Here's the REAL State of our State

With tomorrow's State of the State address looming, you can bet there will be plenty of platitudes and stretching of the truth with our governor's speech. And you can equally bet that our state's bought-off media won't do much when it comes to analyzing these statements and calling out the inevitable deceptions and lies. Which is why I'm here.

1. "Wisconsin is Open for Business"- you'll probably hear some kind of variation of this now stomach-turning statement from Walker tomorrow. He'll probably mention as one of the ways this statement is being carried out is due to the state's "being a better place to do business."

The source of those claims? Surveys from such in-touch, unbiased sources as Chief Executive Magazine and Wisconsin Manufacturers and Commerce. And this will be followed by some equally nauseating tip of the cap to "job creators"- a role Scott Walker has never had in life (heck, he's barely been HIRED for a private sector job in his life), but somehow knows a whole lot about.

You know what you won't hear about tomorrow? The Forbes magazine survey that said Wisconsin would have the second-worst job growth through 2016, and ranked 42nd in states to do business in. Nor would you hear about another No. 42 ranking for Wisconsin - in private sector job growth in the first full year of the Walker/WisGOP budget. Heck, even a VP at the failing WEDC admits

“The study came out and we’re 47th [in entrepreneurship]. We suck. We’re bad.”

And if Walker brings up the cost of doing business as a reason we suck, and how perhaps there should be some modifications to help "our job creators," I bring up another interesting stat from last week's QCEW report. Wisconsin had the 2nd-lowest average manufacturing wage in the Midwest in the 2nd Quarter of 2012, barely rose above the rate of inflation the last 12 months, and was in the bottom third of the U.S. Our wages in manufacturing (and many other fields) are plenty low enough, thank you. The real problem in this state are greedy business owners who would rather pay off the Scott Walkers of the world than pay Joe Sixpack another 10 cents an hour, not Joe Sixpack demanding to get paid for his hard work.

2. "We made some hard choices and our budget is balanced." Funny, I don't see Scott Walker's corporate contributors getting over $300 a month pulled out of their paychecks a month like hundreds of thousands of Wisconsin workers did. No, the corporates already have received tax breaks from the first 2 years of Fitzwalkerstan, and stand to collect hundreds of millions more in breaks for the next 2 years. And Republican politicos like Scotty and his legions have a whole lot of wingnut welfare to suck up any lower paycheck that they might have had. Us with real jobs in the real world? Not so much.

As I've mentioned many times, any claim that Walker's current or future budgets were balanced by merely "spending no more than what we took in" is absolute bunk, as evidenced by the $500 million in increased long-term borrowing and $2.2 billion GAAP deficit in year 1 of the Walker budget, as well as the next budget relying on $219 million in estate taxes when Walker's own DOA admits the Wisconsin estate tax will not exist.

3. "Wisconsin's unemployment rate is under 7%, and we are poised for growth and expansion for the next 2 years." Well you can thank President Obama and the Federal Reserve for that one, Scotty. With Walker in attendance, St. Louis Fed Governor Louis Bullard told the Wisconsin Bankers Association last Thursday that he anticipates 3.2% growth for U.S. GDP for each of the next two years. That would be some of the fastest growth in the 3 1/2 years we've been in this recovery, and would chop unemployment down even more (and it went down 0.7% in the U.S. in 2012).

By comparison, Wisconsin barely stayed above water for jobs in the last year, having its unemployment go down by 0.3% while the U.S. dropped 0.7%, and we only gained 12,300 jobs in the last 12 months measured, while the U.S. added 1.9 million. And I can surely bet that we won't hear a mention that the Walker jobs gap is still over 90,000 jobs in the two years he's been in office.

4. "I plan to work in a bipartisan way, and I work to improve the lives of all Wisconsinites." We'll let One Wisconsin Now and Scot Ross take this one.

“Two years ago we got the same song and dance from Gov. Walker and the Republican legislative majorities, but they put raw politics and power grabs before all else at very step of the way. Their actions offer precious little reason to believe them this time," [Ross said.]

Ross noted that in his inaugural address, Gov. Walker promised to be a leader for “all of the people in this state of Wisconsin” and vowed to focus on jobs, improve public education and protect the state’s natural resources.

Yet, mere days later, Walker was caught on tape revealing his political strategy to “divide and conquer” to Beloit billionaire Diane Hendricks as he and the GOP legislature stripped 175,000 state and local employees of their rights in the workplace. They followed up with enacting the largest cuts to public education in state history in his biennial budget and narrowly failing in efforts to rewrite state environmental regulations and clean air and water protections on behalf of an out-of-state mining company wanting to develop a pit mine in an environmentally sensitive area of Northern Wisconsin.

But you can bet our uncritical media will shrug when our governor says obvious bullshit about wanting to work with the Democrats tomorrow. And if the Dems are smart, they'll take the advice of Scotty's "cousin" George.



I'm seeing a lot of the 2005 Bush in the 2013 Scott Walker, and much like the 2005 Bush, I'm done listening to any speech our state's executive is going to give. I'm going to watch the 3-0 Badgers as they go to Bloomington to take on the top 5 Hoosiers instead, and now that I've already given you the real State of the State speech, I'd recommend you watch Bucky as well.

Medicaid's balanced- by throwing lives out of balance

If you're wondering how the Walker Administration could consider balancing its debt and deficit-ridden budget with a possible income tax cut, take a look at how the Wisconsin Department of Health Services allegedly balanced its budget, and the damage that was done in the process.

On a classic Friday news dump, DHS Secretary Dennis Smith informed the Legislature's Joint Finance Committee at the end of December that the projected Medicaid deficit for the state was going to disappear. And the way they did it was by tossing the working poor off of BadgerCare, and making those who stayed pay more out of pocket.

On July 1 [2012], non-disabled and non-pregnant adults with incomes at or above 133% of the federal poverty level (FPL) became subject to the same premium amounts that will be required of individuals eligible for federal tax credit subsidies through health insurance exchanges beginning January 2014. The premiums are based on a percentage of a family's income based on a sliding scale. Individuals that do not pay a premium are allowed a grace period to pay the premium, before they are subject to a 12-month restrictive re-enrollment period.

The Department has developed tracking tools to measure the impact of the premiums on enrollment. A total of 11,682 individuals or 23% of 48,835 individuals subject to premiums did not pay the required premiums in July, August, or September, and were disenrolled after the grace period was exhausted.

And of the 3,140 individuals that were on BadgerCare that made over 200% of the poverty level or more, 53% dropped off of BadgerCare. Now you can hope that this was because these individuals found a better job that paid health care benefits, but given the bad job performance in the state in the age of Fitzwalkerstan, I'd say it's more likely they ended up not getting insured whatsoever, and chose to spend their limited money on other necessities.

Sure, it got the Medicaid budget into balance (well, until Logisticare adds another $40 million to the cost when it's rebid in a month), but how many people got left out to do so. And for what? So insurance companies could get more clients and this administration could brag about "fiscal responsibility" (and they're still failing miserably). Hope you enjoyed Wisconsin being among the national leaders for having people be insured, because we're going to fall into mediocrity very soon under these guys with these policies.

And another way the DHS got the budget into balance is by cutting payments to providers of Medicaid-related services. This resulted in the Eau Claire-area's Community Health Partners (CHP) laying off over 350 employees at the end of this year, and news dropped yesterday that CHP has fallen into receivership and will be liquidating its assets. Now the state claims they have found a CHP replacement for a similar cost, but what happens to the workers that were at CHP? Well, they end up having to get dislocated worker assistance from the Wisconsin DWD at taxpayer expense. So didn't save all that much in Western Wisconsin, and got a whole lotta unnecessary disruption.

This governor is stilll clinging to the delusional thought that he's some kind of contender for national GOP office, so you can bet he'll try some kind of "innovative" program that allegedly controls Medicaid costs while keeping taxes low in this upcoming budget. And for the "GOP bubble world" crowd, it'll probably also involve tweaking President Obama and done in a way to try to keep Obamacare from being effective or cost-efficient. Citizen Action of Wisconsin and Communtiy Advocates think one of the ways Walker's DHS may try to do this is by not going along with Obamcare's offer of increased federal funding for increased availability of Medicaid. They sent out a relase yesterday reminding the Governor that he could be screwing Wisconsin businesses if he chooses such a short-sighted, ideological policy.

On a Media Call Friday morning health advocates discussed new research that shows that Wisconsin businesses will pay $120 million more in federal taxes if Governor Scott Walker rejects increased federal Medicaid money offered by the Affordable Care Act, the national health care reform law.

The reason for this huge tax differential is that under the terms of the Affordable Care Act employers with over 50 employees who do not offer adequate health insurance pay an additional tax penalty if their employees enroll in the new health exchanges. (aka the "freeloader tax") They do not pay a tax penalty if employees enroll in Medicaid (BadgerCare).

“Another important reason the Governor and the Legislature should accept hundreds of millions in federal money to fill the gaps in BadgerCare is to protect Wisconsin employers from a massive federal tax increase,” said David Riemer, Senior Fellow at Community Advocates Public Policy Institute, and the author of the analysis.

We've already seen a hint of this with Walker's pose of refusing to set up a state-run Obamacare exchange and leaving it up to the feds to do it. Do not be surprised if he tries a move with Medicaid that would be similar to the costly, unproductive decision to turn down stimulus money for high-speed rail. Turning down the train money is still a move that we are still paying for, as the DWD release that mentioned assistance for CHP workers also said former Talgo workers would receive dislocated worker assistance (turning down the train is truly the "gift" that we keep having to pay for).

Much like with the train, the DHS's messing with Wisconsin's previously-strong health care services will add nothing to the state's quality of life, and probably cost the state a whole lot of economic activity due to lost jobs and lost disposable income.

Priebus- "Walker leading the way"....to permanent wreckage

Caught this little tweet from AP writer Scott Bauer, who ran into RNC Chair Reince Priebus at Monday's inauguration of the Wisconsin State Assembly (Priebus was in town to watch fellow shameless scumbag SE Wisconsin Republican Robin Vos be sworn in as Assembly Speaker).

@sbauerAP- "RNC chair Reince Priebus says Wis. Gov. Scott Walker "leading the way" across country on making case for "fiscal responsibility."

Fiscal responsibility, eh? You mean as exhibited in the state's CAFR, and reiterated in yesterday's report from the Legislative Audit Bureau? LAB, take it away!

As reported on a GAAP basis, and as shown on page 44 of the CAFR, the General Fund deficit decreased from $2.9 billion as of June 30, 2011, to $2.2 billion as of June 30, 2012. In its Management Discussion and Analysis on page 29, DOA attributes this change primarily to an increase of $129.2 million in General Fund revenues, a decrease of $498.7 million in expenditures, and a decrease of $133.3 million in other financing sources and uses, such as transfers to other funds. In FY 2011-12, the State also paid two previously reported liabilities, including $233.7 million to settle transfers previously made from the Injured Patients and Families Compensation Fund, and $59.9 million to the State of Minnesota for individual income tax reciprocity.

The CAFR also reports information on the State’s long-term debt. As shown on page 110, the State’s long-term debt issued for general government operations was $11.0 billion as of June 30, 2012, which is an increase of $453.3 million since June 30, 2011.

Maybe you give a golf clap for having a GAAP deficit of ONLY $2.2 billion in one year, but given that a lot of that decrease in expenditures was taking dollars out of state workers' pockets and that some of those revenues were nearly $50 million of foreclosure funds and Medicaid bonus money that went to fill budget holes instead of go to services, it's not that impressive.

The raising of long-term debt is also alarming, bumping up the state general fund debt by another 4.5% in 1 fiscal year, and refinancings that require hundreds of millions of dollars in added debt payments in the coming years. Somehow that doesn't seem to square with the party that constantly whines about "Obama's debt" and how "they fear for their kids' and grandkids' futures." Another classic example of the GOP's Number 1 rule- "our rules don't apply to our guys."

And now Walker is going to try to cut Wisconsin income taxes in the next budget, to go along with corporate tax cuts that are slated to massively expand in the next couple of years. Because when you're 42nd in job growth, you don't try the same failed, trickle-down strategy! Oh no. You take that failed strategy right to the next level!

But hey, those policies are all the more better to cause a huge budget deficit and FUBARing of services so the 2015 successor to Walker can't clean it up, and it'll clear the way for more privatization to Walker/WisGOP donors and other connected folks. Which is the REAL goal of these failed, unbalanced budgetary plans of Walker and company (along with getting a few more donations off of those tax breaks, which is a nice side effect).

"Fiscal responsibility"? Only in GOP bubble world are Walker's higher debt and destroying of needed services considered "fiscally responsible." Reince sounds as stupid as he did when he stumbled onto the set with Chris Matthews this summer.

Steroid era- stop denying it existed

Today the Baseball Writers Association of America refused to pick any players to be inducted into the Baseball Hall of Fame. Most notably, not one player widely suspected of using performance-enhancing drugs finished in the top 6 for votes, and all-time home run leader Barry Bonds and 300-game winner Roger Clemens didn't even appear on 40% of the ballots, let alone the 75% needed for induction.

It is obvious that the baseball writers do not want the Hall of Fame to be associated with the steroid era of the late '80s through the early 2000s. And it led me to think back to my recent reading of Chris Hayes' The Twilight of the Elites - America after Meritocracy, where Hayes discusses baseball's steroid era, and how it was symptomatic of where the game and this country was back then, and the mess that it's in today as a result. After discussing how trainers like Brian McNamee and Kirk Radomski pumped up their clients to the point that they earned hundreds of millions of dollars in free agent contracts, Hayes switches, and talks about how steroids affected the average player.

...Kelly Wunsch was a middle reliever for the Chicago White Sox and, somewhat unusually for a realtively new player like himself, the team's union representative. Wunsch was a member of what might be called baseball's forgotten middle class. While stars get the most attention, the majority of a major league roster is made up of players who will never make an all-star game. And though they're clearly well compensated, they tend to live their lives in a constant state of fear that their skills will diminish or they won't make the cut...

Wunsch recalls that during his early years in the league, his steroid suspicions were largely focused on pitchers of comparable skill. "The people...that organizations are holding up as comparable to me in contract talks: Joe Blow makes this much money and you're 6 mph less than him, same number of appearances, and smaller number of strikeouts. And when you begin to get a strong suspicion about those guys, it begins to dig at you."

So in the spring of 2003, as the first round of diagnostic testing was about to begin, Wunsch started discussing the drug testing policy with fellow players, and they happened upon a novel strategy. According to the rules set forth by the union and management, if a player refused to actually take the test, it would count as testing positive. Wunsch and a few teammates who weren't on performance-enhancing drugs realized that if enough of them refused the test, they'd push up the nuber of positive results and greatly increase the likelihodd that the 5 percent threshold would be met and automatically kick in a testing regime.

Not surprisingly, the players' union opposed this idea, figuring that the owners would use the news of positive tests against them. But let's be fair, the owners weren't fans of positive steroid tests either, as they wouldn't want the game to fall into disrepute (today's refusal to admit steroid-accused players into the Hall of Fame backs up how this era still lingers over the game). As Hayes goes on to note, owners were more than happy to allow drugs to be part of the game, as long as the money kept rolling in to see the roiders.

The report on steroids commissioned by Major Leage Baseball, produced by former senator George Mitchell, concluded..."There is validity to the assertion by the Players Association that, prior to 2002, the owners did not push hard for mandatory random drug testing because they were much more concerned about the serious economic issues facing baseball."

A 2003 postseason scouting assessment of Dodgers star pitcher Kevin Brown speculated about "what kind of mediciation he takes" and noted, "Steroids suspected by GM." Brown was never, apparently, confronted about this suspicion and was later traded to the Yankess, which continued to pay his annual salary of $15.7 million. One imagines there were quite a few similar memos written during that time.

The reason for the laissez-faire approach to drug use is blindingly clear: the steroids era was a lucrative time for baseball. In 2007, as the widespread steroid use was coming to the surface, MLB broke its attendance record for the fourth consecutive season. That same year, revenue for baseball's thirty teams went up by 7.7 percent, to $5.5 billion. In 2007, the average team was worth $472 million, up a whopping 143 percent since 1998...Like the peak years of the housing boom, the players and owners were all making far too much money to trouble themselves with the massive fraud that was driving the profits.

And as much as many writers try to ignore that reality, I still am reminded of this Sports Illustrated cover from the end of 1998, which still sits at my house as a wicked reminder of the era.

And outside of the emergence of Babe Ruth (in another asterisk time for the game- before players of color were allowed), no hitter has ever been more unstoppable than this guy was in the steroid era.

Look, a lot of guys were on roids in the early 2000s. None of them hit 73 home runs in a year or came close to OPS's of 1.378, 1.381 and 1.421 (Ryan Braun was at .994 in his 2011 MVP season and .986 last year, for comparison). No one was a better player of his time period, and to deny him the Hall of Fame because he was among a group of players that used PED's is TO DENY THE STEROID ERA EVER HAPPENED. I'm sorry writers, but it did happen, and it is a part of the legacy of the game whether we like it or not. I think what Barry Bonds and Roger Clemens and Mike Piazza and numerous others did in that time period was scummy and screwed over some players, but it was also legal under the rules of the time, and they were ingesting nothing different than a large percentage of their contemporaries did.

That doesn't change the fact that I can't stand Barry Bonds and I still recognize Hank Aaron as the all-time home run king, because steroids changed the game and blew stats out beyond recognition, and has put a large amount of players of that time under serious suspicion and disdain. But ignoring the steroid era as a part of the game is absurd, and a denial of existence. It's much like ignoring that banks defrauded homeowners and bank regulators and played a major role in bringing the economy to its knees, and we need to acknowledge it happened. There was another reminder of the frauds of the past this week when Bank of America agreed to pay an $11.6 billion settlement as part of the shady practices of Countrywide Finanical. And no matter how much the Rick Santellis of the world try to say otherwise, individuals were lied to and bank ponzi schemes and idiotc trades were a major part of the mortgage scam that led to millions of job losses and trillions in lost stock and home value.

Much like with a lot of things in this country, be it the steroid era, or the mortgage meltdown, or mass killings with guns, the bigger question isn't "What do we think about this bad thing?" The real questions are "WHAT DID WE LEARN FROM IT?" and "What kind of people would pull shenaningans like this, and why?" Americans kinda suck at that part, be it baseball writers or policymakers, and we need to do a whole lot better in finding a way forward. If we don't, we'll find ourselves falling back into the hole created by the past, and never be able to get out of the hole and become truly healthy.

Context on jobs matters....and shows the #Walkerfail

I'd been waiting for 2012's 2nd Quarterly Census of Employment and Wages. This report is also known as Scott Walker's favorite jobs metric, and the one Scotty was using when he got busted by the Journal-Sentinel for trying to spin his way into making the jobs numbers look good.

Well, the report finally gave the context I was looking for in the Walker Administration's job claims, and it showed Walker continuing to fail. Even the Walker-endorsing Journal-Sentinel jumped on the report, with headlines blaring about Wisconsin being 42nd in private sector job creation during the first full year of the Walker/WisGOP budget.

Not surprisingly, Walker tried to hide this type of apples-to-apples comparison when he had his DWD release these figures last month, because when you put Wisconsin up against all of its Midwestern neighbors, we fall woefully short. I'll even stick with private sector job growth, because that's how Walker insists he should be judged (even if that doesn't give the full story), and I'll use the stats from BLS's handy interactive map.

Private sector jobs, Jun 2011- Jun 2012
Ind. +2.9%
Mich +2.9%
Ohio +2.6%
Iowa +2.0%
U.S. +1.8%
Minn +1.8%
Ill. +1.6%
Wis. +1.5%

And that 1.5% increase is down from the 1.7% increase in private sector jobs that we had this time a year ago. June 2011 also marked the end of the Doyle-Dem budget, and this report illustrates the first year of the Walker/WisGOP budget. In fact, if you look at the last 2 years of year-over-year job performance as measured by the QCEW, you can see the number peaked at 1.9% in March 2011- the same month that Act 10 passed the state Legislature.

And the wage story isn't much better, as Wisconsin ranks 31st in wage growth in the U.S.. Although we at least made like the Packers and beat the Mud Ducks.

Change in avg weekly wage, Jun 2011-Jun 2012
Ohio +2.8%
Iowa +2.5%
Ind. +1.9%
Mich +1.7%
Ill. +1.6%
Wis. +1.4%
U.S. +1.3%
Minn +1.1%

The wage story is even more scarier when you look at how Wisconsin's figures compare to the previous quarter- it dropped from $826 a week in Q1 2012 to $778, a drop of 5.8% in 3 months. Now, some of that is due to Summer jobs leading to more part-time work and driving the average wage down (see, unlike Scotty, I'll look past the "raw data" for context). But when you look at the time since Wisconsin bottomed out from the recession, the trend is not Scotty's friend, with the two worst marks in wage growth since the start of 2010 have been in the last 9 months.

So no, it ain't working. And these figures don't even count the mediocre July, August and September job reports, where Wisconsin gained a total of 800 private sector jobs while the nation was gaining over 140,000 a month. Expect more bad numbers in the months to come, and to have that reflected in a rougher-than-portrayed budget picture.

The fact that the J-S would go ahead with the "pants on fire" rating and give this huge headline on Walker's failures also makes me wonder something else. Maybe JournalComm knows how badly it's hurt that paper to carry the water of Walker and the Bradley Foundation/MMAC oligarchy the last several years, and they're trying to escape the inevitable crumbling that is going to happen to this Administration in the next 2 years. If they do it soon enough, they're hoping people will forget what the allowed to slip by (not unlike critics of the Iraq War who only started speaking up around 2005 and 2006).

Sorry guys, I'm not forgetting what you at JournalComm have condoned and allowed to happen to this state. But if you're willing to finally hold Scott Walker and WisGOP accountable for their awful record on jobs, the economy, and the budget, then I say "Welcome to the party!"

Circus is back to town!

 And the fun begins again with a new session of the Legislature in Fitzwalkerstan. Pathetically, the media is trying to go along with Gov. Walker's claims of "moderation" and bipartsanship in a classic case of how our media helps to allow the  Overton Window gets moved to the right, where radical, failed policies gets to be considered the new "normal."

  Fortunately, real Dems and lefties aren't being fooled by this act, nor are they going to fall for the fake version of "bipartisanship," which is this day far too often means "give legitimacy to moronic ideas and accept 'both sides do it' false equivalences." With that in mind, I loved reading Assembly Dem leader Peter Barca's Inauguration Day Message.

Throughout the fall campaigns, citizens of Wisconsin repeatedly heard the word bipartisanship - spoken as a promise. And it is important that all of us here use and define that word the same way as all other Wisconsinites outside the Capitol.

Here is what bipartisanship is:

Bipartisanship is working together with one another and the public from the start – not just a final vote tally.

Bipartisanship is wide consensus – not picking up a stray vote or two from the other side.

Bipartisanship is cooperation on thorny problems – not just passing easy, ceremonial bills on a unanimous vote.

Bipartisanship is not one side going along with the other side’s extreme ideas. Limiting public input to simply tweaking extreme proposals is not bipartisanship. Today needs to mark the end of extremism dominating Wisconsin politics.

The people of Wisconsin have the right to expect they will get what they were promised by each of us as candidates at their door. 

This session we must bury the partisan hatchet that chopped away at our Wisconsin values and legislative traditions and poisoned Wisconsin politics. We must end the extremism that resulted in valuable legislation being ignored and rushed legislation tied up in court.

And given that the GOP leaders in both houses of the Legislature are promising to start the session by taking up the divisive, corporately-written mining bill, I'm not betting these guys are going to play fairly or decently, and they deserve no quarter from the Dems, and they should be given no cover.

  Scot Ross at One Wisconsin Now equally called out Walker, and also thinks that actions speak louder than empty words.

"Two years ago we got the same song and dance from Gov. Walker and the Republican legislative majorities, but they put raw politics and power grabs before all else at very step of the way." [Ross said] "Their actions offer precious little reason to believe them this time.”

Ross noted that in his inaugural address, Gov. Walker promised to be a leader for “all of the people in this state of Wisconsin” and vowed to focus on jobs, improve public education and protect the state’s natural resources.

Yet, mere days later, Walker was caught on tape revealing his political strategy to “divide and conquer” to Beloit billionaire Diane Hendricks as he and the GOP legislature stripped 175,000 state and local employees of their rights in the workplace. They followed up with enacting the largest cuts to public education in state history in his biennial budget and narrowly failing in efforts to rewrite state environmental regulations and clean air and water protections on behalf of an out-of-state mining company wanting to develop a pit mine in an environmentally sensitive area of Northern Wisconsin.

On his signature promise, creating 250,000 jobs over four years, Gov. Walker has made precious little progress. While the national economy staged a recovery, Wisconsin under Walker ranked as one of the worst states in the nation for new job creation adding a mere 37,000 (hey Scot, it's not even that good under most measures). In addition, Gov. Walker and Republican’s signature jobs initiative, creation of a quasi-private Wisconsin Economic Development Corporation (WEDC), has been mired in scandal and missteps, violating guidelines in issuing grants and loans, losing track of millions in state taxpayer funded loans and even failing to follow basic business practices like conducting a comprehensive audit...

"The record of the last two years clearly shows that Gov. Walker, his administration and lapdog legislative majorities are either not telling the truth or not competent enough to deliver on their promises. Neither alternative suggest their latest promises are anything but empty,” concluded Ross.

At some point, actions and results have to win out over spin, lies and propaganda, and it's our job to make sure that happens. And not to be nice about it.

Wisconsin budget bunko- 2013 version

As the Legislature gets back into session, you can bet the Wisconsin GOP will try to insist the state's budget is in balance and that there is room for tax cuts (incoming Assembly Speaker Robin Vos hinted as much over the past month). Well the real numbers tell otherwise - we have a budget deficit now and it's slated to grow in the next few years, with recent events confirming that trend.

The first problem comes from bills passed in the last GOP-run Legislative session- corporate tax cuts which will explode in cost for the coming years. Remarkably, the Walker DOA budget request projects corporate taxes to go UP during the 2013-2015 budget, despite these cuts. It says corporate tax revenues will rise from $865 million in FY2013 to $897.6 million in FY2014 and $887.1 million in FY2015. The Wisconsin Budget Project estimates the cost of 2013-2015 tax cuts at $439 million, with much of that coming from the corporate tax side, and they  described some of the giveaways that will increase over the next two years.

• The start of a nearly total phase-out of income taxes for manufacturers and agricultural producers, $102.2 million over two years. 

         This new credit is based on income derived from manufacturing or agricultural   property, and can be claimed through the individual or corporate income tax. It phases in over four years -- starting at 1.9% of business income in 2013, and gradually increasing to 7.5% in 2016 and beyond. 

        The corporate income tax rate in Wisconsin is 7.9%, so when the credit is fully phased in, businesses receiving the credit would be paying an effective income tax rate of 0.4% on income that qualifies for the credit. A business with $1 million in taxable income could see its taxes drop from $79,000 to $4,000.

         When the credit is fully phased in, businesses will be paying an estimated $129 million less in income tax each year. The cumulative ten-year cost of the credit is $874.5 million. The credit does not require businesses to create any jobs. In fact, even businesses that initiate massive worker layoffs could qualify for this tax break.

• A deduction for child care expenses, $9.2 million over two years

       In tax year 2012, individuals can deduct up to $3,000 in child and dependent care expenses, up from a maximum of $1,500 in 2011. For tax year 2013, the maximum deduction rises to $4,500. It was originally enacted as part of the 2007-09 budget, but the phase-in was later postponed.

• Loosening restrictions on investments that qualify for angel investment credits, $9.1 million over two years

       A law that went into effect in April 2012 made changes to the parameters for businesses that investors may invest in to get this income tax credit, and relaxed rules on how long investors must hold investments to qualify for the credit.  

• A credit for expanding a dairy farm, $4.4 million over two years

      Corporations who expand or modernize a dairy farm are eligible to receive a credit for up to 10% of the cost of the activities. This credit was originally set to sunset at the end of 2011, but legislation was passed that extended the credit through the end of 2016. So THAT'S why all those huge farms had "Thanks Walker" signs along the interstate.

•  Allowing corporations located in multiple states to shift prior losses to the state with the most favorable tax treatment, $3.8 million over two years

      Multi-state corporations can shift businesses losses incurred before 2009 to other states. Starting with tax years beginning in 2012, a corporation can use up to 5% of its business loss to offset its total income, for the next 20 years.

There are a few items that would help actual people, like the expansion of  a write-off for people who pay for their health insurance premiums, and breaks for businesses that hire veterans and produce biofuels. But on the whole, these are tax cuts that will do little to nothing for Wisconsin small businesses, and will cost the state revenues that could be built into infrastructure and services that generate economic development.

  Wisconsin corporate taxes are already off to a slow start in FY2013, down 8.5% for the first 5 months of the new fiscal year, while the Walker DOA only projects a 4.6% drop in their budget. A 4% shortfall in corporate taxes is about $35 million a year, not a lot in the big picture, but it also doesn't include the coming tax breaks that'll make that shortfall bigger.

   The Walker DOA also built its budger request under another wrong assumption- that all aspects of the fiscal cliff would hit, and that Wisconsin's estate tax would fully kick in for 2013. Well the deal that was struck in Congress during New Year's takes that revenue out of the equation, as an article from the Wisconsin Reporter (!) explained

...Congress did, indeed, pass this week a deal to avert major tax increases for most Americans and spending cuts economists said would threaten the economic recovery. 

In doing so, Congress kept about $219 million from coming to Wisconsin in the form of estate taxes, money the Department of Administration was counting on in projecting that tax revenues would grow by $1.5 billion over the coming biennium. 

Already, however, the DOA said state agencies’ requests for funding exceed expected revenue for the biennium by $171.4 million, with the $219 million factored into the equation.

And the Wisconsin DOA concurred, saying the state estate tax is gone under the deal.   So strike another $219 million from that "balanced budget." The other part of the fiscal deal Congress struck put off the mandatory spending cuts from the feds for another 2 months, but they are still looming for March. The DOA estimated the effect of this cut as follows: 

The fiscal tightening – also known as the fiscal cliff – compels a sequestration of funding streams that Wisconsin receives from the federal government, absent some other agreement. Medicaid and many other programs were exempted from thes equestration order. Initial reports indicate that Wisconsin has about $94 million at stake in fiscal year 2013-14 with the sequestration agreement. About one-half of this reduction would affect federal education transfers to Wisconsin and, therefore, would not be felt until next fall's school year and after passage of the 2015-17 Biennial Budget.

 I assume the DOA means the 2013-15 budget for school aids, but regardless, that's another $188 million you take away from the revenue estimates, though I'll take $16 million away from that for the 2 months that are funded through March. So combine the restoration of the estate tax credit and the drop in corporate taxes and the threats from Congress cutting state aids and you get.

  Estate tax gone - $219 million
  Sequestration - $172 million
  Corporate taxes down-  $70 million
   Total revenue shortfall for biennium- $461 million

  I'm not even figuring in the fact that revenue growth has slowed for the first 5 months of this fiscal year, which projects to revenue figures that would be below the DOA's estimates. I am also going to go with the DOA's assumption that the U.S. economy will continue to grow at its present pace - around 2 million jobs being added a year and growth of 1.8-2.8 % a year. If Baggers in Congress decide to crash the economy due to the debt ceiling, this obviously goes out the window. So ironically, for the Wisconsin GOP to claim a decent fiscal picture, they have to hope the Congressional GOP is prevented from screwing things up by installing austerity that would drive the economy in recession.

   Needless to say, there's a whole lot of Fantasyland in WisGOP's claims of a balanced budget, and we'd better be ready to state these facts as the new legislative session begins, with the Republicans sure to be trying to continue inflicting destructive policies and tax breaks that would send the Wisconsin budget past the point of repair.