Thursday, March 30, 2017

Hey WisDems, stop obsessing about money!

I saw that Tim Cullen dropped out of being a candidate for Governor in 2018. It's too bad, because I like Tim and thought Ringside Seat was a very good read.

But Cullen's argument that he couldn't raise enough money, and that's why he's dropping out? That's a pathetic excuse, and whatever consultant hotshot told him that should be fired from all Dem campaigns.

Any Dem lucky enough to win the Dem primary in 2018 will have plenty of money to run against Scott Walker, because there are thousands of Wisconsinites waiting to rally around a candidate and donate. Sure, Walker will have a ton of money (unless he becomes toxic), but any Dem will have enough to compete.

So memo to DPW hacks and prospective candidates- STOP CHASING MONEY! It'll be there, so worry about making Walker be disqualified for a third term.

Tuesday, March 28, 2017

Oops, big Walker talk on education won't come true

A couple of stories in the news today illustrate that some of the big education-based initiatives for Governor Scott Walker in the 2017-19 work a lot better as public poses than real-life policy. Especially given that it is unlikely that there won’t be the funds available to back up these proposals.

One of the ideas mentioned is the UW System’s new Flexible Option program. The idea is that these programs would increase the state’s talent base by allowing busy Wisconsinites to take higher education programs at home and at their own pace, and remove barriers for some prospective students. But there’s a problem- while Governor Walker wants to have Flex Option offerings be increased by 50 percent in the next 3 years, programs such as teacher certification haven’t been set up yet. And Walker’s budget doesn’t provide any extra money to set those programs up.
“I did not see funds earmarked for developing new programs,” said Laura Pedrick, executive director of online programs at UW-Milwaukee. “There would definitely need to be development funds.”…

Flexible Option programs are developed through a kind of “backwards design, she said. That involves looking at the student learning outcomes of traditional programs and identifying competency sets. Students then can, if able, demonstrate mastery of those competencies, Pedrick said. This is typically done through projects, she said. For the bachelor’s degree in nursing, for example, students might be asked to write a quality improvement plan for some aspect of patient care, she said.

[UW Colleges and Extension Chancellor Cathy] Sandeen and Pedrick both raised questions about a program to credential certified nursing assistants as registered nurses, because of hands-on patient care aspects of RN training….

Even if developing Flexible Option programs for registered nurses and K-12 teachers were feasible, concern about cost and timeframe for those or other programs remain.

“There is an issue with that kind of growth rate,” said Aaron Brower, provost at UW-Extension. “It takes $1 million and a year to develop a new program. And without additional money attached, we could only mount one at a time.”
So in other words, Walker is talking big about what the Flex Option may be able to do, but as usual, isn’t putting money where his mouth is.

The same problem exists in regards to Walker’s plans to add $649 million in spending to public schools over the next 2 years. First of all, we already know that $30 million of that is based on using magic savings from having the state go to a self-insurance plan for health insurance for self-insurance (I call the savings “magic” because that $30 million never existed in the budget in the first place- it’s assumed to lapse). Not only is it very questionable that a self-insurance model will be approved by the Legislature’s Joint Finance Committee, but the savings are far from guaranteed.

The remaining $619 million is also greatly at risk, partly because some members of WisGOP legislative leadership want to assume that there will be no K-12 increase whatsoever when it comes to figuring out the budget.
The proposed $649 million increase in K-12 funding for public schools is “under threat,” public school advocates say, because of a plan some lawmakers on the budget-writing committee are considering to build the next state spending plan from current funding levels instead of using Walker’s proposals as a starting point.

“At stake are the substantial increases Gov. Walker has proposed for public schools, including increases in per pupil aid, aid targeted specifically to rural schools and funding from school-based mental health services, to name a few,” Wisconsin Association of School Boards (WASB) lobbyist Dan Rossmiller wrote in a blog post aimed at school board members. “Working from the base budget rather than Gov. Walker’s proposal would erase the proposed funding increases for public schools as a starting point for budget discussions. This would put public schools back to square one in the budget debate.”…

Assembly Speaker Robin Vos, R-Rochester, earlier this month expressed support for crafting a budget based on current funding levels, but Senate Education Committee chairman and Joint Finance Committee member Luther Olsen, R-Ripon, said Monday that Senate Republicans support working from the governor’s proposals.

“I honestly think it’s a slap in the face to say to the governor, ‘We’re not going to work from your budget,’ ” Olsen said.
However, given that many of the governor’s budget assumptions are sketchy and hopeful (at best), maybe it makes sense for us to figure out how much money we MAY have available, and then make our allocation decisions from there? For example, Vos has mentioned finding a more stable source for Transportation funding- would using some of that $619 million that's designated for per-pupil aid be a source for that, and split it 50-50 with highways, for example?

And let’s not forget a “pessimistic” scenario that the Legislative Fiscal Bureau floated in an otherwise rosy revenue picture that it produced in January, which enabled Walker to put in all of these campaign talking points budget giveaways in the first place.
Under the pessimistic scenario, the January, 2017, forecast assigns a 20% probability of a two-quarter economic contraction in the first half of 2018 due to strained trade relations with China and Mexico. U.S. exports decline more than imports, and economic conditions worsen across the world. The U.S. dollar increases in value, further undermining export competitiveness. U.S. businesses react by postponing capital investments. The stock market declines markedly, along with consumer confidence. Meanwhile, productivity continues to decline, and thus modest demand-side growth causes inflationary pressure. OPEC oil production cuts (which are not offset by increased domestic production) and inflation prompts the Federal Reserve to raise interest rates, further constricting growth. Under this scenario, disagreements between the new Trump administration and Congress, as well as a federal government hiring freeze, prevent stimulus spending. As a result, consumer and business confidence deteriorates, leading to declines in business investment, meager growth in consumer spending, and a fall in housing starts. Real GDP growth is estimated at 1.3% in 2017, -1.1% in 2018, and 1.9% in 2019. These growth rates are lower than the baseline forecast by 1.0% in 2017, 3.7% in 2018, and 0.4% in 2019.
Well, consumer confidence was stupidly high earlier this month (at 2000 levels, as we saw today), and oil prices have retreated a bit recently, so maybe that part of the equation hasn’t happened. But “disagreements between the new Trump Administration and Congress, as well as a federal hiring freeze,”? Yep, we’re already there. And do you think consumer confidence will stay high after last week’s failure in health care, and this Trump Bubble in the stock market inevitably pops?

If you start putting the pieces of this “house of cards” budget from Scott Walker together, you can see they don’t fit. And that’s why I wouldn’t count on little if any of those increases to either K-12 public schools or the UW to actually work out when the budget gets finalized…whenever that may be.

Monday, March 27, 2017

GOPs fiscal follies on full display- both in DC and Madison

Now that the Republicans have bombed in their attempt to remake health care in America, they’re turning their eyes toward screwing up something else- the country’s tax system. Max Ehrenfreund had a good article in today’s Washington Post Wonkblog going over how the GOP “Freedom Caucasians Caucus” and other Republicans would like to reform the country’s tax code.

To no one’s surprise, these plans include steep tax cuts, especially for the rich and corporate. But there are two intriguing developments in Ehrenfreund’s article that don’t make the “conservatives” seem that conservative. One involves them backtracking on a “flatter tax” plan that would have removed popular deductions for items such as mortgage interest and chartiable giving. Alleged Wisconsinite Paul Ryan kept those deductions in his asterisk-ridden budget plan, and while that may be the starting point for GOP discussions on taxes, it also means the budget deficit will go up.

Remarkably, after crying crocodile tears about the increasing national debt for 8 years under President Obama, these guys in GOP-land now aren’t as concerned with driving up the federal budget deficit now that they have a Republican in the White House who might sign off on those tax cuts.
Closing loopholes could, in theory, allow Republicans to deliver their promised rate cuts without decreasing the total revenue going to the government — a combination that would keep the new legislation from adding to the federal debt.

Under Ryan's plan, by contrast, reduced taxes would mean the federal government would give up at least $2.5 trillion in revenue over a decade, according to an analysis by the nonpartisan Tax Policy Center. The figure accounts for increased economic growth, so that is $2.5 trillion that the federal government would have to borrow — unless lawmakers found other ways of limiting deductions and loopholes or federal expenditures to save money.

So far, members of the Freedom Caucus have indicated they could accept a plan that implied more borrowing. They are less concerned about closing loopholes than they are about making sure rates go down and that, in general, Americans pay less in taxes.

"I think there's been a lot of flexibility in terms of some of my contacts and conservatives in terms of not making it totally offset," Rep. Mark Meadows (R-N.C.), the chairman of the Freedom Caucus, told ABC News on Sunday on "This Week," arguing that tax cuts would provide financial relief for ordinary American families.

"Does it have to be fully offset?" Meadows asked. "My personal response is no.”
Even the shiba inu that we are dogsitting can recognize that this means a return to the Bush-era GOP mentality of “deficits don’t matter.” Now contrast that statement to a bill sponsored by Wisconsin Republicans that is getting a hearing tomorrow in Assembly and Senate committees at the Wisconsin State Capitol (scheduled at the same time for both Committees, conveniently). Here’s what it says.
Whereas, 49 states, by constitution or statute, require a balanced budget; and

Whereas, the legislature of the State of Wisconsin supports the federal government operating under a balanced budget; now, therefore, be it

Resolved by the assembly, the senate concurring, That the legislature of the State of Wisconsin herewith respectfully applies to Congress, under the provisions of Article V of the Constitution of the United States, for the calling of a convention for proposing amendments, for the limited purpose of requiring the federal government to operate under a balanced budget; and, be it further

Resolved, That the secretary of state of the State of Wisconsin be, and is hereby, directed to forward a proper authenticated copy of this resolution to the President of the Senate of the United States, and to the Speaker of the House of Representatives of the United States; and, be it further

Resolved, That this resolution constitutes a continuing application for a convention for proposing amendments in accordance with Article V of the Constitution of the United States until such a convention is convened on the same subject or until the legislature of the State of Wisconsin rescinds this resolution.
Well, that seems like a helluva conflict with the direction things are going with Republicans in DC, where they’re planning to drive up deficits to even higher levels due to unfunded tax cuts. To then turn around and force the budget to be balanced would require massive cuts in services, increased taxes, and sizable cuts in aid to state governments, leading to more budgetary problems at that level.

I’ve also pointed out that this is hypocritical for WisGOPs to be part of this “balanced budget” sham, since they have approved budgets with borrowing in each of the last 6 years, including $850 million for roads for 2015-17, and sizable amounts for new buildings. In fact, Wisconsin was in record debt at the end of 2016, at over $8.07 billion. In DC, when we borrow money for items, that’s an increase in the deficit, and we sell Treasury bonds to get the cash up front to pay for it. AJR21,2,20So why are WisGOP legislators even discussing this Constitutional Convention pipe dream when we can’t even live up to this standard ourselves, and it forces unrealistic and economically damaging restrictions on our federal government?

State Rep. Chris Taylor knows exactly where this foolish, double-standard idea of a “balanced budget Constitutional convention” comes from- the American Legislative Exchange Council (ALEC). She’s gone behind the scenes at ALEC’s annual meeting the last 4 years, and describes how this bill was peddled to GOP puppet legislators, and what the ultimate goal really is (hint: it isn’t about balancing the budget).

At my first ALEC conference in 2013, Citizens for Self-Governance (CSG) rolled out the “Convention of States” campaign. Their scheme was to get 34 states to pass resolutions calling for an Article V Convention of States, provided for in the U.S. Constitution, in order to propose constitutional amendments that severely limit the government’s ability to regulate and spend. CSG’s Mark Meckler, founder of the Tea Party Patriots, and his colleague Michael Farris railed against the federal government, civil rights, and social safety nets. Meckler proselytized like a preacher at a church revival, exhorting us to use our power as state legislators to save the country and join their movement, for which we would be handsomely rewarded with bundled campaign contributions and grassroots support. We were given a model Article V constitutional convention resolution, urged to save the Republic, and sent on our way.

One of my Republican colleagues was sitting several rows in front of me, and I knew then this effort would come to Wisconsin. His resolution, which would make Wisconsin the 30th state calling for a Constitutional Convention to propose a balanced budget amendment, will soon be considered by the Wisconsin legislature….

After CSG’s presentation, a representative from the right-wing Madison Coalition asked about my thoughts on such an effort. I told him I didn’t think people would go for it. He replied that because Republicans controlled so many state governments and the corporations pushing these changes had unlimited money to spend, they didn’t really need the people.

That sums up ALEC. ALEC’s drive to amend our constitution has nothing to do with actual people and everything to do with their big corporate backers. They want to stop the federal government from protecting our environment, giving workers a voice at the table, paying fair wages, and giving the economy a boost during recessions. To them, government is not about the people, but the most powerful doing what they want, when they want, and to whom they want.
100% correct, Rep. Taylor. This is about removing barriers to corporate power and reducing the average person to a feudal serf at the whims of the CEOs and other oligarchs.

Do GOPs in 2017 have a clue about how these things tie together between the state and federal governments? Do they just throw this shit out there for talking points to stir up the rubes without ever planning to pass it into law (like many admitted they did for years with their “repeal Obamacare” bills under Obama)? Or do they truly have no idea about what they’re doing, and are just following the orders of their puppetmasters?

Whatever the reason, if any of your state legislators are in favor of this Article V garbage, they are fools and traitors, and need to be removed ASAP, before the country follows this state down the drain of unchecked, pro-corporate austerity.

Sunday, March 26, 2017

February jobs look good, but we also thought so last year, and it didn't turn out

Now that we've adjusted 2016 jobs data in Wisconsin to new annual benchmarks, we are seeing the state's jobs reports come in fast and furious. The latest one came out on Thursday reflecting the figures from February 2017, and it indicated a strong month when it came to job growth.
Place of work data: Based on preliminary data, the state added 28,200 total non-farm jobs and 21,500 private-sector jobs from February 2016 to February 2017, with a statistically significant gain of 11,100 total non-farm jobs as well as 7,600 private-sector jobs over the month. January 2017 total non-farm jobs were revised up 5.200 and private-sector jobs were revised up 4,600....

DWD Secretary Ray Allen issued the following statement: "Revised numbers show Wisconsin gained 10,400 private-sector jobs in January and preliminary numbers show we added 7,600 private-sector jobs in February, pointing to an excellent start to 2017. Building on this economic progress, Governor Walker's recent budget proposal reinforces Wisconsin's economic and workforce development strategy, which has supported the state's economic growth."
Sounds great, but looking inside the numbers, it seems like two low-wage service areas were the biggest beneficiaries of those two months of growth- one involving retail trade and other stores, and another that's mostly lodging and food services.

Change in jobs, Dec 2016-Feb 2017
Trade +7,800
Leisure and Hospitality +3,900
Rest of private sector +6,300

I also found it odd that the construction industry lost 800 jobs in February on a seasonally adjusted basis in Wisconsin, in the same month that we were seeing record-warmth in the state, meaning you'd expect a "gain" that would result from lower-than-normal seasonal layoffs. Manufacturing did have 600 jobs "gained" for this reason in February, but let's see what the next two months look like in both of those industries. I want to see if hiring was spurred in late February and early March due to all the warmth (which would show in a higher March number), or if the cooler, wetter weather of this month means that seasonally-adjusted hiring goes down for March and April.

And in general, these "good news" jobs reports should be taken with a serious grain of salt. Why do I say that? Take a look at what Walker's DWD was saying last April.
The state added a statistically significant 13,100 private sector jobs from February 2016 to March 2016 on a preliminary basis, including a significant gain of 4,200 jobs in manufacturing. Wisconsin also added a significant 47,500 private-sector and 51,200 total non-farm jobs over the year ending in March 2016, the best year-over-year growth since August 2004 in both categories. Additionally, revised February private-sector job counts swung from a gain of 8,000 to a gain of 10,500 private sector jobs, a difference of 2,500....

"Today's report shows that Wisconsin's employment was higher than ever in March, our unemployment rate dropped over the month while the national rate increased, and the state experienced the best 12 months of job growth since 2004," Secretary Allen said. "All indicators show that under Governor Walker's leadership, Wisconsin's economy is expanding and adding jobs in 2016."
And then the "gold standard" Quarterly Census of Employment and Wages came out several months later for the January-March 2016 time period, showed that year-over-year job growth for March 2015-March 2016 was 10,000 jobs less than than what DWD said it was, and certainly NOT the best since 2004 (it wasn't even as good as March 2014-March 2015). This led to the figures to be largely revised down when the numbers were benchmarked earlier this month.

Jan 2016- Feb 2016 private sector jobs
Jan 2016
Originally reported +5,800
Later revised +9,400

Feb 2016
Originally reported +10,500
Later revised +4,300

March 2016
Originally reported +13,100
Later revised +600

Originally reported +29,400
Later revised +14,300

So yeah, DWD, let's not get too far ahead of ourselves, shall we? Well, if you have any semblance of your office's mission beyond being a Walker campaign piece, that is.

Even more remarkable is that these surprisingly high job totals for January and February still have Wisconsin trailing most of our neighbors when you look at the last 12 months (the tables are located in this report), as well as the nation as a whole.

Private sector job growth, Feb 2016-Feb 2017
Mich +1.86%
U.S. 1.50%
Minn +1.36%
Ind. +1.25%
Ohio +1.06%
Wis. +0.87%
Iowa +0.77%
Ill. +0.71%

Combine these lagging figures with the claims of a 3.7% unemployment rate (that's caused by Wisconsin's low population growth more than adding jobs), and a consistent WisGOP olicy of wage suppression, and you tell me where the spark comes that will allow things look much better in the state over the next 10 months? And along with that, how will we get the revenue growth necessary to pay for our services? I'm not seeing it.

How gas tank cleanups may go away to fix potholes

For the first time in this session, the new 16-member Joint Finance Committee will meet tomorrow. The agenda is relatively minor, a few of the special session bills on opiod abuse, a child labor bill (in JFC due to licensing cost changes), and a 13.10 meeting to deal with a handful of in-year fiscal adjustments. That was where my attention was drawn, because of an item dealing with Petroleum Environmental Cleanup Fund Awards (PECFA).

First of all, let’s allow the Legislative Fiscal Bureau to explain how PECFA works.
The petroleum environmental cleanup fund award (PECFA) program reimburses owners for a portion of the cleanup costs of discharges from petroleum product storage tank systems and home heating oil systems. The amount of reimbursement varies from 75% to over 99% of eligible cleanup costs. Owners of certain underground and aboveground tanks may receive up to $1,000,000 for the costs of investigation, cleanup and monitoring of environmental contamination. PECFA awards are funded from the segregated petroleum inspection fund, which receives revenue from a 2¢ per gallon petroleum inspection fee assessed on all petroleum products brought into the state, including gasoline, diesel, and heating oil. The fund also receives revenues from inspection and plan review fees for bulk petroleum tanks, and interest income on the fund balance….

Under 2015 Wisconsin Act 55, PECFA eligibility is not available for any site if a person: (a) did not notify the Department of Natural Resources (DNR) of the petroleum discharge and the potential for submitting a claim before July 20, 2015; and (b) does not submit a claim for the reimbursement of eligible costs before July 1, 2020. In addition, Act 55 required that an owner or operator of an eligible site must submit a claim for reimbursement within 180 days after incurring the eligible costs, or February 1, 2016, whichever is later, or else the costs are no longer eligible for reimbursement.
This move in Walker’s last budget led to a rush to put in claims and clean up places that had petroleum contamination, so much so that the PECFA fund is out of money for the last few months of the 2017 Fiscal Year. So it has led to this 13.10 request for $2.1 million in more money to be set aside for claims over the next 3 months.
On February 16, 2017, DNR announced that the PECFA program had expended all of the 2015-17 available appropriation, and the program would pay claims when funds become available. PECFA claims approved for reimbursement as of March, 2017, are being placed on a waiting list for payment after additional funding is available in the PECFA claims appropriation. DNR indicates that PECFA claim demand increased in response to the Act 55 requirements. In addition, many site owners may be trying to speed progress on site cleanup work during the 2016 through 2019 construction seasons, so they may submit final claims before the June 30, 2020.
So this means that there's more money coming out from the PECFA fund to pay for these claims. Which makes for a complication in another part of Scott Walker's budget for the next 2 years, because Walker is planning to use for PECFA money for another purchase- to fill budget (pot)holes for the state's deficit-ridden Transportation Fund. As the Legislative Fiscal Bureau describes
Transfer $24,000,000 annually during the 2017-19 biennium from petroleum inspection fund (PIF) to the transportation fund. This transfer would be in addition to the existing ongoing transfer of $6,258,500 annually from PIF to the transportation fund. As a result, the total estimated PIF revenues provided to the transportation fund would be $30,258,500 annually compared to a total of $27,258,500 annually in the 2015-17 biennium in ongoing ($6,258,500) and one-time ($21,000,000) transfers.

Require the Secretary of the Department of Administration (DOA), beginning on June 30, 2020, and on June 30 of each subsequent fiscal year, to transfer the unencumbered balance of PIF to the transportation fund, except for an amount equal to not less than 5% of the gross revenues received by PIF during the fiscal year in which the transfer is made.
But is there going to be enough money to pull off this transfer of $30 mil a year out of the PECFA fund when we already don't have enough to pay for all the claims now? A quick look at the Petroleum Inspection Fund condition says they might be able to squeak by, because there is a few million less to be paid in debt over the next two years. But if there's a continued increase in claims for these items, and an increased need to pay for inspections and administration as a result, and those funds could be gone really fast.

And then what happens to Walker's plans to use the 2 cent-a-gallon PECFA fee as a backdoor gas tax increase to pay try to prop up the DOT Fund starting in 2020, a move that would probably net something like $70-$75 million a year? If that money isn't around, or if the needs to clean up these storage tanks continue past 2020, then where do we find the money to do that? Does remediation just get de-emphasized in the "open for business" DNR, and if people get their drinking water and soils contaminated by old gas tanks, so be it?

I'd be interested in seeing what those plans are for the PECFA duties over the next 3-4 years, as well as seeing how much money really is available. Maybe we won't get that information in tomorrow's 13.10 hearing before the Joint Finance Committee, but it definitely needs to come up as we go over budget talks in the coming months.

Saturday, March 25, 2017

$1 billion deficit in Wisconsin? Yep, it's coming

You may have heard by now that Wisconsin is back to facing a large structural budget deficit, as a result of gimmicks measures that are part of Scott Walker's proposed budget.
Gov. Scott Walker’s proposal for the state’s next budget creates a larger structural deficit than previously thought, nearly $1.1 billion, in the ensuing budget cycle beginning in 2019, the state’s nonpartisan fiscal office said Thursday.

The Legislative Fiscal Bureau released the findings in a memo made public late Thursday.

It shows Walker’s plan for the 2017-19 budget, which back-loads spending and tax cuts into its second fiscal year, leaves a structural deficit of $1.1 billion that lawmakers would have to erase in crafting the 2019-21 budget.
So why are we looking at a billion dollar deficit in the next 2 years? Well, let's look into the LFB memo and see what we find. Here are a few of the explanations.

1. In Walker's proposed 2017-19 budget, the state of Wisconsin is projected to spend more than it takes in for both years, but is able to slip by as a "balanced" budget because it is slated to carry $453 million over on June 30. In that budget, Fiscal Year 2019 has a deficit of $211 million baked into it, and given that the structural deficit figures on those expenses being the same as a base, that means we start $422 million in the hole.

2. Some of it is from Walker's "welfare reform" measures, including job training programs and the indexing of the Homestead Credit, which is $80 million of extra expenses which will hit in 2019-21. Another $105 million will be needed to maintain current expenses for various child welfare and family programs, since the state is using up left-over federal money under the Temporary Aid to Needy Families (TANF) program in the 2017-19 budget, and the structural deficit picture assumes the same amount of spending on programs for 2019-21, which mean state taxes have to make up the difference.

3. Another $94 million is the result of the full funding of a proposed 2% wage increase for state employees that hits in early 2019, with the last $47 million of that raise vs the 2018-19 hitting in Fiscal Year 2019-20, then staying at that higher level. But that wage increase may be threatened, as we found out earlier this week that the availability of that funding is based on projected savings from going to a self-employed health insurance model- a model which may not even be approved by the Joint Finance Committee, nor may it result in any of the $40 million a year in savings the Walker Administration claim it will.

4. $149 million in the additional deficit comes from additional debt costs, with much of it as the result of a debt swap that I described back in August. The debt swap was done to avoid a $383 million balloon payment that would have messed up this budget, but the next budget will be paying back some of those costs as a result, and from what I can tell that it will peak in the 2019-21 budget.

5. Lastly, $166 million in the additional deficit happens because of a federal law change that hits in 3 years, as the Wisconsin Department of Revenue notes.
1. What is the Internet Tax Freedom Act (ITFA)?
The ITFA is federal legislation banning states and local governments from imposing sales tax on Internet access. The ITFA was set to expire on October 1, 2016 but the ban was made permanent on February 24, 2016.

2.Is Internet access taxable in Wisconsin?
Yes, sales of Internet access services are subject to Wisconsin sales or use tax when the customer's place of primary use is in Wisconsin.* However, the permanent extension of ITFA includes a provision that bans grandfathered states, such as Wisconsin, from taxing Internet access services after June 30, 2020. Therefore, charges for Internet access services in Wisconsin will not be taxable as of July 1, 2020.
So that sales tax reduction hits in the 2020-21 budget, and blows another hole in the budget.

So how can we reduce this billion dollar budget deficit? How about getting rid of some of Walker's stupid poser tax cuts in this budget. Let's start with Walker's idiotic proposal to cut income tax rates by 0.1% for most Wisconsinites. This is a tax cut that the LFB says will give the average person less than $1 a week, but will cost the state over $200 million in the 2017-19 budget, and likely around $200 million more in the 2019-21 budget. That's $400 million right there.

Then add in another stupid pose, where Walker plans to get rid of the part of the property tax that goes to DNR Forestry items, and instead spend and additional $179 million in tax dollars to make up the difference. Not only would getting rid of this gimmick reduce expenses by an estimated total of $370 million over the course of the next 4 years, but it also would quiet criticism from people who own land in DNR woodlands and would likely be affected by future cuts in assistance in maintaining forest lands when the state is crunched for funding in future years.

These two moves would reduce the structural deficit by $770 million, wouldn't change spending in any other areas, and not make Wisconsinites pay anything more in taxes than they do today. Get rid of few other Walker budget gimmicks like a $22 million for 2 August sales tax holidays that could well be more trouble than it's worth to institute and a pointless $20 million deposit to the rainy day fund in 2018-19, and you've pretty much closed the structural deficit by that alone, and are still increasing funding to K-12 education in the process.

Oh, and given that it seems highly possible that Congress will shirk some of its funding duties in order to try to "pay for" some stupid GOP tax cuts and/or "de-federalize" certain governmental duties, we may well need to spend more money at the state level just to maintain services in the near future. In addition, given that we are likely to have some kind of recession in the next 4 years (we are going on 8 years of expansion, the record in US economic history is 10) , doesn't it seem like a good idea to have a sizable cushion built into our current and future budget to guard against the declining revenues that inevitably occur when the economy takes a downturn?

So maybe the State Legislature should take the LFB's warning to heart, and get rid of all the Walker pre-election poser garbage, and make this budget more stable over the next few months. Because it seems more likely that not only is there bad risk of deficits for 2019-21, it's also very possible that it'll creep up for 2017-19 as well.

Listen "Liberals"- Step up and tell the truth to rural America

One of the most influential political books to me was Thomas Frank’s What’s the Matter with Kansas? I think I first heard about it while flipping around the radio in the aftermath of Dubya’s re-election in 2004 when a whole lot of us were like “What the fuck is wrong with people that they can’t see through this guy and the destructive garbage he is peddling?”, and Frank’s explanation of why these rural whites continue to screw themselves by voting for these pro-rich, anti-worker Republicans rang very true.

I picked up the book soon after, and constantly found myself nodding my head saying “Yep, know that guy. Yep, I’ve seen that mentality.” Living in a small, post-industrial town in the mid-2000s definitely tuned me into the type of filter these people were seeing things through, and how mushy, half-assed messages from Democrats did not register with them, even if Dem policies were the ones that better fit what they wanted.

Frank is back with another book, and it seems as relevant as ever now that these same rurals voted big-time for a billionaire from Manhattan who has gold-plated toilets.

He is heading to Madison on Wednesday to have a reading and book signing, and the Capital Times’ Paul Fanlund interviewed the author ahead of the visit. Frank points to the tactics and “divide and conquer” mentality of Scott Walker as a perfect example of the tactics that Republicans will pull in order to grab and grow power, and how Democrats still don’t seem to know how to respond to it.
“Scott Walker is a textbook case of the kind of conservative that I wrote about in ‘What’s the Matter with Kansas?’ Now, ‘Listen Liberal’ is the other side of the coin. The question is why can’t the Democratic Party beat these guys? Why does the country keep moving farther and farther to the right?”

If Wisconsin reflects themes in those two books, it also shows up in another of his books, he said, the one titled “The Wrecking Crew: How Conservatives Destroyed Government, Enriched Themselves and Beggared the Nation.”

He pointed to Walker’s attack on unions: “That’s very typical of the right. They play the game much better than the Democrats do. One of the things that you find them doing again and again and again in different places is they figure out what props up the local Democratic Party and then they destroy it.

“They either destroy the institution or they destroy the method by which it funds the Democratic Party. There’s a slogan they used to have back in the ’70s — ‘Defund the Left.’ And that’s what Scott Walker is doing. They’re doing this nationally as well. They’ve been going after organized labor for years because unions donate to the Democratic Party.”

Frank added, “They figured out they could use the state to actually attack their opponents, invent various issues and reasons for doing it, but use the state to structurally injure their opponents. That’s Scott Walker.”
Far too many Democratic Party leaders think that 2010s politics is a debating society where being nice and “going high when they go low” will impress enough voters (often mouthed by comfortable elites lite Paul Fanlund) that we can slip by without saying much about economic issues. How’s that strategy working out for us?

Frank goes on to note that too many national and state Democrats have “lost their ability to speak to a huge part of the population in a state like yours,” and that they need to return to populist, bread-and-butter messages focused on the economy and the power of big money. Whether we like it or not, many people vote based on their gut, and they don’t want to hear a message of “you have to get better skills and hope they’ll pay you more.” They want to hear their lives will get better, and they want someone to blame for why their wages and lives have stagnant.

Which gets back to what Frank’s book is titled. “LISTEN, LIBERAL!” Listen to why these people are angry in all of these newspaper and magazine articles that we’ve seen in rural Wisconsin since the elections. They don’t see politicians trying to fix the real economic and social problems in their lives, so they default to politicians that are at least relaying their anger at “the system” and “those people”, and Republicans are craven enough to play to those lesser angels.

One of the people Thomas Frank says is showing the way on how Democrats should act if they want to win with blue-collar voters is someone who far too many DNC and DPW hacks knocked down for “not being a real Democrat”- Bernie Sanders. Here’s a great example from this week, where Bernie says “Hey working-class America- Donald Trump lied to you.” (Bernie comes on around 2:15)

I'll remind you that Bernie won 71 of 72 counties in Wisconsin just under a year ago, and it’s because he connected to everyday people and their problems, and offered solutions to them in a way that people can understand. With the implosion of Trump/Ryancare in DC, now would be a perfect time for Democrats to jump in and say how they will IMPROVE Obamacare, and stop greedy insurance and drug companies from abusing their power over vulnerable Americans.

Speaking of craven, in between hoops, I had on MSNBC Thursday night as they discussed the debacle going on with Republicans in DC regarding the health care bill, and none other than Wisconsin’s own Charlie(tan) Sykes was on (I can’t find the link). But what was striking was that Charlie(tan) admitted that most mouthbreathing right-wing radio listeners GOP voters don’t care about high-minded conservative theories like “returning power to the states over Medicaid.”

And Sykes is correct- the average angry blue-collar voter wants to have the stability of affordable health care, and to be able to make a decent wage at work, and to not have to change their lives in order to have a decent existence. They can’t understand why hard work and playing by the rules isn’t rewarded much these days, while others that don’t follow those rules seem to get away with more. Whether you like that mentality or not, it is there, and for Dems to win those voters (and win many states like Wisconsin in the process) it requires honest, straight talk that redirects rightful blue-collar anger to the people who caused it- greedy corporates and the politicians that have done their bidding.

I did see one release from Wisconsin Democrats that indicated they might be catching on. It related to the Legislative Fiscal Bureau’s release this week which showed that voucher schools get more state funding per student than K-12 public schools. When voucher lobbyists and their Republican puppets tried to claim that property taxes meant that public schools were more expensive (a questionable assertion in itself), Dem legislators shot back
“What’s the difference between $7700-$8400 handed to the voucher industry and an average of $6700 for public school students?,” Rep. Gordon Hintz (D-Oshkosh)asked. “The voucher industry has made their answer clear this week: property taxes.” …

“Wisconsin taxpayers have been on the hook since the GOP started hijacking state aid intended for public school students and handing it to the special interest voucher lobbyists,” saidSen. Jon Erpenbach (D-Middleton).“Republicans have decided to leave it up to responsible school boards across the state to fill the hole the GOP created by handing the voucher organizationsmore per student.”

One of the chairs of the Legislature’s budget-writing committee decried the revelation that the GOP was taking funding out of public schools and handing it to voucher schools by complaining that state funding detailswere “... completely neglecting the funding that comes from our state’s property taxes.”

“It IS time to stop neglecting property taxpayers and start living up to our responsibilities as state legislators,” said Rep. Sondy Pope (D-Mount Horeb).“The simple fact is that we have a constitutional responsibility in the statehouse for state funding of public education, and my GOP colleagues have chosen to hand voucher operators muchmore per student than public school students, and the voucher industry says it’s up to property taxpayers to fill the gap.
THAT is the type of straight-talk messaging that Dems in Wisconsin need to be giving if they ever want to be back in control of the state Legislature. Sure, gerrymandering is part of the problem, but gerrymandering doesn’t explain all of those Obama-Trump counties in rural Wisconsin. Maybe a few more Dems at the Capitol can make their way down to Room of One’s Own on Wednesday to hear from Thomas Frank and see how it’s done. 