Thursday, August 31, 2017

Nope, Scotty's not getting the highway bailout from DC that he wanted

This got dumped out late this afternoon from the Wisconsin Department of Transportation.
The Wisconsin Department of Transportation (WisDOT) has received $66.4 million in redistribution funds from the Federal Highway Administration (FHWA). The redistribution dollars announced today by FHWA represent federal transportation improvement funds that were allocated, but not used by other state DOTs. The funds are not tied to any specific project and will greatly assist the Department in it’s efforts to improve the safety and quality of the roadways in Wisconsin.

Based on FHWA records, the $66.4 million is the highest amount ever received by Wisconsin. The previous highest amount received by WisDOT was $39, 472,925 received back in Federal FY 2014. “We could not be more pleased with this historic amount of funding that is being received,” stated WisDOT Secretary Dave Ross. “ I would like to thank the people at FHWA and the hard work that the team here at WisDOT have put in working together to arrive at this record level of funding.”
Sounds pretty good, as getting these redistribution dollars means Wisconsin doesn't have to use as many state dollars to pay for their many highway needs. But let's also remember that this is far less than what Governor Scott Walker was looking for when his administration sent in that request 2 months ago. Remember this memo?
In an analysis provided to this office, DOT officials indicate that the Department may submit a larger-than-typical request for redistribution funds, totalling $341 million, which they indicate could result in a larger amount of redistribution aid received by the state than in past years. If this amount were obtainable, a delay in the passage of the budget would likely limit the state's ability to obligate sufficient state funds to match this federal amount. However, any expectation of a significant increase to the state's share of this federal redistribution funding should be tempered by the following considerations: (a) in past years, regardless of the size of the state's redistribution request, the amount of aid received has been similar to the state's obligation authority as a percentage of the national total (on average, slightly less than 2% of the national total); and (b) the Department's potential $341 million request may include $211 million of project work related to the southeast Wisconsin freeway megaprojects, which would require a minimum state match of $52.8 million. This match would require $41.3 million more in state funding than is included under the Governor's 2017-18 recommendations for this program.

So we got less than 20% of what we requested, even with Paul Ryan and Scott Walker likely trying to kiss up to Donald Trump with the Foxconn deal. And yes, those two items could well be related, as added federal highway funding is a part of the Fox-con bill, as noted in this segment of the Legislative Fiscal Bureau's analysis.
The bill would authorize $252,400,000 in general fund-supported, general obligation bonds, which may be used for the I-94 North-South corridor project in the southeast Wisconsin freeway megaprojects program. The bill would create a general fund-supported, sum sufficient appropriation that would be used to pay any debt service associated with the issuance of these bonds and specify that the Department of Transportation (DOT) would not be able to expend the proceeds from the bonds authorized under this provision unless the state receives an award of federal moneys for the I-94 North-South corridor project. The bill would require DOT to receive Joint Committee on Finance approval in order to expend the proceeds of the $252.4 million in bonds. In order to receive this approval, DOT would be required to submit a plan for the expenditure of the bond proceeds to the Committee. No later than 14 days after receiving such a plan, the Committee would be required to meet to approve or modify and approve the plan.

Although the administration indicates that these bonds would be used as the state match for a potential federal "FASTLANE" ("INFRA") grant that would fund remaining work on the I-94 North-South corridor project, as drafted, any award of federal moneys for this project, in the 2017-19 biennium or beyond, could provide DOT with the authority to use these bond proceeds. For instance, if the state did not receive a "FASTLANE" grant, but instead received some amount of federal redistribution aid for this project, it is possible that the receipt of the additional aid could be interpreted as satisfying the criteria required to expend the bond proceeds.
But the fact that the federal redistribution money is only $66.4 million means that state taxpayers would have to come up with the rest to pay for work on I-94 near the Foxconn site (wherever that may be). So this is a double loss, as there aren't enough Fed dollars to lower borrowing or do more projects on the already bare-bones DOT highway budget, and now the General Fund will face even more strain due to having to pay for more on I-94 for the Fox-con.

I suppose it's good that we know this before the Joint Finance Committee meets on the DOT budget the day after Labor Day. But we'd better not hear the GOPs on Joint Finance try to indicate that these new federal funds put any kind of a meaningful dent in the $1 billion of unmet needs that exist in the Transportation Fund. We'll see how much gets added in from the state side and how much more debt we have to take on, and the fact that it will likely be jammed through in a massive, multi-part omnibus should make all of us concerned that the GOP leggies will choose gimmicks and one-time stunts over real solutions.

UW's Noah WIlliams isn't just a RW hack. He's a Koch addict

I've talked before about the fraud that is Noah Williams, a UW Economics professor who happens to come up with "studies" that favor right-wing policy when all other analysis says otherwise. An example of his fallacious crap was this masterpiece of cherry-picking which claimed Wisconsin's Manufacturers and Agriculture tax credit was growing manufacturing employment in the state...right before the "gold standard" jobs report said Wisconsin lost nearly 3,800 jobs in manufacturing for 2016.

Well, Noah was back at it recently, claiming that the Fox-con would be a massive economic boost for the state. The Milwaukee Journal-Sentinel dutifully reported on Williams' "analysis", which allowed Governor Walker and other GOP politicians to point to the stories as "proof" that the Fox-con will work.

Bruce Murphy of Urban Milwaukee saw how this was playing out, and called bullshit on Williams, the pro-corporate hack who hired him, and the pro-corporate paper that relayed the "news."
The newspaper’s front page story touted a new report concluding the state could get “a return of $3.90 for every $1 in state subsidy costs spent to lure Foxconn” to Wisconsin. The problems with the report are many, but let’s begin with the elephant in the room. The author of the “evaluation,” as he describes it, is UW-Madison economist Noah Williams, a fan of Gov. Scott Walker who sought a job with the governor as a campaign advisor and who previously issued a study of the impact of the Agriculture and Manufacturing Tax Credit that was quickly discredited.

Yet the Journal Sentinel story, whose headline announces that “Foxconn could return nearly $4 for every $1 in state subsidy,” never mentioned any of this baggage. It’s an incredible omission, and behind that is a story of how the media works (or doesn’t) and the unseemly haste to pass the multi-billion Foxconn deal before the problems with it are understood by the public.

For starters, the report was commissioned by the Wisconsin Technology Council, which has been an aggressive champion of the Foxconn deal. The group’s president Tom Still, who served for 11 years as associate editor of the Wisconsin State Journal, writes a weekly column for the Journal Sentinel. Still wrote an Op Ed saying the state should be happy just to be considered by Foxconn, set the stage for Foxconn getting a good deal by noting other states may dig deeper into their pockets than Wisconsin, reported all the officials and politicians who support the deal and none of the opponents, and has been quoted saying the $3 billion subsidy is still a good deal if Foxconn creates only 10,000 jobs rather than the 13,000 that’s been touted. The media frequently quotes Still as an expert on the Foxconn deal without ever noting his group is an unabashed supporter.
As for the report itself, Murphy notes that Williams claimed the Fox-con would add even more jobs than the rosy assumptions given by Foxconn's own consultant.
Williams at first inflated the number of jobs spun off by the deal by 13,000, as he admitted to the Journal Sentinel. Even after the figure was corrected, Williams comes up with an even bigger economic impact from the Foxconn deal than the company, EY, hired by Foxconn to provide the best-case analysis. The non-partisan Legislative Fiscal Bureau has cautioned that the EY data on the spin-off jobs is “speculative,” but Williams ups the estimate even further.

Williams asserts that Foxconn will assuredly be creating far more than the minimum 3,000 jobs because its capital investment of $10 billion is so high, but ignores the fact the deal offers no assurance Foxconn will actually invest the $10 billion and no penalty if it doesn’t. Similarly he notes that Foxconn plans to run the plan longer than 15 years, thus increasing the value of the deal, without noting there is no guarantee this will happen or penalty if it doesn’t.
And let's not forget that the "3,000 jobs" is the amount of people who would be employed at the Foxconn plant after it opens (if it ever does). That has nothing to do with jobs that are related to the construction of the facility. Those construction jobs are accounted for separately in the LFB's anaysis of job impacts, and not mentioning that is an intentional bait-and-switch - a common trick for a GOP hack like Williams.

That's proof enough that Williams will say anything as long as it gets his name in the paper and gets himself paid, but Pat Schneider of the Capital Times gave us even more insight today as to why Williams is such a blatant scammer. Because right-wing oligarchs are using him to embed their bullshit ideology onto the UW-Madison campus.
Professor Noah Williams is director of the Center for Research on the Wisconsin Economy, established in July. It operates out of the Social Sciences Building, 1180 Observatory Dr.

Funding for the center includes $240,000 from the Charles Koch Foundation and $100,000 from the Bradley Foundation, according to a proposal for the center approved in March by the UW-Madison College of Letters and Science’s Academic Planning Council.

It ain't just ads at Badger games

This is something that the Kochs and Bradleys have done at campuses around America, as part of an agenda to slant university research and create "alternative facts" that confuse the average dope into not understanding what a failure trickle-down economics and other right-wing policies really are. And the code words in the new CROWE center are obvious to those of us who have paid attention to this ugly, scummy agenda to hurt public research institutions.
The issue of political influence was addressed in the center’s founding proposal. “The principles of academic freedom and lively internal departmental debate about the quality and integrity of the research and activities supported by those funds would insulate the work from political influence,” it read. ( you know, because the donors aren't doing this for political reasons whatsoever., and would NEVER harm the integrity of what CROWE releases to the public).

The mission of CROWE is to “provide objective economic research to support economic development and policy evaluation for important state-level issues,” according to the proposal. The center will “provide a crucial link in tying the UW to the broader policy and business community statewide, expanding the outreach from academic research to practical application,” the proposal said.
"tying the UW to the broader policy and business community" ? Guess you won't be hearing much from CROWE about the correlation over the last 30 years between lower unionization and lower real wages for everyday workers. Nor will you see much about lower capital gains taxes sand lower tax rates on the rich leading to 1920s levels of economic inequality in America today, will ya?

Anyone who ever quotes Noah Williams' "findings" without saying the words "what a lying sack of shit" should be laughed out of anuy kind of serious discussion. But that kind of fact-blurring and Koched-up placement of right-wing hacks in academia is what we've sadly come to expect in the post- Citizens United world, and is part of an overall strategy to defund and deform public universities to keep them from giving inconvenient truths to the average citizen. This was accurately described in the excellent documentary "Starving the Beast."

Wednesday, August 30, 2017

Biggest winner in Joint Finance K-12 moves- vouchers.

This week, the GOP-controlled Joint Finance Committee voted to go along with Scott Walker's plans to add back some of the money that has been cut from public K-12 education over the past 6 years. As Wispolitics describes, most of the $639 million increase for K-12 comes in the form of increased per-pupil aids in each of the next two years.
The overall package would come in less than Gov. Scott Walker’s $649 million plan. But the 18-page motion also would keep the heart of Walker’s K-12 proposal by pumping more than $500 million into categorical aids that are split evenly among school districts....
Under the proposal:

*Districts would see their per-pupil categorical aids go up $200 per student in 2017-18 and another $204 in 2018-19 to $654 per student in the final year of the budget. That payment would be $630 in 2019-20 and every year after that.
The flip side of this is that General school aids, which are geared to give more aid to poorer districts, would stay at the same level for this year, and only have a 1.6% increase for 2018-19. And that was before the GOP-controlled JFC got going on Monday. By the time they were done, those General Aids were actually getting cut for this year. And why? Because the money was being sent to private voucher schools.

This happened through several budget changes. First of all, $17.45 million in General Aid was already going to be taken away from public schools and $15.7 million of that money funneled to voucher schools to reflect higher-than-projected enrollment at the voucher schools under the current programs. Then, the Republican Finance Committee members came up with new new ways that the voucher program is expanded, with all money paid for by funneling dollars away from public schools.

1. Students from richer families now can attend voucher schools, as a result of this change.
Specify that a pupil could participate in the statewide choice program with a family income of less than 220% of the federal poverty level, rather than 185% as under current law, beginning in the 2018-19 school year. As a result of this provision, it is estimated that an additional 550 incoming pupils could participate in the program in 2018-19 relative to the estimates in the bill. In 2017-18, DPI indicates that the current 185% limit is $44,955 for a family of four, and is $51,955 if the pupil's parents are married
This will cost public schools a cool $4.4 million, and Robbin’ Vos and other ALEC clones in the Assembly wanted this income limit to go even higher, so you know that’s the next step if the voters of this state are stupid enough to give them the chance after 2018.

2. Another change in enrollment rules that open the door to more students to use vouchers if they’ve applied in the past.
Create an additional prior year attendance criterion that would allow a pupil who applied to attend a private school under the statewide private school choice program in any year but was placed on a waiting list as a result of school district enrollment limits, to enter the program regardless of grade level at the time of entry….
The LFB estimates that another 100 students will use this provision, and it’ll cost public schools $794,500 as a result.

3. There’s also an item that allows for a voucher student to continue to receive a voucher if he or she doesn’t even attend a school that wants to be part of the voucher program. And it’ll only cost public schools $6.36 million.
For the Racine and statewide private school choice programs, specify that if a private school that does not participate in a private school choice program enters into an agreement to be subject to the same governing body as a private school that participated in the Racine or statewide private school choice program in the previous school year, the prior year attendance criteria would not apply in the first two school years in which the schools are subject to the same governing body.

And that’s not even all of it. There are also other grandfather clauses and even more money given to DPI to hire more people to oversee the added amount of schools and students in the voucher program. This results in $29.8 dollars sent away from public schools ON TOP OF what Gov Walker’s 2017-19 budget was already funneling out of them.

If you’re wondering why the WisGOP Legislature keeps doubling and tripling down on voucherization despite little or no improvement on K-12 education, and destabilizing public education, the Wisconsin Democracy Campaign has a simple explanation. Follow the DeVos and Bradley money.
Between January 2010 and December 2016, mostly out-of-state school voucher interests doled out about $8.5 million for direct campaign contributions and outside election spending in legislative and statewide races – nearly all of it to support Republican candidates.

Special interest outside election spending by the pro-voucher American Federation for Children, which was founded by President Trump’s education secretary, Betsy DeVos, totaled about $6.4 million between January 2010 and December 2016. A leader of the American Federation for Children in Wisconsin is none other than the disgraced former Speaker of the Assembly, Republican Scott Jensen.

The federation issued a statement commending the committee’s action.

Campaign contributions by mostly out-of-state millionaires and billionaires who support vouchers totaled about $2.1 million.
Yeah, it's nice that most Wisconsin public schools will be getting a needed bump in per-pupil funding from the state. But don't let the headlines of "$639 million increase" fool you, as a notable amount of that increase is heading to voucher schools, and the drop in General Aids for next year means that it is likely that poorer schools will have an even tougher time trying to compete with the richer communities. In addition, if the state is foolish enough to keep the paid-off voucher proponents in the GOP in charge after 2018, you can bet that much of that "added investment" to public schools will be taken away.

Tuesday, August 29, 2017

UW gets a few more buildings, but still being shortchanged

In addition to signing off on K-12 funding for 2017-19, Wisconsin’s Joint Finance Committee also had another notable bit of action yesterday. The JFC unanimously agreed to add over $209 million in building projects to Scott Walker’s budget, bringing the total amount to a cool $1 billion. Most of that new funding went to the UW System, and a large amount of that went to one particular campus.
The state legislature's budget committee approved $55 million in funding for a new school of engineering building at UW-Platteville, which is expected to produce an additional 800 graduates each year.

The current engineering hall on campus is 50 years-old.

UW-Platteville officials told members of the budget committee during a public hearing at the school in April, the current facility is simply outdated.

They believe the new "Sesquicentennial Hall" can add enough new classroom space to allow more students into the engineering program.
Platteville also got $23.7 million to add on and renovate Boebel Hall, which holds science and math classes on the campus. Even more impressive is that both of those Platteville projects would be entirely funded by borrowing money and paying it back with General Fund tax dollars over the next 20+ years.

Wispolitics also notes a few other UW projects at other campuses were restored yesterday with the JFC’s actions, including a couple in Madison.
$35.9 million to renovate Wyllie Hall at UW-Parkside.

*$32.7 million for utility repairs on UW-Madison’s Lathrop Drive/Bascom HIll.

*$23.7 million for a parking lot replacement at UW-Madison.
The parking lot near the UW Vet School and Natatorium will be paid for through user fees, as will an addition to UW-Eau Claire’s Governor’s Hall and an add-on to River Falls' May Hall. The rest will mostly be paid for through taxpayer-funded borrowing. There were also a couple of other minor projects added to the Capital Budget yesterday- a boiler replacement at Mendota Mental health Center, $7 million for a “Geriatric Prison Facility” (location to be determined), and $1 million for some kind of work in the basement of the Capitol (Dems on the committee asked what that was about, since the motion adding the items didn't say, and co-chair Alberta Darling said she wasn’t sure).

Those total a combined $13.7 million, but are dwarfed by the added UW projects. In all, JFC added $195.4 million in UW building projects yesterday, but even with that action, the 2017-19 budget has the smallest amount of money dedicated to UW facilities by $100 million compared to any other budget in the last decade, using this information from the Legislative Fiscal Bureau.

UW building projects, 2007-2019 (after JFC action)
2007-09 $658,988,000
2009-11 $931,031,600
2011-13 $420,529,000
2013-15 $703,764,000
2015-17 $451,934,000
2017-19 $323,697,000

So we’re spending the lowest amount on UW buildings by $97 million compared to any other biennium over the last 12 years. And that’s assuming Walker doesn’t veto any of these projects if/when the budget reaches his desk (not out of the question as some kind of BS resentment play). So while it is nice that the Joint Finance Committee recognized that Walker had shortchanged UW's faciltiies and decided to do some improvement and upkeep, I don't think we should break out the party hats. And the deferred costs on other projects will likely drive up the price tag for the next round of maintenance and improvements.

Monday, August 28, 2017

Fox-con numbers keep getting worse, so GOP hacks turn up the spin

As I like to say, “When you’re lying, you’re losing.” Well, if the recent comments from Governor Walker and his puppetmasters are any indication, they are losing big-time when it comes to convincing people that the Fox-con is a good idea. Take a look at this pile of crap from the mouthpiece for Wisconsin’s right-wing corporate oligarchs, where he claims the Legislative Fiscal Bureau isn't taking into account all of the benefits of Foxconn.
Wisconsin Manufacturers & Commerce lobbyist Scott Manley said the analysis “fails to take into account the tremendous ripple effect Foxconn will have on the state’s overall economy.”

“There is no doubt that Wisconsin will experience greater revenue growth thanks to this once in a lifetime investment from Foxconn,” Manley said. “In the long run, this project will allow for greater investment in the state’s priorities, not less.”
Those are two paragraphs from WMC’s chief scumbag are dishonest, to the point of flat-out LIES. The LFB analysis absolutely accounts for higher revenue growth from the Fox-con, and the “ripple effect” of more jobs in the nearby area. This passage comes directly from the LFB paper on the Fox-con, which assumes the “best-case” scenario for jobs and wages on this project.
The estimates assume that the project will require an average annual employment of approximately 10,200 construction workers and equipment suppliers earning an average total compensation of approximately $59,600 (including benefits) per year during the four-year construction period (from 2018 through 2021). Total income for these individuals is estimated at $2.4 billion. In addition, it is assumed that nearly 6,000 indirect and induced jobs will be created during the construction period, with an average total compensation of $48,900.

It is estimated that the additional construction-period jobs would generate increased state tax revenues (primarily income and sales taxes) equal to approximately 6.3% of the additional gross wages. The total increased state taxes associated with the construction period are estimated at $186.9 million.

As noted, permanent staff at the Foxconn facility are estimated to increase from about 1,000 in the second half of 2017 to 13,000 beginning in calendar year 2021. The average annual wage for these employees is estimated at $53,875, based on a headcount distribution, by job type, provided to EY by Foxconn and median wages for each occupation from the Economic Research Institute. Total ongoing payroll at the company is projected to be $13.8 million for the remainder of this year and increase to approximately $700 million annually beginning in 2021. State tax revenues associated with the additional employees and wages are estimated to increase from about $900,000 this year to $44 million annually beginning in 2021.

Indirect and induced jobs associated with the project are estimated to total 22,000 beginning in 2021, based on a multiplier of 2.7. Average annual wages for these individuals are estimated at approximately $51,000. Total ongoing wages are estimated at $1.12 billion annually, and related state taxes are estimated at $71 million per year. Smaller impacts are estimated in calendar years 2017 through 2020 as the project ramps up.

The analysis assumes practically all of the employees that both work at the facility and the Fox-con related jobs in the supply chain will live in and spend money in Wisconsin – quite a risky assumption for a facility that will be located within 15 miles of the Illinois border.

Now, it’s not a bad thing in itself that FIBs might be working on the Foxconn construction or in Foxconn-related jobs. It is logical to assume that if those individuals work in Wisconsin, they will spend some of their money in Wisconsin, benefitting the economy that way (as part of those indirect/induced jobs). In addition, tax reciprocity with Illinois means that Wisconsin would cut a smaller check to Springfield if more people from Illinois worked here. It wouldn’t add tax revenue, but would help the state’s bottom line in a similar fashion by “lowering” spending.

A bigger concern is the idea of Illinois freeriding on any economic improvement that comes from Foxconn, while Wisconsinites pay for it. The Chicago Sun-Times pointed this out in an editorial earlier this month.
Best we can tell, it’s a crap shoot as to whether luring the giant electronics company to Wisconsin would work out well for you, given the billions of dollars in tax breaks your governor has promised, but it would be terrific for Illinois. It would cost our state nothing, yet up to half of the new jobs could go to our residents, while O’Hare Airport would get the new international travel business.

The best thing that ever happened to Illinois might be losing Foxconn to you, Wisconsin. Much appreciated….

Wisconsin would be taking all the risks, even as Illinois enjoyed a nice share of the benefits. The Foxconn plant likely would be located right across the border in Kenosha County or Racine County. The commute from Waukegan to Kenosha is just 16.5 miles. The commute from Zion is ten.

Border wars are stupid. Interstate job-poaching is nothing but a race to the bottom. And the best way to tap global markets would be to create a regional economic development strategy.
But Scott Walker’s not interested in a regional partnership, as he and WEDC frequently use their tax giveaways incentives around Illinois as an example of Wisconsin “winning." This is an attitude I’ve frequently compared to the Packers caring more about being better than the 3-13 Bears than actually trying to win a Super Bowl. Because with cuts in education, road funding and quality of life, Wisconsin is definitely not trying to excel in the Age of Fitzwalkerstan.

And there’s little reason to believe Wisconsin's situation would become better any time soon if the Fox-con is approved, as Mark Sommerhauser noted in Sunday’s Wisconsin State Journal that the LFB says the biggest costs to taxpayers would come in the near future. Which means other state services will face more budget cuts, even if the Fox-con does create a lot of jobs
The budget impact would be most acute from 2021 through 2026, when the credits would cost the general fund between $169 million and $196 million each year, according to the fiscal bureau analysis.

Matt Kussow, director of Badger Advocates, a nonprofit group independent of UW-Madison that rallies state support for the university, said the cost of the Foxconn incentive deal is worrisome — in part because university funding often is targeted in a budget crunch.

“Are we concerned? Absolutely,” Kussow said. “From a state budget perspective, absolutely, this will put pressure on very valuable resources.”
This is why State Rep. Gordon Hintz rightfully questioned UW-Milwaukee Chancellor Mark Mone for testifying in favor of the Fox-con in last week’s public hearing in Sturtevant. Mone claimed that UWM would benefit from the partnerships and research that may come from Foxconn, but Hintz noted that lower available revenues would cause fiscal problems, and basically told Mone “You’re crazy if you think UWM won't see budget cuts as a result of this.”

I'm not even going into the environmental damage and displacement of other economic activity that would happen as a result of the Fox-con (which by itself should be enough of a concern to put this thing back in the oven and massively improved), because the absurd costs to Wisconsin taxpayers and the resulting strain on every other part of the state’s finances that are the largest problem with this giveaway. And those worsening budget situation caused by the Fox-con should make anyone who cares about this state should say “HELL NO” to this corporate welfare scam.

Sunday, August 27, 2017

More to vouchers? Less to the rural K-12 schools? We find out tomorrow

Tomorrow appears to be the day when we get a better idea what schools might get for the upcoming school year for funding from the state. Except that the Wisconsin GOP-run Joint Finance Committee isn't revealing what will that funding will be.
The Legislature's budget-writing committee will vote Monday on a spending plan for the state's K-12 schools, moving the weeks-overdue state budget closer to passage — but details of the education package are still unclear.

"For the most part, stay tuned," said Joint Finance Committee co-chair Rep. John Nygren, R-Marinette, when asked on Thursday what will be included in the plan the committee will consider.

Nygren said not much has changed since the state Senate and Assembly released competing education packages earlier this summer. Lawmakers have agreed to keep intact an increase in categorical aid proposed in Gov. Scott Walker's original budget, Nygren said.

The budget will also likely include a measure to allow low spending districts to raise their revenue limits, both Nygren and co-chair Sen. Alberta Darling, R-River Hills, said.
If that's all there is to it, I don't why the GOPs on the Joint Finance Committee didn't go ahead and vote on K-12 education 2 months ago. Instead, we've seen school districts around the state hold off on hiring new or additional staff because they aren't certain that there will be enough money around, meaning the damage is already done, even if the sizable increases in per-pupil aid go through.

My guess is that we'll see some absurd, multi-part GOP omnibus that'll be sprung onto Democrats and the public with only a few hours to figure it out, and it'll end up being notably different from what was in Governor Walker's budget.

It's not like there hasn't been proposals thrown out there in the last 2 1/2 months. We've seen them from Assembly Republicans, who released a plan in early June, Senate Republicans, who released their own K-12 plan as far as a larger budget in July, and Legislative Democrats, who released their plan in .

But now we get to see what gets included. One of the big items that'll be interesting to see in a possible agreement will be in how many students will be eligible to use vouchers to pay for private schools. In addition, how much of that extra funding for vouchers would come at the expense of public schools, and it could especially hurt rural schools.
Right now, only families at less than 185 percent of the federal poverty level qualify for private school choice programs.

State Senate Republicans want to raise that to 220 percent, while Assembly Speaker Robin Vos, R-Rochester, favors 300 percent of the poverty level. That's equivalent to a family income of $74,000 a year.

Under the Senate GOP plan, virtually all of the current $20 million in "sparsity aid" that covers the higher costs of rural school districts would be removed.
Even with the smaller voucher expansion in the Senate GOP K-12 plan from last month, I noted that regular public schools would also be hurt.
...Not only does the Senate GOP raise voucher eligibility to families of 4 that make nearly $54,000, but they also have other giveaways like not allowing for incomes of current voucher families to be verified, and approving the setup of "virtual private schools", where a teacher instructs from a remote location.

Combine those giveaways to the voucher lobby with prior revelations that the voucher program is taking more money and students from K-12 districts than previously thought, and now vouchers are projected to take $36 million more in taxpayer dollars than what was in Walker's original budget. And almost all of that is "paid for" by funneling away money from public K-12 districts in Wisconsin.

So, no I don't feel good about what kind of kickbacks to Scott Jensen and Betsy DeVos are going to be revealed in tomorrow's Joint Finance Committee meeting, nor do I believe that public schools will be getting a "$649 million increase" in funding, like Walker yapped about all Summer (and has gone silent on over the last month, redirecting his focus to the Fox-con).

But between the K-12 proposals (by far the largest spending item when it comes to state tax dollars) and the likely release of final tax revenues for 2016-17, we'll have a much clearer idea about how much non-DOT money will be available, and if anything else might have to be adjusted before this thing hits Governor Walker's desk.

Our Founders didn't count on Trump or today's GOP

Bill Maher is very hit-or-miss with me, but he definitely hit the mark this weekend with his "New Rule" explaining that the our Founders never thought that a crook like Donald Trump who used the office to enrich himself, openly ignored the law of the land and abused the powers of his position would ever be allowed to take office.

When our Founders drew up the Constitution, they never imagined that someone who combined "morally corrupt" and "ignorant" like Donald Trump would ever become president. Even if enough voters were stupid enough to choose such a tyrannical fool, the Electoral College existed as a failsafe, as the wise electors were supposed to veto the bad choice for the good of the country. Instead, 54% of the electorate didn't vote for Trump, but he still won because the outdated Electoral College splits up votes by states, and the electors have "evolved" into being party hacks that care more about guaranteeing their team's "win" than in doing their job to prevent an unfit president from taking office.

Our Founders thought that presidents would ultimately serve the people, and that they wouldn't abuse their power to enrich themselves or avoid accountability to the voters or the law. And even if a rouge president were to act inappropriately, then Congress and the Courts would step in and take action to stop the president. But there's a flaw in that thinking. What if the president and Congress don't care about violating the laws, and don't do anything resembling ethics or public accountability? That's what we're seeing now, and that's the danger this country is in.

We've seen how this plays out in Wisconsin, where Wisconsin Manufacturers and Commerce got enough Supreme Court justices elected to claim that Scott Walker's money-laundering operation in John Doe was"free speech," and Walker and the GOP Legislature passed voter suppression measures that likely played a role in giving the state to Trump in 2016.

Likewise, Walker appoints hacks like Cathy Stepp to give the DNR a "Chamber of Commerce" mentality which handcuffs its workers from protecting the environment. Combine that reality with oil industry puppet Scott Pruitt running Trump's EPA, and it shows the bullshit behind the Walker Admin's claim that the environmental carve-outs in the Fox-con are fine "because the DNR and the EPA still will oversee it." That's the point, THEY WON'T OVERSEE IT. And these GOP hacks were appointed not to carry out the law.

So we have a modern-day GOP that refuses to provide for the common welfare, and a Legislative branch that is either too bought or too scared to do its job of oversight, and a court system that has been infected by right-wingers who believe their job is to work for the GOP and their benefactors instead of the Constitution and the good of the people. In 2017, the system of checks and balances and public accountability imagined by our Founders is in serious danger of breaking down for good, leading to a Banana Republic(an) situation where a handful of insiders control all governmental functions and policy, and the rest of the people can piss up a rope.

I'm not sure we can wait another 15 months for the November 2018 elections to start to correct this lawlessness and damage to our democracy. This is especially true if you buy into the theory that Trump pardoning racist civil rights violator Joe Arpaio may be a test run for pardoning his associates that are wrapped up in the investigation into Russian intereference in our elections, Here's how our Founders thought such a situation would go.

If Trump isn't immediately blown out of power for trying to pre-emptively keep people from being prosecuted for crimes in the Russia investigation, then what? Here was Thomas Jefferson's response on July 4, 1776.
Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
I hope it doesn't get to that point. But show me a better option to correct this evil rigging of our democracy if Congress and the Courts fail.

Saturday, August 26, 2017

The big taxpayer costs of WisGOP property tax "cuts"

On Thursday, Wisconsin's Joint Finance Committee finally got back into action, and among the items they signed off on was another property tax cut proposed by Governor Walker.
The state would wipe out its only property tax, which now funds forestry programs, and instead use general purpose revenue to cover those expenses after the Joint Finance Committee voted 12-4 along party lines to support Gov. Scott Walker’s proposal.

The forestry mill tax would be expected to bring in roughly $181.5 million over the next two years. But that property tax would be pulled off homeowners bills starting this December under the provision.

Dems argued the savings from eliminating the state property tax — an estimated $25 to $26 for a typical Wisconsin home — did not outweigh the risks the move posed, both to forestry programs and the fiscal picture for future budgets.
There's another property tax cut that the WisGOP-run Joint Finance Committee is expected to approve on Monday. This one would reduce the personal property tax (generally paid by businesses on equipment and similar items) by $73 million a year, and just like with the Forestry tax, General Fund tax dollars would be used to make up the difference so the average homeowner doesn't end up paying higher property taxes due to businesses paying less. No printed bill says exactly what businesses can write off, but Republican leaders on Joint Finance have said that's what the compromise will be, after they realized there wasn't enough money available to get rid of the entire $239 million in personal property tax.

The Forestry tax and the potential reduction in the personal property tax are not the only areas that Republicans have shifted off of the property tax that in Wisconsin since 2014. Take a look at these 2 "school spending" measures that aren't going into the classroom.

1. Giving away $406 million a year to the state's Tech College System in 2014, but mandating that the money had to go entirely for property tax relief.

2. Increasing the School Levy Credit by $105.6 million a year in the 2015-17 budget, and Governor Walker has proposed increasing it by another $87 million a year in this budget.

Neither of these measures has any other tax associated with them, Walker and WisGOP just assume the money will be there, so they can spend more of it on these property tax credits. This naturally means that other needs can't be funded because there isn't any money left in the state's General Fund to do so.

Now if your "reform" is taking the funding for Forestry and the Tech Colleges off of the property tax and onto the General Fund, I can see where that's going, and frankly it may be a good idea (we do rely too much on property tax in Wisconsin when it comes to services). But YOU SHOULD TAX IN SOME OTHER WAY TO MAKE UP THE DIFFERENCE. Republicans aren't doing that, and are merely increasing spending without asking for the money to make up the difference. That is not sustainable, and it helps explain why the state is looking at a $1 billion structural budget deficit in 2019 because these ongoing bills need to be paid.

So let's add up the unfunded property tax breaks that have been passed or proposed from the last 3 1/2 years, and look at what it'll cost us in a 2-year budget.

1. Forestry tax $181 million
2. Personal Property Tax $146 million
3. Tech Colleges $812 million
4. School Levy Credit $385.2 million

Think we could fix a few roads (or at least not borrowed for them), eliminate the need for increased amounts of local sales and wheel taxes, and/or prevent tax-raising school referenda with $1.5 BILLION? And for what? Maybe $200 a year in lower property taxes (which can be written off on your federal and state taxes) while having to pay more in fees and other local taxes (many of which are not able to be written off)? Oh, and there's the lagging job growth and lower quality of life that has hit in the Age of Fitzwalkerstan as well. Doesn't sound like a good trade to me.

Remember that these are the same Republicans who cried crocodile tears from the day President Obama took office about "overspending" causing increases in US budget deficit, and some still are peddling that bullcrap with their calls for a new Constitutional Convention to require a "balanced budget." Well, whether WisGOP likes it or not, to balance budgets GOVERNMENTS NEED REVENUE TO PROVIDE SERVICES, and any small bump in the economy that might come from lower taxes is more than wiped out with the extra fees and cuts that have to be imposed to make the numbers balance.

It's a stupid fiscal strategy based entirely out of short-term thinking to trick voters into keeping the scam of "lower taxes for our donors, lower services and lower wages for normal people" going for another 2-year cycle of giveaways. This "spend on gimmicks, borrow and pray" method of budgeting will continue until we boot these GOPs out of office, and I don't want to wait for the train wreck that the next recession will give to this state's Kansas-like finances to see that change happen.

Thursday, August 24, 2017

WisGOP budget delays are especially hurting rural schools, vouchers

As if hinted at in the past, the delay in the Wisconsin state budget is now going to have real effects on Wisconsin schools, even if the State Legislature goes ahead with Governor Walker's proposal and gives sizable increases to per-pupil school aids in the final document. That's because that extra money can't go out the door until the final numbers are known, and the WisGOP dallying on the budget has kept that from happening.

In Wisconsin, school districts get their first aid payments from the state with the start of school in September. However, with no increase in either general or per-pupil aids finalized in the state budget, that means schools are taking on a risk if they assume they will get any of that extra money until the budget passes, and many have apparently chosen not to do that. Recent published reports have quoted some school officials saying they will begin the year with larger classrooms and/or reduced staff because full-time positions can’t be offered without the guarantee of funding to back it up. In addition, a recent memo from the Department of Public Instruction says that payments for sparsity aid and proposed increases to voucher/charter schools won’t happen until the budget that is signed into law.

Those delays in the budget are causing uncertainties for many districts, but might the most stressful on small rural districts who may be counting on that sparsity aid to maintain their regular operations.
The Wisconsin Rural Schools Alliance represents around 150 rural districts in the state. Executive Director Kim Kaukl said it’s possible some rural schools are trying to keep costs down in several ways, including holding off on buying equipment.

"Some districts may start with substitutes in classrooms that weren’t filled yet or they may choose just to drop a section of a class," Kaukl said.
Some districts are developing contingency plans in the event they’ll see less money than what’s been proposed, said Ken Kasinski, administrator of the Cooperative Educational Service Agency in northern Wisconsin.

"If a district is lucky enough to have a fund balance, they’ll be looking at maybe tapping that fund balance along the way to be able to offset that until aid dollars come in," he said.
The concerns must finally be getting through to the WisGOPs that run the Legislature, as the Joint Finance Committee looks like they will finally be picking up K-12 school funding on Monday, which might at least give districts a better picture of what things look like before the first classes begin.

Waiting for these large quarterly payments for both vouchers and public schools is something that some legislators are now thinking of changing. That was the subject of a bill that received a public hearing in the Assembly’s Education Committee today, which would spread out payments evenly and more frequently throughout the year.

Under current law, a school district receives 15 percent of its state aid in September, 25 percent in December, 25 percent in March and 35 percent in June.
Current law also provides an option for a school district to receive its state aid in ten equal monthly payments from September to June. Under current law, if a school
district opts to receive its state aid in ten equal payments, the school district must compensate the state for any lost interest. Under the bill, school districts receive state aid in 12 equal monthly payments. The bill retains the option for a school district to receive its state aid in ten equal payments but eliminates the requirement that such a school district compensate the state for any lost interest.

Under current law, the Department of Public Instruction pays annual amounts due to operators of independent charter schools and to private schools participating in a choice program or the Special Needs Scholarship Program in four equal quarterly installments. These installments are paid in September, November, February, and May. Under the bill, other than for the first school year in which payments are received, DPI pays operators of independent charter schools and private schools participating in a choice program or the Special Needs Scholarship Program in 12 equal monthly installments. For the first school year in which an operator of an independent charter school or private school participating in a choice program receives a payment from DPI and for the first year in which a pupil participates in the Special Needs Scholarship Program, DPI pays the annual amount due in ten equal monthly installments.
Also, there wouldn’t be a holdup for late payments in case future budgets can’t get passed.
For the payments from July to October, the total aid entitlement for each district shall be estimated based upon the total aid payment in the previous year. The November payment shall be adjusted to account for any difference between the total amount paid from July to October and one-third of the school district's total aid entitlement for the school year.
Dem Senate Leader Jen Shilling called out WisGOP for its lack of leadership and responsibility to fund the schools on time.
From transportation project delays to school funding shortfalls, the Republican dysfunction in Madison is affecting local jobs and driving up costs for taxpayers.

For months, Gov. Walker and Legislative Republicans have refused to pass a budget that prioritizes community schools and fixes Wisconsin’s transportation deficit. Instead, they’ve continued to push more tax breaks for the wealthy and well-connected at the expense of our working families and seniors.

As a result of these misplaced priorities, Wisconsin is now one of only two states in the entire country that doesn’t have a new budget in place – and local communities are paying the price.
Damn right, Jen. And even if the K-12 funding package is shoved through on Monday (and God knows what it'll look like), self-inflicted damage by WisGOP's foolishness has already been done.

Wednesday, August 23, 2017

Tomorrow will have lottery news beyond the $700 million Powerball

It’s time for more Powerball fever in Wisconsin, as the jackpot has now hit an estimated $700 million, which likely means more people running to stores to plunk down$2-$3 a ticket today. Just bought for a group of friends myself, and there were a few others in line ahead of me when I did it.

Interestingly, Wisconsin’s Joint Finance is going to talk about the Lottery tomorrow, and not because they want to change budget estimates in case someone wins the big one. They’re actually going to discuss what to budget for the property tax credit that comes with the proceeds of the Lottery, and the situation surrounding the Lottery Credit offers more intrigue beyond legislators signing off on a number.

First of all, you may be curious to see what happens with lottery ticket sales when jackpots get this high. The Legislative Fiscal Bureau’s summary from May gives us a clue, as they say that lottery sales went up significantly in the weeks leading up to the $1.6 billion jackpot in January 2016.
On-line game sales appear to be lower in 2016-17 than estimated in October, 2016, primarily because large Powerball jackpots, which can increase sales dramatically, have not been generated in 2016-17 as often as they were in 2015-16. The Powerball game accounted for slightly more than 48.5% of all on-line (lotto) game revenue in 2015-16. In 2015-16, there was an occasion when the Powerball jackpot grew high enough to attract weekly sales of more than $20.0 million for at least a two-week period. In 2016-17, there have been no weeks in which Powerball sales have exceeded $5.0 million. Average weekly sales for Powerball tickets in 2015-16 exceeded $2.15 million per week. By contrast, in 2016-17, average sales through April, 2017, have been about $1.52 million per week. Total Powerball sales this year are not likely to reach the estimate of sales made in October, 2016. The reestimate of on-line ticket sales in 2016-17 would decrease from $232 million to approximately $213.5 million.
Now combine the lower lottery sales with the fact that the Joint Finance Committee agreed last October to blow all of the surplus money on property tax cuts last year (a move I found to be stupid at the time, and now you see why), and there was less money in the Lottery Fund to start the year. This means that the Lottery Credit is projected to go down by a sizable amount this year, raising tax bills for Wisconsinites this winter.

Lottery tax credit FY 2017 vs FY 2018
2016-17 $185.3 million
2017-18 Walker budget projection $167.2 million
2017-18 LFB re-estimate $156.75 million

That’s a drop of more than 15% in what’ll you get taken off of your property taxes this year, and my rough math indicates that this would raise the tax bill on the average home by about $20, and about $7 more than what Walker’s original budget would have done.

This doesn’t seem like a big deal on the surface, but you may recall that around the time the re-estimate of the Lottery Credit came out, the budget talks broke down, and I do think this had an effect. Given that GOPs and especially Walker have made “lower property taxes” a talking point of theirs, the increased chances of voters seeing higher property taxes in the year before the 2018 election may have spooked them.

Add in this week’s release from the LFB that showed rising property values will likely lead to Wisconsin property taxes being higher than previously projected, and the problem becomes bigger. In that memo, the LFB said that if Gov Walker’s budget stays as-is, that property taxes would go down $6 on the average home next year.

But now if you add in the $7 for the lower lottery credit, and now it’s UP $1, and bye-bye “lower property taxes” talking point. Not that the “lower property taxes” shtick will work on most people with IQs over 80 at this point (not after seeing services suffer and other local taxes and fees go up), but it’ll be hilarious to see Walker and WisGOP flounder about trying to explain away an increase that still would be below the rate of inflation.

Back to the big-money drawings of today. The giant jackpot and a $393 million one that was won in MegaMillions 2 weeks ago both got big after June 30, and therefore took place in the 2017-18 Fiscal Year. Which means you won’t see your property tax bill be any lower from those extra sales until December 2018. So no help for Scotty and WisGOP there, either.

But it does lead me to wonder if the GOP-led Joint Finance Committee will try some shenanigans tomorrow. Might they gamble on higher sales from the recent huge lottery jackpot, and raise the Lottery Credit for this year? It would be an extremely risky maneuver, and might not be allowed (by law, the minimum reserve must be 2% of lotto sales), but I’m going to be interested to see if the WisGOPs try to justify the recent big jackpots and related larger sales as a reason to try.

Another option the WisGOPs on JFC could try to keep the Lottery Credit high would be by using General Fund tax dollars to send payments to retailers that sell lottery tickets. This was floated in the Senate GOP’s budget proposal from last month (see pages 514-516 of this PDF), where $45 million in tax dollars would be sent to retailers, allowing the Lottery Fund to send more money back to taxpayers.

But considering the prospect of no Trump Boom and lower revenues for the next couple of years along with a $1 billion structural deficit starting in 2019, there may not be $45 million left to give away in this budget. Combine that with the extra budget holes that the Fox-con would give, and the JFC might back off from messing with the Lottery Credit. But keep your eyes peeled for something funny tomorrow, as there may be more news with the Wisconsin Lottery beyond finding out that I someone won the $700 million Powerball.

Tuesday, August 22, 2017

WisGOP budget dysfunction, as the Tweeters fly

Earlier today, it looked like out long, statewide nightmare might soon be over. THe Wisconsin State Journal's Mark Sommerhauser dropped this bit of information from a Scott Walker PR appearance this morning.

Sommerhauser went on to report that Walker said the deal included a reduction (but not elimination) in the personal property tax that is mostly paid by corporations, and that a new tax on hybrid vehicles might be put in to reduce borrowing for roads.

After Walker's comments, Joint Finance Committee co-chair John Nygren gave more details to the media ahead of today's Foxconn hearing, but said things weren't quite wrapped up.

And then Assembly Speaker Robbin' Vos and Senate Majority Leader Scott Fitzgerald met this afternoon at the Capitol....and emerged singing a different tune.

So was Scotty just running his mouth and being foolish, or was he LYING and trying to give a false image of confidence and competence to the rubes? Either way, he looks like garbage now.

Instead of finishing the budget, the JFC will be debating and trying to pass another unpopular GOP gimmick in the next 2 weeks.

So while road projects stall out, and caregivers continue to be unpaid, and schools and local communities are playing a guessing game that likely will lead to lower services in the next year, the 8-week budget impasse inside the GOP seems like it'll continue past Labor Day.

If I believed that WisGOP were adults that actually actually cared about not wrecking the state and keeping things functional, I'd say that Dems should be going public with their budget proposals to try to pressure the GOPs into moving ahead and/or adopting some of them. But with the WisGOPs being the child-like, cynical fools they are, they'd try to bring the Dems down with anything they did, and then call their bad budget "bipartisan", like Walker was doing with the Fox-con today.

There's no reward from voters for doing the right thing, so the Dems' best strategy is to sit back and let the GOPs keep messing things up. What a clown show. GET THESE WISGOP FOOLS OUT OF HERE.

EDIT- Great response by a guy who's had quite a few of them recently- State Rep. Jimmy Anderson (D-Fitchburg)

WisGOP throwing $181 million at property tax cut, and we won't even get lower taxes!

While the Joint Finance Committee was out of town discussing the Fox-con today, the Legislative Fiscal Bureau dropped this bit of information ahead of JFC’s Thursday meeting regarding the state’s expected property tax bill.

What’s interesting here is that the projected property tax cut that was part of Governor Walker’s budget is even smaller than the minor writeoff that was expected. And the main reason is a good one- a larger increase in property values.

Projected property tax bill, March vs August
Projected Median Value Home, Wisconsin
2017- $160,622 (Aug) vs $159,393 (March)
2018- $163,834 (Aug) vs $162,581 (March)

Projected property tax bill
2016 $2,852
2017 (March proj.) $2,832
2017 (Aug proj.) $2,846 (-$20 vs 2016, +$14 vs March)

2018 (March proj.) $2,831
2018 (Aug proj.) $2,844 (-$8 vs 2016, +$13 vs March)

$8 in two years? Go crazy, everybody!

The LFB also notes that the increased property tax values means that the cost of the proposed Walker/WisGOP tax gimmick eliminating the state’s Forestry tax also goes up.
It should be noted that the new values will also impact the fiscal effect of the Governor's proposal to sunset the state forestry tax beginning in 2017(18) and replace that revenue with a transfer to the conservation fund from the general fund. The proposed transfer would equal the amount otherwise raised through the state forestry tax. In the Governor's 2017-19 budget recommendations, this was estimated at $88,759,300 in 2017-18 and $91,695,600 in 2018-19. Because the actual 2017 state total equalized value is higher than previously estimated, thereby affecting the estimated 2018 equalized value as well, the proposed transfers to the conservation fund are now estimated at $89,259,600 and $92,224,100. These amounts represent an additional general fund commitment of $500,300 in 2017-18 and $528,500 in 2018-19, or $1,028,800 in the biennium.
So that’s an additional $181.5 million going out the door over these next 2 years just to cut property taxes by an estimated $26 per homeowner. Given the money that we don’t have for roads or schools or local governments, is that worth it just to have a campaign talking point of “see, you saved $8! Aren’t I doing great?”

I say no, but it appears that the WisGOP-controlled Finance Committee is willing to say “yes” on Thursday. And you know what’s even worse? With the Lottery credit being lower than what Walker's bill projects, I bet your property taxes won’t go down at all next year.

Now add in the increased deficits and future budget cuts that will result, and you can't tell me these property tax gimmicks will leave the average Wisconsinite better off. But that's what we're looking at in the near future, and it's more damage from a Wisconsin GOP who has made "politics over policy" one of their hallmarks in the 2010s.

Monday, August 21, 2017

Has budget delay allowed a shortfall to appear?

After a long absence, we will finally see the Joint Finance Committee back in action this week. First, they will hold a "public hearing" on the Fox-con, which naturally will not be held in Madison, but near a likely site of the Foxconn campus in Sturtevant (that doesn't seem sketchy at all). Then, they will actually try to make some progress on the budget by discussing a few items, including property taxes and the DNR.

According to today's Milwaukee Journal-Sentinel, it looks like the GOP-run JFC is going to proceed with initiatives to move ahead on property taxes at state expense. In addition, there may be a bigger deal that gets revealed in the near future that finally gets this budget done.
Rep. John Nygren (R-Marinette), the panel's co-chairman, said there is an agreement in principle on transportation and the personal property tax between Gov. Scott Walker and GOP leaders in the Senate and Assembly. But Nygren declined to reveal the deal in detail, saying it was tentative and could still fall apart as legislative leaders share it with rank-and-file lawmakers.

"It's not final, but there's a framework," Nygren said.

A spokesman for Walker had no comment but the committee's other co-chair, Sen. Alberta Darling (R-River Hills), said progress has been made between Senate Republicans, who favor sizable borrowing for road construction, and Assembly Republicans, who oppose new borrowing without new revenue to pay for it.

"We're very close on transportation and both sides had to give to get to something," Darling said.

Both Nygren and Darling said the committee will vote Thursday to eliminate the property tax levied by the state for forestry programs, which would save $26 on the tax bill for a median-valued home.
That initiative would cost around $180 million over the next two years, but recent events make me wonder how prudent it is to throw that money out the door when we might need it in the near future. And not just because the Fox-con would cost taxpayers hundreds of millions of dollars for each of the next 2-3 budgets after this one.

A report came out a couple of weeks ago showing the state's cash position and outlook. While not an exact proxy for the totals in the state's General Fund, it usually gives us a good idea. So let’s take a look at what was projected at the end of April and how things looked at the end of July.

Gen Fund cash in millions, March 2017-June 2017
Mar 2017 $1,028.5
Apr 2017 $1,360.9 projected vs $1,269.8 actual (-$91.1 mil)
May 2017 $1,889.2 proj. vs $1,847.1 actual (-$42.1 mil)
Jun 2017 $1,552.6 proj. vs $1,369.5 actual (-$183.1 mil)

So why did we fall $141 million short in June and $183 million overall? Is it as simple as July 1 being on a weekend in 2017 and on a Friday in 2016, which means all expenses that were typically paid on July 1 got paid on June 30 (this happened with the federal government)? Or will we end Fiscal Year 2017 with a lower-than-expected carryover, which immediately would put the 2017-19 budget into a deeper hole? Lower revenues and cash balances was what Senate GOP Leader Scott Fitzgerald seemed to hint at recently when he implied that there may need to be a larger cushion built into the budget than the $12 million Walker left it with 6 months ago.

The 2016-17 final General Fund revenue figures are expected to be released in the next 2 weeks (last year it was on September 1), and that can tell us if we fell short on that side, and may need to compensate in this budget. So while bad GOP policies and dysfunction have led to a delay in the Wisconsin state budget that is approaching 8 weeks, it might now also present an opportunity to avoid further budget problems. If we aren’t going to see final floor votes on the budget or the Fox-con in the next 10 days anyway, we might as well wait to have a better idea of where we are.

Now, that doesn't mean that some items can be moved forward if certain parts of the government have funding changes that need to be finalized ( school aids and caregiver rate increases are among the items being held up due to the GOP's dallying on the budget, and should be moved ahead separately and quickly). But maybe we should hold off on the property tax giveaways and other big-spending pre-election gimmicks until the revenue numbers come in, because the current-year budget might already be messed up due to January revenue projections overshooting the weaker reality that appears in August.

Instead, I have a suspicion that GOPs will try to sneak everything out of Joint Finance late Thursday night right before Labor Day Weekend, in a repeat of the time 2 years ago when they tried to gut the state's Open Records law ahead of the 4th of July weekend. I hope that's not the case, and I hope they get it right and try to do more to fix the house-of-cards pile of garbage that Scott Walker sent to them. But with Walker at 40% approval and falling and Trump doing even worse than Scotty in Wisconsin, I can see the WisGOPs trying to pull lame gimmicks that make an already-bad budget outlook even worse.

Worse roads and higher local taxes? Welcome to NE WIsconsin!

As Wisconsin Republicans continue take their sweet time in finishing the overdue state budget (now at 52 days and counting), local governments don’t have such a luxury. Local city officials will likely release their proposed budgets in the next few weeks and have to finalize them by late November, and past budget cuts from the state means that many fixes are needed on local roads, without a lot of funds available to take care of those issues. And one of the places that is feeling the crunch the worst is northeastern Wisconsin.

The Door County Peninsula Pulse notes that Sturgeon Bay’s City Engineer said last month that the city has to hope its streets hold out for 50-60 years with the current funding system, and Mayor Thad Birmingham says in the article it’s even worse than that, given Wisconsin’s lack of flexibility on property taxes.
“That lifespan gets stretched out more each year as our revenue stays the same,” Birmingham said. “So that 50 – 60 year lifespan could end up being 100 years.”

Prior to 2010, local governments could increase their tax levy by 3 percent of the previous year’s levy. In 2010, Gov. Scott Walker lowered that limit to 0, allowing Wisconsin municipalities to increase property taxes only at the rate of net new construction in the community. So even as the cost of fuel, materials, services, and human resources increases, budgets do not unless there is significant new construction. Levy increases were first capped at 3 percent by Gov. Jim Doyle in 2006.

“How can you keep up with anything – roads, parks, sewer – if you can’t increase revenue to pay for expense increases?” Birmingham said.
Now, just like with schools, a local government can go to the voters to raise property taxes above the limit. The Town of Liberty Grove in Door County did this with success in 2014, but that’s not something that most local governments in Wisconsin choose to deal with, and they have turned to a couple of other methods to scrape together revenue in recent years in Wisconsin.

One involves new wheel taxes, which have been added in 4 Wisconsin cities and villages in 2017 along with all of Milwaukee County. That follows several other places that put in wheel taxes in both 2015 and 2016.

Another option has been for counties to put in new local sales tax, if they hadn’t done so already. The Door County article notes that Kewaunee County’s new sales tax was as a last resort after Act 10 “savings” and other budget cuts couldn’t fill the potholes and other needs the county had.
In 2016 Kewaunee County had to implement a .5 percent sales tax to plug a gaping hole in its budget that remained even after the county cut 31 positions from county staff and transferred $600,000 from its highway department budget. Kewaunee’s problem was exacerbated when the Kewaunee Power Station closed in 2013, costing the county a lucrative utility fee.
In addition to Kewaunee, Sheboygan County put in new 0.5% sales tax this year, Brown County agreed to put one in starting in January 2018, and Manitowoc and Calumet Counties are also considering putting in a sales tax as part of this Fall’s budget deliberations. If all of these counties go through with sales taxes, there will only be 4 counties left in Wisconsin without one.

Where'd all these new taxes come from?

There also is an option for some tourist-related communities of Wisconsin to put in their own sales tax to pay for the extra needs that tourist towns have. This is a “premier resort tax”, and the Cities of Bayfield, Eagle River, Wisconsin Dells and Rhinelander along with the Villages of Lake Delton and Stockholm all have been able to levy a tax. The Door County article notes that Sturgeon Bay is consider such a tourist tax to try to keep its roads fixed, and voters in La Crosse County signaled approval in a non-binding referendum in April.

However, the State Legislature would have to sign off on such a measure (likely in the state budget), and given that more than a few GOPs in the Legislature are already huffy about the increased amount of school referenda and wheel taxes, it may reduce the chances of a new premier resort tax area being allowed for 2018…if we ever pass a budget.

But it’s the WisGOPs’ own fault that the need for new local taxes exists in the first place. For 3 budgets (and likely a 4th), WisGOP has chosen to defund aids to local governments as a means to pay for their tax cuts to the rich and corporate, and to claim they kept property taxes in check. The new wheel taxes and sales taxes are the natural outcome of this mentality, and now the GOPs are whining because their ALEC “low-tax” fantasies are crumbling in the real world. Not just with the higher taxes, but also the deteriorating roads.

Maybe a better idea is to get rid of these GOP clowns in the Legislature and replace them with people who understand the connection between state and local funding of services, and won't shortchange local governments stupid, Norquistian poses. All of those places in the 920 that have new sales and wheel taxes would be a good place to start seeing voters step up and force these changes, as throughout the 2010s this area has sent Republicans to “represent" the area, and all they've gotten back are potholes and more money being taken out of their pockets.

Sunday, August 20, 2017

The Fox-con isn't for good policy. It's because of Walker's drop in polls.

I wanted to add some visuals and breakdowns of information related to the Foxconn package, that may help you (or your friends) understand the full fiscal picture better.

The first involves some good graphics and analysis from UW Professor Menzie Chinn at Econbrowser Professor Chinn uses the analysis of taxpayer costs and added jobs and tax revenue from the Legislative Fiscal Bureau to show the initial hole the state falls into, and how it eventually recovers those losses…if everything goes right.

Later on in the post, Professor Chinn brings up another good point.
In principle, [both benefits and costs] should have both deflated, and discounted, but I think in order to make the calculation as transparent as possible, they did what they did. Of course, had they deflated, and discounted, the cumulative net benefit calculation (or NPV) would have looked worse.
That’s exactly right, because 1. There is no limit on how many tax credits can be taken out in a given year, so they could be used up quicker if costs/salaries rise. 2. On the flip side, if salaries do not keep up with inflation, that means there is a bigger hole that has to be dug out of, because the higher payments that come out from 2017-2024 are “more costly” than whatever the state is making back in 2040.

Now let's throw in this analysis from the Wisconsin Budget Project, which illustrates how much has to go right for the Fox-con to pay off, and also how much we stand to lose if it doesn’t.
One of the important questions is the matter of making an estimate of the relationship between Foxconn’s hiring and payroll and the employment gains that Foxconn’s spending will generate elsewhere. The consulting company’s analysis for Foxconn estimates a multiplier effect of 2.7. What that means is that the creation of 13,000 jobs at Foxconn would generate an increase of 22,000 jobs elsewhere, for a total of 35,000 jobs.

With that in mind, the easiest way to consider scenarios with fewer workers at Foxconn would be simply to apply the same multiplier in each case. However, there are two major components of the multiplier effect. One is the employment at businesses that supply components or services to Foxconn. The other component is the positive impact on the local economy of the spending by Foxconn employees. If Foxconn builds a factory with state-of-the-art automation and fewer employees, that will significantly reduce the positive effects of having an influx of employee earnings flowing through the economy, but it will not necessarily cause a large decrease in Foxconn’s contracts with other businesses. (But keep in mind that those businesses will not all be in Wisconsin.)

With those considerations in mind, we decided to assume that a 50 percent reduction in the number of Foxconn workers would result in a 25 percent reduction in the employment gains resulting from the new economic activity. And for alternative #2 we assumed that if there are just 3,000 Foxconn employees there would be a 50 percent reduction in the indirect employment gains.
The Budget Project also illustrates just how much Wisconsinites would be left holding the bag if Foxconn decided to cut and run from Wisconsin once the handouts ended.
Considering how quickly television and other flat screen technology has been changing, there is a significant risk that the proposed Foxconn plant will not be operating long enough to come close to offsetting the state’s massive investments. Assuming the new plant does not become obsolete even before 2034, that year is when the risk of Foxconn pulling up stakes and going elsewhere is probably greatest because it is when the state would stop writing the company huge annual checks for 17 percent of payroll costs. When a company’s business plan relies on such large subsidies, how confident can we be that they will remain in Wisconsin when those subsidies are gone?...

One of the surprising findings of our analysis is that the net loss for Wisconsin taxpayers from Foxconn exiting Wisconsin in 2034 is in the same ballpark regardless of which of the three scenarios one assumes..... The difference between the three scenarios we analyzed becomes much clearer in later years, after the state stops paying job credits that are directly proportional to the size of its payroll.
And these analyses does not even consider which services and economic activities get hurt as a result of so much money and business being funneled over to Foxconn. When you look at the up-front costs that Wisconsinites have to take on for the Fox-con, there is no honest way that a giveaway of this size is justifiable.

But Scott Walker and the Wisconsin GOP don’t care about dealing with the damage that will happen to the state over the next few years due to this scam, as long as they get a nice kickback for their next campaign and/or head out the revolving door to some lobbying gig or other wingnut welfare where they can cash in. And make no mistake, this Fox-con is not about economics or good policy, but is a desperate attempt to reverse bad poll numbers.

If these GOP vandals shove through the Fox-con, it'll be Dems and others in the real world that'll be forced to be the adults to clean up from the fiscal and environmental mess (if we’re even able to). It’s sickening cynicism, but would we expect any less from the ALEC crew at this point?