Kaukauna's literally unbelievable budget miracle

Right-wing propaganda has been promoting the changes in the Kaukauna School District's fiscal situation, and are trying to credit the higher contribution requirements of the collective bargaining bill as a reason behind the better situation. And while there is truth behind increased contributions being a help in balancing a budget, a little context will find the results not so miraculous. In fact, it becomes quite disgusting that it had to even get to this point.

First off, let's look at Kaukauna's original budget cuts for 2011-2012. The district was looking at a deficit near $3.0 million dollars after the Governor's budget was originally proposed. But page 14 of this slideshow buries the real lead and the reason why Kaukauna was in trouble in the first place.

Prior to February 11, 2011, the district was anticipating a balanced operating budget but changes at the state have forced the district to make major revisions to its original forecast.

So this wasn't a "union costs exploded for 2011-2012" problem. This was a "budget cuts from Scott Walker and WisGOP in Madison are screwing us on the local level" problem. In fact, the original budget proposal from the guv resulted in a drop of Kaukauna's available revenues of $2.16 million (a bit under 5% of their total), and $2.75 million from the state (check out your favorite district's cut here, Kaukauna's on Page 5). The unions responded by proposing $1.8 million in concessions, which combined with the district $345,000 in surplus funds from 2010-11, would have taken care off all of the state cuts put into Kaukauna's budget. The Kaukauna School Board turned them down and asked for layoffs of 14.5 full-time positions instead, and decided to wait on the Legislature and State Supreme Court to do the dirty work of putting the screws on the teachers, and hope for large numbers of teacher retirements.

Which is exactly what happened. The Kaukauna teachers will now have to chip in over 18% of their pay in health care and pension contributions, with no corresponding increase in salary. And for all the talk about "Kaukauna class sizes going down," even Kaukauna School Board President Todd Arnoldussen admits it's projected class sizes being reduced, and those are reductions from huge INCREASES THAT WERE PREVIOUSLY PROJECTED. In other words, little to no change will result from what students would have seen this year. Class sizes DID NOT GO DOWN, as much as the deceptive press releases may indicate.

And I'm not even bringing up the fact that I wish Kaukauna good luck in attracting and retaining quality teachers when they're getting a huge cut in their take-home pay. Strangely, those "free-market" types that are always bashing public educators leaves out the free market reality of lower pay = lower quality. (But when has consistency and reality ever been part of the equation for those haters, anyway?)

So, once again, any benefits from Walker and co. reducing teacher benefits is nothing more than spin and short-term thinking. Let's check back next year when we see what kind of budget difficulties exist in K-ville, and see if Act 10 aolved all their problems. I'm putting my money on "far from it."

What are we celebrating this weekend?

Well, principles like THIS.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown 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. --Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government.

In July 2011 in Wisconsin, these words are no less true than it was in the Engish colonies of America in July 1776. And that is why recalls are not only proper, but necessary, when government officials ignore their public and act in the selfish interest of them and their contributors over the interest of the people they are supposed to govern over.

The Declaration of Independence is a great document. Read it at some point in the next 2 days

Jobs? Walker's Wisconsin is losing its Midwestern edge

Couple of reports came up this week that illustrates the Walker Way isn't one that is and will not work for Wisconsin.

The first is the new statewide jobs report. A whopping 900 jobs was created in May in Wisconsin , a rate slightly below the dismal nationwide showing of 54,000 total jobs and 90,000 private sector jobs. In fact, if you take out the state government's addition of 1,700, Wisconsin would have LOST jobs in May, and only 4,400 jobs have been added in the last 2 months. Not exactly a pace for 250,000 in 4 years, now is it?

"But Jake, aren't we doing better than our neighbors?" Well, we survived the Bush recession job-wise better than our East North Central bretheren, and when Walker took over in January 2011, we had a smaller hole to dig out of, as Wisconsin's job loss was at least 1% less than any of the other states.

vs Jan. 2008 - 2009 2010 Jan. 2011
Wisconsin -2.57% -5.82% -5.11%
Illinois -3.19% -6.86% -5.79%
Indiana -4.34% -7.06% -6.09%
Michigan -6.59% -9.47% -7.71%
Ohio -4.04% -7.70% -6.61%

But since this January, we've seen now higher-taxed Illinois keep pace in job gains with Wisconsin and Ohio, while 2 other states have gone the other way of the rest of the country, and have job LOSSES- Indiana, which happens to be led by...Walker's "sell everything off" guru, Mitch Daniels, and Michigan, led by Rick "the hell with local control" Snyder.

Wisconsin +0.73%
Illinois +0.71%
Indiana -0.14%
Michigan -0.37%
Ohio +0.71%

If you go deeper into the BLS's May report on state job changes, you can see which states have been coming on, or coming down. Check out the picture on Page 18 of the report, and you'll notice a total of 2 states east of the Mississippi and north of the Ohio River that have the dark shading signifying a loss of jobs vs. this time last year. Who are the two? Indiana and New Jersey- home of union-bashers Mitch Daniels and Chris Christie. As I mentioned 4 months ago, these states are going the wrong way, but it seems to be what Scotty wants to be the Walker Way.

Well I don't want to be part of losing state, and before Scott Walker took over, Wisconsin wasn't a losing state, because our investments in social welfare and education stabilized us better than the other states in our region. But if we don't blow Walker and his supporters out of power soon, history suggests we will be losing. It makes it critical to drive these facts and figures about slowing job advantages to people over the next 6 months, because there is next to nothing in this budget bill that will actually create jobs and improve lives for real Wisconsin.

Connect the dots- Wisconsin version

Our media isn't exactly great at using this Google thing to reach back and figure out the connections between certain groups and the legislation that follows. This is why I'm glad to help those lazy-asses on a pro-bono basis.

Example 1: GOP promotes relaxing of child labor laws in Wisconsin.

Big Proponent is Wisconsin Grocers' Association head Brandon Scholz (his second in command Michell Kussow is quoted in the article), a former Chief of Staff to GOP Congressman Scott Klug and longtime Madison lobbyist for GOP causes. In addition to heading up the Wisconsin Grocers Association, his and Kussow's Lobbying group does quite the array of fronting for right-wing organizations. It helps to have connections, don't it?

And by being able to hire more part-time teens, this allows the corporate grocers to avoid having to hire adults full-time at higher wages, and means the grocers are much less likely to have to pay benefits to those adults (the teens are covered by their parents). Of course, the fiscal effect of this is that more of those adults get pushed onto public assistance like BadgerCare (which I and others call the Wal-Mart effect, as over 3,300 Wal-Mart associates (and 9,900 when you figure in family members) are on BadgerCare in Wisconsin - by far the most of any employer in the state.

Now instead of being exhibit A for the need for a public option, as the public option would allow freedom of movement by employees and free employers from the expense of providing health care, this expansion of Badger Care cases can be used as an excuse by Republicans that "these social programs cost too much", and be the impetus for cutting this, as well as other things they don't like, such as family planning service and public schools. And it all starts from corporate greed via lowering wages and benefits.

Example 2: Then- Gov. candidate Scott Walker flies down to Florida to meet with the Wisconsin Road Builders in Feburary 2010. (apparently this group isn't tough enough to handle a Wisconsin winter and spend their money in their own state?)

The Road Builders give $25,000 to Walker's campaign in the 3 weeks after he jets down to Fla., and over $100,000 through August 30, 2010 of the campaign season. This isn't even counting the individual contributions road builder employers may give "on their own" (quotations are intentional, as the case of William Gardner shows, these are frequently people being shaken down by the boss to get around finance laws).

Walker's "budget-cutting" budget includes increases in DOT expenses by 6%, funneling $137 million a year in General taxes to the Transportation Fund instead of GPR_-funded services like schools and medical aid (it's on the first few pages of this document). At the same time, it cuts state aid to transit agencies by 10% and recall that Scotty sent back the Feds' train money for the Milwaukee-Minneapolis line (both would have made for nice alternatives to using the roads in a time of $4 gas). Now check out pages 37-39 for the extra goodies thrown in by his GOP colleagues in the Legislature, where $35 million is sent away from road aid to local communities and highway maintenance, and funneled into state highway rehab (i.e. new roads to build and fix). Guess who might be getting those juicy contracts? Yep, the same people who paid Scotty to fly down last year.

And we're not even bringing up the ridiculous provision that Vos and Darling and co. on Joint Finance passed that would have forced local communities to give their road building projects to private companies if the cost was over $100K and involved more than 1 jurisdiction- even if the road builder cost more to the taxpayer. It was so bad that GOP Senator Mike Ellis and others ound it "stupid" and threw it out of the finalized budget. But given what else the Road Builders got for their investment in a puppet like Scott Walker, why not try this as well? When you're clearly open for corruption, why not go all the way?

Example 3: Voucher school supporters gave Walker over $125,000 over the table, and a whole lot more under the table in "issue ads". In fact, contrary to right-wing radio rants, the "sell off schools" lobby drastically outspent WEAC and public school supporters in 2010.

Flash forward to the state budget and SURPRISE! Here's an expansion of voucher schools and funneling of state dollars to these organizations combined with reductions in funding for public education. We know there's no real school crisis in Wisconsin right now, as Wisconsin has the highest high-school graduation rate in the U.S., and it's strong educational background is a big reason why our unemployment rate and poverty rates are significantly lower than much of the rest of the industrial Midwest.

So why expand voucher schools when public schools are working just fine? Because the voucher supporters paid for that investment, so the Walker Admin., knowing who butters their side of the bread, wants to make sure that their boys and girls get some of that taxpayer dough. They can even argue that it costs less to educate kids, as long as you don't remind them that they're violating federal rules by avoiding the kids that require the most attention and cost. The expanding voucher argument also makes sense if you want public schools to fail, because when you make it harder for them to succeed, it justifies your argument for saying "See, there's a problem that needs to be changed." Just like with the relaxing of child labor laws leading to the cuts they want in Badger Care.

I'm glad to see groups like One Wisconsin Now file Open Records Requests against legislators who promote this crap, as the dots will be connected even further between these shady groups, campaign contributions, and legislative action. Now, the voucher schools can still be expanded due to an even shadier amendment introduced in the Legislature during the budget bill that removed GB by name, but added criteria that numerous cities could fall under. Now Scotty's flacks may say the expansion will just be in Racine, but we know that they'll conveniently leave this provision in there...."just in case."

These are only a few examples of how Doyle's "pay-to-play" has been put on steriods by this corrupt administration. Now, more than ever, the directive of Deep Throat in "All the President's Men" is instructive. "Follow the money." And you'll see exactly why these things are put in place.

Let's talk beer- and taxes - and beer taxes!

And why not, it's summertime, and we all want to think about warmer weather and quality brews, right? I'm know I'm Terrace-bound with this in mind tomorrow.

One source of revenue I want to discuss is Wisconsin's beer tax. Wisconsin's beer tax was the 3rd lowest in the country as of the end of last year, at $1 a keg, or about 4 cents a 6-pack. The only states lower are Wyoming and Missouri and Colorado is 4th-lowest, amazing how 3 of the 4 states with the lowest beer taxes are home to the 4 biggest brewers in America, isn't it? (Check out the list yourself, with a reminder that Miller and Coors are now merged.) So, despite the 2.5 kegs-per-Wisconsinite for our state in 2009 (6th in the U.S.) , the state only pulled in about $9.6 million in beer tax for the most recent fiscal year. And when you consider the state is slated to get $12.9 billion in revenue for 2010-2011, it means just over 0.05% of all revenues come from those outstanding fermented malt beverages.

But that figurative drop in the bucket still doesn't mean there aren't places where beer tax policy can help the state's bottom line. The 2nd point in this DOR link mentions that any brewery which makes less than 300,000 barrels a year gets half of their beer tax back on their first 50,000 barrels. In Wisconsin this means pretty much anyone not named Miller falls under this category, though Minhas may be getting closer as it takes on more business. Even with its recent expansion, New Glarus doesn't get halfway to this 300,000 barrel figure. And with this exemption in mind, I think the state of Wisconsin could do much more to encourage our growing craft brewing industry.

A good combo policy could work as follows: Doubling the beer tax to $4 a barrel, but also raising the "half-off" exemption to 150,000 barrels. This means Wisconsin microbrewers would only pay a minimal amount of new tax ($50,000, or $1 on the first 50,000 barrels), and the overall beer tax would still be in the bottom third of all U.S. states. At the same time, the beer tax collected would go up significantly, probably in the $8 million range or so, with the burden falling on Miller Coors, a company that can well afford the increased costs.

Also, the increased taxes can encourage more consumption of the products of the local small brewer. In addition to familiarity, one of the reasons MillerCoors draws a lot more in consumption (even in a place with microbreweries like Wisconsin) is its generally lower price vs. the small brewer. This is hardly surprising, as Miller, Anheuser-Busch and others have huge economies of scale that make the next 10,000 barrels they brew very cheap to produce, and is a way they can keep prices lower. It's harder for a small brewer to do the same, as the regular costs of making beer and maintaining a brewery are spread among a much smaller amount of product (I'm leaving the higher care and quality part out of it for now). So the casual drinker often chooses macrobrew at $5.50 a 6-pack over microbrew at $7.99-$9.99. If you raise the beer tax (which is paid by the brewer, so they'll pass the tax as part of the price it asks from the business it sells the beer to), it is logical to assume that this will lead to a similar increase in prices for consumers. It's also not very logical to assume that beer consumption will greatly change because of the higher prices as, well, we're in Wisconsin and we like to drink beer. There's a certain inelasticity to our desire to have a coldie or 6. (I know I have one)

Granted, the price difference here may be small (likely $5.75 vs. $5.50), but it makes the premium for the microbrew seem a bit less, and can cause the buyer to substitute for the good stuff, either at a store, or in a bar. There's also an additional revenue increase through increased prices, as sales taxes of 5% kick in on a higher cost.

The small brewers also are the ones more likely to expand and add jobs through the expansion, much like what we've seen in New Glarus and in Stevens Point in recent years. And you'd certainly think that would be a trend our Legislature would encourage, being that we're "open for business" and all.

Well, you'd think so. But of course, they don't. In fact, WisGOP and co. are trying to limit microbreweries from controlling their own distribution, and the Wisconsin craft brewers are not happy about it. Not surprisingly, the big boys at Miller would love for the little guys to fight them out for shelf space by dealing with a wholesaler instead of allowing the small brewers to get their own ways and prices into the market.

And again, "open for business" really means "open for big corporations to exploit", and not so open for everyday Wisconsinites- especially those living their dreams of running their own brewery. Pathetic, but par for the course for these people.

"High-taxed" Wisconsin? Not on sales and gas taxes

I always notice when the Sykes-types whine about Wisconsin's taxes, they conveniently leave out that our sales taxes are extremely low compared to other places. Don't believe me? Check your bill at the grocery store the next time you go. Yesterday I grabbed about $35 worth of food, and paid a sales tax rate of just over 1% (I got a couple of multi-packs of soda). If I had to pay 5.5% sales tax on that like other products, that would have been another $1.50 or so that would have come out of my post (income) tax income. Multiply that by several trips to the grocetry store a year, and that's a lot of money staying in my pocket.

And as page 17 of this LFB report shows, there are 14 other states that don't give this tax break to their citizens - almost all red states. That report also mentions that Wisconsin's 5% statewide rate is the lowest in the Midwest, with very low County and local sales taxes (compare to a place like Chicago, with its 4% local sales taxes, or Indianapolis with its 2% prepared food tax, and it makes a big difference).

Another interesting point on that LFB table is the 9 states that impose sales taxes on a gallon of gasoline, including the nearby states of Indiana, Illinois, and Michigan. Wisconsin chooses not to go this route, and instead stays with a flat 32.9 cent-a-gallon tax on the 3.1 to 3.2 billion gallons of gasoline consumed in Wisconsin each year (page 3). Combined with the 18.4-cent Federal gas tax, it means you pay 51.3 cents a gallon in taxes when you go to the pump in the Badger State.

With the recent run-up in gas prices, not having a sales tax on gasoline now means Wisconsin's gas tax rate slips down to 12th in the nation as places like Floriduhhh, Michigan, Illinois and Indiana zip past when the pre-tax amount goes over $3 a gallon, and now is only 1.8 cents a gallon above the national average, with pump prices well below those other states. And unlike several other states, Wisconsin doesn't have the extra user fee of a toll road like many other states. This makes Wisconsin is quite friendly on the tax burdens put onto tourists going through our state compared to our neighbors.

Keep your eye on these sorts of things, because it's Wisconsin's low sales and use tax rates that keeps us in the bottom 10 in states for sales tax burden, and middle of the pack for the all-tax burden. It shows me that if we made the FIBs and other tourists pay more in sales or gas taxes, we could use the savings to cut into our comparitvely-high property taxes, and still maintain the high quality of services that has kept Wisconsin ahead of most states during this economic downturn. So instead of handling the high-(property) tax "problem" by gutting local aids and services and driving down land values further, maybe we could throw the burden onto the tourists and SUV users, and end up a whole lot better off.

But then what would the daytime talk-show whiners have to complain about?

BROKE MY ASS!!

Hate to say I told you so, but I told you so. Wisconsin is on target for a biennial budget surplus near $215 million for the end of this fiscal year. And no, that doesn't count any additional savings from the budget "repair" bill, as the LFB notes that it isn't in effect, and won't effect any fiscal year that ends in 7 weeks.

Well, how did this happen is we're so "broke"? Biggest reason given is the strong increase in income tax collections, especially given that "payments remitted with returns have increased by almost 35% compared to last year, and refunds are 7.3% lower." So why did this happen? The LFB credits "large gains in the stock market since early 2009 and improved business profits of pass-through entities...that are taxed under the individual income tax." In others words, "Thanks Obama!" for the big runup in stocks and stability in the job market, and "Thanks Jim Doyle and Legislative Dems!" for reducing the state's write-off for cap. gains from 60% to 30% in the last budget (guess that "disincentive" didn't keep gamblers from locking in gains, eh?). You know, the cap. gains exemption that Walker and co. want to turn from 30 to 100% on long-term holdings and on using the proceeds for God knows what in a business? Yep, that one.

An interesting sidelight of the LFB report is a drop in sales and corporate tax revenue, partly due to a consumption slowdown in things that have sales taxes in Wisconsin (which doesn't include groceries and gas, by the way), and because of Scotty's giveaways at the start of the year to corporations. This actually lowers the rev's by $193.4 million for the upcoming biennium, or else we'd really be in good shape. Of course, the LFB assumes that economic activity will continue at a decent growth pace when significant amounts of the population are seeing take-home paycuts and services for needs like health insurance are being slashed. Somehow, I doubt this would be true, unless Obama's record on the economy in the next 2 years ends up even better than it has been so far (which is something I bet Republicans like Walker and WMC do NOT want to see, because it means landslide 2012).

Lastly, the LFB says there is a projected budget surplus of nearly $660 million for 2011-2013 based on these better revenue projections and Walker's proposed budget. But again, this assumes that all the K-12, university, transit, medical service, and local government aid cuts will have no effect on the revenue side or in the state's overall economic growth. And as mentioned, that won't happen, and you wouldn't like to find out what the real result would be.

You know, I'll stop harping on this topic when WisGOPs stop lying about our state's fiscal situation. Don't bet on it happening in the next couple of months, but that'll just fuel the recalls from the majority of us in the reality-based community. In the meantime, it's more ammo for my trip to the Capitol on Saturday.