Monday, September 9, 2019

New events on old stories - MKE sales tax and weak manufacturing

I wanted to follow up from a couple of posts last week, as developments have happened in recent days that add on to what I ranted about, and give a better illustration of what we have.

You may recall a post where I mentioned the limitations that have been imposed on Wisconsin’s local governments. And no place suffers more from these limitations than the state’s largest attractor of tourism dollars - Milwaukee County. Well, today we saw Milwaukee County legislators agree with city and county officials to formally introduce a bill that will allow the County to raise and keep a bigger proportion of the dollars it generates while reducing its reliance on property taxes and fees.
Milwaukee County leaders are proposing a 1 percent local sales tax increase that could be reinvested into the community through property tax relief and refurbishing the county's aging buildings.

State Rep. Evan Goyke, D-Milwaukee, and state Sen. La Tonya Johnson, D-Milwaukee, plan to introduce a local option sales tax to the Wisconsin Legislature this fall. If approved, a referendum would be brought to Milwaukee County voters in Spring 2020.
The proposed plan could bring in an extra $160 million in the first year, with more than 25 percent of that money projected to come from visitors and non-residents, according to the county.

The additional revenue could be used to reduce property taxes, investment in municipal facilities, community assets and services and address capital projects and deferred maintenance, according to the county.

"For years we have been doing more with less as state aids continue to decline, and having the option to generate local revenue represents a watershed moment for us to not only sustain ourselves, but to thrive for generations to come," Milwaukee County Executive Chris Abele said in a written statement. "This plan is the best way forward for us to give Milwaukee County taxpayers the services and programs they deserve."
Let’s see if the GOP Legislature goes along with a plan that costs ABSOLUTELY NOTHING to Wisconsinites that don’t visit Milwaukee, and mirrors the Premier Resort Area taxes that have been set up in several smaller communities throughout the state.

Let these people go free!

If the WisGOP Legislature doesn't pass that bill and leave the sales tax decision up to the people of Milwaukee County, then it reiterates that "the party of local control" hasn't changed at all. It would prove again that the GOP would rather hamstring the state’s largest economic engine to maintain the economic apartheid and lame-ass suburban superiority that up to now has been a doctrine of both WisGOP and their spokespeople on AM radio.

But let's see if there are some cracks, particularly given how GOPs gerrymandered a sizable amount of Assembly and Senate districts to include parts of blue-leaning Milwaukee County suburbs. That "cracking" means they can't afford to lose those parts of Milwaukee County by overwhelming margins if they want to stay in office. Related to that, State Sen. Dale Kooyenga was interestingly non-commital today on the subject of an additional Milwaukee County sales tax. Combined with his decision not to run for Jim Sensenbrenner's seat in Congress, it appears that Koo-Koo recognizes the danger in winning an election 51-49 and then ignoring the wishes of the eastern half of his district.

We also had an extra bit of data that backed up other information on a portion of the US economy that I had discussed last week. It came from the revised productivity numbers from the Bureau of Labor Statistics, and it showed US manufacturing was slowing even more than we thought in the 2nd Quarter….. before all of the bad news we saw in that sector for July and August.

Manufacturing, Q2 2019
Previous -1.6%
Revised -2.2%

Hours worked
Previous -0.5%
Revised -0.8%

Previous -2.1%
Revised -3.0%

Unit labor costs
Previous -+5.8%
Revised +6.7%

None of that is going to be encouraging hiring or growth in that sector any time soon, and given that prices paid for manufactured goods continue to stagnate, how much longer can it be before we tip over from low manufacturing job growth to job losses?

Both of these developments might prove intriguing as 2019 ends and 2020 begins. And neither are items WisGOPs are going to want to talk a lot about, unless we make them have to talk about it.

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