Saturday, March 7, 2015

Many more battles yet to fight in Wisconsin

Quality cartoon today from the State Journal's Phil Hands (even if his "aging Madison liberal hippie" is still lame).

I also suspect the timing of the work-for-less bill was not coincidental, given that there were plenty of other stories that came out this week that would put the Walker and WisGOP economic record in a bad light.

Such as the Joint Finance Committee's budget hearings, which took place for all departments this week. Among the items revealed in those hearings was the fact that Scott Walker's corporate tax cuts are blowing a bigger hole in the state budget than originally predicted. As Mike Ivey's article notes, the projections are now out there that indicate a tax cut for manufacturers and agri-businesses will now cost state revenues around $275 million above what they predicted it would when the Koo-Koo tax cuts of 2014 sped up these corporate write-offs- or just about as much as Walker is trying to cut the UW System's budget by. Funny how that works.

The UW Board of Regents also said their piece about the cuts and changes in Walker's budget this week (not coincidentally, the Assembly was having the work-for-less debate at the same time that the Regents were meeting). In addition to asking for reductions in the huge budget cuts that Walker is asking for, some Regents also asked for other methods to give the System more independence, outside of the separate authority mechanism.
The regents unanimously passed a resolution asking the Legislature to "substantially reduce" the governor's proposed budget cut, and to grant flexibilities for the UW System to do business more efficiently and effectively "either through an agreed-upon public authority" or by amending state statute.

The resolution also asked for "a dedicated funding stream" for UW System operations, which a public authority would include.

Several regents pointed out that predictable, stable funding for the UW System could never be counted on because one legislature can't set policy for future legislatures.

"This is fairy dust. This is not something I think we can rely on," [UW Regent and UW Hospital Authority Board Chair David] Walsh said. "At the end of the day, this is about Draconian cuts" and efforts to persuade lawmakers to reduce those cuts. "Damn it. It's time we step forward and send a message to the State of Wisconsin that this is wrong and it's not who we are."
And it's not like the tax giveaways that have led to the UW System budget cuts have created huge amounts of jobs. As noted earlier this week, the Wisconsin Department of Workforce Development revealed that the state had 30,000 fewer jobs than previously reported, due to annual benchmark reporting. This story was largely buried in the state press because it came out the same day as the Board of Regents meeting and the work-for-less debate, but it needs to be brought back up again when the state-by-state reports come out later this month, because it seems possible that these revisions would cement Wisconsin's "worst in the Midwest" standing for job growth in Scott Walker's first term. And let's see if that reality squeaks over into Iowa and other places where Walker is trying to run from his failed record on the campaign trail.

So while I'm disgusted by the passage of work-for-less and find it to be another step on the state's decline in the Age of Fitzwalkerstan, there are many other fights and issues to go after. And since it's all part of the same "Robin Hood in reverse" Koch/ALEC agenda, I'd recommend the protestors in Phil Hands' picture turn around and go after the many other areas of Wisconsin that are being injured due to the demolition crew that's in power at the Capitol.

1 comment:

  1. Jake,

    The doubling of the impact of the M&A credit is totally in line with the experience of Kansas in this regard. These underestimations are consistent with an analytical framework that assumes that there will be no change in businesses with regard to their organization in response to these dazzling tax reduction opportunities. It is strange that a political party which seeks to impose dynamic scoring with regard to tax cuts, should fail so miserably when it comes to revenue loss from these programs.

    I fully expect that the impact will double to $550-million by this time next year, and then DOUBLE again to around $1-billion by the end of 2016. This will be the result of the wholesale reorganization of Wisc. corporations (but not publicly trade ones) to be pass-through entities to their owners, combined with fraudulent over-statement of manufacturing and agricultural revenues on the M&A Credit return. Fraudulent overstatement will occur when rents, and non-manufacturing and non-agric. revenues are claimed as manufacturing or agricultural revenues on the Wisc. form. This form of tax fraud is very easy to accomplish since the federal filings for these entities on either the 1120 form or Schedule C do not break out gross revenues (Schedule F does ask for "other income" but denotes the aggregate total as "Farm income" so that is somewhat confusing) so there is no federal report to provide a cross-check. Since there are nowhere near enough auditors at the DoR in Wisconsin to tackle this, and absolutely no political will to do so, fraud will be widespread.

    So if you think you're shocked now, just wait.

    Dr. Morbius