Sunday, May 7, 2017

No shock- Walker is a clueless bluffer on GOP Transportation package

In Sunday's Wisconsin State Journal, Mark Sommerhauser and Matt DeFour discussed the conflict between Governor Scott Walker and the Assembly Republicans on the tax plan presented by State Rep. Dale Kooyenga and other legislative GOPs late last week (I discussed the proposal in this post).

The article indicates that Walker does not want to have his name associated with a gas tax hike before next year's elections, even if the money goes to fix its deteriorating roads.
In an interview Friday, Walker panned the proposal to apply the 5 percent state sales tax to gas. He noted the net effect of the sales tax plus a proposed 4.8-cent reduction in the per-gallon gas tax would still raise taxes on consumers about $430 million over the next two years.
From looking at the Legislative Fiscal Bureau's scoring of the Kooyenga/AssGOP tax plan, it seems like that number comes from the following.

$660 million from 5% state sales tax on gas
$43 million from 0.5% county sales tax on gas
$4.8 million on hybrid/electric vehicle fee
-$278 million from 4.8 cent/gallon decrease on gas

Well yes, consumers will be paying more in gas TAX, but Kooyenga and other Assembly Repubicans have argued that they wouldn't be paying much more from a reduction in the state's minimum markup. That may be true, if the Wal-Marts of the world and other retailers don't pocket the lower markup for themselves. But interestingly, DeFour and Sommerhauser report that Walker does not think that'll happen, so he's not on board.

I kind of agree with Walker in being skeptical that getting rid of a minimum markup will actually lead to drivers paying less for gas. But Scotty's opposition seems to be parked in Fantasyland, thinking that "tax" is some kind of dirty word.
Walker also panned a provision that would allow a local referendum the ability to raise a half-cent sales tax for transportation, saying, “I’m trying to keep the cost burden down in terms of how much they pay in taxes.”
This is a flat-out stupid statement. A local sales tax allows for outsiders and tourists to pay something for the wear and tear they put on local streets and highways. The other options that are out there for more local road funding is.

1. More wheel taxes, which are solely paid for by local residents.

2. More cuts to road repairs at the local level. As if we don't have enough potholes and delayed work already, and this increases out-of-pocket costs for the inevitable car damage that'll result from the disrepaired roads.

Even more remarkable is that Walker doesn't seem to mind making one group pay more to help fund the Wisconsin DOT - owners of hybrids and alternative-energy vehicles.
Walker said he would consider a proposal to impose an annual fee of $30 on hybrid vehicles and $125 on electric vehicles — something Walker has proposed in the past and a bipartisan transportation commission recommended. The move would generate about $4.8 million over the biennium.
While an argument can be made that this somewhat fair, given that these vehicles use less gasoline than conventional vehicles and therefore don't pay as much for the roads, this still reeks of hypocrisy from a guy who says he wants to avoid having Wisconsinites pay more to government. But I suppose if you can stick it to those hippie Prius users in Madison, it's not so bad to Scotty.

But then Walker goes completed off the rails and argues in favor of spending more for road repair and highway projects, while not having the money to pay for these things.
Walker says he has heard more concern from then public about roads not being funded than about borrowing being too high. (what public? You mean the Road Builders' lobby and the hand-picked GOP officials at your listening sessions, Scotty? The next time you talk to "the public" will be your first)

"For all the talk about needing to put more money into transportation projects, this plan fails to do that," Walker said.

So if you read between the lines, what Walker is saying is that he would rather borrow the state into oblivion to pay for road projects than to put in an extra cent of gas tax to pay for them.

And for what? So he can stay in the good graces of DC lobbyist/Bubble Boy Grover Norquist instead of RESPONSIBLY FIX THE ROADS? That in itself is a clear tell that Walker does not care what wreckage he leaves behind when he inevitably jumps ship from Wisconsin and goes to chase bigger money and bigger power.

The article goes on to mention that Walker has one actual hope for finding this extra money while not raising gas taxes- to use hundreds of millions of General Fund dollars to transfer over to the DOT Fund. There's one huge problem with that idea. There's no money out there to transfer. Under current estimates from the Legislative Fiscal Bureau, the General Fund has only $12 million of cushion under Walker's pre-election budget, and the 2019-21 budget has a structural deficit of over $1 billion. And Koo-Koo Kooyenga's tax plan makes the General Fund so broke that the only way it can balance for 2017-19 is to end $81 million of current transfers to the DOT, and give $43 million in county sales tax on gasoline to the General Fund instead of the DOT.

So there's only two ways that Walker can pull off a "no-tax, no regular car fee" hike in DOT spending without another massive increase in borrowing- a major increase in projected General Fund revenues due to some kind of "Trump Boom." The problem is that this was already counted on by the LFB this January, and sizable revenue increases are already budgeted for 2017-19, and unless those already-rosy revenues are revised even higher when the new estimates come out this week, that option will go away.

To use a Texas Hold 'Em analogy, when it comes to Transportation funding, Walker is currently bluffing, and needs a major break on the River (in the form of a big increase in revenues) to pull it off. If that card doesn't turn up, he's going to be out a lot of chips, and it's going to limit his options for what can be done in the future.

The problem is that many of us will also lose out in the form of crappier roads and fewer jobs, if our Governor's obnoxious and reckless bluff doesn't work out.


  1. I'll admit I had to read that a couple times, but I'm with you. Don't hybrid buyers already pay more for most models? Some of that price boost going to the state in sales taxes of course.

    As for borrowing, it's the perfect Republican play as long as they bail out before the bill comes due.

    They get to give people things they want without raising taxes, and when the economy tanks, they duck and cover and blame the resulting chaos on Democrats who then have to face the hard choices with fewer possible solutions. It's an automatic public opinion bounce if they time it right.

    Even if the dream scenario doesn't work out quite that way, the increased debt service allows them to make an austerity argument in the future and pay debt rather than provide services.

    For a group that defines itself by reducing government services, it's a win/win/win.

    1. Yep, and the income tax cuts are a double-whammy that way.

  2. And sure enough, the LFB came out toda and said there is no added revenue, so there's no transfer that can be made.

    Even more laughable is Walker trying to spin that this means there is sufficient money, and that his Grover Norquist fantasy still adds up. Who the fuck is he kidding?