Tuesday, February 19, 2019

WisGOP comes around to giving more to public defenders. So what will they cut?

Once a Dem wins the governorship and steps up on criminal justice issues, it’s interesting to see how quickly Republicans at the Capitol start to care about not having a third-world legal system in Wisconsin.
Their plan would cost about $50 million over two years, according to Republican Rep. Mark Born of Beaver Dam, who sits on the budget-writing Joint Finance Committee.

"These initiatives are tough but smart on crime," Born said at a news conference in the state Capitol….

Wisconsin pays private attorneys $40 an hour to represent criminal defendants when the State Public Defender's office can't handle the work. That's the lowest rate in the nation and many attorneys say it doesn't cover their overhead costs.

The plan Born announced Monday would raise the pay to $70 an hour. That increase would cost taxpayers about $33 million over two years, according to state records.

Because of the existing rate, private attorneys often refuse to take cases, leading to delays in getting defendants representation.
In addition, the GOP package would allow counties to hire 61 more assistant attorneys and increase pay for prosecutors and correctional officers. All of these are great ideas, but it begs the question “Where were the GOPs on these things the last 8 years?”

It’s not like low pay and understaffing in these offices is something that just cropped up. 2 years this week, the GOP-controlled Joint Finance Committee received a report showing how much Wisconsin courts were relying on private defenders, and that even at the paltry fee of $40 an hour.

In the 2017-19 budget, the Public Defender Board actually had funding for its own public defenders cut by $2.9 million, but the amount farmed out to private defenders was increased by $6.8 million, admitting that this need and related funding had been underestimated in the past. But the rate paid to private attorneys did not increase.

It was clearly not enough, as the FY 2018 Fiscal Report indicates that the Public Defender Board has to use more than $2 million in fees and other redirected money to pay all the bills for last year. As a result, the Public Defender’s Board asked for $49 million in this next budget in additional money, noting that nearly 40% of cases involving a public defender has to be outsourced to private attorneys due to understaffing and conflicts of interest.

The Legislative Fiscal Bureau explained (on Page 122 of its summary of budget requests) than nearly $40 million of that increase is to bring the pay of private defense attorneys up to the $70-an-hour rate the GOP proposed.
4. PRIVATE BAR ATTORNEY COMPENSATION. Request $16,612,700 annually and modify current law to increase the rate at which private bar attorneys are compensated from $40 per hour to $70 per hour. In addition, grant the SPD authority to modify rules to reflect the changes in the rate. Under current law, private bar attorneys are compensated at a rate of $40 per hour for time spent related to a case, regardless of the case type. The increase in hourly compensation would apply to cases assigned on or after July 1, 2019.

5. PRIVATE BAR COSTS Request $3,036,200 annually as an estimate of funding to pay private bar attorney costs. The State Public Defender employs trial and appellate attorneys who represent clients who qualify for SPD representation. However, staff attorneys cannot represent all clients who qualify for SPD representation. Overflow cases and cases in which staff attorneys may have a conflict of interest are assigned to private bar attorneys throughout the state, at a rate of $40 per hour for time spent related to a case, and $25 per hour for travel. Base funding for private bar and investigator reimbursements is $25,354,100.
In addition to their avoidance of action on this real problem for several years, there’s another reason WisGOP looks dumb and desperate with this announcement yesterday. Where’s this extra money coming from? These guys just passed a $338 million a year unfunded tax cut last week, but they now claim there’s magic money lying around to fund this budget request.

Let me remind you that if that if Gov Evers were to sign off on that unfunded tax cut (which he won’t), there would have to be $1.5 billion in additional money to pay for every budget request in the 2019-21 budget.

So if we’re going to give the Public Defender Board the money they ask for (and deserve to get), what requests aren’t getting funded? WisGOP needs to be forced to answer that question. This can likely be answered in the full budget, but WisGOP clearly feels the heat from what those answers would be.

Which is why they wanted to get in front of the media with an image of “see, we’re dealing with this problem and can be bipartisan”. Too bad their earlier decisions and buck-passing make it less likely that they can do what they claim they want to do. And even if they do the right thing, it’s more costly in 2019 to do it, and they don’t get a cookie for trying to make up for their past neglect now that we have a governor who actually cares about governing.

Monday, February 18, 2019

WMC makes an idiotic comment on weed

I know Wisconsin Manufacturers and Commerce are right-wing lowlifes, but what they said today left me dumbfounded.

There's a lot wrong with that take.

1. IT IS ILLEGAL AND FIRABLE TO OPERATE EQUIPMENT WHILE HIGH. Whether that substance is booze, opiods, weed, or other prescription medications. How would allowing marijuana to be legal with a prescription change that reality?

Wisconsin's Lieutenant Governor found it odd that WMC isnt concerned about a more common type of impairment in our state.

2. Given how many people get hooked on much more addictive and damaging opiods to deal with pain and keep working, and if they're hooked, they become unproductive if not outright dangerous in the work place. Wouldn't we rather have people self-medicating after work with a much less addictive drug like cannabis? Seems like a no-brainer to me.

3. WMC and other business groups have constantly complained about the "skills gap" and the inability to find qualified employees. Evers' initiative would expunge the records of some people with convictions for pot possession, and would only give a ticket to people in the future that get popped for weed, instead of having a criminal conviction on their record.

Both of these effects should increase the availability of qualified labor in Wisconsin, which WMC allegedly wants. In addition, having fewer people in prison and/or with limited job prospects reduces social and fiscal costs, which theoretically can allow for lower taxes or a better use of resources that improves goods and services that businesses use.

As Evers notes, dercriminalizing pot could lower the racial disparities that have limited Wisconsin's economic and social growth.

You'd think that would be in the interests of businesses that want to succeed. So why isn't WMC supporting Evers' plans to change marijuana laws?

Because WMC isn't about improving the quality of the Wisconsin economy and making Wisconsin more competitive in the 21st Century economy, but instead they are GOP hacks who are rent-seekers that try to steal as many tax dollars and suppress wages by any means they can.

WMC's "business leaders" are a big reason why our state's economy got left behind the rest of the country over the last 8 years, and today's idiotic, partisan response to Tony Evers' proposals on marijuana are another example of why those regressive fools should be ignored at all turns.

Sunday, February 17, 2019

Was it a Trump/GOP scheme that'll make you end up writing checks to the IRS this year?

As people start to file their 2018 taxes, a hashtag of #GOPTaxScamStories has become a common fixture on Twitter, filled with stories like this.

The Trump/GOP response to the taxpayers' anger has been a cross between "But didn't you enjoy the extra mone in 2018?" and "You should have known better." These words from Sen. Chuck Grassley (R-Iowa) are typical.
Speaking to reporters on Feb. 13, the Senate Finance Committee chair was frustrated about the messaging around tax season.

"Isn’t it kind of stupid to look at a refund,” Grassley mused. “What your refund is — that doesn’t tell you what taxes you pay."

Though a refund would provide an indication of tax level in instances in which someone does not change their withholding after a change in the tax law, Grassley is right. A refund is not the same thing as a tax bill.

"What taxes you pay is: compare what you’re going to do in 2019 vs what you did in 2018. The bottom line is the answer," he said. "I’m frustrated that people as individual taxpayers may think their refund is the answer to how much taxes they actually paid.”
Except it seems likely that the instructions from Trump's Department of the Treasury are part of the reason too little money was taken out, because GOPs like Grassley wanted to get the tax cuts to show up in people's checks as soon as possible,
Prior to the Tax Cuts and Jobs Act, the portion of any employees’ pay that was excluded from withholding—that is, the employee’s total withholding allowance—was determined by multiplying the number of withholding allowances an employee claimed on Form W-4 by the amount of the personal exemption for that year. The personal exemption amount increased over time because it was statutorily indexed to inflation. The Tax Cuts and Jobs Act set the personal exemption to zero for tax years. beginning after December 31, 2017, and before January 1, 2026. The Tax Cuts and Jobs Act gives Treasury the authority to determine a new withholding allowance structure based on certain statutory factors.
But the problem is that the personal exemption was done away with in the Tax Scam, which typically allowed a two-income couple to claim 2 exemptions. There should have been either a requirement to have people re-file their W-4s, so they'd lower the number of withholding adjustments, or the tables should have been adjusted in 2018 to reflect the fact that more income was being taxed.

Instead, the Trump Administration gave little to no outreach on the subject, and went ahead and adjusted the withholding tables before the changes could be incorporated into the payroll software companies had. They guessed at the amount of new income that would have to be taxed, but left it up to the everyday person to make the changes to their W-4 forms, even though they knew this would result in more people having to write checks to the IRS in early 2019.
Under the Tax Cuts and Jobs Act, Treasury had new discretion for 2018 to adopt rules under which the total withholding allowance is determined based on certain factors, rather than to tie the withholding allowance to the personal exemption. Treasury officials told us that, because of time constraints, they considered the value of the withholding allowance to be the only parameter Treasury could change to affect withholding for 2018. Treasury decided that the withholding tables for 2018 should be compatible with the existing Forms W-4 employees had already filed because there would not have been enough time for employers and payroll providers to accommodate larger changes in 2018 that may have required employees to file new Forms W-4. Representatives of an association representing payroll providers corroborated that payroll providers would need 6 to 8 months to incorporate major structural changes into their software, input new information, and ensure that employees updated their Forms W-4

Treasury recommended the $4,150 value because there was “no higher or lower value that was clearly better” for achieving the goals it outlined. Treasury’s simulation showed that any of the withholding allowance values it analyzed would decrease the proportion of overwithheld taxpayers and increase the proportion of underwithheld taxpayers compared to prior law. As shown in table 1, Treasury’s simulation found that for 2018, using the $4,150 withholding allowance value would result in a slightly lower proportion of overwithheld taxpayers and a slightly higher proportion of underwithheld taxpayers under the Tax Cuts and Jobs Act than would have been the case under prior law.
The estimation was only that 3% of tax filers would see a change from getting a refund to having to pay in, but that's still 4-5 million people. And I wonder if this figure will be badly underestimated when it is said and done. Yes, it's still early in the filing season, but these are not good signs.

Average tax refund, through early Feb
2017 $2,135
2018 $1,949 (-8,7%)

Number of tax refunds processed through early Feb
2017 13.52 million
2018 11.38 million (-15.8%)

Total $ amount of tax refunds, 2018 vs 2017 tax year through early Feb
2017 $28.86 billion
2018 $22.18 (-23.2%)

That's $6.7 billion that is being taken out of the pockets of US consumers, and often unexpectedly. You gotta think that'll hurt the economy in the coming months (and retail sales tanked in December, before the tax issue hit people).

We're a good example of how this is playing out. In 2017, we had deductions totaling more than $34,400, well above the $20,800 writeoff that came from the standard deduction + 2 personal exemptions that were likely assumed in the withholding tables. But when we file for 2018, the $10,000 limitation on the writeoff for State and Local Taxes (SALT) combined with the end of the $8,100 personal exemption means that it's more worthwhile for us to take the $24,000 standard deduction.

That's nice if you want a simpler tax system, but it also means more of our income will be taxed at the federal level. Combine it with the fact that many assumed withholdings and exemptions at the prior level, and that double-whammy explains the surprise checks being written to the IRS, especially in states that rely more on income and property taxes to fund government (like Wisconsin). Note this map for where the SALT limitation will bite the most.

Bottom line - it seems like a lot of the current mess was due to the cynical decision by the Trump/GOP to increase people's take-home pay ASAP so they'd "see" the impact of the tax cut before the 2018 elections, which likely inflated the amount of the actual tax cut that many people actually got. Now we're paying it back in early 2019, and a whole lot of people feel bamboozled, even more than they do with typical GOP trickle-down garbage.

Saturday, February 16, 2019

Weekend ramblings - Milennials and Boomers

I've been meaning to talk about this "Millennial Millions" skit from SNL last month.

Lots to unpack here- starting with one of the 20-sonething contestants, who is a contractor without health insurance.

Host: "What's the name of the start-up?"

Milennial: "Google."

And then someone comes out singing a song that sets the tone for the milennials' adversaries

"Well…their parents came home from World War II
And they had a lotta sex
And they had a lotta kids
And the kids grew up
In a prosperous time
Where America was the only superpower left.

Then...they played all the music
And they did all the drugs
And they had all the sex
And they all went to college
And they got all the jobs
And they made all the money
And bought all the houses


The goal of the game is for the Milennials not to yell at well-off Boomers who,complain about their situations.

Parrothead Boomer: "She worked as a banker for 30 stable years, and then she got a $8 million severance and moved to Key West."

Boomer: "I had to work. $8 million dollars is not what it used to be so of course I'm taking the Social Security."

Milennial: "You're taking the Social Security? Bitch you are rich!" (Milennial loses)

Milennial: "It feels so funfair"
Host: "Well, maybe you can tweet about it, that'll solve everything. (laughs) I'm just playing. I'm Gen X, I just sit on the sideline and watch the world burn."

Host" "This prize could pay off your college loans up to $100,000."

Milennial with Master's who works at Burger King: "Oh awesome, that'll cover like half."

Collector Boomer: "He spends his latter years acquiring everything he wanted as a youth. He owns 6 vintage cars and a wall of guitars. But somehow, he's only an orthodontist."

Boomer: "I'd love to retire and free up a job for a younger person, but we got the house in Jersey, the house out on the Cape which is a tax nightmare, and the Scottsdale place. It's too much! What am I supposed to do?"


Now, it's time for the final round.

Host: "Carrie, it's your lucky day. That means you get to play for the Boomer Birthright Bonanza...That's a full-time job, a starter home, no student debt, and we'll throw in the Social Security. In other words, you get everything the Boomers got, just for being born at the right time."

Except that Carrie has to withstand a lecture about student debt from her Dad. Which basically will fall along the lines of this "Old Economy Steven" meme.

If it wasn't an evil thing to do, and would lead to righties trying to wreck the program, I'd support lowering Social Security benefits through 2030. Not only would it save a ton of money and make Social Security solvent for the next 40 years afterwards, but it would also mean the "Me Generation" can finally start to pay the rest of the country back for the things they have taken. But I'm a big-picture guy and I wont do that.

Of course, making rich people pay the same percentage into Social Security as the rest of us would also solve this issue, and a 70% income tax and/or wealth tax on the ultra rich might stop the problem of the Collector Boomer who can't retire due to having too many homes and stocks to worry about.

CEO Howard Schultz is the manifestation of this Boomer "I took mine and I'm keeping it no matter what happens to you" mentality.

As someone in his mid-40s that never made enough money to benefit from the '90s bubbles and resulting income increases, I'm just shaking my head at the whole thing. We're off to the side as part of the Middle Children of history. At least we'll hold down the benefit costs in our golden years, since there aren't as many of us.

But you wonder why younger people don't have a lot of trust in capitalism and especially corporate America? When your parents have sold you a lie about how the working world REALLY acts, why should you buy into the rest of the "pay your dues and build wealth" social contract?

It also doesn't help that Boomers have voted really poorly for most of our lives, which left the country and many of the states in the mess we are in today. You can see why so many of us want to see them get off the stage that they've been allowed to command for so long.

Why Evers should stay course and end tax cut for manufacturers

The Wisconsin Budget Project has been a great resource for me over the recent years, and one of their analysts has an Op-Ed in Urban Milwaukee discussing tax policy in Wisconsin as the GOP Legislature's unfunded tax cut lands on Tony Evers' desk.

Tamarine Cornelius says Evers should stick with his plans, and help to pay for his proposed middle class tax cut by repealing the "Big Giveaway" tax credit for large manufacturers in Wisconsin.
All Wisconsin businesses depend on public investments in roads, workforces and communities to thrive. But this loophole gives manufacturers a special exemption from paying their fair share. That means that companies like Foxconn and Kimberly-Clark pay little or nothing in income taxes even before the state piles on the subsidies. In fact, an investigation by One Wisconsin Now showed that, in the four years between 2013 and 2016, Kimberly-Clark paid a grand total for $1 in state income taxes.

Businesses don’t need to create new jobs to receive this tax break. Even manufacturers that lay off workers, send jobs overseas, and close factories can receive the credit. There is no evidence that this tax break has any effect on employment.

Only about three out of every 1,000 tax filers get this tax break, but those that do get an average tax cut of about $23,000. Some multi-millionaires get seven-figure tax breaks, with no requirement that they expand their business or hire additional workers.

Evers wants to limit this costly, ineffective loophole and redirect the resources to put more money into the pockets of the middle class and working parents with low incomes. His proposal would allow manufacturers to use only the first $300,000 of income to claim the credit. More than $9 out of every $10 in revenue gained through capping the manufacturing credit would come from millionaires.

The manufacturing credit contributes to economic inequity by increasing the concentration of income and wealth in a few hands—hands that are most likely to be white, due to a long history of racial discrimination. Thanks to powerful interests that have rigged the tax code to their advantage, Wisconsin residents with the highest incomes pay a much smaller share of their income in state and local taxes on average than other taxpayers.
Cornelius is referencing the “Who Pays?” report from the Institute for Taxation and Economic Policy, which showed last year that it's the middle and upper-middle classes that pay the highest percentages of their income in taxes in Wisconsin.

Let me also reiterate a point I’ve made a few times on here. Manufacturing corporations in Wisconsin have gotten other tax and policy breaks on top of the M&A credit in recent years. They include:

1. The GOP Tax Scam at the federal level, which featured a significant cut in corporate taxes that have artificially inflated earnings.

2. Wisconsin’s repeal of most of the personal property tax, which just took effect this year and includes most types of business equipment. Not only are manufacturers not paying as much, but it shifts the burdens onto homeowners to make up the difference.

3. Manufacturers have also been allowed to cut corners due to Walker-era deregulation. In addition, the GOP’s union-busting policies have helped lead to Wisconsin having the lowest manufacturing wages in the Midwest.

What did we get from that? Bottom-half job growth for 7 straight years, Scotthole-marked streets and lousy wages. And don’t buy the BS from Republicans about “great job growth in Wisconsin manufacturing in 2018.” Like most recent years, this is highly likely to be revised down by thousands of jobs when the jobs figured are benchmarked to the “gold standard” QCEW next month.

In light of this awful performance by state businesses, I’m supposed to cry tears for the possibility of the largest manufacturers having to pay back a fraction of what they’ve taken in recent years? Especially since those funds would be used to help middle-class Wisconsin consumers with a tax cut while increasing the ability to maintain public investments that benefit manufacturers more than most Wisconsinites? I dare Robbin’ Vos, John Nygren and other GOPpuppets try to justify Diane Hendricks continuing to get a tax cut of millions while infrastructure, schools, and quality of life deteroriates across the state.

WMC and the other RW puppetmasters can shut up, sit down, and be glad Evers isn’t asking for more, because I bet the average Wisconsin voter is sick of the 8 years that corporations have gotten a free ride in this state, especially since there hasn't been much of a benefit for people that aren't CEOs and the politicians they bought.

Friday, February 15, 2019

The emergency is to...take money from disaster and military aids?

I could discuss the merits of President Trump's "emergency" declaration to try to build more of a wall at the border, but besides the concerning tendencies toward fascism, what's the point? And after all, if Trump himself spent weeks threatening the move, and is admitting he could have waited on it, it's not an emergency.

I'd rather discuss what calling the emergency allows Trump to do. It lets the Trump Administration steal funding that had been set aside for other needs, and instead potentially use it for this stupid wall.
The administration has been eyeing several pots of money — including disaster funds, counternarcotic accounts and military construction dollars — to fund Trump’s wall, according to congressional aides and White House officials.

One possibility is shifting a portion of the $13 billion in disaster aid Congress approved last year for Puerto Rico and a dozen states, including California and Texas, hit hard by hurricanes, flooding and other disasters. The money funds Army Corps projects, and the Puerto Rico aid alone totals more than $2 billion.

These are real emergencies to deal with.

Classy! Who needs rebuilding after natural disasters when you can create a disaster of your own through detention camps and scaring stupid shut-ins over something that doesn't isn't nearly the threat that severe weather is.

Where else could Trump try to raid money from? How about from the bases where our men and women in uniform stay ready against real threats.
A more likely option is the military construction account that’s used to upgrade bases and facilities.

Congressional aides said there is $21 billion available. That includes about $10 billion in funds from the current 2019 fiscal year that ends Sept. 30, and $11 billion remaining from the previous four years, said the aides. They spoke on condition of anonymity because they weren’t authorized to speak publicly about the funding details.

But tapping the military construction money also may hit resistance. The money often goes for improvements to housing, roads, hospitals and other facilities, and can be used to eliminate mold or other hazardous problems at military installations in congressional districts across the nation and around the globe.
Now, I don't mind the idea of repurposing money that isn't going to be used instead of spending new money. But there are needs that are going to be unmet as a result of this Trumpian vanity project, and there is no consultation with Congress regarding the reuse of this money.

And oh yeah, ignoring Congress when it comes to the president pulling money as he/she wishes has been found to be illegal for more than 40 years. Charles Tiefer foresaw this possibility of Trump impounding and/or changing the destination of funding in a Forbes column from September 2017. Tiefer notes that when Richard Nixon tried the same thing in the 1970s, he was shot down by the Supreme Court.
Trump could announce that he will leave congressionally appropriated funds unspent, a move that we have ti go back more than forty years to the Nixon administration to make sense of. Trump will be tempted to go this “express” route for the propaganda value of contrasting himself with the big bad allegedly “spendthrift” Congress. Moreover, from his perspective, by doing this loudly and expressly, he will direct attention to his asserted overall goal of making savings, rather than just toward his personal ideological goals of starving particular programs for funds.

However, President Nixon totally lost the battle of impoundments, creating a binding precedent. After Nixon announced the impoundments, Congress fought back by insisting on the appropriations. Nixon lost a pivotal Supreme Court case, Train v. United States. And, Congress enacted the Congressional Budget and Impoundment Control Act [in 1974]. This Act required him to submit any proposals for impoundments, defined as “rescissions” and “deferrals,” for Congressional votes. This is a statutory framework that has worked well for forty years. If Trump uses it, he will win few of those necessary votes. If Trump does not use it, he is operating outside the very well-established law.

This Dick tried the trick, and it didn't work.

At the time, Tiefer pointed out that the Trump Administration could limit spending and move money around in other ways.
The second way is for Trump not to announce his cuts expressly, but to sneak them in by diverse ways. For keeping money unspent, the key agency is the Office of Management and Budget (OMB), and the management officials under OMB in each agency. The OMB Director, Mick Mulvaney, is a very savvy veteran of budget issues, and he will have management officials in important agencies who implement his directions. For this approach, the key is sophisticated work in the shadows. It includes taking heed of nuances between whether the appropriation provides that the funds “shall” be spent or just “may” be spent and asserting the power not to spend funds saying “may” because they are discretionary.

Another method is to “transfer” funds from one appropriation item to another one, which can be a big change that puts a whole program out of business. It may include “reprogramming” funds within an appropriation item, more fine-tuned than transfer, moving funding from one activity (allocation) to another. While this is a smaller change it can still starve some program that is out of favor.
So disaster funding and military infrastructure is "out of favor"? For something that is disfavored by the 2/3 of us that don't exist in the GOP's Bubble of BS? You go and try that one Donald.

In the meantime, there are other things that Dems in Congress can do to whack Trump with if he tries to go further with this fake emergency. In fact, it's probably being added to the already-long list of "high crimes, misdemeanors and court defeats" that this senile fool has on him.

Thursday, February 14, 2019

Walker-era neglect increasingly costing us more in 2019

The costs of the tax and budget cuts in the Age of Fitzwalkerstan are becoming apparent by the day. One example comes from this recent article from Wisconsin Public Radio, which includes an analysis from David Darling, who is UW-Madison’s administrator for Facilities Planning and Management.

Darling says that the Madison campus in particular has a lot of older buildings that are breaking down, and more money is needed to catch up.
Darling stressed the need for increased funding in his presentation to the Board of Regents and said UW-Madison needs an additional $21 million annually just to stop the growing backlog of maintenance projects. In total, however, the campus has approximately $1.5 billion of deferred maintenance.

"But that would just halt the growth of our deferred maintenance backlog," Darling told Wisconsin Public Radio.

In other words, it would take $21 million each year for UW-Madison to keep up with repairs.

"We have approximately $1.5 billion worth of deferred maintenance in aggregate," he said.

Dated, and in need of repair

And in light of this week's snowstorm, us in Madison have seen another major infrastructure breakdown due to a failure to keep things fixed up.
The eastbound Beltline ramp to southbound I-39/90 remains closed Thursday afternoon because of deteriorating road conditions discovered last night on the Interstate.

Significant delays are expected on southbound I-39/90 in the Madison area during this afternoon’s commute....

Emergency repair work on the southbound lane of I-39-90 just south of the Beltline exit is planned to begin this evening, according to the Wisconsin DOT.

Repairs are expected to be completed before the weekend, weather permitting.

This is the same Beltline vs I-39/90 interchange that had work delayed on it due to Walker/WisGOP budget cuts, and the was the subject of a ridiculous pre-election proposal by a desperate Walker Administration to try to fix the heavily-traveled area on the cheap.
The department recently told federal highway officials it recommends rebuilding the I-39/90 interchange with the Beltline such that the northbound side narrows, through its core section, to two lanes.

The interchange overhaul, set to be completed in 2022, would be the final phase of a $1.2 billion plan to widen the interstate to three lanes each way from Madison to the Illinois state line.

Overhauling the interchange without expanding to three lanes in both directions — which would be the case north and south of the interchange — would crimp the flow of northbound traffic, causing “significant safety concerns,” said Craig Thompson, director of the Transportation Development Association of Wisconsin, a group of business, labor and local governments that advocate for more spending on roads, bridges and transit.
That's the same Craig Thompson who is new Governor Tony Evers' appointee to become the new DOT secretary that has to deal with getting the state's highways back to speed with less of these Scottholes.

And yet WisGOPs are still selling BS like this.

Not in the DOT and the UW, Johnny. And it's pretty easy to have extra money when YOU DON'T PAY TO GET THINGS FIXED.

Now these dopes want to throw away $338 million on an unfunded tax cut while things are literally falling down? Given all of the problems and additional needs that keep becoming apparent, it'll be a stretch to find enough money to stop the bleeding as it is.

Retail sales tank in December. Are things getting that bad this fast?

Because the federal government has been opened for the last 3 weeks, it means the sizable backlog of economic data from the end of 2018 and early 2019 is finally coming out. And the report on retail sales for the important month of December was a shocker.
Advance estimates of U.S. retail and food services sales for December 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $505.8 billion, a decrease of 1.2 percent (±0.5 percent) from the previous month, but 2.3 percent (±0.5 percent) above December 2017. Total sales for the 12 months of 2018 were up 5.0 percent (±1.4 percent) from 2017. Total sales for the October 2018 through December 2018 period were up 3.7 percent (±0.5 percent) from the same period a year ago. The October 2018 to November 2018 percent change was revised from up 0.2 percent (±0.5 percent)* to up 0.1 percent (±0.4 percent)*.

Retail trade sales were down 1.3 percent (±0.5 percent) from November 2018, but 2.1 percent (±0.5 percent) above last year. Clothing and clothing accessories stores were up 4.7 percent (±1.4 percent) from December 2017, while food services and drinking places were up 4.0 percent (±2.5 percent) from last year.
That’s the worst 1-month drop in retail sales since September 2009, and along with a reported decline in inventories, caused the Federal Reserve of Atlanta to tank its projections for 4th Quarter GDP growth, all the way down to 1.5%.

The drop in retail sales was wide-ranging, and contradicted information from credit card companies and retail studies who said the Christmas shopping season was a great one. The huge decline was such a surprise some economists literally refused to believe it.
The weakness was broad-based. Sporting goods stores sales fell 4.9%, miscellaneous store retailers fell 4.1%, non-store retailers — which includes online retailers — dropped 3.9%, department stores fell 3.3%, and health & personal care stores fell 2.0%.

Economists said that the decline in the “official” Census Bureau figures is easily explained in the context of broader financial market volatility and uncertainty over a partial government shutdown, which saw about 800,000 federal employees either furloughed or working without pay. Both of these factors had also contributed to weaker readings for consumer sentiment, with a reading from January capturing the residual impact of December’s market performance and government shutdown registering at the lowest level since October 2016…

The largest drop in headline retail sales was especially surprising given that previously released data from other institutions had suggested that retail sales had risen for the month. According to a Mastercard SpendingPulse study released at the end of December, the holiday shopping season had been the best in six years. A Johnson Redbook report, likewise, showed that December sales rose over last year, though the firm draws results from a smaller sample.

The release of the Census Bureau’s retail sales figures – along with a host of other economic data – was delayed due to the government shutdown.

The Census Bureau’s retail sales numbers “are astonishing, and impossible to square with the Redbook chainstore sales survey, which reported surging sales in December and a record high in the week of Christmas, on the back of the plunge in gasoline prices,” Ian Shepherdson of Pantheon Macroeconomics wrote in an email Thursday.
And it may well be that the bad December numbers reflect a seasonal adjustment that counts on Christmas shopping being heavily concentrated in December - the amount of money spent in retail went up 8.7% in December vs November, but that’s less than “normal”, so it registered as a big loss. However, it doesn’t explain the lousy year-over-year figures that include what was happening in December 2017 (the raw sales for Dec 2018 were only up 1.4%, below the rate of inflation).

But wait, Trump economic advisor Larry Kudlow says that there’s a legitimate reason for the decline.
National Economic Council Director Larry Kudlow played down the weak December retail sales report, which showed the biggest monthly drop in nine years. Speaking from the White House, Kudlow noted the impact of 10 days of a government shutdown as well as shoppers procrastinating on holiday purchases. "Shoppers were very late, according to the National Retail Federation," he added. "I wouldn't be surprised if January was revised up because of that."
Koch/coke makes you say stupid things.
So Kudlow is saying that Americans were waiting until January to do their Christmas shopping. WHAT?????

It's an additionally stupid take because the shutdown didn’t happen until the Saturday before Christmas, and no one missed paychecks until the start of 2019. If there’s a shutdown-induced loss of retail spending, you’d think it would show up in January not December. Even by that dimwit’s low standards, this a lame excuse.

There was also a national report this week which indicated that consumer debt kept going up at the end of 2018, which makes you wonder how soon a breaking point is reached.
The U.S. household debt and credit report, published Tuesday by the Federal Reserve Bank of New York, showed that the overall debt shouldered by Americans edged up to a record $13.5 trillion in the fourth quarter of 2018. It has risen consistently since 2013, when debt bottomed out after the last recession.

While mortgage debt, by far the largest slice, slipped for the first time in two years, other forms of borrowing rose including that of credit cards, which at $870 billion matched its pre-crisis peak in 2008…

Another signal of weaker demand, the closing of credit cards and other accounts, jumped to its highest level since 2010, while flows into serious delinquency for credit cards rose 5 percent, up from 4.8 percent in the third quarter.

Serious-delinquency flows, a warning bell for economists because they can prelude defaults, spiked in the third quarter for student debt and remained there in the fourth quarter, with 9.1 percent of the $1.5-trillion total debt seriously delinquent.

These flows have also been rising since 2012 for auto loans, which rose slightly to total $1.3 trillion by the end of 2018, a year that had the highest number of auto loan originations since at least 1999.
And the Fed added that “subprime” borrowers are a big reason for the worsening state of car loans, which sure gives off echoes of the mid-2000s in bad ways.

That being said, the Bureau of Labor Statistics said this week that real wage growth increased again in January as gas prices and other inflation bottomed out, so there shouldn’t be headwinds from that standpoint. However, I’d think a large number of people finding out that they’re going to be sending checks to the IRS instead of getting a refund will have some kind of effect on the consumer economy in the next few months.

These realities are why I’m not trusting the recently melting-up stock market. The horrid retail sales figures and the worrysome debt numbers also shows that the economy on Main Streeters might be very different than what’s happening for Wall Streeters, and I don’t like how those situations often resolve themselves.

Can Foxconn follow Amazon?


All it takes is for communities and elected officials to SAY NO. The result is they don't hamstring their communities for years vs over a net gain of a relatively small amount of jobs gained (at best).

There will never be a point where oligarchs say "NO" to subsidies, and they will always try for more. It only stops when we choose to stop giving away the farm to them.

Wednesday, February 13, 2019

Vouchers now hurting small-town Wisconsin districts

I wanted to go into an article in the Baraboo-Portage newspapers, which went into schools being hurt by vouchers are in smaller communities in South Central and East Central Wisconsin.

Some might say if students leave the public schools, then the schools can reduce staff and other costs to make up for the loss of funds. However, that’s not necessarily realistic, if the numbers are relatively small in each class.
But losing some students to private schools doesn’t necessarily mean a district has reduced costs, said Portage Community School District Business Director Peter Hibner. Since 2015, Portage has had more than 20 voucher students per year. Participation jumped to 36 this year, taking with them almost $300,000.

“Let’s say you have 30 kids district-wide under that program,” Hibner said. “That might only be a couple at each grade level, so it’s not like we can have less staff for anything else because we have a couple less students.”

What’s especially damaging is that Republicans have set up a funding system for vouchers that takes funds away from the district’s of a child’s residence, as a method of saving tax dollars. Which leads to the public school system constantly having to work uphill, and often having to increasingly rely on property tax dollars because of state revenue limits.
Lodi School District Administrator Charles Pursell said if legislators wanted a choice program, they should have funded it as a separate entity, rather than tying it to public schools.

“I believe in kids having a quality education,” Pursell said. “I’m not opposed to the idea of choice, I just don’t think that public schools should be penalized in order to support a second school system.”

The Lodi district already uses funds from an operational referendum to support existing programs due to a lack of public school funding, Pursell said. Unless state funding changes, he expects the district will need to ask local taxpayers for more support once the referendum ends.

As the article points out, Republicans are steadily increasing the amount of students and money that can be taken away from, 3% for this year, and going up to 10% in 2025. After that, the caps go away entirely.

That funneling of money out of public schools for vouchers seems like a flaw that Governor Evers could try to change and draw attention to in his budget. In addition, with the increasing needs and referenda that continue to crop up due to past Walker/WisGOP neglect, Evers can use the budget to lower the voucher cap to start letting this scam die on the vine.

In the process, this would dare Robbin' (donations from Betsy De)Vos and Fitz and other GOPs to justify this theft that's hurting one of the few things left that ties communities together - quality local public schools. This is yet another issue where Wisconsinites agree with Dems and hate the GOP's policy, but they have yet to adequately punish Republicans for what they have done.

Monday, February 11, 2019

Now that it's tax filing season, the GOP's Scam is biting back

The middle of February doesn’t just mean a depressing weather scene, it also is when tax-filing season ramps up after Americans have received their W-2s for the previous year. And tax filing season is getting extra attention this year because it’ll be the first one that reflects the changes from the GOP’s tax bill, which was passed at the end of 2017 and took effect at the start of 2018.

Eric Levitz in New York magazine points out that the Tax Scam is “about to become a political disaster.” It stems from a calculus the Trump Administration and other Republicans made last year, where they thought the higher take-home pay would make voters happy enough so they could sneak by in the November 2018 elections.
But GOP operatives insisted that the “blue wave” on the horizon would crest long before November — because the Trump Tax Cuts were about to kick in. Once voters saw fatter paychecks, Republicans would see better poll numbers. And just to be sure that voters noticed all the good Paul Ryan had done for them, the Trump administration reportedly pressured the IRS to err on the side of withholding too little from Americans’ paychecks “so people will see big increases in their take-home pay ahead of this year’s midterm elections.”

This did not work out as planned. Even with (allegedly) light withholding, the the tax bill’s breaks for middle-class people weren’t large enough to attract much notice. Between changes in salaries, health-care premiums, and 401(k) contributions, most Americans didn’t detect much tax relief in their paychecks. The Trump Tax Cuts actually became less popular after they took effect. And, of course, Paul Ryan’s majority drowned in a blue wave.
They get to keep their tax cut. You may not be so lucky.

The cynical part about the GOP’s strategy was that the literal payback of the lower withholdings would come after the elections, during this year’s tax filing season. And that is hitting tens of millions of Americans in the face.
Now, the bill for the GOP’s (reported) withholding shenanigans is coming due: The average American’s tax refund was 8.4 percent lower in the first week of 2019 than it was one year ago (under the pre-Trump tax code). And while Americans have trouble noticing tax changes when they’re dispersed across 12 to 24 separate paychecks, they do typically pay very close attention to the size of their refunds. About three-quarters of the country typically qualifies for a tax refund most years — and for many of those households, that check from the IRS is the largest lump sum they’ll receive all year.

“Ask people how much they paid in taxes, nobody knows. Ask them how much they got in their refund, people know,” Howard Gleckman, a senior fellow at the Tax Policy Center, told the Intercept’s David Dayen this week. “Everyone focuses on size of the refund, and it does affect perception.”
A big reason why many Americans are getting smaller refunds and/or having to pay back the IRS for the first time in several years is partly due to the smaller withholdings from last year. But it’s also partly due to changes in the Tax Scam that were intended to make it easier for people to file. The standard deduction was expanded to $12,000 for single filers and $24,000 for married couples filing jointly, which theoretically leads to a lower tax bill for many.

The problem is that in order to keep the Tax Scam from blowing an even bigger hole in the US budget deficit, certain deductions were limited and/or eliminated. And two items are hitting working and middle-class homeowners harder than others, especially if they don’t have children.
2. Personal exemptions. The increased standardized deduction will be welcome news for many households, but there's a catch: Personal exemptions have been eliminated. While not technically a deduction, the exemption allowed taxpayers to subtract $4,050 from their taxable income for each dependent they claimed, so eliminating it is a significant loss for families. The increased standard deduction helps soften the blow of losing personal exemptions, but it might not make up for it entirely, says Mark Jaeger, director of tax development for TaxAct, a provider of tax preparation software and services.

3. Unlimited state and local tax deductions. On this year's tax forms, deductions for state and local taxes – known as SALT deductions – are capped at $10,000. "That to me is the one (new tax code rule) that is going to impact middle class taxpayers the most," [Tampa accounting firm director Shaun] McClung says. It will particularly affect those living in states like California and New York, which both have above-average state income tax and property tax rates.
That limitation of SALT is going to nail a lot of Wisconsinites as well, given our system of making local governments rely on property taxes and having a low sales tax make up for our income tax.

What a nice going-away present from Wisconsin's own Paul Ryan!
Soooo punchable.

Combine that $10,000 limitation on SALT and the fact that Wisconsin’s relatively moderate cost of living limits the amount of mortgage interest needed, and many of us won’t reach $24,000 in deductions. So we’ll take the standard deduction, which is fine from a net tax standpoint, but it also means that the amount deducted from our paychecks are likely to be in line (or less!) than what should go to the IRS. So no tax refund either.

On a related note, I went to the IRS site with the filing stats, and the more interesting figures to me were not that people were getting smaller refunds, but these ones.

Total Returns processed, YTD
2018 17.93 million
2019 13.31 million (-25.8%)

Total Returns with refund, YTD
2018 6.17 million
2019 4.67 million (-24.3%)

There are 2 reasons this may be happening. One is relatively benign, and simply reflects that people are starting on their returns later, and perhaps there was a bit of a hangup due to the government shutdown in January. That will correct over time.

The second reason would be very bad, as it would reflect fewer people getting refunds in general and having to write checks to the IRS. Those people would have no reason to file a federal tax return in early February, as why would you write a check before you had to in April? In fact, I can see a scenario where many Americans file their state return, get a refund from that, then file their federal taxes after the get their state money in the bank (raises hand).

If there are fewer refunds in general, then what does that do to consumer spending in the coming months, where the typical boost in the bank account isn’t coming? And does it artificially inflate tax revenues for this year, because of higher payments and higher withholdings from people who don’t want to pay again?

And even if the number and amount of tax refunds are on the average in line with previous years, the people getting them and the reasons why are quite different from recent history. I would bet a lot of refunds will be the result of stock market losses in 2018, especially in December. Those losses wouldn’t be something the average person would bank on for their withholding status, but it would reduce their overall income and the amount of tax they pay. So it gets made up with a larger refund.

The problem is that the type of person that has losses in the stock market that can be written off on their taxes (because they’re using “extra” money to gamble with, instead of tax-deferred IRAs or 401-ks), is also going to be richer and wealthier than many people who used to rely on the personal, SALT and mortgage interest exemptions to get refunds.

We thought the Tax Scam was a regressive mess that would explode the deficit, but I at least recognized that I'd be in line for a slight tax cut (or so I thought. My first look at our filing information indicates it might not have gotten us a thing). However, most people live their everyday lives and don’t spend time thinking deeply about tax decisions and changing the amount of money they have taken out of their paycheck, and they'll definitely notice if they have to write a surprise check.

Republicans lost a lot of ground in the suburbs among middle-class and upper-middle class voters in 2016 and 2018 due to Trumpism and other GOP idiocy. Now add in the impression of higher taxes and the diminishing of the benefits of home ownership, and we ain't seen nothing yet.

You wonder why Republicans are desperately (and dishonestly) trying to change the subject to abortion and Israel these days?

Sunday, February 10, 2019

Last year's record floods are still costing us. And this winter likely will too

There was a minor line item in last week's Joint Finance Committee hearing that was drowned out by the discussion about tax cuts. However, with more snowstorms coming for this week, it seems to be a good time to point it out.

The WisPolitics summary is innocuous enough, but it still notes the decent amount of money that is being added to deal with past weather damage.
The Joint Finance Committee voted unanimously Thursday to give the Department of Military Affairs for a one-time supplement of $2 million to provide disaster assistance to local governments.

It also approved unanimously giving $50,000 to the Kickapoo Reserve Management Board to cover clean-up costs from floods. That money will be transferred from the state forestry account.
Let's go into this a bit more, to get a fuller picture on how this works.

The Department of Military Affairs oversees and pays for recovery efforts associated with weather-related "catastrophes" that generally involve Wisconsin's governor asking the president for a federal disaster declaration. These funds are paid out by the state's Petroleum Inspection Fund, which gets its money from a 2-cent-a-gallon tax that is paid on gasoline and other fuels, and the Legislative Fiscal Bureau says that for the last 5 years, there's been a dedicated amount of money set aside in that fund for disasters. Usually the amount set aside is sufficient, and anything that's not used for disasters can be carried over.
...DMA has a SEG continuing state disaster assistance appropriation funded by amounts provided from the petroleum inspection fund. Since the appropriation was converted from an annual to a continuing appropriation in 2007-08, appropriated amounts have been as follows: (a) $0 in 2007-08 and 2008-09; (b) $1 million in 2009-10; (c) $1 million in 2011-12; (d) $257,900 in 2013-14; and (e) $711,200 annually since 2014-15. In addition, in December, 2011, under s. 13.10 of the statutes, the Joint Committee on Finance provided an additional $1,000,000 SEG in expenditure authority to the appropriation in 2011-12. In August, 2012, the Committee provided an additional $1,000,000 SEG. As a continuing appropriation, any amounts appropriated do not lapse back to the petroleum inspection fund at the end of a fiscal year, but instead remain in the appropriation until expended.

Gotta fix this with some kind of money.

And just like we saw in 2011 and 2012, 2018 is a year where the disaster aids to local government are going over the amount that's in the fund, due to record flooding and other crazy weather that we've seen in the last 6 months.

While available FEMA money can pay up to 75% of certain public infrastructure costs, that still leaves a lot of costs that the state and local governments have to pick up. and the DMA account had already been used up for the 2019 Fiscal Year. Which is why the Joint Finance Committee was asked to give another $2 million out of the petroleum fund last week.
In order to provide funding for currently approved claims in excess of available balances under DMA's SEG continuing state disaster assistance appropriation, and in order to have additional balances to address additional disasters in 2018-19, DMA is requesting that the Committee transfer $2,000,000 SEG on a one-time basis in 2018-19 to DMA's state disaster assistance appropriation. Revenue for the request would be provided from the petroleum inspection fund. Based on a review of the petroleum inspection fund, a sufficient balance exists to support the DMA disaster assistance request. Approval of the current request would reduce available fund balances to support the other activities supported by the fund. The petroleum inspection fund's estimated closing available balance for 2018-19 is expected to be $14.0 million. The $14.0 million expected balance is before consideration of any transfer under DMA's request.

….In 2018-19, through February 1, 2019, the Wisconsin Disaster Fund had expenditures of $799,100, approved claims pending payment of $869,600, and a balance of $600. The Department estimates that additional disasters, such as winter weather or spring floods, could incur $291,200 in eligible claims this fiscal year. Based on current petroleum inspection fund balances, revenue is available to support the request.
But with polar vortex cold and numerous snowstorms in the first 6 weeks of 2019, it sure seems like there is going to have to be more money that the state will have to come up with to help local governments to deal with weather events for the 2019-20 Fiscal Year as well. Which makes me wonder if more money is going to have to be set aside from the Petroleum Inspection Fund or other sources in the next budget, and whether that will limit the ability of the state to continue to divert money from the petroleum fund to make up for deficits in DOT for road repairs and other needs.

This is coming across the St. Croix soon enough.

In addition to the money to the Department of Military Affairs, the Joint Finance Committee voted to pay more funds to deal specifically with the cleanup in Western Wisconsin from the record flooding in August and September. The funds went to the Kickapoo Valley Reserve, which manages around 8,600 acres in Vernon County with money derived from camping and other activities for the natural area.
The Kickapoo River valley has often been subject to severe flooding events. In August and September of 2018, severe rainfall events contributed to record-breaking totals of rain in the Kickapoo River watershed. The National Weather Service reports an estimated 12.68 inches of rain fell in Viroqua (12 miles west of the KVR) from August 16 through September 6. Further, measurement of the Kickapoo River in La Farge (immediately south of the KVR) showed a peak estimated flow of 27,800 cubic feet per second on August 28, breaking the previous record of 22,100 set on June 8, 2008. From August 15 to September 15, the average cubic feet per second was 863, compared to the river's August-September historical average of 161 from 1939 through 2016. The final crest of the river was measured at 19.42 feet, breaking the previous record of 15.78 feet also set on June 8, 2008.

KVR reports that damages from flooding included washed out trails, sinkholes, downed trees, damage to signage and boundary markers, debris accumulating under bridges, erosion at parking lots and river access sites, and other infrastructure damage. The Department of Administration (DOA) Bureau of State Risk Management reports that damage associated with the flood is not covered by insurance.
The LFB summary indicates that FEMA wants to have its disaster assistance funds to go to repairing infrastructure and private homes, so the KVR has to pay for the repairs to their lands themselves. The problem is that they don't have enough money available to do so, even after reducing staff for wildlife management duties.
In response to the anticipated deficit, KVR reports it is already reducing LTE hours from February to April, which will limit invasive species control work and timber stand improvement. KVR also reports it is considering other funding options, including fundraising with the Friends of the Kickapoo Valley Reserve, although these funding sources may be limited.
So the Joint Finance Committee took $50,000 available from the Forestry Account to pay for it - the same Forestry Account that Walker and WisGOP replaced property taxes with state tax dollars in the last budget, to the tune of approximately $90 million a year.

This $2,050,000 in extra costs aren't a big deal in the overall budget picture, but additional weather events will cause another area of added expenses that weren't part of the budget requests for this year. And in a time where roads, education and other services are also in need of reinvestment after 8 years of neglect, the extra costs and needs that crop up with these storms add to an already-complicated situation.

Interesting that the GOPs on the Joint Finance Committee ignored this reality when they decided to advance a $338 million-a-year unfunded tax cut last week, isn't it? And it makes for yet another reason we should hold off on that one until we look at the full budget picture in the coming months.

Saturday, February 9, 2019

Taxpayer-funded graft and abusive behavior. A WisGOP hallmark

The "fiscal conservatives" of today's Wisconsin GOP strike again.
Republican lawmakers are charging taxpayers nearly twice as much an hour as Democratic Gov. Tony Evers in the legal fight over Wisconsin's lame-duck laws.

Taxpayers will pay the lead attorney for lawmakers $500 an hour, according to contracts released Friday under the state's open records law. The law firm Evers has hired is charging taxpayers $275 an hour.

The deals Evers cut are capped at $100,000, though that limit could be raised if the litigation is extensive. There are no caps on how much attorneys for the Republicans can charge.
Vile enough, especially since the gerrymandered GOP Legislature also is shelling out $840,000 on another no-bid legal contract to defend their sketchy-at-best redistricting. But then there was this comment in the Journal-Sentinel's story.
Senate Majority Leader Scott Fitzgerald of Juneau defended how Republicans structured their contracts.

“We didn’t pick this fight, but we will defend the rights of the Legislature against the liberal activists bringing these suits," Fitzgerald said in a statement. "Legal representation wouldn’t be necessary at all if Governor Evers would have his allies drop these legal actions."
ARE YOU SHITTING ME, FITZ? The only people who "picked this fight" were you and the rest of your Republic-scum, by rushing through your Power Grab to tie Evers' hands before he took office.

Evers was elected with the idea that he would have certain powers and abilities to affect policy, and it was Republi-thugs like Fitz who decided to change these powers and procedures to rig things to their advantage. Even after voters rejected them statewide.

It's also a disgusting statement because it continues a trend of Republicans who make the statements of abusers.

"Why are you complaining that we acted poorly?"

"It's your fault that there's a problem due to our actions. Why don't you accept what we did?"

"I don't care that you want to act in your interest. Only we get to use our power and taxpayer funds to advance our own interests."

What a bunch of disgusting, selfish lowlives. But it's far from the first time that Fitz has let the mask slip on the real reasons and motivations for WisGOP policies.

If only Fitz was as much as an unemployed joke in 2019 as Megyn Kelly.

They rig, they gaslight, and they steal taxpayers' dollars for their own selfish reasons thay do nothing to improve the state. And the only way WISGOP will stop doing scummy things like this is if they are fought and exposes at every step, blown,out of power, and kept out of power.

Friday, February 8, 2019

Tolls won't fix Wisconsin's Scottholes any time soon

A story that re-emerged this week dealt with the issue of how to pay for Wisconsin’s many needs in transportation. And the leaders of both houses of the State Legislature both backed a new way to get money to pay for those needs – tolling.
Assembly Speaker Robin Vos of Rochester and Senate Majority Leader Scott Fitzgerald of Juneau described placing tolls around the state as a way to fix the state's highways and bridges.

"You can do it on bridges. You can do it in an awful lot of places. So I think there’s a lot more flexibility (on where tolls can be placed) and that’s why we wanted this study,” Vos said.

They said a tolling study would help guide lawmakers on the issue but emphasized they see it as the best way to pay for roads. But they came short of committing to implementing tolling in the state budget they pass this year.

Heading North of the Illinois border?

Of course, we already had a study at the end of 2016 looking into tolling in Wisconsin, so I’m not sure what would be different from a new study in 2019. Well, unless Vos and Fitz weren't going to have the state run the tollways, but instead would sell them off like Scott Walker's Administration was reportedly thought about before the 2018 elections.
Gov. Scott Walker's transportation secretary told business officials and others last week he had talked to a London financier about selling off Wisconsin's highways but had rejected the idea.

Transportation Secretary Dave Ross told a group last week that Walker's administration was adopting new ways of getting its work done and mentioned in passing his discussion about selling off roads, according to people familiar with the meeting.

He then said he was not pursuing the proposal because Wisconsin has good contractors to maintain the state's roads.
I think we need a little follow-up from our media to have Vos and Fitz expound on how this "tolling" would bring in money to the state. But for now I'll assume the State of Wisconsin would be the ones running the tolls and getting revenues every year from it.

Another advantage of tolls in WisGOP World is that they can be construed as “user fees”, which would allow the GOPs to remain on the good side of no-tax right-wing oligarchs like Grover Norquist and the Kochs. Since other options to raise funds for highway work include raising the state’s gas tax for the first time in 13 years or upping the state’s vehicle registration fee for the first time in a decade (your local wheel tax doesn’t count), this likely plays into the GOPs’ calculus in backing tolls.

But it’s worthy to look at how much money we are talking about. Let’s start with the conventional options that could be instituted right away. If you look at the Legislative Fiscal Bureau’s paper from last month, it says that every 5 cents the gas tax is increased would result in $170 million a year in added revenue, and every $10 increase in vehicle registration fees brings in $47 million.

By comparison, if you look at the detailed part of that 2016 tolling study, you’ll see that it would cost $366 million up front to do a statewide tolling system, and it wouldn’t generate any money for WisDOT for 4 years as it was being built.

Which means tolling would do ZERO when it comes to fixing all of the Scottholes we have today and for the next 2 budget cycles. In contrast, Dem Assembly Leader Gordon Hintz noted that the gas tax would put money in the bank to pay for those road needs immediately.
[Hintz] dismissed the GOP leaders’ remarks during a question-and-answer session with reporters, saying Fitzgerald and Vos have been talking about tolling for years. He said tolling would take money to set up and “won’t happen tomorrow.” A gas tax increase would generate revenue more quickly, he said.

“We need money now,” he said.
Granted, those up-front costs of tolling could be limited if you didn’t put tolls on all interstate segments in the state (as you can bet outstaters and Milwaukee commuters will demand), but that would be offset by less toll revenue. For example, the study said if tolling was limited to I-39/90 between Beloit and Madison and I-94 from the Milwaukee airport to the Illinois State Line, it would raise less money than raising the gas tax by a nickel.

But the Republican leaders claimed that increasing the gas tax isn’t going to solve the overall problem of having a steady source of money for the Transportation Fund.
Vos told reporters that he thinks a gas tax increase would be a short-term fix, at best.

“If we don’t have a long-term answer like tolling or something similar to that,” he said, “all we’re doing is putting a Band-Aid on a gaping wound.”
And Fitz claimed that even increasing the gas tax by a dime wouldn’t get the job done.

Wait, so the WisGOPs are now admitting our highway deficit is more than $300 mil a year, and requires more money to be raised, which is why they’re calling for tolls? OK, then I got a solution to this quandary for Robbin’ and Fitz.

If we need to fix the roads, why don’t we use $300 mil a year of General Fund money over the next 4 years and send that to the DOT instead of blowing it on an unfunded income tax cut? Seems like a bigger priority at this point.

This doubletalk also puts the lie to the GOP meme of “our fiscal policies have put Wisconsin in great shape.” Because if we were in such great shape, we wouldn’t have so many Scottholes that we allegedly need to add more than $300 mil a year to get back on track. It also exposes that WisGOP’s legislative “leadership’s” call for tolling as a gutless piece of cynicism. It makes Vos and Fitz appear that they have a solution for the state’s many transportation needs, but it doesn’t do anything for the needs that exist today.

At the same time, WisGOP’s strategy tries to set up Governor Evers and other Dems as “tax hikers” for wanting to fix the roads NOW, while the gerrymandered GOP Legislature can block such a measure, and then stand by over the next 4 years whining “Why can’t Evers get the roads fixed like he said he would?”

Don’t fall for it, and call out the GOP’s garbage for what it is.

Thursday, February 7, 2019

Shopko, MMAC, and Diane Hendricks - today's edition of "RW Wis corps behaving badly"

Two quick items from this week illustrating the classiness of this state's business community.

Start with this news from yesterday, where bankrupt Wisconsin retailer Shopko announced that their store closings had multiplied.
Shopko will close almost 70 percent of its locations between now and mid-May as it attempts to reorganize and emerge from bankruptcy.

The company published a list this week that indicates it will close 251 stores, more than twice the number of stores Shopko identified for closing in mid-January. The updated list now includes 42 stores in Wisconsin....

Shopko and its affiliate companies filed for bankruptcy protection from creditors on Jan. 16 in U.S. Bankruptcy Court in Nebraska, citing assets of less than $1 billion and debts between $1 billion and $10 billion.

The Ashwaubenon-based retailer announced plans to close stores, sell its pharmacy assets and spin off its optical centers into standalone locations. The changes were designed to enable the company to emerge from bankruptcy with the ability to continue operating with a slimmed-down, more profitable footprint across the Midwest and Northwest United States.
Now go back to something I wrote about back in May 2016, where I followed up on a WKOW report in Madison which noted that the parent company of Shopko had received $1 million in job creation writeoffs from the Wisconsin Economic Development Corporation, but were outsourcing jobs within 2 years.

In that post, there was a comment from "lufthase", which pointed out the interesting GOP connections with that company.
Why ShopKo, you ask? It probably isn't all the little 3-figure WIGOP donations. Look higher up the foodchain. ShopKo is owned by Specialty Retail Holdings, which is in turn owned by Sun Capital Partners... and they happened to give a cool $950,000 to Romney's PAC (Restore Our Future), plus another $212k to the RNC. Very likely they were also generous with some of Walker's preferred groups (WICfG?).
And within 7 years of these publicized WEDC handouts, the vulture capitalists in charge of Shopko are going to throw several hundreds of Wisconsinites out of work and depress the tax base in whole lot of state communities. What a deal, huh?

And then there's this item that shows up in the middle of a Mother Jones' article from today that shows how right-wing donors withheld their contributions to GOP members of Congress in 2017 until the GOP Tax Scam was passed into law, followed by those donors opening up the purse strings to kick back the added cash in their pockets.

That's not surprising, and the Kochs, Adelsons and U-Lines had been well-documented in their carrot-stick approach in regards to the tax scam. But a couple of more familiar names closer to home caught my eye in this graphic, which tracked donations to GOP politicians and front groups in the 2 months the Tax Scam was being debated.

The MMAC and Diane Hendricks? Classy! And what did the Milwaukee metro area get for job growth in the 1 year after the Tax Scam was passed into law?

Job growth, Dec 2017-Dec 2018
U.S. +1.81%
Milwaukee Metro +0.78% (+6,800 jobs)

Well under 1/2 of the US rate, in a state where we've been in the bottom half for job growth for 7 straight years under policies that the MMAC and Diane Hendricks has backed every step of the way. Maybe instead of throwing more than half a mil on GOP politicians (and a lot more before the end of 2017), maybe the MMAC's corporate members COULD HAVE HIRED SOME PEOPLE instead of having Milwaukee massively lag the rest of the country.

Oh, but WisGOPs tell us that despite the Tax Scam's major corporate tax cuts and the sizable tax cuts to rich individuals, that if they get their M&A giveaway reversed at the state level, it'll be catastrophic for these companies? BULLSHIT. The massive donations, bad job growth and failed WEDC giveaways tell me that their free ride needs to be ended, and these lazy oligarchs can take a seat in the back for a long while.

Instead, let's allow people that actually work jobs, actually believe in fiscal responsibility, and believe in quality of life to be the ones that get to direct economic policy for a while in this state.

Dueling plans shows unfunded GOP tax cut leads to a bigger hole

Right now, a large debate is happening in the State Legislature over the best way to cut taxes for middle-class Wisconsinites. Katelyn Ferral had a good breakdown in the Cap Times on the “dueling tax cut proposals” between the two parties, and I'll let her describe the topline issue.
The main point of disagreement between Democrats and Republicans is how their respective plans would be funded.

Republicans want to tap into budget reserves to fully fund the tax credit for the next two years. Democrats want funding for their plan to be tied to narrowing the Manufacturing and Agriculture Tax Credit, which would effectively raise taxes on some manufacturers and redistribute that money to pay for the individual income tax cut. Democrats argue that relying on budget reserves to fund the whole individual income tax cut is irresponsible and argue that reducing a tax credit to pay for a new one is a more sustainable route.

Republicans say that effectively raising taxes on some manufacturers to reduce taxes for others is unnecessary and a deal breaker. They argue that there are enough budget reserves to both cut taxes for the middle class and maintain a low tax burden on all manufacturers and farmers. …

Overall, the approximate cost difference between the two plans is $147.4 million in reserve money. Either way, the state would tap its reserves to pay for the cut, it's just a matter of how much and if another state tax credit is altered in the process.
Let's start with the proposal revealed this week by Governor Evers and other Democrats. It would cost $144.4 million in the 2020 fiscal year, and just under $204 million in FY 2021. The Governor's press release on the subject says the tax cut will come from a few sources, depending on the income level of the filer.
Under the Evers plan, middle-class families with a Wisconsin adjusted gross income (WI AGI) below $80,000 for single filers and $125,000 for married-joint filers will receive a new nonrefundable credit equal to 10% of the remaining tax liability after all other credits (it actually phases out between $125,000 and $150,000 for married couples, and $80,000 and $100,000 for single filers) ….

The Evers plan will also expand the Earned Income Tax Credit (EITC) for families with one or two children. Beginning with tax year 2019, the credit rate as a percentage of the federal credit for families with one child will nearly triple, from 4 percent to 11 percent, and the rate for families with two children will increase from 11 percent to 14 percent. Increasing the credit for those categories brings Wisconsin closer to parity with the median EITC provided by other states.

In addition, the Evers plan will rollback a Republican giveaway to some of Wisconsin’s highest earners by capping the Manufacturing and Agriculture Credit (MAC) for manufacturing claimants. Agricultural firms would continue to have the credit as it exists under current law.

As of October 2018, the nonpartisan Legislative Fiscal Bureau estimated that 79 percent of the MAC goes to individuals with adjusted gross incomes of over $1 million. In 2019, 21 individuals with an adjusted gross income of $30 million or more a year are estimated to receive $38.9 million in tax breaks (an average of $1.8 million each).
The Evers/Dem plan has the tax cut be retroactive back to January 1, meaning it would likely lead to larger tax refunds this time next year. By contrast, the GOP’s tax cut doesn’t take effect until next year. There is a minor change from what we previously knew about the GOP's plan in that the state’s withholding tables would now be adjusted on January 1st, instead of waiting until July 1. But otherwise, the parameters are the same (targeted relief for married couples making under $155,000, or single filers making $127,400).

As a result of the pushing back of the change in the withholding tables, the LFB says this means that the GOP tax cut will start to pay out in the 2020 Fiscal Year, instead of having it all come in Fiscal Year 2021 as originally projected.
The bills would reduce individual income tax collections by an estimated $338.1 million in tax year 2020 and $350.0 million in tax year 2021. Relative to the tax year 2020 amount, the withholding tables change would result in a revenue reduction of $152.1 million in 2019-20. The balance of the tax year 2020 estimated revenue reduction, $186.0 million, would occur in 2020-21, along with a revenue reduction of $157.5 million related to the tax year 2021 withholding table effect. The total revenue reduction for 2020-21 is estimated at $343.5 million ($186.0 million + $157.5 million), and the reduction for the 2019-21 biennium is estimated at $495.6 million.

The preceding amounts include both direct and indirect effects resulting from the bills. The bills' direct effect is reduced individual income tax liabilities for taxpayers claiming higher standard deductions. The bills' indirect effect results from the interaction between the standard deduction and the state itemized deduction credit. Because the calculation of the credit is based, in part, on the claimant's standard deduction, a higher standard deduction will result in a decrease in tax credit claims. For tax year 2020, itemized deduction credits are estimated to decrease by $55.0 million, from $316.0 million to $261.0 million.
That last part is intriguing, as it is possible that the WisGOP tax cut ends up causing some of the same problems that we’re seeing with the GOP’s Tax Scam at the federal level – where the larger standard deduction makes it a bad choice to take writeoffs for home ownership and donations to charity.

So what happens to the overall budget under each of these tax cuts? Well, there's a sizable hole to fill all budget requests in the next budget under either, but the Dem proposal makes that hole smaller.

The GOP plan also makes the one-year deficit and cut in revenues larger than the Dems' plan. As you can see, both plans require a reduction for some of the big budget requests in year 2, but the GOP's unfunded tax cut leads to a bigger hole in both the short and long term, which is why Evers has spoken out against it.

And Evers is right to do so. Given that economic growth is supposed to be slow, and Wisconsin seems to be especially vulnerable due to the combination of awful weather and numerous layoffs from companies like Shopko, an unfunded tax cut carries a lot of risks, and a high likelihood of a structural budget deficit opening up within 2 years that requires painful budget cuts or tax hikes on more people than corporate manufacturers.

Which is the real reason the GOP's are trying to do it the way that they are - to tie Evers' hands for the future. And it needs to be called out as a the cynical BS as it is.