Revenue limits have not been changed for this school year, which helps explain why there are so many school referenda on the ballot in 3 weeks. But it also makes it possible that non-state revenues won’t change and/or slightly decline when this is calculated in the next state budget. It won’t mean that YOUR school property taxes are lower (due to referenda), but the stats will sound good and it won’t take that much extra money to reach 2/3.

However, even if both Evers and Walker are promising 2/3 funding, how they get there would likely be very different. Remember that almost all of the “added funding” that Walker talks about for this budget was in the form of per-pupil aids and increased property tax credits, even if the money never went into the classroom.

That is in major contrast to where Evers’ budget request for the Department of Public Instruction would place the money.

1. $1.7 billion more for General Aids, which distributes more money to poorer districts and less to property-rich districts.

2. Remove the $1.1 billion in School Levy and First Dollar Credits and raise revenue limits (the thought is that the increased General Aids will make up the difference).

3. $650 million more for Special Education and Mental Health aids (extra bonus, districts are less likely to have to have Special Ed and counseling costs eat into their regular budgets).

So interestingly, Scott Walker may not be completely lying when he says there could be enough money in the next budget to reach 2/3 funding. But what he’s not mentioning is that this stat likely doesn’t account for all the operating referenda that has raised Wisconsinites’ taxes, and that many classrooms and schools will still likely be underfunded because of Walker’s refusal to deal with resource disparities that are crippling much of the state.

Give me real funding with a guy who actually has a degree past high school and a guy who’s actually been in a classroom for reasons other than a taxpayer-funded photo op. And that guy’s Tony Evers.

Sunday, October 14, 2018

Tony the tax...cutter?

Well this was a bit of surprise to see today. Looks like Tony Evers has some tax-cutting plans of his own that goes beyond changing how we fund schools in Wisconsin.
In a brief overview of his plan provided exclusively to the Wisconsin State Journal, Evers said he would pay for most of the $340 million proposal by scaling back a tax credit for manufacturers and agricultural producers.

The proposal calls for tax cuts for individuals making no more than $100,000 a year and families making no more than $150,000.

Under the plan, Evers' campaign said 86 percent of Wisconsin's income tax filers — those below the $100,000 individual or $150,000 family annual income threshold — would see an across-the-board 10 percent cut in the amount of income taxes they pay.

Didn't know he had this up his sleeve.

Evers' plan is a little light on the details on just how those income taxes would be cut and targeted, but the way to pay for them is sensible - stop the Big Giveaway of the Manufacturers and Agriculture Tax Credit for large corporations and rich individuals.
...the manufacturing and agriculture tax credit, which — after being adopted in 2011 and phased in from 2013 to 2016 — has virtually eliminated income tax liability for manufacturers and agricultural producers that claim it. Eligible individuals and businesses may claim the nonrefundable credit for 7.5 percent of eligible income from manufacturing or agricultural production.

Evers' plan calls for capping the credit at $300,000 in annual income. He has called the credit a "handout" for "wealthy corporate interest" while emphasizing nearly 80 percent of its benefit goes to filers, including individuals and businesses, making more than $1 million a year.
The Wisconsin Budget Project has new information on how costly and awful this Giveaway has been, and in addition to the ballooning price tag, MAC has failed miserably at adding jobs in the manufacturing-heavy Wisconsin economy, despite the fact that manufacturing jobs have been growing nationwide.
Companies do not need to create new jobs to claim the credit. Even manufacturers that lay off workers, send jobs overseas, and close factories can receive the credit.

In the wake of the enactment of the credit, the number of manufacturing jobs in Wisconsin has grown more slowly than the national average, and so has the average manufacturing wage. There are many factors that play into those trends, but it’s clear that Wisconsin is not keeping up with national growth in manufacturing. Between March 2013 and March 2018, the number of manufacturing jobs in Wisconsin grew by 4.0%, below the national growth rate of 5.2%. Wisconsin’s average annual pay in manufacturing jobs grew by 1.5% over that period after adjustment for inflation, compared to 3.6% growth in average pay at the national level. Manufacturing workers in Wisconsin earn $9,800 less a year than the national average for manufacturing jobs.
Obviously, a big question is whether there will be enough money to go around from 2019-21 to afford even a revenue-neutral tax cut, given the $1 billion structural deficit that looms. What's a big reason behind these fiscal difficulties? Because of Governor Walker's and WisGOP's pre-election giveaways from earlier this year (remember those? They sure were game-changers, weren't they?), and the hundreds of millions of dollars slated to be given away to Foxconn's construction and first jobs.

There's also the complication that revenue growth will likely slow down in this time period as a recession seems quite likely with the sugar high of the GOP's Tax Scam from DC wearing off, and the hangover of higher interest rates, austerity and overproduction takes hold.

But the Tax Scam also is a good reason to have a targeted tax cut for Wisconsinites in the working to upper-middle classes. Because those individuals are likely to be the ones that will find out that they have to cut a check to the IRS in a few months. Why? Because of the increased $24,000 standard deduction for married couples ($12,000 for single filers).

That number may cut people's overall tax burden, but that's generally happened through lower withholdings already. But that $24,000 total for married individuals also means that it be worthless to take many of the deductions that those individuals are used to taking. This includes:

1. State and Local Tax deduction (SALT) - now limited to $10,000 a return, no matter if that is a single or joint return, and $5,000 if married, filing separately. Given that Wisconsin's tax system relies heavily on income and property taxes, many state residents will hit that limit.

2. Mortgage interest on a primary home.

3. Charitable contributions (although keep it around for state returns).

The possible damage to the housing market is another hit to working and middle-class individuals' pocketbooks (since it's less worthwhile to own a house). So a lot of Wisconsin homeowners will be feeling unexpected financial distress around the time the next state budget is being discussed, and could use a break from what the GOP Tax Scam will put onto us.

From that standpoint, Evers' tax cut proposal is a sensible economic idea, if the money is there to do it and it doesn't endanger the ability to pay for needed services. It's also a good political play because it forces Walker to defend this question.

"Why should we continue to give a free ride to mega-corporations like Kimberly Clark and CAFOs when they just got a massive tax break from Republicans in DC? And why shouldn't those big businesses pay for the infrastructure and services they use more than most people?"

Nice sneak attack Tony. Let's see where it goes, and if you'll get a chance to carry it out.

Reinsurance scam isn't nearly enough to erase Walker/WisGOP sabotage of the ACA

With a new year of ACA exchange rates coming out in October, you can bet it'll be a big deal ahead of an election where health care is at the top of the list of issues. This is especially true in Wisconsin, as Governor Walker put together a plan to spend $200 million in state and federal tax dollars to subsidize insurance companies in an attempt to keep exchange rates down ahead of next month's elections.

We found out some of that information this week, and Governor Walker used the occasion to try to claim victory.

However, like many things in WalkerWorld, that claim leaves out a lot of a context and history. And Dr. Robert Kraig of Citizen Action laid out the overall numbers which show Walker’s pre-election “reform” is cosmetic at best, and still falls far short of similar efforts on reinsurance that are happening on the other side of the Saint Croix River.
The initiative Walker is touting, so-called reinsurance, benefits less than 1% of Wisconsin’s health care consumers. This is because it does not provide any price relief for people who get their health care through their jobs, through Medicare, or BadgerCare. It only benefits the small number of people who buy health insurance on the Affordable Care Act marketplace who make too much money to receive federal affordability tax credits. Only 5% of Wisconsin health care consumers buy insurance on the individual market, and 83% receive federal tax credits which offset any premium increases.

Second, Walker’s election year hyperbole misrepresents his actual health care record. Even if we consider the one year premium decrease for a small number of Wisconsinites Walker is touting, his record of sabotage compares very unfavorably with neighboring Minnesota, which has embraced and built on the Affordable Care Act. According to a[n] analysis of 2019 individual marketplace premiums conducted by Citizen Action of Wisconsin today, Minnesota’s premiums are decreasing for 2019 by double the amount that Wisconsin’s for a benchmark plan (13% vs 6%). As a result, the well know[n] cost advantage Minnesota has over Wisconsin actually is increasing, from 45% more expensive in Wisconsin in 2018 to 59% more expensive in 2019." This means the average 40 year old Minnesotan who buys a benchmark plan on their own and does not qualify for a federal tax credit will pay premiums of almost $200 less per month than a 40 year old Wisconsinite. ($533 per month for premiums in Wisconsin vs. $335 in Minnesota for a 40 year old purchasing the benchmark plan on their own without a federal tax credit).

In addition, like a lot of other things with Walker, this one-time improvement doesn’t come close to repairing the damage he and his fellow Wisconsin Republicans have done in prior years. Kraig notes that it's a price many Wisconsinites will still be literally paying for in 2019.
Third, Walker’s election year representations on health care do not take into account the cost of his sabotage of the Affordable Care Act. According to numbers compiled from independent research by Citizen Action, Walker’s actions have increased premiums on individual market by at least 17%, and Donald Trump’s sabotage of the ACA has increased premiums by at least 18%.

“The fact of the matter is that Scott Walker has never made meaningful health care reform a focus of his administration, and Wisconsin families are paying the price with high premiums, skyrocketing deductibles, and unaffordable prescription medications,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “No amount of election year spin can cover up Scott Walker’s abysmal health care record. Walker may find it politically necessary in an election year to pretend to care about affordability, but 7 years of sabotage reveals that he has played politics with the lives of Wisconsinites who are struggling to afford health care.”
And let's not forget that in addition to premiums, Walker's Administration has done nothing to control the COST side of health care, as shown by the Wallethub survey from August, which showed Wisconsin had the 5th highest health care costs in the US, and the highest costs in the Midwest.

We cannot stand by and allow these cherry-picked deceptions by Walker and WisGOP to stand, and we cannot allow them another term in office where they will go back to wrecking the ability of Wisconsinites to get health care that both covers them while not making them go broke in the process.

Saturday, October 13, 2018

A big Milwaukee weekend reminds me that Milwaukee County should get more from its visitors

It got more stressful at the end than I'd like, but all's well that ends well. So it's BURGERTIME in Milwaukee!

Like a lot of people from various parts of the state (and the country!), I’m heading to Milwaukee this weekend to take part in the Brew Crew’s October festivities. And that makes this week’s Urban Milwaukee article by Bruce Murphy all the more timely, as it gives new evidence that the City and County with the state’s largest population continues to get a raw deal from our state government.
A recent document released by the administration of County Executive Chris Abele dramatizes the county’s plight. Oh the one hand the county is a big contributor to the state: annual taxes paid by county residents to the state rose from just over $2.1 billion in 2009 to just over $2.5 billion in 2015, an increase of $400 million, figures from the state Department of Revenue show.

This has helped the state increase spending faster than inflation under Gov. Scott Walker. State General Purpose Revenue rose by an annual average of 3.2 percent from 2011 to 2018. Yet even as the county contributed an additional $400 million per year, the state actually cut its funding to the county. State General Transportation Aid was flat while shared revenue, Basic Community Aids and Mass Transit Operating Assistance all saw declines in funding to the county.
And as a commentator notes in the article, this doesn't even account for the suburbanites that have their jobs and/or spend money in Milwaukee County, which would raise that $2.5 billion number higher.

While Abele has been able to reduce the County $51.2 million structural deficit (that he inherited from a guy named SCOTT WALKER) down below $37 million, it’s come at a very high price, with massive cuts to services and staff.
The parks department alone has been cut from 800 to 200 employees, he notes. The case load in the county child welfare program is a mind-boggling 900 clients per worker. “We’re number 1 or number 2 in the United States,” Abele notes, in the case load per worker, hardly a record to brag about.

Abele was able to convince the board to pass a wheel tax, about the only tax the state allows the county to levy (other than the property tax and a small slice of the sales tax), but the board balked at another increase in the wheel tax last year and also fought a proposal to add a fee for parking in county parks.

“If you feel like your taxes are going up, you’re right,” Abele says. “And if you feel like you’re getting less services, you’re right.”

And that’s largely because of the shortfall in state funding. If the county got just $100 million of the $400 million additional taxes paid by county residents to the state, the county’s problem would be solved, Abele notes.
Oddly, the only "extra sales taxes" beyond the 0.5% county sales tax that Milwaukee County has is the 0.1% for Miller Park (it's supposed to be retired in the next 18 months...we'll see), and the 0.5% sales tax for food and beverages that goes toward the new Bucks arena and nearby Wisconsin Center District.

This is where I want to point out that the Number 1 destination of tourist dollars in Wisconsin is Milwaukee County, and not by a little.

Direct visitor spending, Wisconsin counties 2017
Milwaukee Co. $1,990.7 million (15.7% of state total)
Dane County $1,246.8 million
Sauk County $1,086.5 million
Waukesha Co. $776.4 million
Brown County $671.0 million

People want to check this place out.

And by the way, I bet a lot of Waukesha County figure comes from people staying in Brookfield and the Falls for events like Brewers playoff baseball. You’re welcome, 262.

Now maybe some of that is sports tourism, but I bet most of it isn't. Which leads to a modest proposal. Why don’t we allow the City of Milwaukee and Milwaukee County to keep more of the money that they generate? And no WisGOP, it doesn’t even have to be in the form of added shared revenue (although they deserve that, too).

Milwaukee County generated $74.35 million in sales tax in 2017 with its current 0.5% sales tax, so allowing that to rise to 1% would likely give it another $70 million+, which fills in the structural deficit that the County has to deal with, and possibly makes it better positioned to handle the huge infrastructure needs it’ll have in the very near future.

Those challenges were made clear in a recent release from the Wisconsin Policy Forum, which described in stark detail about the challenges that are looming.
Two major facilities – the public museum and the Domes – must be replaced or fully renovated within the next few years. The museum is seeking more than $100 million from private donors, the State of Wisconsin, and possibly the county to construct a new building downtown. Meanwhile, a task force studying the conservatory’s future is considering a dramatic overhaul that could require $40 million to $95 million in private and county funds. As a result, the facilities’ supporters could be competing with each other and with other cultural institutions for major donations. If either or both fail to meet their fundraising goals, or if the public museum does not obtain unprecedented capital support from the state, county policymakers would be 44 under pressure to fund survival plans for these local icons at the same time they are trying to finance a new criminal courthouse.

• Almost every form of parks infrastructure has pressing needs. The list of parks assets that the county must replace within the next 10 years includes 85% of parking lots and service yards, 75% of walkways, 73% of parkways, 54% of rated Oak Leaf Trails and of basketball courts, 48% of tennis courts, and (measured by replacement value) 47% of large buildings other than the Domes. Current condition ratings are lacking for other infrastructure types, but the county has identified additional needs for park bridges, water parks, swimming pools, golf courses, and playgrounds, among others….

• The county lacks the capacity to finance the capital needs of its parks, recreational, and cultural assets if it wishes to stay within its self-imposed bonding limits and address its other capital needs. To meet existing capital requests, the county would need to more than double budgeted spending on cultural institutions (from $6.2 million to $13.9 million) and increase spending nearly tenfold on parks (from $2.4 million to $23 million) in 2019 alone. Fulfilling all of the parks, recreational, and cultural capital requests for the next four years would require a 135% increase, from $82.6 million to $194.1 million, over budgeted spending of the past four years. Moreover, doing so would consume from 68% of the county’s financing capacity in 2019 to 97% in 2022 under current policy.
And given the state’s antiquated method of financing local government, the burdens of paying this overwhelming fall on County residents, while outsiders get to take advantages of the great quality-of-life amenities that the Milwaukee area has, while paying very little (if anything) toward it.

Given that the nation’s attention is being turned to Wisconsin’s largest city with the Brewers’ great run, maybe we also should pay more attention to the ways that we can restore the rest of Milwaukee to elite status as well. Perhaps trading the Miller Park tax and even the Wisconsin Center tax for a sales tax that the County and/or City can use for any needs (like roads, parks, facilities, and social services), instead of just having it go towards sports and entertainment complexes.

Know what else would help? Getting a Governor and Legislature in places that’ll allow the Cream City the fiscal freedom to have a 21st Century infrastructure, and stop the political game-playing that has resulted in the "divide and conquer" racism and economic apartheid that holds what back what should be a first-class city.

Friday, October 12, 2018

Walker hasn't caught Evers. The Marquette Poll just had a "red shift"

I could discuss the recently-released NBC/Marist Poll which shows Tony Evers up between 8 and 10 points on Scott Walker in the Governor's race. But that poll's consistently been on the positive side for Dems (it was Evers +13), and I don't want to get overconfident or relaxed.

But what it did do is counteract a result from the Charles Franklin at the Marquette Law School which showed Walker up 1 point on Evers, and I wanted to go into what was up with the Bradley Foundation Internal Marquette Poll. That was quite a change from their previous poll in September, which had Evers up by 4 points

So is Walker gaining and has the race changed? Not really, and one look inside of the likely voter crosstabs of both the October and September Marquette Polls give the real reason why the totals shifted.

Party ID with Leaners – likely voters
September Marquette Poll (Evers +4)
Dem 47.1%
GOP 45.9%
Indy 7.0%

October Marquette Poll (Walker +1)
Dem 44.9% (-2.2%)
GOP 47.6% (+1.7%, GOP +3.9% net change)
Indy/Other 7.5%

The slanting of the electorate to the GOP is 80% of the explanation right there. So if the electorate hasn’t changed from the D +1 we had in September (and that’s being nice to the GOP, given that an increasing amount of people aren’t identifying as Republican in 2018), this would translate into a small Evers lead.

The October poll slanted even more to the right when we look at the ideology of Charles Franklin’s universe of “likely voters”.

September Marquette Poll
Conservative/Very Conservative 38.8%
Moderate 30.8%
Liberal/ Very liberal 29.5%
Don’t Know/Refused 1.1%

October Marquette Poll
Conservative/Very Conservative 43.4% (+4.6%)
Moderate 28.3% (-2.5%)
Liberal/ Very Liberal 26.4% (-3.1%)
Don’t Know/Refused 2.0% (+0.9%)

The shift from moderate to conservative in the electorate is of major importance here, because moderates overwhelmingly prefer Evers over Walker.

Moderates, Marquette Law Poll
Evers 53-32

Evers 56-30

That stat makes the “movement towards Walker” meme all the more absurd. Evers gained 5 points with moderates in the last month. And not to go all “skewed polls” on you, but if the ideological scale in October’s poll was the same as September’s, then Evers would be up 48.6-43.4 – statistically the same as the 47-43 Evers led by in September’s Marquette poll of likely voters.

This makes me all the more suspicious that the Bradleys smashed their fists on Franklin’s scale and said “WHAT WILL IT TAKE TO SHOW WALKER LEADING?” Know why else I suspect Chucky Franklin put on some “weighting”? Because demographics with 10 people have totals like 53-32, and 6 people with responses total 30-28-42. People don’t give “1/2 responses”, so those numbers are mathematically impossible, and deserve some more explanation.

But despite the frustratingly BS headlines the slanted Marquette Poll gives us, it’s also a very good warning for those of us who are counting on a Blue Wave. If the good guys don’t vote, and if Walker, Schimel and the rest of the GOP are allowed to suppress the vote of Dem-leaning individuals, then Walker could sneak his way into a win.

So let’s overwhelm the deplora-trash at the ballot box on November 6, and prevent the Bradleys’ dream electorate (as created by Charles Franklin) from becoming a reality. In fact, let’s make it a younger, diverse D +6 electorate (like we saw with Obama’s landslide in 2008), which would be the worst nightmare for Scott Walker and his oligarch puppetmasters.