Thursday, April 30, 2015

Higher Wisconsin layoffs =/= higher unemployment?

In the wake of numerous Wisconsin businesses closing around the state, WKOW Channel 27 in Madison ran this report yesterday.
By the end of last week Wisconsin employers had already notified the Department of Workforce Development (DWD) of 3,543 planned layoffs, putting the state on pace to eclipse 10,000 in 2015.

That would be the highest number of layoffs announced in Wisconsin since 2011, when Gov. Scott Walker first took office. The total number of layoff notifications topped 9,000 that year.

By comparison, employers notified the state of 6,511 layoffs in 2012, 7,029 in 2013 and just 6,186 layoffs in 2014. The state records the notifications on the date when they are informed about the layoffs, which can then sometimes take effect over the course of a year or several years afterwards.

Many of the 2015 layoffs will impact hundreds of employees here in South Central Wisconsin. Last week alone, 93 employees at the Eaton Corp. plant in Watertown and 119 workers at McCain Foods in Fort Atkinson were told they will be out of a job by the end of the year.
Since there are so many layoffs going on, you'd think that would translate into sizable unemployment claims, even in light of the rest of the country having the lowest number of new claims in 15 years. But that's not the case, as Wisconsin claims also continue to go down in 2015.

So what's going on here? Is it because the WKOW story is based on WARN notices, with the actual closings and new claims not coming till later? Is it because small businesses are becoming more successful in Wisconsin, and therefore not laying off as many people? Or is it related to this, which we found out about last December?
A new state report says state Department of Workforce Development call centers blocked almost 1.7 million calls from people looking to claim unemployment benefits in the year that ended June 30.

The Legislative Audit Bureau issued findings Tuesday showing that DWD placed people in hold queue when call center staff were busy. If more calls were received than the queue would hold, the callers were told to call again later. The findings indicated that the vast majority of blocked calls were made between December 2013 and January 2014.

DWD officials say claims typically spike in winter in cold-weather states such as Wisconsin and the number of calls blocked isn't an indication of the actual number of callers, saying the same callers often call back multiple times.
The DWD has claimed this "blocked calls" issue has been fixed, but something's not adding up between the large amount of layoffs and small amount of unemployment claims. And given this administration's habit of hiding bad information as long as possible (note that we haven't seen the March revenue numbers yet), would you be surprised if the problem was still going on?

Let's see how this plays out in the next couple of months.

Tuesday, April 28, 2015

Thought the WEDC outsourcing issue was fixed? HAH!

Our media in Wisconsin has generally fallen down on the job when it comes to following up with the actions and consequences of this governor's policy, but one notable exception has been Greg Neumann and Channel 27 news in Madison when it comes to the Wisconsin Economic Development Corporation (WEDC). It was Neumann and Channel 27 that noted last July that Plexus Corp and Eaton Corp had received tax credits from WEDC as incentives to create jobs, but they also turned around and outsourced Wisconsin jobs to other countries. In addition, it was revealed that executives at each of those companies also had donated money to Governor Scott Walker's campaign. This was especially noteworthy because the Chair of the WEDC Board that decides to hand out these tax credits is none other than...Wisconsin Governor Scott Walker.

That revelation, combined with other stories that showed WEDC tax credits had more correlation to Walker campaign donations than job creation, led a panicked Governor Walker to announce in September that WEDC would not be associated with outsourcers.
Companies that accept financial awards from WEDC will now be required to alert the agency if they outsource Wisconsin jobs....

"If people want the privilege of getting taxpayer funds to help their business go forward, then there's some requirements," Rep. [Peter] Barca told his fellow board members. "The requirements are you're not gonna outsource."

Gov. Scott Walker, who serves as WEDC Board Chair, echoed Rep. Barca's sentiment.

"I don't think its unreasonable to say, if you're going to make a change in those circumstances, which we understand change is gonna happen, we'd like to know," said Gov. Walker.

Companies that outsource would also have to disclose that information in their annual reports to WEDC, while new companies seeking funds would have to sign a document stating no WEDC money will be used to outsource Wisconsin jobs.
So flash ahead 7 months, after Walker was re-elected, and take a look at what hit the news yesterday.
Eaton Corp. announced last week it is permanently discontinuing the manufacture of printed circuit boards at its facility in Watertown, which will result in the elimination of 93 employees there.

"We first informed employees in April 2014, one year ago, that we would be moving the Printed Circuit Board (PCB) line from Watertown and consolidating it into another existing facility in Tijuana, Mexico," Eaton Corp. Spokesperson Ann Marie Halal told 27 News. "These actions are in response to ongoing business and market conditions and a continued challenging business climate. They will allow the business to continue to compete globally and meet market demand."

A 27 News investigation from July 2014 found that Eaton Corp. had received over $190,000 in WEDC tax credits despite laying off 163 employees at its Cooper Power Systems plant in Pewaukee in April 2013. The company moved those jobs to Mexico as well.
Oops! Here's the TV report from last night, where Neumann also mentions the $23 billion in sales that Eaton pulled in last year.

Well imagine that! Scott Walker and WEDC didn't follow through on their promises, and corporations continue to steal from taxpayers while taking away workers' jobs. Sure, the WEDC staff claim that they'll try to get back some of the $370,000 Eaton received, but given that they still can't find tens of millions of dollars they previously loaned out, would you count on them to do so?

This Eaton outsourcing episode reiterates two things-

1. Do not take your eyes off of Scott Walker for a second, and require that there be actual proof of action before you believe he will ever live up to his word. For example, Walker's tax-exempt campaign fund says it will pay back Wisconsin taxpayers for all the campaign trips Walker has taken in recent months. Don't accept it, and keep asking about it, until there is an actual check that clears.

2. It's well past time to shut down the slush fund known as WEDC, and put those funds toward filling some of Walker's many budget holes.

Monday, April 27, 2015

MMAC tries BS poll to sell magic Bucks arena

If you've ever wondered what a push-poll is, the oligarchs at the Metrpolitan Milwaukee Association of Commerce gave a great example today, with a pile of propaganda designed to imitate support for the Bucks arena project. Check out this release from today.
When voters are given the facts surrounding a new downtown Milwaukee sports and entertainment arena and public financing plans surrounding the development, they express broad support for both the arena and current funding options under discussion, according to a new poll released today by the Metropolitan Milwaukee Association of Commerce (MMAC).
Hmmm, that seems quite a bit different from the Marquette Law Poll from 2 weeks ago, which showed overwhelming disapproval of the idea of borrowing $150 million in state funds toward the arena. Let's find out more.
According to the statewide survey of voter attitudes conducted by The Tarrance Group out of Alexandria, Virginia. When voters are given a complete description of the Milwaukee arena proposal, significant majorities agree the Bucks should stay in Wisconsin, support the proposal to build a new arena, and agree that the state borrowing money is a good investment.

o Sixty-four percent (64%) say it is better for Wisconsin if the Bucks stay in Milwaukee.
o Sixty-seven percent (67%) support building a new arena, given a full proposal.
. Sixty-four percent (64%) agree that Wisconsin borrowing money to help fund the area is a good investment for the state.
Hmm, something doesn't quite match up with these two polls. Let's look at what the MMAC actually asked those people, and compare it with the reality that's part of the arena bill and the associated project.
As you may know, the [NBA] says that if a new arena is not built in Milwaukee, they will force the Milwaukee Bucks basketball team to leave by 2017. If the team leaves, the state of Wisconsin will lose more than $730 million in revenue over 30 years, and will be forced to pay $100 million to keep the Bradley Center open, hurting Wisconsin's ability to fund other priorities like education and economic development.
Sounds like a dire situation. Too bad it's not even close to true.

1. The number of "$730 million in revenue over 30 years" is repeated throughout the poll, and it seems to be what the MMAC implies is the added tax revenues from the Bucks arena and related development. There is a major fallacy with this thinking. IT ASSUMES THERE WILL BE NO OTHER ACTIVITY IN AND AROUND THE PROPOSED SITE FOR THOSE 30 YEARS. This is of course absurd, as it is highly likely something else gets built on the vacant land at the Park East site and nearby areas in coming years if the Bucks arena plan goes by the wayside. It also refuses to take into account that individuals in Wisconsin would likely choose other areas of the city and the state to spend their entertainment dollars if the Bucks weren't there, raising those revenues to offset some of the "loss" (and possibly offsetting it entirely).

2. The "$100 million in Bradley Center repairs" is another repeated claim throughout the poll, and it comes from last year, from then-Bradley Center Board Chair Marc Marotta, who was projecting the expenses for the building over the next decade.
The $100 million figure is an estimate, Marotta said, but local taxpayers would have to pick up at least part of the tab. The state has provided funds in recent years under both Gov. Scott Walker and former Gov. Jim Doyle, Marotta noted, but it would not cover the entire cost for what will be needed.....

The $100 million would go for repairing the building’s internal systems such as heating, ventilation and cooling as well as other projects like replacing the original seats, Marotta said. Also on the horizon will be maintenance costs for the BMO Harris Bradley Center’s parking structure, he said.

“These seats have never been replaced — they’re the same as when the building started,” Marotta said. “At some point you’ve got to replace those seats. At some point we have challenges with our parking structure...There will have to be a fair amount of work there.”
So not only would the state not be the ones paying all of that alleged $100 million (which goes against the impression that the MMAC wants to give), but these are not needs that have to be met tomorrow. If the Bucks do move, then there aren't 45+ NBA games a year for the Bradley Center to host as the anchor tenant of the building, and I'm guessing some of those projects can be put off for another few years. So that's Fallacy #1 for this poll.

Here's another one of the slanted questions from the MMAC poll.
The Milwaukee Bucks and Herb Kohl have committed to spend $250 million of their own money, half of the cost. The city, county, and the state would raise the other half. As part of this 50/50 public/private partnership, there would be no new statewide taxes, and revenue generated by the NBA team would more than repay the public investment. Do you support or oppose a new arena in Milwaukee?
There's a whole lot missing from reality in that question.

1. Since when are public entities agreeing to pay $250 million? This is why there were all those meetings between state and local officials in Milwaukee last week. State Sen. Scott Fitzgerald is only offering $150 million in borrowed money (down from Gov Walker's budget proposal of $220 million), and published reports only put the City's and County's in-kind donations of land and infrastructure at around $50 million. There's no finalized deal for $250 million in public financing toward the Bucks arena- heck, there isn't even a new bill that's been formally proposed.

2. There may not formally be a new tax imposed by the state, but there certainly will be debt payments that have to be paid back, which can crowd out other needs in future years (oddly, this is the same point the MMAC tried to make in the previous question about "$100 million for the Bradley Center", but they leave that out in this one. Funny that). In addition, the argument that the taxes and revenue would "more than repay the public investment" is based on an assumption of growth in the league and its salaries, and doesn't mention that the current arena bill makes the income of the "sports and entertainment District" exempt from paying Wisconsin corporate taxes. It also doesn't mention that it would take 20-30 years to realize the increased tax revenues from players and other Bucks personnel, and doesn't mention the offsetting costs of reduced services that may result due to sinking resources into this. Strike 2.

Now let's go with one more deceptive question.
Total public investment of $250 million dollars for a new arena would attract up to $500 million dollars in additional development beyond the arena itself, creating a sports and entertainment district in the heart of Milwaukee. The total development would create over 10,000 jobs over the next decade, many of them permanent. All of the development and jobs will generate tax revenue for the state that benefits everyone statewide. Knowing this, would you support or oppose building a new arena in downtown Milwaukee.
1. PIE IN THE SKY BULLSHIT. Just because Bucks officials came up with a vision of what to do with the area next to the arena with an estimated $500 million in development doesn't mean something like that would actually come to fruition, and it would likely be years if not decades before it would anything look like this.

To portray the future building that may happen in a few years as a guaranteed part of the arena project is dishonest, and not giving the full story to those being polled. If much of that is still vacant in 2020, with nowhere near the $500 million in projected development finished or even planned, somehow I don't think the people will be able to get their money back because it wasn't what was promised.

2. While there might be some jobs generated from the development as it happens, many of those are short-term construction, and could merely be displacing activity that would happen elsewhere in the city. It is also absurd to think that the currently-existing bars and restaurants on 3rd and 4th Street would not be at a disadvantage with some of their potential customers heading further north toward the new Bucks arena site. This is especially true when you consider this portion of the Bucks arena bill.
Property Tax Exemption. Current law [s. 70.11(36) of the statutes] provides a property tax exemption for property consisting of or contained in a sports and entertainment home stadium of a professional athletic team that is a member of a league that contains teams with home stadiums in other states. The exemption includes parking lots, garages, restaurants, parks, concession facilities, entertainment facilities, transportation facilities, and other functionally related or auxiliary facilities or structures.
This indicates that the new development could skip property taxes while the existing businesses would not- which makes it nearly impossible for places like Major Goolsby's and Buck Bradley's to compete. Bruce Murphy of Urban Milwaukee estimates that this provision could cost the Milwaukee area $629 million in property tax revenue over the next 30 years, with no ability for the city or county to make up the difference.

Not surprisingly, none of these very possible ramifications are mentioned in the MMAC's poll. It just assumes the added development will grow like a random beanstalk, without any side effects that could permanently handcuff a number of other Milwaukee businesses, raise property taxes for Milwaukee-area residents (since they'll have to make up the difference for the arena district's write-off), and likely lead to the closing of other, more established businesses in the area due to unfair competition.

With these realities in mind, it is magical thinking (or just flat-out bullshit) to believe that the Bucks arena and related arena/entertainment district would be "all gain, no pain," but that's how the MMAC portrayed it in this absurd push-poll. I guess I shouldn't be surprised that the right-wing oligarchs that infest that group would think that way, and try to pull off something like this, since they've always been about scamming local and state government to line their own suburban pockets instead of actually investing and creating in stuff. But pulling this seamy routine to spread propaganda in the pro-arena Journal-Sentinel (whose most recent CEO served on the MMAC Board of Directors) and to lie about what would really happen in the wake of an arena deal means STRIKE THREE for me. This dishonest poll from the MMAC just sunk any chance I had of supporting this plan, or pretty much any other arena plan, barring major changes to protect Milwaukee taxpayers. And hopefully you feel the same way.

Sunday, April 26, 2015

GOP governance fails.

If you want some good Sunday reading, check out this article from's Paul Rosenberg. The whole article is deep and filled with stats, and shows the Democrats' superior economic record when they are in control. If you live in a world where results matter, you can't help but notice that most big-name GOP governors fail miserably, including our Guv here in Wisconsin.
What do Scott Walker, Chris Christie and Bobby Jindal all have in common? They’re all sitting governors who’d like to be president, sure. But what else?

How about being embarrassingly bad at job creation? That’s right. From January 2011 through January 2015, Louisiana under Jindal ranked 32nd in job creation with 5.4 percent growth over four years. Wisconsin under Walker ranked 35th, with 4.85 percent growth. New Jersey under Christie ranked 40th, with 4.15 percent growth. This compares with a national average of 8.21 percent.
Rosenberg goes on to note that as these GOP guvs try to promote their record on the national stage, the reality back home is that their right-wing policies are bankrupting their states, to the disapproval of the people that know them best.
It’s not just the embarrassing job-creation numbers, though that alone should be enough to disqualify the whole lot of them. New Jersey has just experienced its ninth bond downgrade under Christie, who may end up looking for a bridge to hide under. In Wisconsin, Walker, facing a two-year deficit that could go as high as $2 billion, has responded with $300 million in cuts for higher education, on top of billions in previous education cuts. Still, job creation was supposed to be Walker’s big thing—he promised to create 250,000 jobs in four years when he first ran in 2010, but came up short by more than 100,000 jobs. Making matters worse are the neighborhood comparisons. Wisconsin ranked between 29th and 41st in job growth over the last four years, the worst in the Midwest three of those years, and second worst the other. In fact, the state performed poorly on a whole host of indicators used by Bloomberg News, and suffers markedly in contrast with neighboring Minnesota, where progressive policies have that state’s economy recovering nicely.

Perhaps the pundits are still dazzled by these guys, but folks at home, not so much. Neither Christie nor Walker has any traction in beating Hillary Clinton in head-to-head home state matchups, probably the only kind of polls this early with any potential long-term 2016 value, since they involve figures well-known to the public being polled. Then again, Walker’s job approval fell to 41 percent in the latest Marquette Law poll (56 percent disapprove), which has plenty of other bad news for him as well.
Throw in Jindal's disastrous reign in Louisiana, which had unemployment rise from 5.6% to 7.2% during 2014, in a year that saw the U.S. add the most jobs in 15 years. Add in a chronic budget deficit, the GOP's refusal to raise taxes or even roll back tax cuts, and constant cuts to education that led LSU to consider filing for bankruptcy last week, and Jindal has been horrendous, even by the GOP's low standards.

And yet there are still some who think the GOP is the "responsible, adult" party that can run government better. I have no idea what planet these people are living on, except for the fact that in GOP-world, results don't matter, "bold moves" and other types of poses do. I'd hope we ask for more from our candidates outside of the bubble.

Saturday, April 25, 2015

Another week, another bad Walker poll

You may have read about our fair Governor's approval tanking in another poll over the last week, but you may not realize how bad those numbers really are. When you take a bit of a closer look, it's little wonder there's been (yet another) drastic shift in tone and messaging from these guys in the last few days - because Wisconsinites are not buying what Scott Walker and the Wisconsin GOP are selling in any way shape or form.

Polls from Wisconsin Public Radio and Saint Norbert College has always been a bit shaky, because of its small sample size and its wacky demographics (more on that in a bit), but the figures do mirror the trends we saw in other polls from Public Policy Polling and the Marquette Law School in recent weeks- Walker approval slipping well underwater, and his run for president is one of the reasons why.
The statewide survey shows Walker with just a 41 percent approval rating....

The survey also found concern among many about how Walker's anticipated run with effect the state. [43] percent of respondents said that they thought Walker's campaign trips were detrimental to Wisconsin. [36] percent said that they thought the campaigning had no effect, 18 percent through they were beneficial to Wisconsin while 4 percent said they were unsure.

A majority of survey respondents also took a dim view of Walker's prospects if he was elected president. About 44 percent said that they thought he would make a poor president and 16 percent said he would be "not so good." [28] percent thought we would be a good president while 11 percent thought he would be an excellent chief executive. Only 1 percent were unsure, according to the survey.
Nothing too new there, outside of the confirming that Scotty's on the slide. But then you look at the demographics of the poll, and it brings the real kicker.
[35] percent of respondents identified as Republicans, 34 percent as Democrats and 26 percent said they were independents. About 57 percent said they consider themselves somewhat or very conservative while 37 percent said they are somewhat or very liberal.
WHOA WHOA WHOA! 57% conservative? R+1? That's a primary electorate, not even close to a general election voting population in Wisconsin. Take a look at the 2012 exit polls, which show the following breakdown.

2012 Wisconsin exit poll, New York Times
Liberal 24%
Moderate 40%
Conservative 35%

Party ID
Democrat 37
Republican 32
Independent 31

So St. Norbert's sample has a whole lot more conservatives (and some more liberals) than the 2012 presidential electorate, and changes party ID from D +5 to R +1. The removal of large amounts of moderates from the sample is a help for Walker, because his approval rating among them and even "Independents" (which includes the sizable amount of Baggers who lie about being Republicans) are noticeably worse than the 41% total.

Walker approve/disapprove, moderates and Independents
PPP March- 26-67
Marquette Law, April- 29-68

PPP March- 36-57
Marquette Law, April- 36-60

That makes it reasonable to assume that Walker's approval among the General Election electorate is in the 30s, with his policies disliked even more (94% of the WPR/St. Norbert poll wants K-12 funding to stay the same or be increased, for example, which goes against the $127 million cut Walker proposed).

With the numbers like those, no wonder why Walker was sending out silly tweets like this yesterday to try to convince people that times are good in Wisconsin.

Scotty also tried to talk up the lower unemployment rate in Wisconsin when he went to Minnesota this week, only to be hilariously slapped down by former Minneapolis Mayor R. T. Rybak. The desperation is obvious with this strategy, with Walker never giving the proper context for Wisconsin's job gain and drop in unemployment over the last 4+ years.

That context being "THANKS OBAMA!"

And if the upcoming state revenue numbers are as disappointing as I fear they may be, that means most if not all of Walker's despised budget cuts will stay in place. Which means you can expect Scott Walker's approval rating in Wisconsin to remain in its "Bush 2nd term" downward trajectory, with little chance of it ever coming back. This week's WPR/St. Norbert poll, as RW-slanted as it was, gave us an even clearer indication that most Wisconsinites have pretty much had it with this guy, and the destructive policies that come with him.

Friday, April 24, 2015

Bucks arena- an epic boondoggle?

Been an interested few days on the Bucks arena front, and not just because of the summit held at the Capitol with leaders from the state as well as Milwaukee Mayor Tom Barrett and Milwaukee County Exec Chris Abele. -

The BS from WisGOP Legislators about how the City has to "get serious" about chipping in towards the arena, but refusing to give the City the tools to do that. Milwaukee Alderman Bob Bauman's prediction from last week is looking spot-on right now, as the deal is blowing up, and the GOP Legislators are trying to pay the blame on a Barrett and other city officials to make them the scapegoat if the Bucks leave.

But Barrett has a right to not want to give away the farm for this project, as the city is at a much higher risk of of sinking a large amount of money into the arena project, without getting much in return. Bruce Murphy at Urban Milwaukee wrote a long in-depth article off of a point I made last week, where the language in Gov Walker's budget says that not only the Bucks arena property itself, but the entire Sports and Entertainment District could be considered tax-exempt. If true, that would make this a huge giveaway for Bucks owners at the expense of Milwaukee taxpayers.
In short, Walker will assure the estimated $10 million in state income taxes on ballplayers isn’t lost, but has created legal language that allows the Bucks a massive property tax exemption. Not only will the $500 million arena be tax exempt, but so will the beer garden, practice facility, public plaza, probably any Bucks apparel and merchandise shops and who knows what else? Assuming everything within the entertainment district will cost at least $700 million (a very conservative estimate) and figuring that value times the current property tax rate of $29.97 per $1,000 of value, that would equal a property tax payment of nearly $21 million per year, meaning local taxpayers would lose far more in tax revenue than state taxpayers would gain. Over the likely 30-year life of the arena that’s a total property tax exemption of $629 million. (That might be a high estimate as property tax assessments for new buildings are often set below construction costs. On the other hand, I’m applying the current tax level for all 30 years of use, while the buildings’ value and taxes are likely to rise over time.)

But that’s not all the exemptions coming to the Bucks. The state proposal also awards a sales tax exemption on “building materials, equipment and supplies used solely in the construction, renovation, or development of a sports stadium.” Note that when it comes to the state sales tax, only the arena is exempt, but when it comes to the local property tax, nearly anything in the sports district is exempt. Assuming the cost of materials for the arena is, say, $300 million, that exemption would be worth about $17 million to the team.

The proposal’s language also specifies that the “income of a sport and entertainment district would be exempt from the state corporate income and franchise tax.” This language is very broad and would seem to include anything the Bucks develop under the banner of an entertainment district. Given the state corporate income tax of 7.9 percent, this exemption could be huge and wipe out most of the $10 million in annual income taxes Walker says he wants to protect.

It’s almost comic to hear state legislators repeat the mantra that the city and county must contribute to the Bucks because they will benefit from this huge development coming downtown. In fact, they are getting nothing but a massive non-profit eating up acres of developable land that will now be stricken from the tax base, and at a time when Downtown has become a magnet to new businesses. For the city, county, Milwaukee Public Schools, Milwaukee Area Technical College and Milwaukee sewerage district, this will represent a huge loss of property taxes that could have been paid by business, residential and retail development. This tax exemption is so far-reaching it leaves no way for the city to create a Tax Incremental District to finance a contribution to the proposed arena because no taxes will be collected in the district.
$629 million in foregone property taxes in 30 years? After giving away City and County-owned land and infrastructure? That's a whole lot more of a contribution that the rest of the state is willing to put in. And unlike the state, the City and County of Milwaukee isn't allowed to raise sales taxes or impose an income tax, barring an act from the Legislature, (and good luck getting that from this anti-Milwaukee, anti-tax crew). It makes Tommy Thompson's "stick it to em" of the 0.1% Miller Park tax seem like a charitable donation, and can you blame Mayor Barrett for not wanting to screw over the city's taxpayers, who would have to make up the difference in this tax exemption with higher property taxes and less services?

I want the Bucks to stay and I like the idea of a huge development associated with it, but not at the expense of permanently deforming the services and finances of the largest city in Wisconsin. Heck, if more Milwaukeeans catch on to how much the City might be on the hook for in this deal, they may hate this deal as much as the 88% of the non-Milwaukee area of the state did in the latest Marquette Law School Poll. Unless this Bucks plan gets rid of a lot of these property tax exemptions and allows Milwaukee more power to generate and keep its own revenues, I say NO WAY. If the Bucks leave, so be it, as I'll trade a city has a high quality of life with good services over giving it all up just to keep an NBA basketball team - no matter how much the Bradley Center was rocking during last night's double OT playoff game.

Thursday, April 23, 2015

GOP happy talk on Wisconsin budget going away quickly

Seems that the happy talk that Wisconsin Republicans were giving earlier this month about upcoming revenue figures is going by the wayside. Check out this comment from our Governor as he made a rare in-state (!) appearance yesterday at a groundbreaking in Appleton.
Gov. Scott Walker says new tax collection forecasts coming out in May will not provide a windfall, but any additional revenue should first be directed to help K-12 schools....

The nonpartisan Legislative Fiscal Bureau is expected to release new revenue projections the week of May 4. Positive projections will give the Legislature more money to spend or reduce cuts as it works on the state budget.

Walker says he does not think there will be a “huge amount” of additional money. But he says the priority will be filling a $127 million cut in funding to public schools he proposed in the first year of the budget.
That's quite the tell there, isn't it? How much you want to bet that Scotty got a preview of the March revenue collections (which will likely be released to the public tomorrow) and they're likely not looking that great. The March numbers aren't the last item of data the LFB will be utilizing when it makes its projections in a couple of weeks (that'll be April's numbers, because of the April 15 tax deadline), but they'll certainly give an indication where those figures are going.

You know Walker would be openly talking up the revenue figures if the numbers were good, because they would be proof that "it's working" and that cutting taxes can raise revenue (it's one of his arguments in the GOP primary). It also would allow for Walker's unpopular cuts to K-12 education to be reduced, and Walker is clearly feeling the heat from those proposals if he's already backtracking on those spending cuts and claiming that any extra revenue will go towards reducing them (those 41% approval ratings don't seem to leave him so "Unintimidated"). So I wouldn't bet on any great bump-up in numbers when they come out tomorrow.

Scott Fitzgerald also sounded downcast on the revenue side when he revealed today that it was unlikely that a lot of the UW System's $300 million budget cut will be reduced at the Capitol.
"I think with the out-of-state and the graduate student tuition increases that the Regents implemented there probably seems to be even less of a commitment to backfill that," said Sen. Fitzgerald.

Both Gov. Walker and Sen. Fitzgerald made it clear that any revenue increases would first be used to restore $127 million in cuts proposed for K-12 public education in the 2015-16 school year. Sen. Fitzgerald said if there is any extra revenue left over, there are a few things he would look to do to restore more funding to the Department of Transportation in order to reduce the amount of borrowing requested for road construction projects.
Given that 70% of respondents to the Marquette Law Poll from earlier this month said they opposed those UW System cuts, for Fitzgerald to not even say he'll try to soothe that damage tells you the money is not there. And the GOPs don't have the guts to raise taxes or even reduce upcoming tax cuts to reduce Walker's slashing of education funding, so they're left to pray that there was a huge influx of income tax returns that boosted April, or else they are SCREWED.

Sort of like what we're seeing in another Koch/ALEC-owned state that just released revenue figures- Kansas.
Lawmakers need to find an additional $200 million to balance the budget on top of revenue increases already proposed by Gov. Sam Brownback.

The development is causing Brownback to consider whether to put forward a revised tax policy, his spokeswoman said.

Officials released an updated consensus revenue estimate Monday that shows a total of about $400 million in adjustments needs to be made to the budget. Brownback, a Republican, put forward about $210 million in cigarette and liquor tax hikes and other changes in his January budget proposal.

Those tax hikes haven’t been passed by lawmakers yet, however, even though legislators crafting the budget have been working on the assumption they will.
Brownback and the Kansas GOP has been cutting taxes on corporations and high-income individuals for the last 3 years, and the resulting has been an ongoing cycle of revenue shortfalls and budget cuts, so much so that 6 Kansas schools are closing early this year because Brownback had to yank funds away from them during the school year to balance the budget.

If Wisconsin's March and April revenue figures also fall short and open up further budget holes, will we see the same type of immediate cuts here? We'll likely have a good idea tomorrow.

Wednesday, April 22, 2015

Classless and secretive- how the Walker Admin rolls on Earth Day

Two stories that broke this afternoon show just how low-class the Scott Walker administration has become. The first you've probably heard of already, and involves 57 employees of the Department of Natural Resources getting layoff notices as a result of Gov Walker's budget provisions, with the dismissals being concentrated in a very convenient section of the DNR.
DNR spokesman Bill Cosh said that of that number, 27 employees are in the Bureau of Science Services, a unit of the DNR where Walker is proposing significant cuts.

The bureau performs significant research duties for the DNR, and the cuts have come under fire from wildlife and environmental groups who say research is the underpinning of many agency activities. Other positions that could be cut are education and communications personnel.

DNR officials have said in recent weeks that it's premature to say what cuts will actually occur, and how science and research will be handled at the DNR in future years. Cosh has said that science is carried out across the DNR, and not just in the Bureau of Science Services.

The DNR's scientific staff conducts research on matters ranging from estimating the size of the state's deer herd to to studying the effects of aquatic invasive species. Work is paid for with state and federal funds.
Catch that last part? Many of these positions are federally and grant-funded, and ending these positions won't do anything to reduce Wisconsin's budget deficit. But remember, Scott Walker has been recently named a favorite of the Koch Brothers in the 2016 GOP primary, and the Kochs are especially interested in reducing (if not outright ending) enforcement of pollution laws, and measures to reduce climate change, since both items might cut into their profits. Having DNR staff that might use actual science to show that bad things are happening to the natural beauty and resources of Wisconsin might turn people against big-money energy execs that Walker wants to grab money off of. So why not take that possibility out of the equation by cutting that staff, and especially strike that pose on Earth Day, to show your Koch bosses how "serious" you are about helping them out? Yes, the Walker Administration's act is just that transparently political and absurd when it comes to its DNR policies.

It's been similarly transparent and absurd that Walker has made Wisconsin taxpayers shell out for his campaign trips trade missions around the globe, as well as the staff from WEDC that accompany him on these junkets. In addition, Walker makes the taxpayers pay for his security detail when he makes his many trips out of state to court donors and GOP voters. This issue came up again in today's Joint Finance Committee meeting, as the State Patrol's funding was discussed, and what they have to spend to accompany Walker on these trips was part of the discussion.
The committee voted along party lines 12-4 to reject a Dem motion to require the Walker administration to detail how much the state is spending on providing protection for the guv.

The motion sought a quarterly report on the expenses for the dignitary protection unit, which protects the guv, lt. guv, their families and visiting officials.

Sen. Jon Erpenbach, D-Middleton, said Gov. Scott Walker's travel outside Wisconsin and the country as he mounts a bid for the presidency has been "staggering," but the committee has no idea how much is being spent.
That's right, the GOP legislators said it was none of the taxpayer's business how much Walker was spending on his personal vanity run for president, and they weren't willing to even get a report how much was being spent. Remember when conservatives allegedly were the ones that were the "tightfisted overseers of the taxpayers' dollars." Not so much in the Age of Fitzwalkerstan, where the accumulation of money and power is always more important than anything that would resemble ethical governance or caring for the public good.

Gee, you wonder why Walker's approval ratings are in the low 40's and falling, and why the Wisconsin public has turned against these budget provisions in massive numbers? Because they know Scotty and the gutless GOP lackeys in the Legislature could not care less about what happens to the everyday person in Wisconsin, or what kind of state they leave behind after the leave their current job and cash in for big bucks as a lobbyist or other type of wingnut welfare case. You just wish a lot of these people could have figured this out 6 1/2 months ago (it's not like the signs weren't there), and then we wouldn't have the disgusting embarrassment of a state government that we're stuck with today.

Tuesday, April 21, 2015

More Transportation funding won't solve the problems

Tomorrow features the Legislative Fiscal Bureau resuming its budget meetings, and the biggest-ticket item will involve several parts of the budget for the Wisconsin Department of Transportation. This included a re-estimate of the state's Transportation Fund, which is separate from the General Fund that has been the source of many Scott Walker budget cuts. And it's generally good news, as there is a little more money to play with in the Transportation Fund for the next budget.
The Governor's budget was based on revenue and debt service estimates made prior to the time of the bill's introduction. Since that time, the Department of Transportation (DOT) has reestimated revenues and debt service payments and this office has reviewed, and, in some cases, modified, those estimates. The resulting estimates are reflected in the fund condition statement shown below. At the time of introduction, the biennium-ending fund balance was estimated at $11.2 million. However, due primarily to projections of higher motor fuel tax revenues and lower debt service costs, the transportation fund is now projected to have a biennium-ending balance of $84.7 million.
Some of that is related to an increased carryover amount of $32.2 million, which is related to more fuel consumption and vehicle registration revenue than anticipated, and lower interest rates have also helped, leading to debt service costs being $37.0 million less between now and mid-2017. It's a nice benefit to have, but as you'll see, it isn't going to go very far in minimizing the many issues that are prevalent in the Transportation budget.

For example, while the debt service is projected to be lower than it was in the budget bill, it's still slated to go way up over the course of the budget, and will crowd out the ability to spend funds in other Transportation areas as a result.

Projected revenue bond debt service, Wisconsin Transportation Fund
2014-15 $234.96 million
2015-16 $242.1 million
2016-17 $276.3 million

And that figure is slated to go up in future years, because Walker's budget plans to borrow $1.0 billion from the Transportation Fund, and $300 million more from the General Fund. This was the trade-off Walker chose instead of raising taxes or fees to pay for all of the $4.5 billion in DOT-related costs, and while the extra $72 million could go toward reducing that borrowing amount, it also is barely more than 5.5% of the total borrowing that's in the Governor's budget, leaving $1.228 billion that would still have to be paid back later, plus interest.

In addition, there are other needs that might be a better spot to spend the extra money on. For example, aids to local governments to help fix their roads is slated to stay at 2015's levels for 2016 and 2017, so that won't even keep up with any inflation that may come along. Same goes for mass transit aids, which are a huge necessity for local governments with bus systems, since the GOP Legislature removed all Regional Transit Authorities from the state in 2011, which means it comes down to state and federal aids, property taxes and fares to fund the systems. A small increase in these funds would go a long way toward removing burdens for cash-strapped local governments.

There are also a couple of General Fund notes that are intriguing with the DOT fund. First of all, the scheduled transfer from the General Fund to the Transportation Fund is notably less from what it gets now. This reflects the self-inflicted wounds that were part of Gov Walker's deficit-ridden budget, because there simply isn't the money available to send more funds into the DOT.

Transfer from General Fund to Transportation Fund
2014-15 $169.6 million
2015-16 $38.0 million
2016-17 $46.1 million

It's interesting to note that $46.1 million is a bit larger than the $39.1 million that was listed in the Governor's Budget in Brief (page 33), which indicates that there is $7 million more that has to be made up in the budget deliberations (unless I'm missing something, feel free to say if I am). That's money that isn't available for filling in the cuts at the UW System or K-12 schools or Senior Care or any number of other unfunded needs.

But maybe the $72 million can fill in some of those holes, and stop the daily announcements of UW layoffs. Oh wait, the Road Builder amendment from last November makes that illegal. So much for schools being helped with the increased tax revenue from driving.

So with that extra money in the Transportation Fund having to stay there, let's see what options the Joint Finance Committee takes tomorrow. Do they try to reduce borrowing, help local governments, pay for something else, or bank it for later. Regardless of which path is chosen, there are still major unfunded needs for Transportation in this budget, and the Walker Administration's "borrow and spend" policies aren't going to allow business as usual to continue much longer.

Monday, April 20, 2015

Bucks arena in major jeopardy? Seems so

Two intriguing articles on the Bucks arena have hit in recent days that seem to indicate that the new facility is far from a sure thing. As a result, NBA basketball is looking less likely to be around in Wisconsin in 2 years, barring major changes in heart at the State Capitol, or in the hearts and minds of state voters.

What really set off the alarm bells for me was when I read this article today from ESPN's Brian Windhorst on how the NBA won't accept much foot-dragging on the arena, and wants a decision to be made sooner than later. Windhorst goes into detail on how the always-contentious issue of public funding for a pro sports facility has an extra level of emotion in Milwaukee, with memories of the battles that led to Miller Park being built in the late '90s (culminating in a recall of a state senator who supported the Miller Park tax), and the present-day conflict between the GOP-led state government and the Dem-run City and County of Milwaukee. Windhorst says that the NBA would have no problem with allowing the Bucks to move if a new building isn't going up.
This is the essential conundrum of being a local politician bargaining with a national sports league. The options are all difficult. And in this case, the answers have to come almost immediately. When a New York-based group led by Wesley Edens and Marc Lasry bought the Bucks from former U.S. Sen. Herb Kohl in April 2014, the deal included both a carrot and a stick to encourage local politicians to put the Bucks at the top of the political priority list.

The carrot was hundreds of millions of dollars toward the stadium. A nice benefit, but not enough to get the building completed. The stick was a clause stating that if an arena is not in place in Milwaukee by the start of the 2017-18 season -- an ambitious schedule -- the NBA has the right to buy the team. League insiders suggest a sale and relocation is the next logical step. The team would be worth more, by most analyses, in another city. NBA commissioner Adam Silver visited Milwaukee last November and made it clear at the time he wasn't carrying a big stick, saying "I didn't come here to announce deadlines." But, according to league sources, the NBA office -- having learned through the years that pledges and promises have little value until ground is broken -- has made it clear to all parties it will enforce the out clause if shovels are not digging quickly. The NBA has communicated it could give on the schedule a bit, but only in the case of true progress. The league isn't threatening consequences; it's guaranteeing them.
Windhorst says that the Bucks would likely move to Seattle in 2 years if a deal cannot be struck, as the Seattle Metropolitan Statistical Area is twice the size of Milwaukee's, and has lacked NBA basketball since the SuperSonics left for Oklahoma City in 2008. Other possibilities include two markets close to Milwaukee's size- Las Vegas and Louisville - who lack any teams in the major 4 pro team sports as of this time.

Windhorst also goes over the financing numbers, and where a gap has appeared in recent weeks after Senate Majority Leader Scott Fitzgerald and other state legislators said they were looking to reduce the amount of money the state would chip in toward the project compared to what was in Gov Walker's budget proposal.
It is projected the new Bucks arena will cost $500 million. With a combined $250 million from Kohl and the Bucks' new ownership, the proposal is a 50/50 split between public and private money. It is similar to the arena being built in Sacramento, California, where the city avoided the Kings moving to Seattle when a partnership was struck that saw the city invest $255 million and the Kings pledge $222 million. Gov. Walker has proposed $220 million through bonds issued by the state. The legislature, however, is fighting him on it and is proposing a deal for much less: $150 million. The city has offered $25 million in the form of infrastructure and land but no cash. The county hasn't offered a formal plan as yet but is expected to offer a package in the range of $25 million, as well.

That leaves a major shortfall -- between $50 million to $100 million -- and no one is offering to fill it, including the Bucks' ownership, who lawmakers have more than hinted should fund the solution. It is in this hole where the Bucks' future probably is going to be decided.
It sure doesn't look likely to be the City of Milwaukee that'll be the ones to cough up more funds than they are already offering. Milwaukee Alderman Bob Bauman gave a revealing interview in Milwaukee Magazine last week regarding the City's side of financing the Bucks arena, and the general political state of play on the issue. Bauman may be quite a prickly guy if you're on the wrong side of him, but he's also extremely knowledgeable on the ins and outs of policy, and few will shoot straighter on what's really going on. This interview is no exception.
[Bauman]: Everybody’s acting undercover here, not just the city. The Walker plan on paper is just fine. The understanding was that the City would come up with $25 million and the County would come up with $25 million, and we basically said, that we can handle. Now, the state’s going to change the deal, where it’s not $200 million, it’s $150 million. That creates a $100 million dollar gap. The City can’t handle that. It just can’t. And I think that’s exactly what (Assembly Speaker) Robin Vos and (Senate Majority Leader Scott) Fitzgerald intend to have happen.

As soon as we heard the legislature changing the deal, we don’t know what they’re willing to offer at this point. Do we have the capacity to make (a $25 million) contribution? Yes. Do we have the political will? That remains to be seen. Do we have the capacity to make a $50 million contribution? No, we don’t. We just plain don’t...

I have a perfect solution to all this, but the state will never go along because it involves raising taxes.

Allow Milwaukee County to levy a dedicated one percent sales tax that funds transit, parks and recreation, cultural institutions and the construction of a new arena. And there’s no state subsidy. And that would remove $74 million from the Milwaukee Country property tax levy to boot. It takes the park system off the county property tax levy, it takes all the cultural institutions off the county property tax levy, it takes public transit of the county property tax levy and it funds the arena with no state subsidy. All the state has to do is say, “OK, Milwaukee County, raise your sales tax one penny.”
And remember, County voters approved of such a 1% tax in an advisory referendum in 2008, but a County Exec named Walker urged the Legislature not to allow it, and it never happened.

Bauman adds that he thinks the GOP-run Assembly won't pass a bill to allow Milwaukee to raise non-property tax revenues toward a Bucks arena, and as a result "this all goes south and the Bucks move," which Bauman says will give the GOP and talk radio the excuse to blame Mayor Tom Barrett. Of course, it's past policy from the GOP-run state government that has led to many of these financing problems, not only in dumping more of the burden of the arena onto them, but in disallowing the tools that would allow the city and the county to get the revenue to comfortably generate funds and spend more toward the project. Instead, the State Legislature has consistently tied the City and the County's hands with limitations on sales taxes and shared revenue payments from the state, then complains when those levels of government decide to pay for police, fire, and streets over neglecting those services and jacking up the tax rates of locals to help pay for a basketball arena.

And last week's Marquette Law School Poll doesn't seem to indicate there's much of an appetite for shelling out state funds to the arena (doubly interesting since Marquette basketball may well play in the new arena). The MU Poll asked about the reduced-cost plan floated by the State Legislature of $150 million to be borrowed (they didn't even ask about $220 million Walker wants to borrow), and the answer was an overwhelming "HELL NO!"
Seventy-nine percent oppose borrowing about $150 million to support a new arena for the Milwaukee Bucks, with 17 percent supporting the proposal. In the Milwaukee media market, 67 percent oppose funding for an arena and 29 percent support it. Those views vary by less than 2 percentage points among the City of Milwaukee, the surrounding suburban counties of Waukesha, Ozaukee and Washington counties, and the seven other southeastern Wisconsin counties included in the media market.

In the rest of the state only 9 percent support borrowing for an arena, with 88 percent opposed.
Oddly, the funding question for the Bucks arena will not likely be affected by new revenue estimates that come out in a couple of weeks, because there is very little debt payoff that is to be made over the next two years on the arena (the Legislative Fiscal Bureau estimates this number at $2.8 million). But given what Windhorst and Bauman have hinted at, the big decisions regarding the Bucks arena and the team's future are likely to be decided in the next few months, and if the developments of recent weeks are an indication, this arena may be moving further away from being reality as the deadline get closer.

Some foks say it better- Rep. Gordon Hintz on "unnecessary crisis budget"

Articles like this is why I was damned happy to see Gordon Hintz join Chris Taylor as the Assembly Dems' 2 reps on the Joint Finance Committee. The man knows his stuff, and knows how to state it to others.

The first thing Rep. Hintz does is take the Walker Administration and GOP legislators to task for the Bush-like move of blowing a projected budget surplus on tax cuts for the rich and corporate, leading to a budget deficit today that was entirely avoidable.
Governor Walker's budget is a "crisis budget" at a time when other states are investing in opportunity and growing their economies. We are told by Governor Walker and his Republican Legislature that we have to make "tough cuts" and this budget "invests in priorities." Yet, just last spring, the state was projected to have a budget surplus. Governor Walker and the Republican legislators were up for election, so they passed a permanent $541 million tax cut. While it may have made for good politics at the time, it was poor fiscal management. The Walker Administration recently had to delay a debt payment of $103 million, which taxpayers will pay additional interest on, just to keep our current budget in the black.

Another misplaced priority has been the increased use of the manufacturing and agriculture tax credit, a measure slipped into Governor Walker's first budget that eliminates most state income taxes on owners of factories and farms once it is fully phased in. When the credit was passed in 2011, it was estimated that it would cost $128 million annually by 2016-17. However, it is now estimated that it will cost more than twice the amount expected. Delaying the final phase in of this credit by two years could restore nearly $78 million to the budget and help avoid further cuts.
What I like about Hintz's column is summarized in that last sentence. Not only does he give why the Walker budget sucks, but he has a solution to help solve the problems that Walker/WisGOP have caused (in this case, by leveling off the M&A tax cut). It's not like Dems don't have solutions to these issues, but far too often, they are unwilling to say what they are, causing the average dope to think the GOP is the party of "action", even if that action is detrimental.

Rep. Hintz finishes off the column with another budget solution, and a reminder that these Walker/WisGOP tax cuts and cost-shifting have not led to good results, but certainly have led to the mess we are currently in.
Maybe the biggest casualty of Governor Walker's presidential ambitions is his stubborn political decision to reject the federal Medicaid expansion funding. We are the only state in the upper Midwest which has not accepted this funding. Taking the expansion money would provide 81,000 additional Wisconsinites access to health care, save state taxpayers $345 million, and add an estimated 10,000 health care jobs.

If Wisconsin had some positive economic results to show for the recent borrow-and-cut policies, you could make a case for continuing this direction. But we don't. Wisconsin remains dead last in the Midwest in job growth over the past four years and 40th in the U.S. overall. The "crisis budget" we are dealing with has been self-inflicted and intentional. Cut revenue enough that government has no choice but to reduce its programs and expenses. We didn't have to be in this position and we don't have to make these cuts now. Instead of slashing and borrowing, we need a state budget that invests in opportunities for the people of Wisconsin.
If more Wisconsin Dems talked truth like this, they wouldn't lose a statewide election for the next 20 years. So why the hell don't they?

Sunday, April 19, 2015

A few notes from Walker's awful Marquette Poll

You may have heard something about the Marquette Law School poll that was released last week, and while the headline number is the tanking approval ratings of Gov Scott Walker, whose approval is down to 41%, and disapproval up to 56%. These results match similar declines for Walker that PPP reported last month, and is even more remarkable because the Marquette Poll and Professor Charles Franklin have ties to the pro-Walker oligarch groups such as WPRI and the Bradley Foundation, so they have little reason to knock down Scotty.

Let's start by enjoying Walker's tanking approval ratings, because it shows a notable change in the relatively consistent trend we had seen over the last 3 years of the Marquette Poll, where just under half of Wisconsinites would approve and half disapprove. This graphic from the Marquette Law School illustrates how different this week's poll was.

In the stock market, that would be known as a "breakout." It bears to mind the polling history of another Dubya, who slipped into negative approval for good in April of his second term, as that Dubya was trying to privatize Social Security, and his number never recovered. And just like with Bush, Walker slipped by in the election in November, and immediately started trying to push through policies that he never ran on.

As I've mentioned before, it's obvious that many Wisconsinites hate the thought of presidential candidate Walker. Just like with the PPP Poll, Walker does worse than most other GOP candidates when matched against Hillary Clinton in Wisconsin.

Hillary Clinton vs. GOP candidates, Wisconsin
Clinton 49, Paul 41
Clinton 49, Bush 38
Clinton 50, Rubio 38
Clinton 52, Walker 40
Clinton 52, Cruz 36

Not only is Clinton destroying Walker, she's above 50% against him, with the fewest amount of undecided out of any of those five candidates. It shows those who know Walker best don't want him as president, just like how Milwaukee County voted against Walker by 20-25% in all 3 of his Governor's elections after putting up with his tenure as County Exec. You've been warned America.

And it's not just Walker that's in trouble in this poll- it's his policies and the Wisconsin GOP in general. Take a look at these responses on certain issues that are part of Walker's budget.

Approve-disapprove, certain Wisconsin budget initiatives

Support cutting $127 million from K-12 schools?
Support 18%
Oppose 78%

Support $300 million cut to UW System?
Support 26%
Oppose 70%

Borrowing $150 million for Milwaukee Bucks arena?
Support 17%
Oppose 79%
Walker actually wants to borrow $220 million in the budget, so you'd imagine that's hated even more.

Requiring Senior Care recipients to enroll in Medicare Part D?
Support 30%
Oppose 44%

Eiminate cap on voucher schools?
Support 37%
Oppose 54%

What's more important to you?
Higher spending on schools 54%
Lower property taxes 40%

Scott Walker's budget is on the losing side of every one of these issues. And yet Walker's excuse for his declining poll ratings was that people didn't know enough about the budget and that they'd ultimately like what they see. Those poll responses indicate the exact opposite- that people hate the budget provisions even more. Walker's either lying, or completely out of touch, and a whole lot of GOP legislators seem to be realizing they will pay a huge price in 2016 if they stand behind this loser of a budget.

I admit that I haven't found a way to dig inside the crosstabs, due to formatting issues with the Zip folder (any help would be appreciated), and I'd like to see which groups in particular Walker are losing compared to 6 months ago. But it is clear that Scott Walker's act as a presidential candidate and the pose-ridden budget that he sent out as a result has angered many people across the state, and may have put his disapproval and lack of favorability past a point of no return. And the Marquette Poll results indicates to me that if Walker wants to do a little game theory, and find his best bet to carrying the state in November 2016, it involves a clear option. RESIGN AS GOVERNOR.

Saturday, April 18, 2015

Economy slowing down, or just taking a breather?

Lots of odd cross-currents going on when you look at the U.S. economy in recent weeks. On the positive side is the fact that unemployment claims remain very low, consistently staying below 300,000 in new claims over the last 7 months, and staying 15-20% below what we saw this time last year. Housing seems to be picking up, with both total sales and prices increasing over last year's totals, and both trends accelerating in recent months.

Even real wages, whose slow growth have long been a drag on the Obama Recovery, have seen a bit of a boost, with real hourly and weekly wages up 2.2% over the last 12 months. All three stats have some interaction, as a tighter labor market should lead to higher wages, and more funds available to buy homes. But the flip side to that real wages increase hints at some of the concerns with the economy, as the nominal change is actually down compared to last year, and it's only a drop in inflation that has led to the "real" increase.

12-mo change, March 2015 vs. March 2014
Nominal hourly wages, March 2014 +2.2%
Nominal hourly wages, March 2015 +2.1%

Consumer Price Index, March 2014 +1.5%
Consumer Price Index, March 2015 -0.0%

Real hourly wages, March 2014 +0.6%
Real hourly wages, March 2015 +2.2%

And a lot of that flat inflation is due to lower oil and gasoline prices, which led to energy prices being down more than 18% for the last 12 months. This is nice for those of us who spend a sizable amount of money driving, but it's also been a big reason why the Mining industry lost more than 22,000 jobs in February and March combined. This was a factor behind the disappointing March U.S. jobs numbers, with only 126,000 gained. That's less than half the average monthly gain of 268,000 jobs over the 12 months before that, and that was in a time when unemployment claims were similarly low to what we've seen recently, so we'll see in a few weeks if March's drawback was a blip, or the start of a jobs slowdown.

A stronger dollar has also played into this trend, not only in lowering gas prices due to cheaper overseas oil, but also in hampering U.S. exporters, whose products become more expensive to foreigners. U.S. manufacturers have only added 1,000 jobs in the two months measured since January, after adding 858,000 jobs in the 5 years prior to that (or more than 14,000 a month). Again, it could be a short-term blip, or an ominous sign of something more.

We'll see how all these contrasting factors play into the GDP report that comes out at the end of this month, and as you can see from this graphic from the Atlanta Federal Reserve Bank, the predictions for 1st Quarter growth have been falling throughout the last 2 months.

Of course, last year GDP actually shrank by 2.1% in the 1st Quarter of 2014 because of the polar vortex winter, then snapped back with increases of 4.6% and 5.0% in the next 2 quarters on the way to 2.5% growth for the year, and the highest single-year U.S. job growth in the 21st Century.

Certainly a continued combination of near-zero short-term interest and high economic growth isn't compatible (even with the higher dollar and lower gas prices), and at least one Fed Governor hinting this week at "boom times ahead" with higher interest rates coming with it. Does that combination then pop the mini-bubbles it seems like we're feeling in tech and housing, to go along with the recent end of the oil and drilling boom, and then set other forces in motion that would cause real damage to the economy.

With these different signals of data, you can see why it's worthy to keep your eyes on these figures over the next couple of months. We're also nearly 6 full years into the Obama Recovery, and at some point in the relatively near future history indicates that there will some kind of sustained decline in growth, if not an outright recession. I just wonder how long from now that'll be, and if we're at or near full employment when it happens.

Friday, April 17, 2015

The hits keep coming to the UW System

Add two more schools to the list of UW System institutions that are taking steps to cut staff because of Gov Walker's proposed budget cut of $300 million to the System. This includes the flagship institution at Madison, where Chancellor Rebecca Blank announced that up to 400 positions would be eliminated to close the gap. The announcement comes a week after the UW Board of Regents allowed for higher out-of-state to help defray some of that deficit, but Chancellor Blank notes that it is nowhere near enough, and with the next school year coming up with the state budget still up in the air, UW-Madison officials had to act.
Even while we continue to advocate for a smaller cut, we must now put our initial plans into action for Fiscal Year 2015-16, which begins on July 1. Our $36 million plan includes $21 million in budget cuts and redirects an additional $15 million from other campus units to our overall educational mission. This plan includes the elimination of approximately 400 positions.

It begins to bridge, but does not fill, a structural deficit that may be as much as $96 million as a result of state budget cuts in the upcoming fiscal year. The nonresident undergraduate tuition increases approved by the Board of Regents on April 10 will provide another $17.5 million in new revenue. There will remain, however, a significant deficit.

The reductions have been planned and will be carried out by our deans and directors, who know best which programs can be cut while minimizing the impact on the student experience and our core educational mission. Starting today, campus leaders are sharing information about their plans for budget cuts in their units.
Blank mentioned that UW-Madison might also merge or restructure some programs, since it will lack the staff to offer a sufficient curriculum in some areas.

Later in the afternoon, another UW campus joined a list of 5 others offering buyouts to its older employees. This time it's UW-Platteville having to make the move, offering early retirement for as many as 226 of its employees to deal with a $5 million cut in this budget, and another $5 million cut resulting from previous cuts and underfunding. In order to qualify, a Platteville employee must
be, as of June 30, 2015, currently appointed as faculty, academic staff, permanent classified staff, project staff, or limited term employee staff;
• be age 55 years or older as of June 30, 2015;
• be vested with the Wisconsin Retirement System and eligible to receive an annuity under WRS;
• have a start date at UW-Platteville on or before June 30, 2010
And what is even more infuriating about this situation is that it was entirely caused by dumb policies from Gov Walker and the Wisconsin GOP-run Legislature. Previous tax cuts have led to shortfalls in revenue, lessening the money available, and this Governor and his TeaBagging minions in the Legislature have chosen not to make up the difference by reversing or even stopping the expansion of any of these tax cuts. Instead, Walker chose to cut the UW System and K-12 schools as a means to make up the difference in this budget over other areas to reduce, such as the slush fund known as WEDC, or coming up with innovative ways to reduce the spending in Corrections.

Instead of all of the "Go Bucky" tweets the last month, why didn't these "Open for Business" legislators fund the great resource that is one of the few separators this state has over others, and remove all of the uncertainty that have led to these job and class cuts. As a result of their foolish choices, Wisconsin is now losing jobs and reducing our competitiveness in developing human capital. So tell me again how that mentality is supposed to attract business and make Wisconsin a better place to live in?

Thursday, April 16, 2015

Legislature asked to bail out Walker's underfunding of the vets

Budget hearings at the Wisconsin Joint Finance Committee continue tomorrow, and one of the items that'll come up is the Veterans Trust Fund. As the Legislative Fiscal Bureau's paper on the Vets Trust Fund and the Veteran Mortgage Loan Repayment Fund explains
The veterans trust fund (VTF) is a segregated fund for the support of programs benefiting Wisconsin veterans and their families, and for promoting interests of veterans. The fund receives revenues from various sources, including repayments of loans made under the personal loan program, federal grants, and receipts from sales at the Wisconsin Veterans Museum. In 2013-14, the VTF had total revenues of $4.0 million (excluding a $5.3 million transfer from the general fund) and total expenditures of $11.9 million.

The veterans mortgage loan repayment fund (VMLRF) is a segregated fund for the administrative expenses related to the veterans primary mortgage loan program and the home improvement loan program and for debt service payments on bonds issued for making loans under those programs. Revenues are derived from loan repayments. In 2013-14, the VMLRF had total revenues of $24.7 million and total expenditures of $29.7 million.
And those financial statements illustrate the problem- these programs are spending more money than they're taking in, so they need to get another source for those additional funds. Combined with other related programs that involve the Veterans Trust Fund, and the LFB says the state has to come up with $8 million in 2015-16 and $13.5 million in 2016-17 to keep these programs going.

So what was Governor Walker's solution in the state budget? LET THE LEGISLATURE FIGURE IT OUT. Here are a couple of the moves they could make to save some Veterans Fund money.
13. The veterans tuition reimbursement program provides grants to qualifying veterans whose education expenses are not covered under federal education programs or the state's University of Wisconsin and Wisconsin Technical College tuition remission programs for veterans. Expenditures under the program have declined significantly in recent years, likely as a result of more veterans receiving assistance through the federal Post-9/11 G.I. Bill. In 2011-12, the total amount expended for the tuition reimbursement program was $992,000, but that had declined to $468,100 in 2013-14, and spending is on pace to be less than $400,000 in 2014-15. Given this decline, the Committee may want to adjust the appropriation to more accurately reflect anticipated spending. Base funding for the program is $1,403,100. The bill would reduce funding by $750,000 in 2015-16, providing $653,100 in that year, but would retain base funding in 2016-17. Based on expenditure trends, an appropriation of $500,000 would likely provide sufficient funding to meet anticipated demand under the program. This adjustment would be an appropriation decrease of $153,100 SEG in 2015-16 and $903,100 SEG in 2016-17, relative to the bill [Alternative B1a].

14. The assistance to needy veterans program provides subsistence aid and assistance with the purchase of dentures, hearing aids, and eye glasses for eligible veterans and their families who have income below 180% of the federal poverty level. The program would be funded at the base level of $970,000 annually under the bill, but expenditures for grants under the program have averaged just $420,000 over the past three years. An annual reduction to this appropriation of $470,000 would provide $500,000 annually, which would likely provide sufficient budget authority to make grants during the 2015-17 biennium [Alternative B1b]. If insufficient funds are provided in this appropriation, the Department is authorized to make a request to the Committee for supplemental funding under a 14-day passive review process.
While this sounds bad on the surface ("You cut these programs for vets????"), it does seem that this is an appropriate place for savings, since the funds are unlikely to be spent anyway. That still leaves another $19.5 million that has to be filled in.

Among the options include using excess funds from the three State Veterans Homes to fill the hole (instead of adding services and/or staff at the homes, which sure was necessary 3 years ago when the vets' home at King was massively understaffed with elderly vets being forced to put up with a scandalously bad situation. You can see why Walker didn't want to put that into the budget and bring that mess back into the public's consciousness. Nor did he want to use General Fund money for the $21.5 million to make the Vets Trust Fund whole, because this budget is so tight it doesn't have the wiggle room. So instead, Scotty just laid the Vets Trust Fund and related information at the feet of the Legislature, and took off to galavant around the country bragging about all the "tough decisions" he's made here in Wisconsin.

So let's see what the Legislature does, and what types of transfers and tricks they have to pull to solve this underfunding of Vets' Fund issues that Scott Walker has allowed to go on for 5 years. And I bet no one else in the "legitimate" media will even mention it, which is just what warmongering Scotty wants.

Fitzwalkerstan tanks - in jobs as well as polls

In addition to the tanking approval ratings of our Governor and his policies, there was another bit of news that added to Scott Walker's dubious standing today. The March 2015 Wisconsin jobs report came out from the Department of Workforce Development, and the numbers were miserable.

Change in Wisconsin jobs
March 2015, all jobs -4,300
March 2015, private sector jobs -5,000

February 2015 revision, all jobs -1,900
February 2015 revision, private sector jobs -1,800

Total change in all jobs vs. last report -6,200
Total change in private sector jobs vs last report -6,800

Yes, the U.S. had a slowdown in job growth in March, with "only" 126,000 jobs added, but they sure didn't lose them like we did here in Fitzwalkerstan. So as a result, the Walker jobs gap is growing again, now back up past 81,000 private sector jobs, and 72,600 overall.

The DWD's (and too much of the state media's) propaganda about the state's unemployment rate being lowered to 4.6% isn't really a good sign, either. It reflects 8,300 people leaving the Wisconsin work force in March (on a seasonally-adjusted basis), and even that survey shows employment dropping by 3,200 jobs last month. The figures look even worse when you look West across the St. Croix, and you see this.
Minnesota employers added 7,800 jobs in March, a second straight month of strong growth thanks to big gains in education and health care.

The state added 49,400 jobs over the past 12 months, a growth rate of 1.9 percent, which is well below the national growth rate of 2.3 percent, according to figures released Thursday by the Minnesota Department of Employment and Economic Development.

But the state has added 18,300 jobs since the start of February, the labor force is growing as more workers who had been on the sidelines decided to look for a job and the unemployment rate held steady at 3.7 percent, compared to a U.S. rate of 5.5 percent.
Hmm, and those guys in Minnesota are using their surplus to add funding to early childhood education and related programs, while Scott Walker's budget is cutting $427 million from K-12 and higher education in Wisconsin (to the disapproval of more than 70% of Wisconsinites). I wonder if there's a relationship there...

Tuesday, April 14, 2015

The UBER wall of shame

While I was able to distract myself by taking advantage of a gorgeous Spring day by hanging with friends at the Wisconsin Union Terrace after work, this development still pisses me off.
A bill that would create a statewide license for rideshare companies such as Uber and Lyft passed the Assembly, 79-19.

Under the bill, a transportation network company can purchase a license to operate in the state. The state Department of Safety and Professional Services would oversee the licensing.

Drivers for the companies are not employees but instead pay the company a fee to be a part of the digital network. The state would not license the driver.

The companies are similar to taxis except drivers hail the rides through cellphone apps and cannot pay cash for the service. The drivers, under the bill, would not be classified in the same way as cab drivers.
Look, I expect Republicans to usurp local control and sell out for a big business without regard to the level of service or injury to the consumer, and not one of the 63 GOPs in the Assembly voted against this bill. But for half the Democrats' caucus to do the same thing? Not acceptable, and with that in mind, I will give you the list of Assembly Dems that voted for this garbage, as naming and shaming is an appropriate response.


There are a whole lot of Dems that are normally good progressives in that list, and it includes almost the entire Milwaukee contingent (only Josh Zepnick voted no out of that group). Maybe there are concerns over Milwaukee taxi medallions that led these legislators to vote this way, but it's still not acceptable in my mind. In fact, a lot of this vote seems to be related to "all politics is local", and it is very telling that NOT ONE DANE COUNTY DEM VOTED FOR THIS. We in Madison have been dealing with the Uber/Lyft issue longer than most of the rest of the state, and these companies have refused to follow the same rules that the several taxi companies in Madison have had to follow, which is why they haven't been able to operate consistently.

Alder Scott Resnick openly backed Uber's side in the mayoral election, while incumbent Mayor Paul Soglin stood up for the local cab companies. The result on Election Night? Soglin 72, Resnick 28. And I have little doubt the Uber issue played a large role in turning what could have been a close race into a massive blowout.

Sorry, but Uber's history shows that they are not to be trusted, and reps like Racine's Cory Mason need to know that if Uber thought it was worthwhile to be in their community, they would have been operating there by now. If the goal is to expand mobility options to people in need, then ask to expand the state's elderly/disabled transit program, or expand regular transit, or set up some similar Transportation-related programs. But to allow Uber to operate by different rules than other cab companies, putting them in a different category of business with protection from local regulation (and make no mistake, that's what this law does), that is bullshit. Any Dem that goes along with such bullshit is spineless and needs to be weeded out if this party wants to get back in control of the state any time soon.

NO MORE VICHY DEMS. Look at the list again, and remember it come primary season in August 2016. This is very bad form, and hopefully the Senate Dems will have the gumption to see through this crap, and not give cover to GOP for supporting such awful legislation.

Monday, April 13, 2015

Think Wisconsin doesn't rely on gambling? Think again

Wisconsin budget season starts to kick into high gear this week, as the Joint Finance Committee's budget hearings with several smaller departments and appropriations being discussed on Wednesday. Included in those departments are discussions of the state's two main gambling accounts- the Indian gaming funds and the state's lottery fund.

We'll start with the Lottery Fund, which is generating more sales than ever, and is a hidden reason behind Gov Walker's claims of higher property tax relief. Take a look at the Legislative Fiscal Bureau's informational paper of the Lottery Fund and other property tax credits, and you'll see that increasing amounts of money have become available to return to Wisconsin property taxpayers over the last 5 years.

Lottery Fund distributions for property tax relief, 2009-2014
2009 $113.2 million
2010 $129.2 million
2011 $134.8 million
2012 $141.5 million
2013 $168.8 million
2014 $166.6 million (+47.2% vs 2009)

In the City of Madison, for example, this has resulted in the lottery credit expanding from $82.46 to $131.39 for the average homeowner over those 5 years (your local savings may vary, given that the lottery credit is related to how much of a tax rate a local school district levies). This expansion of tax relief has next to nothing to do with initiatives from Gov Walker or the GOP Legislature, but is instead based on higher lottery sales in recent years and the related "earnings" (the difference between how much people shell out for Wisconsin lottery games vs. the winnings and expenses to put on a lottery). But you bet the Gov and the WisGOP leggies have taken credit for the lower property tax bills that have resulted from those lottery credits.

On Wednesday, the Joint Finance Committee will decide on the level of the Lottery Fund's credit for the next two years. The LFB just looked at the most recent figures for the Lottery Fund, and as a result, the next two years will also feature sizable paybacks to Wisconsin property taxpayers, if a bit smaller compared to the last 2 years - $162.95 million for next winter's property tax bills, and $161.7 million for 2016.

Indian gaming also will be on the docket for that JFC meeting, which is intriguing given Gov Walker's cave-in to fundie interests in Iowa earlier this year, where he refused to allow the Menominee to build a casino near Kenosha. Interestingly, Walker's 2015-17 relies on the current Indian casinos giving the state an increasing amount of money, to fill in the gaps in his deficit-ridden budget, as these numbers from the LFB's summary of Indian gaming provisions will show.

Indian gaming revenues to be deposited to General Fund
2015-16 $23.85 million
2016-17 $24.71 million

The Indian gaming provisions also play a role in the proposed cuts to the UW System, because Walker's proposal to turn the UW System into an independent authority and end the outreach mission of the Wisconsin Idea also removes the requirement of certain Native American-related programming at UW schools. And many of those programs were previously funded by Indian gaming revenue. The Fiscal Bureau goes over these reductions, as well as the additional staff that the Department of Administration are set to hire to regulate the Indian gaming, now that there's more money to play with.
(a) Administration UW-Green Bay and Oneida Tribe programs assistance grants [item #2, reduction of $247,500 in 2016-17 due to the creation of the UW System Authority]; (b) Tourism general tourism marketing [item #35, reduction of $475,000 annually to eliminate required transfers of specific amounts to specific organizations]; (c) Ashland full-scale aquaculture demonstration facility debt service payments [item #38, a reduction of $6,400 in 2015-16 and $62,900 in 2016-17 for debt service payment reestimates]; (d) Ashland full-scale aquaculture demonstration facility operational costs [item #39, a reduction of $417,500 in 2016-17 due to the creation of the UW System Authority]; (e) University of Wisconsin-Madison physician and health care provider loan assistance [item #40, a reduction of $488,700 in 2016-17 due to the creation of the UW System Authority]; and (f) Administration Indian gaming operations [item #45, increases of $43,500 in 2015-16 and $46,300 in 2016-17 for standard budget adjustments and increases of $33,900 in 2015-16 and $28,900 in 2016-17 for a reestimate of the cost to operate and maintain the gaming integrated regulatory information system].

(EDIT: There's been a late development! As part of a list of corrections sent this afternoon to "better reflect the Governor's intent," now the Walker Administration says that $325,000 of the tourism funding that is generated from Indian gaming should stay with the Department of Tourism. So drop that help to the General Fund by the same $325,000.)

Those lapses and refusal to provide Native American-related programming is how the state can take in nearly $280,000 LESS in gaming revenues for 2016-17 vs 2015-16, but still allow the General Fund to take in just over $535,000 MORE from those revenues in the second year of Walker's budget. Nice trick, eh?

In addition, the provisions that remove funding for the UW System is a double-whammy, because if the System chooses to continue to operate provisions such as the Oneida Assistance grants at UWGB or the Acquaculture facility or the physician/health care provider loan assistance, the UW has to fund that themselves. This is insult to injury at a time where five UW campuses are already offering buyouts to employees in the face of $300 million of other Walker cuts. Let's see if those lines get connected at Wednesday's hearing.

So as you can see, just because Scott Walker pandered to anti-gambling fundies in Iowa to turn down the proposed Menominee casino in Kenosha, it doesn't mean he isn't fond of using gambling money as part of the state budget. For both the increased property tax relief from the lottery fund, and in giving the General Fund a higher amount of Indian gaming revenues, Walker is all about using gambling proceeds if it helps him look good, and bragging about the improved budget and tax relief that results. He's just hoping you don't look back at the source.