Wednesday, September 19, 2018

Walker tax gimmicks are far too late, won't help us today, and cost a lot of money

Losing in the polls and after his campaign's racist dog-whistles ended up backfiring, Scott Walker is going to the only “new strategy” he has left, more tax giveaways.
Walker, who has championed holding the line on taxes in past budgets, announced Monday he would create a new tax credit for parents paying for child care and would seek a 50 percent increase in a refundable tax credit for low-income seniors 62 and older — a housing credit that was cut in the most-recent state budget.

The measures accompany a $1,000-per-year credit for college graduates in Wisconsin to help pay off student loans that Walker announced previously. Walker also is proposing again to soften the penalty for married couples receiving a tax credit for the working poor — a measure lawmakers on the Legislature's budget-writing committee rejected….

Walker's increase for a tax credit aimed at helping low-income seniors who own homes would be tied to inflation in future years and would cost $61.8 million in the first year and $72.7 million in the second, according to the Department of Revenue.

Walker also is seeking a new tax credit to cover 20 percent to 35 percent of child care expenses, depending on the income of a parent or guardian. Up to $3,000 of expenses per child may be claimed. ….
The first indication to me that this is nothing but a desperate gimmick is that neither the child care credit or Homestead Credit would go into effect until the 2020 tax year, which means individuals wouldn’t get a dime from these proposals for well over 2 years from now. There’s no immediate relief or plans to immediately deal with the problems going on today, but it makes for a nice talking point for the last 7 weeks of the campaign.

None of Walker’s brand new tax credit ideas had a price tag on the topline numbers of the Wisconsin Department of Revenue’s budget request, but if you dig into the narrative, you can find it. And it’s not a small bit of money.

Let’s start with that child care credit, and recognize the way these credits work today.
A claimant’s allowable expenses generally may not exceed the earned income of the claimant or the claimant’s spouse. Depending on the claimant’s adjusted gross income, the [federal tax] credit may be worth between 20% and 35% of the claimant’s allowable expenses, up to a maximum annual amount of $3,000 if there is one qualifying dependent and up to $6,000 if there are two or more qualifying dependents.

Under current Wisconsin law, individuals may claim an income tax deduction based on their qualifying child and dependent care expenses. The state deduction has the same $3,000 or $6,000 qualifying expenses limitation that applies federally.
Walker’s proposal would
1. Turn that state deduction (of income) into a credit that writes off taxes by a certain amount.
2. Use the federal standard of 20-35% of expenses as the amount of the credit.

The DOR estimates that would triple the amount of write-off for an upper-middle class family with a child in care. Sounds great. What does it cost?
The provision reduces revenue by $52.9 million in fiscal year 2021 and similar amounts annually thereafter.
In other words, this would be $41.3 million less than the $100-per-child bribe Walker and WisGOP pulled this Summer, and do more to deal with the real barrier to work and economic activity that child care costs are. Like many other things with Walker, where was this before you started losing in the polls?

The Homestead Credit expansion is even more of a crass electoral move, as an attempt to get the votes of older people who may be tired of Walker’s act. It’s also an admission of failure, as the Wisconsin Budget Project notes that the Homestead Credit was cut by Walker and WisGOP in the current state budget.
The budget includes several changes to the Homestead Credit, which reduces property taxes for owners and renters with low incomes. The overall effect of the changes to the Homestead Credit will be that individuals with low incomes will pay $10 million more in property taxes during the next two years compared to what they would otherwise pay if no changes were made to the Homestead Credit. The bill ends eligibility for this property tax relief for an estimated 11,400 households who have no earned income.
As mentioned earlier, the Homestead Credit would start with the property tax bills that come out in December 2020, cost $61.8 million in its first year, and eventually grow to $72.7 million.

Another idea deals with preventing a marriage penalty on the Earned Income Tax Credit (EITC) for newly-hitched couples. Right now, the credit phases out at $18,700 for unmarried people, or $24,000 for married couples. In a situation where both individuals make $15,000 (for example), getting married would make both of them ineligible to receive the EITC, as their combined incomes would be $30,000.

So here’s how this “reform” solves that situation.
Allows newly married couples to claim a state EITC equal to the larger of their joint EITC or the amount(s) that they individually claimed in the year prior to marrying. Eligible couples can use this provision for up to three years, allowing time for new households to adjust.
Good idea, and it’s a very small price tag ($1.4 million in 2021, $2.8 mil in 2022, $4.3 mil thereafter). But why only newly-married couples? Why not everyone in these income brackets? And while we’re at it, why not raise the state’s minimum wage past $7.25? Right now, two full-time workers in this situation could make so little that they’d be stuck with the EITC “marriage penalty”, and that seems bad on a lot of levels.

(A quick aside- Isn’t it amazing how Republicans try this “kinder, compassionate” act around election time? It’s almost like they know their past policies haven’t worked out, and that voters don’t buy into RW garbage on the economy. Of course, if the people of this state are stupid enough to keep the Republicans in power after November, Walker and the other WisGOPs will go right back to giving away the state’s resources and treasury to their corporate contributors at the expense of everyone else. )

Let's move on to the “new graduate tax credit”. The idea is that once someone graduates from a Wisconsin-based college or tech school, they get a $1,000 tax credit a year for five years, as long as they stay. And the Wisconsin DOR says the price tag is huge
Based on anticipated graduation and retention rates fo students obtaining post-secondary degrees, the credit will increase costs by approximately, $8M in FY20, $62M in FY21, $114M in FY22, $164 in FY23, $213M in FY24, and $255M in FY25. Given the significant cost in time and money of obtaining a degree, the estimate does not include an adjustment for a significant influx of new graduates.
Wait, so it could be even MORE than this? Given the $2 billion in combined deficits between the General Fund and the Transportation Fund, where are we coming up with the money to pay for this again?

In addition, the new graduate credit wouldn’t affect anyone who graduates college until May 2019, so current graduates from Wisconsin colleges aren’t getting anything out of this, nor are they getting any relief from their student loans, which could have a major effect as to whether they stay in lower-wage Wisconsin, or how much other economic activity they take on.

As you can see, these combined proposals will cost around $178 million for FY 2021. But they hit full force in the 2021-23 budget, and their costs explode to a total that exceeds $531 million.


Add in Foxconn (which is slated to be paying out more than $600 million in that ‘21-‘23 budget) and other Walker tax giveaways, and what kind of public investments are going to be around by 2022-2023? If the roads are a mess, the schools have fallen even further than they already have, and the environment and water quality are even more degraded, it’s going to take a lot more than $1,000 a year to encourage young talent to stick around a state like that.

Lastly, the WEDC out-of-state scam marketing campaign to encourage younger adults to relocate to Wisconsin is back as a budget request. We're already blowing $6.8 million this year on this campaign, and Walker and WEDC want to continue for the next 2 years, at a price tag of $5 million a year.

You know, instead hundreds of millions of dollars in more tax giveaways of money we don't have, I know a better way to make young workers and others want to stay in the state. Booting Governor Dropout out of office, and reinvesting in the schools and quality of life that used to make Wisconsin an attractive place to live in.

Even better, all Wisconsinites will benefit from not having a dopey Dropout Governor and the new investments. This is in stark contrast to Walker's desperate proposals, which are limited to the poll-driven demographics that he’s struggling with, and leaves the rest of us out of the equation. Fair taxation and spending policies that intended to meet the needs of ALL Wisconsinites? What a weird concept!
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Wisconsin gives out massive corporate welfare. Don't tell me we can't fix roads and fund schools

I wanted to take a brief moment to give some numbers on just how much this state gives away in corporate welfare and other tax-reducing giveaways. It illustrates that we likely don't need to raise taxes on everyday Wisconsinites in order to get back to making the investments that used to make Wisconsin a great place to live in.

Let's start with where we were before the Age of Fitzwalkerstan began. In the 2009-11 budget, there was $10 million set aside for jobs and business-related tax credits (which are defined in the budget as an expense vs a lowering of taxes received), and only $688,000 was spent out in Fiscal Year 2011. Part of that is due to the fact that Wisconsin was just coming out of the Great Recession at the time (although we did add more jobs in 2010 than we did in 2016 or 2017).

But contrast it to where we are today, courtesy of the 2017 Annual Fiscal Report.

FY 2016-17, tax credits paid out
Enterprise Zone tax credit $23.4 million
Jobs tax credit $10.575 million
Business Development credit $0.615 million
TOTAL $34.590 MILLION

May I remind you that in the 2016 and 2017 calendar years, Wisconsin had its 2 worst years for jobs in the 2010s, so it's not like those increased payoffs reflect a big boost in payrolls.

And in this current budget, we're shelling out even more in these giveaways in a time of full employment.

2017-19 budget, total tax credits budgeted
Jobs tax credit $33.0 million
Business Development credit $46.25 million
Enterprise zone jobs credit $80.6 million
Research credit $2.1 million
TOTAL $161.95 MILLION

Those numbers don't even include this big-money fiasco.


$2.35 million in write-offs for Foxconn are slated to hit in this Fiscal Year, and then it blows up to $473 million going out the door in the next budget for payments to Foxconn and Fiserv.

Also don't forget the "The Big Giveaway", the Manufacturers and Agriculture Credit that goes overwhelmingly to mega-millionaires, while manufacturing-heavy Wisconsin has lagged the nation when it comes to adding jobs in that industry. But the costs of this giveaway keep rising.


Add in the $200 million a year+ that taking the expanded Medicaid funding from the ACA would save us, and the $1.7 BILLION of General Fund money that's being used to reduce property taxes, and don't tell me we don't have enough money available to fund our schools or fix our roads. We just need to use our money better.
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Tuesday, September 18, 2018

As dairy prices collapse and Wis farms go under, Big Ag and WisGOP make it worse

2018 has been a bad year for dairy farmers in Wisconsin, with 429 dairy farms going under in the first 8 months of the year (the most in 5 years), and less than 8,400 dairy farms left in the state. In reaction that news, Channel 27 in Madison and Channel 3 in the Capitol City had reports yesterday about the tough times that dairy farmers are going through.

The Channel 3 segment featured an interview with Doug Rebout, who has farmed near Janesville for 50 years. Rebout notes that while prices rise and fall, the real problem is when they stay low, as they have over the last few years, which doesn’t allow any ability to build up a cushion for when things get worse.

The collapsing prices of milk have forced many farmers in the country to call it quits. Not being able to pay bills can put a lot of stress on farmers.

"There's good years and bad years," Rebout said. He added the good years are meant to build cash reserves in anticipation of the bad years.
University of Wisconsin, Madison Director of Dairy Policy Analysis Mark Stephenson said he's not surprised at the declining trend.

"Their cash reserves have pretty much been gone. Many of them are having to borrow now to continue milking," Stephenson said. "There's simply too much milk production happening in the world right now relative to demand."

Stephenson also added many of those who are leaving the industry due to falling milk prices, are farmers who are too old to wait for the prices to go up again or put the money toward it, and most just end up retiring altogether.
In the most recent Producer Price Index report, the price for end-stage dairy products (basically what the store pays) dropped by a seasonally adjusted 1.2% from July, and July was 1.2% lower than June. In addition, end-stage prices for dairy products have dropped 3.7% over the last 12 months, and are down nearly 15% from Spring of 2014.


It looks even worse for the near future, as raw milk prices have plummeted, dropping 10.2% in August alone, 19% in the last 12 months, and more than 41% (!) since peaking 4 ½ years ago.


I also noticed a comment from the head of Big Ag in Wisconsin as part of a bigger story on Wisconsin Public Radio regarding the struggles of state dairy farmers.
Mike North, president of the Dairy Business Association, said it's not surprising given the current market and long-term trend toward consolidation in the industry.

"There’s lots of motivating factors in this but it's a trend that's been going on for my entire lifetime," North said.
Oh, the guy from the Dairy Business Association, the front group for the mega-farms and CAFOs, is saying consolidation is an issue. WHY WOULD THAT BE, MIKE?

Hearing North shrug off “consolidation” as a reason behind the shrinking number of farms is sickeningly disingenuous. A huge reason family farmers are hurting and have to consolidate is due to overproduction from CAFOs and other mega-farms, which leads to the plunging milk prices that have gotten worse this year. In addition, mega-farms have a much better ability to weather through those low revenues through economies of scale that smaller farmers do not have.

It’s especially infuriating because you can count on the Dairy Business Association and their corporate buddies at WMC to run ads in the next 7 weeks claiming that “burdensome regulations” on issues such as runoff pollution are what’s hurting Ma and Pa Kettle, and that people should vote for Republicans as a result. In fact, it’s those GOP stooges that are making an already-difficult situation for small farmers much worse by allowing their Big Ag donors to keep pumping out milk to reckless levels, and letting the mega-farms cut corners at the expense of everyone else in rural communities.

And it requires leaders in Wisconsin whose responses to the dairy farm crisis go further than this.


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Monday, September 17, 2018

Oconomowoc Barbie can't measure up to Mandela

Not content with making a lying fool of herself over the weekend by claiming Scott Walker would protect pre-existing conditions (he won't), Lieutenant Governor Rebecca Kleefisch decided to blast her dog whistle today.



In addition to the absurdity of the statement - there were a lot of people there, if Mandela Barnes actually kneeled for the anthem, there would have been pictures everywhere and AM radio wouldn't have had another topic for 2 weeks - the racist overtones from Oconomowoc Barbie were obvious. But she made the fatal error of messing with someone smarter and tougher than her.



Which led Kleefisch to play the "well that's what I heard," copout, complete with other fake-triotism.



And then Barnes put the dimwitted Bubblehead from Waukesha County away with this.



It's got the double-entendre with suburban strip malls/mega stores matched with images of white nationalists in Charlottesville. And it sucks in Menard's, whose right-wing owners secretly funneled $1.5 million a Walker front group in 2012, and got slapped last year with multiple class-action lawsuits for wage theft from their employees. A+ smack, right there.

Barnes also served notice to the WisGOPs that he and the rest of the Evers/Barnes team were onto the game they were trying to play.


And that's why I was all about seeing Mandela Barnes being Lt. Gov during the Dem primary. That's the way you get it done against these lowlifes when they try to pull their two-step jive.
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Evers' plan to restore K-12 funding is a lot. But it's doable, if we choose

Over the weekend, we saw reports about how Democratic candidate for Governor Tony Evers would ask for a big boost in funding for K-12 education. The plan was formally presented today as Evers' day job- as the elected superintendent of the state's Department of Public Instruction.
Evers’ request for $15.4 billion in state support for K-12 schools in 2019-21, up 12.3 percent from the $13.7 billion distributed to school districts in the 2017-19 cycle, is similar to what the Legislature agreed to more than two decades ago, [DPI Spokesman Tom] McCarthy said.

“I think it’s been a long, long, long time coming,” McCarthy said. “You’re seeing it in referenda results around the state, people voting to raise their own taxes to support their schools. That should be a big wake-up for the state to say maybe it’s time for us to not only redesign how we fund our schools but also contribute enough money so local districts don’t have to pick up so much of the dime.”
We already knew that Evers would call for an additional $606 million in special education aids, which I discussed here. General special ed aids to K-12 schools have not been raised since 2011, and districts have had to increasingly use “regular” school aids to pay for these services in recent years, causing an extra budget crunch.

What the article also indicates is that Evers will have the bulk of the rest of the K-12 increases come from Wisconsin’s General School aids formula. That formula gives more resources to poorer districts than richer ones, and also adjust aids for certain high-needs students such as English Language Leaners.

It's a change from Governor Walker’s increases over the last 2 years, which came in the form of per-pupil aids based on enrollment in a district, giving an advantage to growing districts over those with stagnant or declining populations.

The rest of the $1.1 billion Evers proposes in increased aids is intriguing because it is geared toward putting money into the classroom over earmarking it toward property tax relief.
Evers is calling for an increase in total aid of more than $2.6 billion over the current biennium. His proposal also calls for, starting in the second year, eliminating property tax credits that total about $1 billion per year and shifting it to general aid.
The $1 billion removal of K-12-related property taxes are another interesting proposed reform, and ends a Walker Administration shell game that the have played for years. The GOP shell game is done by increasing the amount of General Fund tax dollars (which are paid for with income taxes, sales taxes, corporate taxes and other everyday taxes) that are then used to cut property taxes.

The largest of this is the School Levy credit (which is removed from property tax bills in proportion to the amount of taxes paid) and the First Dollar credit (which goes to all forms of improved property). This was already sizable when Walker took office, but the School Levy credit has been increased by more than $210 million in that time, while the First Dollar credit has been basically flat.


That also helps to answer attacks from Republicans like this one from the Number 2 GOP in the State Assembly.



Sorry little Jimmy, but the money is there, if we want it to be. Not only can those K-12 property tax credits be transferred into the classroom through higher General Aids, but it can also be used to reduce and/or limit the property taxes that are needed to operate schools. Unlike Walker and WisGOP, Evers allows for a higher revenue limit, giving flexibility to decide whether they want to put the extra money in the classroom, or for property tax cuts. Or both, in the case of some districts.
Evers’ proposal also raises the revenue limit by $200 per student in the first year and another $204 in the second year. Limits vary by district but on average are between $10,000 and $11,000 per student.

McCarthy called the overall proposal “property-tax neutral,” but said changes like those could cause districts with higher property wealth to see taxes go up while the opposite would play out in lower property wealth districts.
And while the School Levy and First Dollar credits are the largest part of the Walker/WisGOP shell game on property taxes, they are far from the only shell game played. There’s also a $406 million payment every year that drastically lowered the property tax for the state’s Technical Colleges, money that also never goes into the classroom. And there were items in the 2017-19 budget to remove the state’s Forestry property tax, and lower the personal property tax for businesses, and give $48 million to lottery retailers so there would be more money to cut property taxes with those games.


As you can see in that chart, state taxpayers are shelling out nearly twice as much for these property tax gimmicks in the Age of Fitzwalkerstan, and more than $800 million a year more than we did in 2014.

Let’s also recognize another way we can afford Evers’ proposed increase in K-12 aids – by taking the Medicaid expansion that is part of the Affordable Care Act. The savings by doing so was estimated at $203 million for this year, and that figure seems likely to grow, based on the new budget request from the Wisconsin Department of Health Services. That request shows state taxpayers are projected to pay an additional $496 million for Medicaid under the current system, and a big reason why is that the type of individuals going on Medicaid increasingly have higher costs per patient, particularly as lower-cost families are pushed onto the ACA exchanges under Walker-Care .

So taking the expanded Medicaid funding, even at the reduced 90% that we’d see in 2019, would still allow Wisconsin to save hundreds of millions of dollars a year. In addition to saving money, expanding Medicaid would cover childless adults that make just enough to not be in poverty, but are still very low-income and close to going over the edge. And 1 in 4 Wisconsinites are in these types of perilous situations, as shown by the recent ALICE survey by United Way, and that amount increased by 3% between 2012 and 2016.


Given this reality, it is clear that the messed up priorities of Governor Dropout and his Koched-up GOP lackeys in the Legislature can start to be reversed with a new Governor and new legislators that actually care about the state’s future and uses tax dollars for investments rather than giving kickbacks to rich and corporate donors. And Evers’ running mate summed it up well


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Sunday, September 16, 2018

La Crosse County and Madison aren't buying what WisDOT is trying to sell

With each week, we see more examples of the problems that are the result of Scott Walker and the Wisconsin GOP's refusal to raise enough money to fix the state's roads. Two more of these happened inn different corners of the 608 area code this last week.

The first happened when DOT Secretary Dave Ross spoke to the La Crosse Chamber of Commerce, and found himself unable to defend the current road funding situation in Fitzwalkerstan. Ross admitted to the group that "we need more money for the local road program," and said the way to do so was...not doing bigger projects and rushing the ones that are left?
One way the state could free up more money for local road funding, Ross said, would be to take on fewer “mega projects.” The state is involved in five such projects now, but if the state didn’t take on so many there would be more money to share with counties and municipalities for their roads.

Also, he said, the state could free up money for local road through “efficiencies” and completing projects more quickly.
Local La Crosse County officials weren’t buying it.
“How do you go faster? What’s the incentive, what’s the plan for making those projects go faster?” [La Crosse County Board Chair Tara] Johnson said. “The notion that cutting up the pie differently is going to solve the problem is disappointing.”

“I have to disagree with the secretary on the funding stream issue,” [La Crosse County Highway Commissioner Ron] Chamberlain added. “We haven’t seen inflationary increases to keep up with inflation. Simply reallocating existing funds does not address that issue.”

Yes, there are plenty of alligator scales in La Crosse

And the needs are immediate, as the Scottholes continue to add up. Much of the reason those needs have piled up is because the state has failed to hold up its end of the bargain when it comes to helping to get these local roads fixed.
At one time, General Transportation Aid payments from the state to local governments covered about 30 percent of local road work, but that has been shrinking for years, down to about 18 percent now. Chamberlain maintains that even with a return to the historic 30 percent GTA level, the county needs to do something to address its list of $101 million in identified road and bridge needs.
Which has led La Crosse County to have advisory referenda put to its voters to ask what they would be OK with as a way to pay for these projects. This includes imposing a 0.5% sales tax, a $56 wheel tax, and/or allowing the County's property taxes to rise by 15%. I'd love to hear Walker try to sell to those people that "I've kept your taxes down."

We also found out today that WisDOT is also thinking of passing the buck on another road project - the Badger Interchange where the US 12-18 Beltline reaches Interstate 39-90 south of Madison. The Wisconsin State Journal reported today that WisDOT isn't planning to finish the Interchange for another 4 years (which means you'll still be exiting left to get on the Beltline), and once the project finally does start, WisDOT will shrink the Interstate from 3 lanes to 2 at the exit, and not restore the 3rd lane until traffic from 12-18 merges back on.

Much like we saw in La Crosse County, those WisDOT plans are not being received well.
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.

“It would be a monumental waste of taxpayer dollars to build a brand-new bottleneck,” Thompson said.

Madison-area officials also lambasted the plan. Mayor Paul Soglin called it “crazy” and said it would cost lives.
The exit on the left would now be on the right, but....

Walker's DOT responded by saying that the move was a good way to conserve scarce dollars, and wouldn't cause problems.
The plan would save about $14 million compared to the other alternative being considered, which would expand the interstate to three lanes both directions through the interchange. Both alternatives would eliminate a left-lane exit ramp from northbound I-39/90 to the westbound Beltline, replacing it with a right-lane exit.

[DOT spokesman Christian] Schneider’s statement said the two-lane northbound interstate configuration is not projected to cause traffic bottlenecks at least through 2040.
Much like with other things Christian Schneider says, that's not likely to be the way it'll work out in reality, which means there will be more slowdowns and crashes in this heavily-traveled part of the Interstate.

And by the way, all of these extra issues just to save $14 million? May I remind you that Walker's DOT shifted $134 million this year to upgrade the roads around the Foxconn plant in the SE corner of Wisconsin, while cutting $80 million to $90 million from projects in the rest of the state? Seems like there's an obvious spot we could find the money to maintain the 3 lanes, isn't there?

Again, we keep seeing the results of a Walker Administration and Wisconsin GOP that refuses to admit that taxes are needed to fix the roads and keep things moving. And their failure to deal with the real problems that exist on the ground is making the problems multiply by the year.

Then again, maybe there's a reason Walker doesn't seem too concerned with the issues that keep piling up with road defunding. After all, he doesn't have to deal with them.

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Even outsiders know Walker/Kleefisch are lying about the ACA and pre-existing conditions


Even the folks in DC are paying attention to the latest desperate lies coming out of the Walker campaign. This time, it's about the claim that somehow Walker and WisGOP would still protect Wisconsinites from losing coverage due to pre-existing conditions if the Affordable Care Act's protections were taken away.





With the GOP, always watch what they do, not what they say.

Let me add that it's especially disgusting that the Walker gang are bringing out Lt. Gov Oconomowoc Barbie to try to sneak this lie past voters. Like somehow the fact that Kleefisch got her cancer treatements paid for under the state health care plan that her legislator husband had is remotely relevant to the circumstances of most Wisconsinites. Unlike Wisconsinites who get their coverage through ACA exchanges or other private coverage, Kleefisch never faced the prospect of having to be priced out of services due to insurance companies turning her down.

It's disgusting arrogance and cynicism to use Kleefisch's gender and onetime cancer affliction to hide what the Walkerites want to do. And as a couple of Twitter associates from Wisconsin noted, the word play done by the Walker types on the ACA tells you they have no intent of following through with their pre-election promises.





There's one obvious reason why Walker and Kleefisch are lying so much about what they'd do with health care protections- because being against the ACA is a loser, what they want to do with health care and insurance is a loser, and they are losing in the Governor's election.
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