Monday, February 27, 2023

Paddy Wack still misleading and BSing in the J-S, this time on vouchers.

I saw that Patrick McIlheran was given a column by the Milwaukee Journal-Sentinel today. This guy was a RW quota case for the J-S 20+ years ago, getting a nice paycheck in exchange for peddling absurdities and hateful garbage in a regular column. The writer known as Paddy Wack then left to make good money in DC as a staffer for US Senator Ron Johnson for a decade.

Well Paddy came back to Milwaukee in 2021 to cash paychecks for a Bradley Foundation-funded front group known as the “Badger Institute” (previously known as the Wisconsin Policy Research Institute. It changed names when WPRI became too synonymous with BS). As part of that gig, Paddy was writing in the Journal-Sentinel today trying to prop up the state’s continually-expanding school voucher program.

McIlheran takes on the argument that voucher schools cause big increases in property taxes, since community-based public schools lose state funds and are allowed to make up the difference. And he agrees that this shouldn’t happen.
Like most spin, it builds on a grain of truth: When parents outside Milwaukee take their state school aid to a private school, the cost is arbitrarily shifted to property taxes. It used to not work that way as the program was funded directly from the state. There’s no reason it cannot be transitioned back.

When a child goes to a private school via choice, $8,399 of state aid follows each elementary school child, or $9,045 for high schoolers. The DPI then redirects the aid it would have sent to the school district where the child lives by the amount of the choice grant.
I read that and thought, “Am I going to agree with Paddy Wack?”, because I also think it is ridiculous that property taxes have to be raised to make up the difference for voucher students. Especially the ones who never attended a day in public school.

But then this Bradley-funded hack gets the situation 100% off of reality. In addition to a ridiculous comparison about a student transferring between public school districts when we know that only 7% of the students in the non-Milwaukee voucher program for this year were in Wisconsin public schools last year, Paddy Wack uses the very specific example of the state’s largest school district, whose voicher program is set up under different rules.
The state simply needs to fund all choice students with the Milwaukee model: State money follows the child, coming out of the state’s general fund. Property taxes play no part. Districts’ levies are treated no differently than if a child’s family moved.

This policy change would simplify the funding process and decouple the funding streams of these programs. It shifts the cost of choice off property taxes and onto state taxes.
First of all, state money “follows the child” in the rest of Wisconsin as well, but more importantly, Paddy isn’t telling you is that the Milwaukee voucher program also used to take away funds from MPS. The GOP Legislature eventually changed this law to increasingly use state funds to pay for two separate school systems – voucher and public.

Note how the Milwaukee aid reduction goes down in this graphic, in contrast to the increasing losses taken on by public schools in other communities.

MPS isn’t getting extra resources to pay for theor schools, mind you. It merely is having a smaller loss of state funds, and doesn't need to levy as many property taxes to make up the increasingly smaller difference.

The rest of the state doesn’t have such a shift, and those districts are literally having state funding taken away to pay for every voucher kid that lives in the district - no matter if that kid never attended public school in the district or if their voucher school is in a different community. Or if the school gets less than that amount of state aid per student to begin with (most districts have lower per-student state funding than voucher schools, by the way).

That’s where the property taxes come in to make up the difference. Paddy Wack offers no answer for that situation, and doesn’t mention if he wants the public school to lose resources, or if he wants the state to spend a lot more money to pay the full costs of having these two different schools systems.

Instead, Paddy repeats the tired (and WRONG) comparison of the cost of state vouchers vs the full cost of educating a student.
Choice, in the end, saves taxpayers money. That $9,045 grant, the total taxpayer outlay for choice students, is far below the average $15,200 per pupil spent by school districts. The gap should be less: The state should view each child as having equal value.
But we don’t know if that spending “gap” exists at all. Those “non-profit” voucher schools get donations (which are written off of taxes), tuition payments from other parents (which also get written off in this state), and require taxpayer-funded costs of transportation and other amenities that Paddy refuses to mention.

You know what also doesn't get asked of oligarch-funded “intellectuals” like McIlheran who insist that school vouchers are a cure-all solution? Milwaukee has had vouchers for over 30 years, and these same righties complain that the City is a crime-infested cesspool that has continued to slide downhill, and is in a cycle of constant defunding. So why would we think that model would do anything positive for the rest of the state, versus the previous method of investing in community schools, and communities in general?

After the decades of data in Wisconsin and no real improvement in the situation, you’d think that we’d stop hearing the same old BS from voucher proponents. But we don’t, because connected righties like Patrick McIlheran never had to deal with the consequences of being wrong. They will always be able to get work for other right-wingers, either as a hack staffer, or through some kind of stink tank like the Bradley-Funded “Badger Institute”.

And yes, I find that right-wing affirmative action program infuriating. Especially when they work with Wisconsin Republicans to produce awful policy that we are paying a big price for.

Friday, February 24, 2023

Americans made more and spent more. Wall Street is freaked, but I'm not

Today, we got our most comprehensive look at how the economy started off 2023. And things were looking up.
Incomes rose 1.8% and 0.6% last month, respectively, according to the report. Consumers also put more in their piggy banks: The personal savings rate increased 0.2 percentage points to 4.7% in January.

“It seems like consumers were feeling jolly in January,” Gregory Daco, EY Parthenon chief economist, told CNN Business in an interview. “They spent more freely across the board, really on all items, despite inflation being higher.”
Sounds like a good thing to me. But that “inflation” item mirrors what we saw in last week’s reports, where prices increased more at the start of the year, both in energy prices and in the “core” index that takes out food and energy.
Inflation picked up speed in January as the Personal Consumption Expenditures price index rose 5.4% from a year earlier, the Commerce Department’s Bureau of Economic Analysis reported Friday. In December, prices rose 5.3% annually.

In January alone, prices were up 0.6% from the prior month, a higher monthly gain from December’s increase of 0.2%.....

The Fed[eral Reserve]’s go-to inflation gauge, the Core PCE index (which strips out the often volatile food and energy categories) showed prices rising 0.6% on a monthly basis and 4.7% for the 12 months ending in January.
And that combination of good economic news and a boost in inflation was something Wall Street did not want to see, as it seemed to confirm to traders that we will see interest rates continue at these 16-year highs for quite a while.
Wall Street's main indexes posted their biggest weekly drop of 2023 after sharp losses on Friday, as investors braced for the possibility of more aggressive rate hikes from the U.S. Federal Reserve as U.S. economic data pointed to resilient consumers. For the blue-chip Dow Jones Industrial Average (.DJI), the 3% fall was its biggest weekly decline since September. It was also the Dow's fourth straight weekly decline, its longest losing streak for nearly 10 months.

The S&P 500 (.SPX) and Nasdaq Composite (.IXIC) were also down 2.7% and 3.3%, respectively. After a strong January, stocks have retreated this month as a slew of economic data amplified worries that the U.S. central bank might have to keep rates higher for longer.
And after stocks rose in January and the first 2 weeks of this month on the hope that the tightening cycle was over, all those gains have been given back in the last two weeks on the thought that the Fed might raise rates all the way up to 5.5%.

But I’m going to go against the Wall Street grain on this, because the latest updates to data tell me that we’re in a strong economy that shouldn’t cause the level of economic concern that so many “experts” are giving off these days.

To start with, we are getting more confirmation that Americans’ pocketbooks are holding up. Income growth at the end of 2022 was revised up in the income and spending report, as November and December’s increases were each raised by more than $20 billion (annual rate), and disposable incomes were revised up by more than that.

We also know that wages went up in July, August and September more than we previously knew, as that was reported as part of the update to 4th Quarter GDP which came out the day before.
In addition to presenting updated estimates for the fourth quarter, [Thursday's] release presents revised estimates of third-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $303.0 billion in the third quarter, an upward revision of $115.2 billion. Personal current taxes are now estimated to have increased $48.0 billion, an upward revision of $7.3 billion. Contributions for government social insurance are now estimated to have increased $41.2 billion, an upward revision of $14.8 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 2.8 percent in the third quarter, an upward revision of 2.0 percentage points from the previously published estimate.
That’s a big difference, and it means that the US savings rate was larger than what was reported at the time. That should be something the Fed notes, and should be an argument against an “overheated” economy in need of continued rate hikes, and instead is merely a strong economy with some savings to go along with increased spending and income growth.

In fact inflation-adjusted disposable incomes are up nearly 4% since inflation peaked in June, and the savings rate has gone from 2.7% to 4.7% in that time. I also think that inflation should cool back down in February, given that the average US gas price has fallen more than 6 cents a gallon in the last month (and nearly 20 cents in Wisconsin), and with producer prices for food falling in both December and January.

So I think the US started off 2023 with a very strong economy, and am rolling my eyes at the INFLATION WATCH/high rate concerns coming back. I think we will see data come in next month that will show the January’s increase in inflation to be a one-month blip, and I also suspect January’s huge increases in spending are a one-off that will head back toward moderation in this month. But that won’t satisfy a lot of Wall Streeters and bankers, because layoffs and the unemployment rate remain at their lowest levels in over 50 years, and they can’t stand to have everyday Americans continue to grab more income and have more flexibility in their job and consumer situation.

I fear the rate hikes will continue throughout the Spring, and by the time things slow down enough to the Fed’s liking, too many will be suffering due to increased job losses and higher borrowing costs that results in an economy that starts to have real problems that hurt real people in real jobs. To the point that it’ll require more work to get things back on track.

If the Masters of the Universe were more connected to people who have to make ends meet, instead of trying to figure out how to bring things into “balance” for their crowd, they might be more likely to take this as their theme for the coming months.

Thursday, February 23, 2023

Sizable boost from DC infrastructure bill means more roads fixed/built in Wisconsin in '23

First of all, how did the state get all of this Federal money? The Legislative Fiscal Bureau says it is the result of 2 bills that passed Congress in the first two years of the Biden Administration.
Subsequent to the passage of [the 2021-23 state budget], the federal government passed two complementary acts that reauthorized federal transportation programming and increased federal highway funding to states for federal fiscal year (FFY) 2023. In November, 2021, the Infrastructure Investment and Jobs Act (IIJA) was enacted, which reauthorized and modified the overarching framework for federal transportation funding over the five ensuing federal fiscal years (2022-26). The IIJA defined the programs that will receive federal transportation funding over this period. In addition, it established upper limits of funding, or "authority," for certain programs in each year of the five-year reauthorization. While upper limits of funding are established for these programs under IIJA, these amounts are subject to annual federal appropriations legislation. This includes the federal highway Page 3 formula aid program, the state's largest source of federal transportation funding. On December 29, 2022, the Consolidated Appropriations Act (CAA), 2023 was enacted, providing federal funding for these federal programs in FFY 2023. The annual appropriation amounts are required to be obligated by the end of the federal fiscal year in which they are provided (September 30). This two-stage legislative process is the standard procedure for the allocation (authorization under IIJA) and appropriation (annual appropriations acts) of federal transportation funding to states. The Federal Highway Administration (FHWA) administers the federal programs and funding.

Separate from this two-stage process, IIJA also provides certain sources of funding that are not subject to annual appropriations legislation. The federal bridge formula program (BFP) and the national electric vehicle infrastructure (NEVI) program are two new programs that are directly funded by IIJA. Further, the funding received under these programs is not required to be obligated in the year it is received, but rather remains available through FFY 2026.
This added funding is going to push the amount of Federal funds from USDOT coming to Wisconsin past the $1 billion mark for the 2023 Fiscal Year.

I’ll note the $55 million in “redistribution aid”. Those are funds that are from projects throughout America that never were used and/or started, and the Wisconsin DOT has to set aside all of their highway funds by September 30 of each year in order to get redistributed funds in future years. Which is another reason WisDOT wanted to get Joint Finance to sign off on this plan as soon as they could.

So what is this extra $181.7 million going to?

The Local Transportation Facilities part makes up nearly half of the additional Fed funding, and is more than doubled under WisDOT’s plan. And those funds fall under several programs that help pay for transportation projects throughout the state.

Additional Fed Funding for Local Transportation Facilities

1. Block grants for local road projects - $57.5 million
2. Highway Safety Improvement Program - $16.2 million
3. Carbon Reduction Program - $15.6 million

You’ll also notice the $45 million being added to block grants to help communities fix bridges, which will more than double the amount of money (state + Federal) that goes for that in Fiscal Year 2023. In addition, there is the bumping the Federal funding of the Transportation Alternatives Program (TAP) by more than 150%. TAP goes to non-motorized projects and improving safety for children heading to school, and WisDOT is using some of these additional funds to start a new program in rural areas.
In addition, DOT has introduced a new initiative for TAP funding provided to areas of the state under 5,000 in population over the remaining four years of IIJA (FFY 2023-26), entitled safe transportation alternatives for rural schools (STARS). The initiative would issue grants for projects that would create safer walking and biking routes to school for children in grades K-8. DOT indicates that these rural local government entities have historically under-participated in projects of this type due in part to limited levels of administrative and financial capacity. Responding to this concern, the initiative would offer additional administrative support to applicants. Program funding in FFY 2023 and 2024 would be provided primarily for project planning and design, while funding FFY 2025 and 2026 would prioritize constructing infrastructure. Thus, applicants could work with DOT to design an infrastructure project over the first two years of the initiative, then receive funding to construct the project in subsequent years. DOT indicates that it has an open project solicitation for the TAP 2023-26 grant cycle. DOT is currently accepting applications for the STARS program component, which are due on March 24, 2023.
The $16.75 million that goes into the NEVI program reflects a new item in the Infrastructure bill that is intended to allow Wisconsin to build out and operate a network of statewide stations for electric vehicles. 2023 is one of 5 years that the state will get NEVI money from DC for, and the network will grow with it.
…This funding would be provided from FHWA's NEVI formula program, newly-created under IIJA to support states to develop a network of electric vehicle (EV) charging stations on designated alternative fuel corridors. The NEVI program includes both a formula and discretionary component. Wisconsin is eligible to receive an estimated $78.7 million in NEVI program formula funds through federal fiscal year 2026. The discretionary grant program, which includes a competitive grant program to help deploy charging in communities, will proceed sometime later in 2023 after FHWA issues guidance for the program.

FHWA guidance for the NEVI formula program specifies that new EV charging infrastructure locations should be spaced a maximum distance of 50 miles apart along designated corridors and that EV charging infrastructure should be located no greater than one mile from interstate exits or highway intersections along federally designated alternative fuel corridors. Currently, Wisconsin's alternative fuel corridor federal designations include portions of I-90, I-94, I-39, I-41, I-43, I-535, U.S. 151, U.S. 53, U.S. 51, WIS 29, U.S. 2, and U.S. 141, and all of U.S. 8 and U.S. 41.

A common sight soon enough? WisDOT says almost all of that $16.75 million from DC that's intended for electric vehicle chargers will be put into the 2023-25 state budget, and the state plans to combine the funding from 2023 and other years to make for a wider, more complete project.

The only main change that the Republicans on Joint Finance made to the WisDOT plan involved the Congestion Mitigation and Air Quality (CMAQ) Improvement Program. This applies to the counties that border Lake Michigan from Door County down to Racine County, as well as Waukesha, Washington, and Walworth Counties in the 262. In a repeat of what was done with extra CMAQ funds in 2022, the WisGOPs on JFC said that the $4.2 million for 2023 could only go for right-of-way improvements, and not transit or bike-pedestrian improvements, or other non-highway methods of improving air quality.

That CMAQ manuever by the GOPs was lame, but whatever. Going forward, this $181.7 million should help move along even more projects this Summer, and lessen the need for the state and local communities to borrow to fix roads and make other improvements to its transportation system. In a time of surplus, these added funds make it even easier to catch up to the neglect of the Walker years, and we are now in a lot better situation than Wisconsin’s road infrastructure was 5 years ago. Both at the state and federal levels.

Tuesday, February 21, 2023

A few numbers ahead of tonight's primary results

3 hours before the polls close for the statewide primary for Supreme Court, I was curious to see what the turnout was in the last 2 Febraury primaries for that statewide office. I also wanted to see what 6 counties had the largest number of votes in that primary, as those 6 counties have made up approximately half the votes in the last 2 February elections.

2018 primary - 534,980 total votes
Milwaukee County 82,050 (15.3%)
Dane County 77,186 (14.4%)
Waukesha 59,556 (11.1%)
Brown, Racine, and Washington were between 17,771 and 18,851 (10.2%)
REST OF THE STATE 261,404 (48.9%)

2020 primary – 705,138 total votes
Milwaukee County 117,875 (16.7%)
Dane County 87,519 (12.4%)
Waukesha 64,830 (9.2%)
Brown, Racine, and Marathon were between 20,939 and 22,738 (9.3%)
REST OF THE STATE 369,199 (52.4%)

That 2020 primary had an extra boost in turnout from another primary in Northern Wisconsin's 7th Congressional district, following Sean Duffy's decision to resign in order to have him and his wife make cash in RW Bubbleworld vs doing actual work. It also included an open primary for Milwaukee Mayor, following the resignation of Tom Barrett, which explains how Milwaukee County added nearly 36,000 votes compared to 2018.

Along those lines, there's also the State Senate primary (among Republicans, anyway) in Milwaukee's northern and northwestern suburbs. That may give a little boost to the share of voters that come from Milwaukee County and the WOW Counties.

Another major difference vs 2020? A lot more money has gone out on ads that raises awareness for casual voters that there's something to vote for today.

So I'm going to look to see if we get past 750,000 or 800,000 total votes. I also want to see what the "advancement number" ends up being as a result of this (my guess would be around 250,000). And then I'll look to see if the numbers and vote shares are very different from the patterns we saw in 2018 and 2020.

And then the real fun will start for the next 6 weeks. And by fun I mean "restoration of Wisconsin, or continued wreckage, with a whole lot of dark money being sunk into ads that will have next to nothing to do with the duties of the job." YEE-HAH!

EDIT - Here's one indication of turnout, although we don't know what the absentee vs day-of breakdown will be (I actually voted today, because there was only 2 races on my ballot).

Monday, February 20, 2023

Is INFLATION WATCH back? Not till we see Feb's numbers

Oh no! After the news from last week, is INFLATION WATCH back? The concerns started last Tuesday with a hotter-than-expected number for the Consumer Price Index.
The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing. The food index increased 0.5 percent over the month with the food at home index rising 0.4 percent. The energy index increased 2.0 percent over the month as all major energy component indexes rose over the month.
Concerning, but the energy increase was a one-time bump that has since leveled off and somewhat reversed. And the food index increases actually indicate a calming after a double-digit rate of inflation for much of 2022, with food at home continuing to see smaller increases in recent months.

It’s shelter that is now the large-ticket item that keeps going up. But as this CNBC report from October notes, that shelter figure can be misleading, and represents a reaction to events from several months ago vs the cooled-off market that we may be seeing today.
The CPI for “shelter” has historically lagged home price changes by four quarters, which suggests that shelter “will continue to put upward pressure on overall inflation through the first half of 2023,” according to [Cristian] deRitis, [deputy chief economist at Moody’s Analytics].

The lag effect is largely due to how long it takes for leases to roll over into a new contract. Landlords typically renew leases every 12 months, which means current price dynamics won’t be reflected in new contracts for a year.

In this sense, housing is somewhat of an outlier among other CPI categories. Consumers don’t agree to pay the same price for chicken or eggs for a whole year, for example…..

And rent tends to be “sticky,” according to economists — which means the total dollar amount of one’s monthly rent generally doesn’t decline; it tends to stay the same or increase with each new lease.
So you can expect that CPI shelter number to fade downward in the coming months.

Similar to consumer prices, the producer price index had a sizable increase last month, especially in goods.

The index for final demand goods moved up 1.2 percent in January, the largest increase since rising 2.1 percent in June 2022. Most of the January advance is attributable to a 5.0-percent jump in prices for final demand energy. The index for final demand goods less foods and energy increased 0.6 percent. In contrast, prices for final demand foods fell 1.0 percent.
That producer-level decline in foods is an especially good sign going forward, with big drops in fresh/dry vegetables (-33.5%), and the first reversal of the huge spikes in egg prices (down 12.7% in Jan, but producer prices have still tripled since Jan 2022).

Writing in Monday’s Miilwaukee Journal-Sentinel, UW-Milwaukee Professor Jeffrey Sommers says that many of the inflationary pressures that drove prices up in 2022 have gone away, and are now reversing.
Recently, I wrote that non-core inflationary items, e.g., food and fuel, saw price growth slowing in some sectors, and dropping in others. Energy prices have fallen substantially from their summer peak when war in Ukraine not only disrupted global fuel supplies, but also grain.

Those threats now look to be in the rear-mirror. Meanwhile, energy producers have finally got off the bench and begun drilling again. Grocery giants, such as Whole Foods, are starting to confront food processors that have kept prices high despite unprocessed food prices dropping, thus adding another new downward pressure on food prices.
To go along with Sommers’ point, take a look back at the Producer Price Index report, and see what happened to unprocessed food prices in January.
The index for unprocessed goods for intermediate demand fell 5.0 percent in January following a 1.5-percent rise in December. An 8.5-percent decline in prices for unprocessed energy materials accounted for 70 percent of the January decrease. The index for unprocessed foodstuffs and feedstuffs moved down 4.7 percent. Conversely, prices for unprocessed nonfood materials less energy increased 0.9 percent. For the 12 months ended in January, the index for unprocessed goods for intermediate demand rose 2.3 percent.

Product detail: Over 60 percent of the January decline in prices for unprocessed goods for intermediate demand can be attributed to the index for natural gas, which dropped 19.1 percent. Prices for ungraded chicken eggs, crude petroleum, slaughter chickens, slaughter hogs, and recyclable paper also decreased. In contrast, the index for nonferrous metal ores rose 4.5 percent. Prices for raw milk and for coal also advanced.
So while producer prices for products like energy and grain-based foods went up for final demand in January, prices for those same products fell closer to the source. So unless someone is making a gouge-level of profits in the middle, final demand prices and consumer producers should be moderating and possibly falling in the next 2 months.

Sommers also points out that the cost to ship products has fallen, as COVID-era and Ukraine-related disruptions have eased, with shippers responding to the added demand.
The container price increase from $4,000 to $20,000 was bad enough, but the added cost of inventories sitting for failure of capacity to ship added additional upward price pressures, time is money, after all. This massive price uptick led to orders for new ships, many of which are coming online now.

Prices for shipping on average have now already returned to normal levels. As Rolf Habben Jansen, the CEO of the world’s fifth largest shipping company, Hapag Lloyd, recently said, "The party is over. We are back to a normal shipping business."

Sommers ends his article by saying that the Federal Reserve should not follow the misleading bump up in prices for January and stop its hawkish pose against inflation that isn’t continuing in February, and isn’t likely to come back for 2023.
In short, prices for non-core and core items are either dropping, or seeing increases slow. The Federal Reserve’s now eighth increase in interest rates privileged the interests of select investors whose returns are dependent on keeping wages low. Yet, many indicators suggest the inflationary threat is behind us. At minimum, the Fed should reject further interest rate hikes as price growth slows. I'd agree with this, but after the PPI numbers hit last Thursday, Wall Street traders became convinced that more rate hikes were coming in March and future months. And felt that would hurt the overall economy.

That feels like an overreaction to me, as I also think that inflation is still trending lower, and will be lower than the 5% Fed Fund rate that the Fed is likely to hit in the Spring. But one month of higher numbers made some people forget about the lower inflation that we had seen the entire last half of 2022, and the unknown direction that this mentality causes could lead to more volatility than we should have. Makes the next month of data all the more critical.

Sunday, February 19, 2023

Lower tax revenues for feds and Wisconsin make tax season more important than normal

I admit that I'm starting to worry some about the US budget situation. And it's not because of the amount of spending, and I'm not too concerned about the size of the deficit (other than its effects on the debt ceiling and interest on the debt). But I am concerned with the fact that tax revenues aren't just failing to keep up with inflation, they're going down.

We saw this in the recently released Treasury Statement for January, which shows that income tax revenues have declined by 7% over the first 4 months of Fiscal Year 2023 vs the same time period a year before, and overall revenues are down 2.9% so far.

But what's also odd is that payroll taxes (mostly the taxes that pay for Social Security and Medicare) are up. You'd expect that in a time of growing employment and wages, but overall income taxes should also go up with that.

Doesn't add up, so let's look at the Congressional Budget Office's summary of the budget numbers and see what they chalk it up to.
Unemployment insurance receipts (one type of payroll tax) were $6 billion (or 33 percent) smaller this year. Those receipts were larger in 2022 because states were replenishing their unemployment insurance trust funds, at least in part by collecting more in unemployment taxes from employers. (The trust funds had been depleted by unusually high unemployment beginning in March 2020.) Those collections count as federal revenues, reflecting the nature of the unemployment insurance system, which is a federal program administered by the states.

• Individual income tax refunds increased by $24 billion (or 81 percent), reducing net receipts. Most refunds typically are made from February through April.
That's still not enough to explain this type of drop, especially given the strong labor market. In January, the income tax brackets were adjusted to account for the higher inflation of 2022, which means more income is taxed at a lower rate. But this trend of lower income tax revenues and overall revenues predates January, so this is a worrysome trend.

I looked at the CBO's budget and economic forecasts for the next 10 years, which also came out last week, to see if it gave more insight. And it seems that 2022 had historic increases in tax revenues as the economy bounced back and people cashed in their stock gains, which now is coming back to earth in 2023.

Given that 2022 was the worst year for stocks since the financial crisis of 2008, it would make sense that the big capital gains of the last 2 years would be going away. And it's plausible that many took tax losses at the end of 2022 (or offset gains that had previously come in earlier in the year), and so there would be less being paid in now. It also makes me wonder what effect this might have on tax refunds as Americans file over the next 2 months.

I'm also intrigued by what the effect may be in Wisconsin, as the state is also seeing declines in income tax revenues in Fiscal Year 2023. The latest revenue update for the Wisconsin Department of Revenue dropped on Friday,

and it shows declines in most revenue sources outside of sales taxes.

Some of this is understandable, given that state withholding tables are now updating with every year, much like the Fed tables are. But an (adjusted) 10.9% decline in income taxes is still a lot, as is a 9.5% decline for the 7 months of state Fiscal Year 2023. This seems like it'll be a shortfall compared to the Legislative Fiscal Bureau's revenue estimates from last month, which thought that revenues would go UP by 4.3%.

But the LFB didn't seem too concerned about this trend through December, and thinks that lower tax refunds in the coming months will offset these declines.
Based on preliminary collections information through December, 2022, individual income tax revenues for the current fiscal year are 12.9% lower than such revenues through the same period in 2021. This is primarily due to decreased withholding collections following the withholding table update that took effect January 1, 2022. However, individual income tax revenues are expected to increase at a rate of 21.1% over the next six months relative to the same period a year prior.

The primary factor for this estimated revenue increase is an expected decline in refunds paid to taxpayers in 2022-23 relative to 2021-22. The income tax rate reduction included in 2021 Act 58, which took effect beginning in tax year 2021, caused refunds to spike when taxpayers filed their corresponding income tax returns in 2021-22. However, because the income tax withholding tables were later updated beginning January 1, 2022, to reflect the rates, brackets, and standard deduction in effect for current law, the amounts withheld from taxpayers during tax year 2022 incorporated the Act 58 rate reduction for the first time. As a result, when taxpayers file the corresponding returns in Spring of 2023, their refund amounts will be lower (all else equal) than the refunds they would have received had the withholding tables not been updated.
It's a good thing on the surface - Wisconsinites took home more money in their paychecks because of that adjustment in withholding tables in Jan 2022. But be prepared not to get as much back from the state when you file this year, and we better start seeing that 21% increase show up in the numbers with February's revenue report, or else red flags should be flying.

Tax season is always the big variable when you talk about tax revenues at both the state and federal levels, and given the shortfalls that we are seeing at both the state and federal levels, it may demand even more attention over the next 3 months. That's the largest fiscal concern that I am feeling these days, and the reasons why income tax revenues make me wonder if this is merely due to 2022's drop in the stock market, or if it portends some weakness in the labor market and income growth that isn't showing up in other data.

Saturday, February 18, 2023

Evers K-12 budget relieves some strains on publics, but vouchers still keep rising

The biggest line-item in any Wisconsin budget comes from aid to K-12 schools, and that's especially true with a former public school teacher as the state's governor. With $7 billion in the bank, Evers wants to go big on K-12 education over the next 2 years, and Wispolitics summarizes the biggest parts of Evers’ K-12 plans.
*$1 billion more over the biennium distributed to schools through the general equalization aid formula.

*$1 billion more over the biennium for special education. The money, in addition to what was approved in the current budget, would mean the state reimbursing 60 percent of special education costs in both years of the biennium. In the fall, Evers and Underly called for $750 million more for special ed.

*increasing the per-pupil revenue limit by $350 in the first year of the budget and $650 in the second. Evers said that would be the largest adjustment since revenue limits were imposed.
The last part is a big deal, as these are the revenue limits based on general aids + property taxes , and those base revenue limits are lower now than they were 13 years ago.

Act 10’s “tools” to control costs (by screwing over teachers and staff) were used up a d ecade ago, while schools have had to figure out other ways to deal with the increased costs in the real world since then. This helps explain the continuing series of school referenda that Wisconsin voters have had to deal with since then in order to help pay for those costs as well as the need to update infrastructure, including more than $1.9 billion last November.

Increasing the overall revenue limits by $350 per pupil next year and $650 in 2024-25 would make it easier for schools to make ends meet, and the $1 billion in general aids should reduce the reliance on property taxes to fund public schools. The $1 billion increase in special education aids also will allow for schools to use more of those “general” funds instead of having to use it to pay for their special ed services.

WisPolitics also notes that Evers is calling for a boost in the one type of public school aids the WisGOPs have been willing to fund in the post-Act 10 era.
Republicans under Walker created a separate categorical aid in the 2011-13 budget. That money was divided up per pupil, regardless of a district’s wealth. Those payments began at $50 in 2012-13 and increased to $742 in the 2019-20 school year. It hasn’t been increased since with Republicans arguing districts should rely on federal COVID-19 money for spending increases.

Evers’ budget would increase those payments by $46.5 million over the biennium, an increase of $24 per student in 2023-24 and $45 in 2024-25.
This comes outside of the revenue limits, so this will boost resources that can be used. And it’s going to be needed, since COVID funds can’t be set aside for funding after September 2024, and many districts have likely already used up what they got, due to the constraints put on them in recent years.

Evers is hoping to cap enrollment in voucher and charter schools at 2024’s levels for future years (seems unlikely that a WisGOP Legislature that gets a lot of Dirty DeVos Dollars would go for that). But his budget also will give a funding boost for those types of schools to go along with the increase that public K-12 schools would get.
*increases of $374 per pupil in 2023-24 and another $695 in 2024-25 for independent charter schools and schools participating in a parental choice or special needs scholarship program;
Which means many more millions to private schools that have already seen a significant boost in state tax dollars over the last 12 years, with those payments doubling since 2015, and increasing amounts of funds being taken away from the home districts of voucher students.

I would have liked to see Evers fix this funding flaw in the voucher system, and stop the aid reduction to public schools that often have not ever had those students attend a class in their district. With a huge surplus, we have the extra funds available to afford it, and lawmakers and the public should have to face the consequence of fully funding two systems of K-12 education, and do it through state taxes, and not the property taxes that are often levied in communities to make up for the voucher funding flaw.

One last item will give $120.2 million to fund school breakfasts and lunches for all students starting in 2024-25. This would restore the free meals was put in schools during in the COVID era, takes away from stigma and/or hunger that results from only allowing assistance for the poorest children, and can fill in the needs that are coming from the reduction of SNAP benefits that hits at the end of this month.

As usual, I don’t count on all (or all that much) of the $2.6 billion increase in Evers’ request for K-12 to get through the GOP Legislature. But there is a definite need to boost revenue limits and to reduce the need to use property taxes, and there is generational chance to change how we fund our public, community schools. Wisconsin needs to use that opportunity to regain our competitiveness, and the high-level schools and quality of life that we used to hang our hat on.

Thursday, February 16, 2023

This is a massive budget. And it'll go to a lot of things

There's a lot of figures and initiatives in Gov Evers 2023-25 budget. And it's a go-for-broke type of budget, that uses up almost all of the state surplus in these two years. The effect of the Evers budget is shown in orange.

And the reason why is almost entirely due to spending/tax credit reasons, as Evers tax cuts for lower/middle-income and vulnerable Wisconsinites are mostly offset by higher taxes on the rich and the end of a multi-million dollar tax cut for large manufacturers. Note the difference in the Evers budget expenditures and what the Legislative Fiscal Bureau estimated as the base budget a month ago.

Here is what a little more than half of the $8 billion in increased GPR spending goes to in the next Fiscal Year. You can see that it is a lot of things, with the largest being nearly $2 billion that will be used for state building projects, and keep the state from having to borrow money for them. You can also see a reduction of DOT debt, $500 million deposit into the state's Rainy Fund, $750 million for broadband expansion, and nearly $1 billion in increased spending on K-12 education in year 1 of this budget.

I doubt that there much of these initiatives in Evers' budget goes through in this form, or in nearly this amount of investment. But this should at least give you an idea about what we're talking about as we go forward in the coming months.

Wednesday, February 15, 2023

Evers wants to help the Brewers fix up their stadium? In the budget?

Over the past week, Governor Evers has been rolling out major parts of the 2023-25 budget that (he will introduce tonight). That’s typical for a Wisconsin governor to do, and most of the items released were your typical meat-and-potatoes stuff (veterans initiatives, tax plans, K-12 schooling, shared revenue, etc).

But I was not expecting this to be a part of it.
Gov. Tony Evers today announced a new plan to keep Major League Baseball and the Milwaukee Brewers in Milwaukee for the next 20 years. The plan, released as part of the governor’s 2023-25 biennial budget proposal, will invest a small portion of the state’s historic approximately $7 billion surplus to ensure the Milwaukee Brewers remain in Milwaukee through 2043. Without this investment, the Milwaukee Brewers and Major League Baseball could leave Milwaukee as soon as the conclusion of the 2030 season when the current lease with American Family Field expires….

Gov. Evers’ budget proposal, which makes a one-time investment from the state’s historic surplus rather than using long-term bonding, will save taxpayers over $200 million over the Brewers’ lease term while generating more than $400 million in revenue over the next two decades.
I had mentioned previously that the Brewers’ stadium issue was one that was going to become more prominent in the coming years, as the Miller Park tax ended in 2020 and team officials started discussing ways to pay for future fixups to what is now known as American Family Field.

I wasn't counting on Evers or the Legislature to do anything about the Brewers stadium question in 2023, and especially not as part of the state budget. I was not the only one taken by surprise by this.

First of all, let’s remember that Robbin’ Vos and almost all GOPs backed a Governor who “dropped the bomb” on public workers 12 years ago this month, and tried to jam that bill through in a week, instead of through the state budget process. I don’t need to hear it from that twerp.

And let's not forget what the previous Governor cooked up when confronted with another Milwaukee stadium issue 8 years ago.

My response to tax dollars paying for pro sports stadiums is generally “NO”, as that industry tends to make a lot of money on its own, and communities usually have other needs worthy of tax dollars beyond entertainment districts (yes, entertainment outlets matter, but roads and public safety and parks and a lot of baseline items matter more).

However, I am willing to give the plan a look. So what is it, and what did they base the need on?

The first step was figuring out how much it would cost to keep up AmFam Field to an adequate level over the next 20 years.
The Evers administration and the Brewers agreed to the $428 million estimate, with another $20 million to cover inflation's effects on those costs.

That $448 million would be covered by the proposed $290 million payment; interest earned on that payment, which would be deposited in an escrow account operated by the stadium district, and $70 million from the stadium district's current reserve fund.
So this is a one-time payment out of the surplus of $290 million, which goes to the Ballpark District board that oversees stadium operations, and then sits in an account along with the $70 million left over from the Miller Park tax, earning interest over time.

It's a positive that this would be done without having to borrow money and take on extra costs over time, unlike the Bucks arena. The final package for the Bucks ended up costing a little over $100 million at the state level (after accounting for the extra funds needed to take care of the Bradley Center in the meantime), and we will be paying off that debt for another 13 years.

I’d argue the Brewers are a bigger draw than the Bucks for out-of-town dollars and attendance, But three times larger? Not so sure about that, and I’m not overly keen on subsidizing the Brewers’ ballpark when those guys don’t even pay property taxes on the acres of property that they have been given (as Bruce Murphy of Urban Milwaukee pointed out last year).

Let's also bring up the sports standpoint. At least Bucks have already gotten one title since moving to their new arena, are in great shape for another this year, and have signed Giannis Antetokounmpo to a league-maximum contract that will likely keep the Bucks as a title contender for at least the next 2 years.

To be sure, no one knew Giannis would become a Hall-of-Fame player when the Bucks arena bill became law in 2015. But it's still going to be hard for the Brewers to justify a subsidy at a time when the Crew’s billionaire owner is shelling out millions for an English soccer team, which happened in the same month when the Brewers tanked the 2022 season by selling off one of the top relievers in baseball with the team in first place.

And this recent headline sure makes you wonder how badly the Brewers want to invest in a winning product going forward.

When the team won’t spend $740,000 to avoid an arbitration hearing with one of the elite starting pitchers in the game, with his free agency looming in 2 years, it becomes pretty hard for them to justify giving them $290 million in tax dollars without any promise of using freed-up funds to improve the team.

Remember that the team is getting all of the operating profits from food and drink and admissions and media rights as it is, and with this package, they wouldn't have to spend as much to fix up the ballpark they use. So at the very least, if we’re going to subsidize the Crew, can they at least not charge fans $12 for a Spotted Cow? I'm just saying.

Given how the Crew has disappointed in the last 6 months on and off the field, this may not be the best time or forum to talk about ponying up hundreds of millions of dollars to “save the team” when it can’t leave Milwaukee for at least 7 years as it is. And bringing the Brewers issue into the state budget is going to make that one of the big focuses of this Spring and Summer’s debate, when this is a once-in-a-generation chance to change a lot of things in this state for the better.

Most of the budget's issues generally favor Evers and the Dems, but now I have a sinking suspicion quite a bit of that will be drowned out by the talk among casual voters about the Brewers stadium. Feels like an unforced error to be talking about this now, especially when this picture could commemorate the last time we see an on-field Brewers celebration for a while.

Sunday, February 12, 2023

Evers tax cut plan revealed. Lower and working classes, vulnerable pops helped. Richest pay more

Along with shared revenues and other spending issues, a big item to sort out with the upcoming Wisconsin state budget talks is not IF there will be tax cuts, but who benefits from those tax cuts. Governor Evers released his plans over the weekend (with more details to come at the official budget release on Wednesday), and let's take a look at them.

Let us start with a reminder of the mind-boggling amount of money that there is to play with in this budget. Based on recent revenue estimates from the Legislative Fiscal Bureau and budget requests from state agencies, there is a projected $7 billion in the bank to start the 2023-25 budget, and it would grow from there.

So plenty of room to work with. The Wisconsin State Journal did a deep dive into what Evers wants, with the biggest part of the plan estimated to be around $418 million for this year, and directly targeted to low and middle-income Wisconsinites.
Evers’ proposal would create a nonrefundable Family and Individual Reinvestment Credit to cut taxes by 10% for individuals earning $100,000 or less a year and married filers making $150,000 or less. The credit would gradually phase out for single filers making between $100,000 and $120,000 annually and for married filers earning between $150,000 and $175,000 a year.
Ironically, this won't do anything for 2-income earner couples like my wife and I, but don't forget that the upper-middle-class and above were the largest recipients of the tax cut Evers and the Legislature agreed to in 2021, as that lowered the 2nd-highest income tax rate for all income between approximately $24,500 and $267,500 (single) and $32,500 and $365,000 (married). So this evens some of out the benefits of the 2021 tax cut.

Evers also released plans for tax cuts intended to help Wisconsinites caring for family members, whether that care be for adults or children, and to expand credits for lower-income individuals and veterans.
The governor’s proposal would also increase the state’s supplement to the federal Earned Income Tax Credit for working families with children. Under the plan, the percentage of the federal credit that filers can claim would increase from 4% to 16% for filers with one dependent and from 11% to 25% for filers with two dependents. The average tax relief for those eligible to receive the credit would be more than $300 annually, according to the governor’s office.

The state’s Child and Dependent Care Tax Credit would also expand under Evers’ proposal, from 50% of the federal credit to 100% starting in tax year 2023. Most individuals eligible for the credit would receive up to $600 for one qualifying individual’s expenses or up to $1,200 for two or more qualifying individuals’ expenses.

Evers’ plan would also spend $195 million over the biennium to create a caregiver tax credit for those caring for a family member; increase the maximum eligible household income threshold for the Homestead Credit, which provides tax cuts to lower-income residents; and expand the Veterans and Surviving Spouses Property Tax Credit.
There's also another tax break intended to repeal the state's personal property tax, which is levied on equipment and other business-related assets. Local governments will get $200 million in state tax dollars to make up for that, and to try to prevent homeowners from feeling more of the burden of property taxes as a result.

Put all that together, and you have nearly $1 billion in total tax cuts in year 1. But Evers also is calling for other provisions that would raise taxes on the richest Wisconsinites to offset some of those costs. A couple of these are items he has called for in the past, but has had turned down by the GOP Legislature (and likely will again).

The first is that Evers is again looking to limit the Manufacture and Agriculture Tax Credit, a notorious giveaway that was put in place by Scott Walker and the WisGOP Legislature a decade ago. Evers' plan would still allow manufacturers to get the credit for "the first $300,000 in qualified production activities income for each firm qualifying for the credit," but end the tax break after that. Ag businesses wouldn't be affected at all, according to Evers' press release.

As State Senator Dianne Hesselbein (D-Middleton) recently noted, the M&A tax cut hasn't done much for grow manufacturing jobs in Wisconsin, but it does keep growing the amount of tax cuts for rich owners, and others in the state who choose to take advantage.

And the LFB analysis also mentions that the "manufacturing" part of the M&A giveaway in particular continues to grow both in dollar amount, and in how it heavily favors mega-millionaires and big firms over small businesses.

Evers also wants to keep the richest Wisconsinites (singles making more than $400,000 and married-joint filers over $533,000) from getting an extra write-off on long-term capital gains, which is estimated to raise over $185 million next year and $154 million in the year after that. Given that rich folks get major tax breaks on long-term capital gains at the federal level, I think they'd get by. But I also don't see the flat-tax Republicans approving anything that'll raise taxes on their oligarch donors the rich.

Long way to go, but you can see the markers being thrown down. Evers will ask for tax cuts on lower-income and working-class Wisconsinites, and give breaks to targeted, vulnerable populations. GOPs will have most of their tax break go to richer Wisconsinites, and will spend down the surplus in a much quicker time frame. Given that we have a "secular surplus" of around $1 billion right now, Evers' tax cut would still result in a balanced budget year-to-year, from what I can add up.

Lots of spin and debate to have as well, so know the numbers being thrown around, and pick the best solution to a great fiscal situation.

Weekend reading - How GOP grifters get ahead due to MAGAt weakness and fear

Wanted to forward this excellent column by David Roth in Defector, which does a great job explaining how GOP voters view the world, and how that MAGAt mentality can lead directly to them buying into grifting scum like George Santos.

Roth begins the column by describing "a perspective on the world that only comes through the windows of a car." And from this perspective comes two worlds - the inside cocoon where these inidviduals are in control of everything, and an outside world that is a threat to all of that self-ascribed importance. And that allows them to both be obnoxious, and also very easy to sucker.
It's hard to know what to do with this. It is strange to know that some of your neighbors are constructing or currently inhabiting a reality in which you, and everyone else, are an urgent threat to their safety. They are in fear of their lives, and as such feel entitled to do whatever they need to do to keep themselves safe from a world that only ever shades further into a state of urgent and omnipresent risk; they melt the enamel off their beings because they believe that's what it means to be informed and aware and engaged. And it is stranger still when you look at how these people act, and what they do with the license that they believe this fear gives them. That duality is what contemporary American conservative politics is. It is about creating a list of enemies, and fantasizing about all the things that might justifiably be done to them, and building the necessary fortifications; about turning on the TV and never turning it off. But also it is about having fun—expressing yourself to the fullest, getting as much as you can of everything you want, never apologizing and never going to bed.

The wreck that this has made of the culture—which is atomized, simultaneously cynical and credulous, blithely predatory and outraged at its perceived victimhood, bottomlessly thirsty and generally too angry and lonesome and scared to think straight—is all around. There are a number of things to say about people who experience the world this way, but one is that their confusion and fear, and the fantasies of retribution and impunity that grow from that, and the fake-it-til-you-make-it recklessness that grows from that, make them not just reactive and jumpy and distractible, but extremely easy marks.
And you see this in the constant whining that is part and parcel of today's GOP. Take a look at the absurd House Committee hearing from this last week where GOP Performance Artists like Marjorie Taylor-Greene and Lauren Boebert used taxpayer dollars to whine to Twitter executives about how THEIR RIGHTS were violated when that private platform chose to ban them for spreading lies and generally beeing boorish trash.

Roth adds that GOP Performance Artists never have to come up with solutions or try to understand why something is happening. They just whine and complain and create their own Bubble of BS as to what is a "problem" to mention and take actions on, and they use these created threats to believe they don't have to follow the rules they lay out to others. Given that MAGAt voters also marinate in that us-vs-them, closed-off mentality, they fall for this crap.
Someone out to enrich or empower himself at the expense or just through the credulity of such people wouldn't even have to be an especially artful liar. Such a person would need only to tell those people the types of lies they like, and then just keep doing it. The problems can never go away; the problems are the only thing holding this curdled worldview and constituency of crabs in a barrel together; the terrifying/titillating lawlessness of the world outside is what justifies the giddier lawlessness that applies for those on the inside. So the sales pitch is merely a matter of reading The News back to the people who have made themselves its captives, and doing so in a way that suggests that you also believe it. If they hear the right tones of distaste and delight, these inside men and women will vote for that candidate, and for the problems that order their lives. Of all the many, many lies that George Santos told in hustling his way into the House of Representatives, these were surely the easiest.
A grifter like Santos is the natural outcome of this, where he has no core beliefs, and all that he talks about are things that he thinks will sound good to others. Since GOP voters don't require solutions or any actual substance, and instead just want to be angry and feel important, Roth notes that there are no standards that need to be followed. And the job of the Performance Artists is to keep talking and building the Bubble of RW BS even higher.
Beyond the freakish vastness of his dishonesty, what’s compelling about Santos is the extent to which his personal scuzziness, as expressed through his aspirational scamming and cheesy little grifts alike, so fully embodies the institutionalized lawlessness of his movement and its moment. Whatever Santos set out to do in arranging all this clutter and camouflage around himself— to make himself look bigger or to disappear, to get over on people or hide from them, honestly who cares— is ultimately less meaningful than the clutter he chose. All that aggro bluster and idiot cruelty and round-the-clock relentlessness is fundamentally a diversion, both in the sense that it exists to deflect and in terms of it being a game. It’s also a fantasy, and his inventions lay that fantasy’s particulars out in a more comprehensive and revealing way than any candidate's actual life ever could.
And continuing a tradition that dates back to former Milwaukee County Sheriff David Clarke, Santos and other non-white straight male Performance Artists use their race, identity, and background to insulate themselves from their BS, which allows these grifting lowlifes to be promoted, as a way for MAGA types to say "See, we're not bigots!"
It is possible to look at the long trail of fantastical lies that comprise Santos's biography and see him figuring this out. He starts by inventing stuff haphazardly, generally silly showbiz shit, to seem like the sort of fabulous and notable person he actually wanted to be; this was all infantile, and hard to parse for how illiterate it is. Later, during his Supermarket Sweep-style run through various aliases and identities, the signifiers that he claimed as his own were things that conservative discourse had held up as get-out-of-jail-free passes, and all of them — as the grandchild of Holocaust survivors, as the son of a 9/11 victim, as the employer of multiple men killed in the Pulse nightclub shooting — were fundamentally things Santos believed would protect him from criticism.
But grifters like Santos wouldn't have a chance of winning a seat in a district that voted for Joe Biden (!) if we didn't have a media that goes out of its way to give air time and attention to these empty Performance Artists, elevates their non-issues, and won't follow up on their lack of solutions. Roth says this was especially true in and around New York City ahead of the 2022 election that gave Santos his seat.
In the suburbs of New York City, this strategy worked unusually well. News of unprecedented chaos and carnage ran on a furious loop for months before the election, in shrieking tabloid headlines and prissy Times-ian locutions alike, without anything like rebuttal; the city's uniquely distractible mayor seldom speaks with any evident interest about any other topic. While the histrionic coverage of the crime surge putting your family at risk predictably dropped off in frequency and intensity after the election, it did what it was supposed to do in New York's third congressional district. "If you don’t feel safe," a new Republican voter in Santos's district told the New York Times after his win and before his exposure as a world-historic fabulist, "then it doesn’t matter what all the other issues are."
Grifters like Santos and Ron Johnson and other GOP trash believe that once they slip by in an election, it immunizes them from responsibility for the rest of their term in office. Add in GOP "leaders" like Kevin McCarthy, who care only about (the appearance of and use of) power than any kind of improvement of the country or solving of problems, and this is how the country's political system keeps sliding down with lesser people serving in it.

The only way this ends? Making the GOP lose for this Performance Artist BS, and lose big. While it likely won't work in trailer trash House and legislative districts, it needs to become impossible for Republicans to win any kind of swing district or the White House. We already have more Americans living under states with complete Dem control than GOP control, and that isn't changing any time soon as long as GOP promaries are decided by a small percentage of morons that GOP politicians care about, vs the overwhelming majority of us who live in and deal with the outside world.

And to speed this along, we don't need to listen to grifters like George Santos or weak-minded MAGAts. Instead, we should burst their Bubble of BS, and mock them to any and all bystanders who might not know the difference.

Once again, here's the David Roth article. Read it, and pass it around.

Saturday, February 11, 2023

Evers asks for big shared revenue boost. How would it work?

One of the central issues of this budget is going to be whether the state is going to send some of the $7 billion surplus to local communities that are struggling to make ends meet with property tax increases being limited. And Governor Evers announced this week that he will be asking for a big jump in next week’s state budget.

The governor’s budget creates a new shared revenue appropriation that will provide increased aid to municipalities and counties of $576.2 million GPR in fiscal year 2024-25. Future allocations will grow with sales tax collections. The appropriation’s allocation for each calendar year will be 20 percent of the state’s sales tax collections of the fiscal year ending in that calendar year. As part of the 20 percent, communities will continue to receive existing County and Municipal Aid, Expenditure Restraint, and the county and municipal components of personal property aid; the remaining funds will be divided between public safety aid and general aid to municipalities and counties.

· Public safety aid will be 43.4 percent of the total funds available ($250 million) under the new appropriation. Public safety aid payments can be used to support law enforcement, fire, and EMS as well as courts and district attorneys’ offices and the distribution formula ensures that no government will receive less than $10,000 under the public safety aid distribution.

· The remaining 56.6 percent of the aid will be distributed as general aid with 70 percent allocated to municipalities and 30 percent to counties....

For future distributions under the new shared revenue, no local government may receive less than 95 percent of their prior year’s allocation. Existing shared revenue programs will continue under their current law provisions.
Based on the current amount of shared revenue distributions (outside of road aids), here's a very crude breakdown of how this would work.

Lots of interesting stuff there, starting with Evers using a version of something the GOP Legislature had floated as 2022 ended (and something I also thought was worth pursuing when I first heard of it).

I also like the targeting of $250 million of those dollars to public safety and prosecutors, which is a nice way to sell it to Republicans and Republican voters, and you can tell that it's already tying up the GOP in knots.

It seems odd that this wouldn't kick in until July 2024, which likely wouldn't help local budgets until 2025, which means that there's one more year where local governments would have to scrape together funds to get by. Maybe what's left of COVID assistance funds can help for next year, but with $7 million in the bank, I don't get why those funds couldn't be released in January 2024, which will have a more immediate impact, and allow for more stability ahead of the 2024 elections.

In addition to the shared revenue boost, Evers also wants to allow local communities to levy and/or boost their own sales taxes, with special provisions for the state’s most populous city and county.

We need to admit that Milwaukee (and to a lesser extent, other cities) is in a very specific situation, where the need to staff and pay benefits for police and fire fighters are much higher than pretty much anywhere else in the state. And because Scott Walker/WisGOP exempted police and fire fighters from Act 10's "tools" to limit taxpayer costs for these benefits (as a kickback for endorsing Walker), it's a lot harder for Milwaukee to adjust to those increasing expenses. It seems only fair that visitors to the Milwaukee area that depend on those public safety officers pay those costs.

The one item in Evers' shared revenue proposals that I haven't seen anything on involves the property tax limits that cities, counties and other local governments would be under with his budget. That's been a central part of the crunch that the locals have been under, as not only have they lacked help from the state, but the WisGOP Legislature has refused to allow the locals much of an ability to raise property taxes to pay for things over the last 12 years.

So will Evers allow for property taxes to be raised along with the added state revenue and a possible sales tax? Or will Evers and/or the State Legislature use this extra shared revenue as a reason to reduce/replace property taxes at the local level, which would be its own kind of reform, changing the revenue source for local governments to provide for services.

Lots of moving parts here, and details that need to be dug into over the next few months. But I do think that both parties recognize that the current system of funding local government isn't working, and that will lead to some kind of significant change. And while it's not a sexy issue, it is likely the most important part of this upcoming budget season.