Wednesday, June 5, 2013

Quick rundown of JFC budget bunko

There was so much crap thrown into the budget by the GOPs on Joint Finance last night that I could write for a number of hours and posts. But it'd drive all of us crazy and when you're getting married in 3 days, there's plenty of other items that can make you lose your mind when your wedding's 3 days out with a huge amount of people coming in, and I don't need the selfish suburb trash that is today's GOP to add to that feeling.

But here are some highlights, based on the great work from Wispolitics along with the Progressive. Yes, K-12 public schools got a minimal increase in general state support of $75 per student, but about 2/3 of that increase is intended to come from property taxes and with the statewide allowance for vouchers, it's cynically intended to make public schools first raise property taxes to keep the doors open (you thought Act 10 would lower property taxes? HAH!!!) and then take additional cuts and overcrowded classrooms. In fact, the LFB admitted that last night's actions will raise school property taxes near 2 percent statewide, even with the revenue cap constraints, and probably much more than that in many communities.

Of course, the voucher lobby got what they wanted out of the JFC, the ability to have privateers open up schools statewide without having to go through the same "take every student" requirement that public schools do, or have to deal with the same testing and accountability measures the public schools do. There was also a goodie thrown in to the rich suburb boys in the 262, where they would receive a tax deduction for parents of $4,000 for sending their kid to a K-8 private school and $10,000 for a private high school. This is regardless of how much money that parent makes, so this could give a massive write-off to some exec in Mequon sending their kids to $20,000-a-year University School.

Interestingly, there is no such deduction for parents who have their kids attend public schools, which is quite a tell as to how private schools are getting preferential treatment. Let's face it, if you were a true believer in the "choice" theory of schools, you'd either give a tax break to a parent to have his/her kid attend any type of school, or give no tax break at all. But giving a tax break to one type over the other? Obvious one-sided bullshit, and straight out of the "separate but equal" system that was found illegal nearly 60 years ago in Brown v. Board of Education.

As for other tax issues, the basic framework of the Koo-Koo tax cut was passed, with people making over $100,000 getting a majority of the benefits, (by comparison, the median household earner is Wisconsin will get about $10 a month), and as I mentioned last week, it guarantees a major hole in the state budget by 2015. Even more appalling, while there appears to be very few tax credits closed up as a result of this Koo-Koo package, the biggest one regards a $21 million reduction in tax credits given to property taxes and related write-offs for veterans and their surviving spouses (see item 2). Nice priorities.

The coming deficit could show up sooner than that, if this stock market bubble pops in the next 12 months. Remember, most of our "upside revenues" are not based on wage or job growth (we suck at that), but one-time boosts from Wall Street legalized gambling. With the market being down nearly 500 points in the last week on nothing more than speculation of the Fed party ending, don't count on that fluky revenue continuing.

Also remarkable was that the JFC decided to undo almost all of their extra oversight of WEDC, letting this failing agency continue to hand out funds to corporations with no real rules and regulations in place. In fact, if you look at the GOPs' 6am wrap-up bill, they said WEDC doesn't have to follow state procurement rules, and threw these screwballs even more money that they could hand out. Not only did the JFC send $16 million of General Fund taxpayer cash back into WEDC (instead of having it come out of the state's Economic Development Fund), but check out this tidbit.
Aircraft Company Job Creation and Retention Grants. Provide $2,000,000 in economic development fund SEG in 2013-14 and 2014-15 in the Joint Committee on Finance Supplemental SEG appropriation for an aircrafy maintenance and repair company grant program to be administered by Wisconsin Economic Development Corporation (WEDC). Require that the program be used to provide grants to companies included in the 2008 North American Industry Classification System (NAICS).
Hmmm, so we're going to throw another $2 million a year into WEDC for one specific industry, which happens to be the same industry that Kestrel Aircraft is in, a company WEDC and WHEDA gave away millions to in order to have Kestrel say it would set up shop in Superior nearly 18 months ago. One problem, as of last month Kestrel still hadn't opened in Superior, and was claiming it needed more state help to finish the grand opening. Sure sounds like a special interest giveaway to someone who's more interested in shaking down governments than creating jobs, doesn't it?

But hey, that's what most of this budget is- a series of right-wing poses, power-grabs, and money-funneling to campaign contributors. There is almost nothing here that will directly create jobs, but there's a whole lot here to make people want to get away from Wisconsin, including major borrowing and future budget deficits, and continued increases in inequality, continued defunding of state aids to local municipalities and public schools that'll kill services, drive up property taxes, and drive down property values. It is sickening, and it is not the state that I knew and loved.


  1. I'm moving to Superior this weekend as it happens, will have to keep an eye on it. I knew about the Enbridge dilbit pipeline expansion plans that promise to be politically interesting, but this one's new to me.

    Seems rather odd though: $40 million in incentives to build a $6-8 million facility? Still, that's Walker-WEDC accounting for you.

    "tax deduction for parents of $4,000 for sending their kid to a K-8 private school and $10,000 for a private high school."

    In private schools in Wisconsin there are 99,622 kids enrolled in K8 and another 23,327 in high school. If the full deductions are made and top rates of the parents are the 7.65% Koo-Koo level then we're looking at $48,329,487/yr - the minimum conceivable Koo-Koo level would be 6.27% or $39,611,227, more than the $30 million commonly being reported.

    Naturally, in the name of not becoming dependent on government when money is on the table and taking heed from the important lesson Walker teaches with his Medicaid expansion refusal, nobody will take up this deduction. Right?

  2. In other news, withholding and sales tax receipts were both up 5.7% in May vs May 2012.

    Fiscal year to date collections for both (+2.3%) are still barely over population growth (+0.5%) plus inflation (+1.2%, although May's CPI isn't out yet).

    Federal Monthly Budget Review should be out on Friday for comparison.

    1. Social insurance tax receipts up 10.8% nationwide in May, continuing its upward trajectory this year.