Low-income tax credits not being cut this year, but will pay less

I was looking at the appropriations in Governor Walker’s 2015-17 budget, and it appeared that there were two tax credits widely used by lower-income Wisconsinites that were facing more cuts – the state’s version of the Earned Income Tax Credit (EITC) and the Homestead Credit. EITC was slated to go down from a combined total of $93.6 million in general tax funds in the 2013-15 budget to $86.1 million in this one, and the budgeted payout for the Homestead Credit is slated to go from a combined $262.0 million to $229.0 million. Was this a back-door cut to these tax credits, and a violation of Gov Walker’s claim of “no tax increases?”

That question piqued my interest, and what I found is that the eligibility for these credits aren’t being cut this year, but instead it is prior cuts in the credit and changes to eligibility in the age of Fitzwalkerstan have led to what looks like reductions today.

First I’ll look at the EITC, and I’ll compare what was in the 2013-15 budget (and adjusted by a couple of tax changes in 2014), and what was proposed by Governor Walker earlier this week. The first thing to know about the EITC is that it is split between two funding sources, as the Legislative Fiscal Bureau explains to us.

The state earned income tax credit is currently paid from two sources: (a) a sum sufficient, gen-eral purpose revenue (GPR) appropriation; and (b) federal funding from the temporary assistance for needy families (TANF) program. TANF funding was first used to cover a portion of the cost of the EITC in the 1998-99 fiscal year, when it became clear that federal regulations permitted the use of TANF funds for this purpose. According to federal regulations for the TANF program, TANF funding may be used to cover the share of the EITC that is refunded to the claimant (rather than used to reduce the claimant's income tax liability). However, TANF funds may not be used to provide the credit to certain legal immigrants. Based on the federal requirements and on past experience with refundable credits, and allowing for amounts paid to legal immigrants, it was previously estimated that about 80% of EITC costs could be paid with TANF funds. As the EITC income thresholds have increased due to indexing and law changes, the percent of EITC costs that can be paid with TANF funds has been re-estimated at 60%.

And as the LFB notes, the TANF share has been rising in recent years, which indicates that more of the funds are going to people with no tax liability. It was as low as 6.8% of total funds in 2008-09, but has increased steadily since then and jumped from 43.2% of total funds in 2012-13, to just over 60% in 2013-14, which is the last year measured.

That’s one reason that GPR state tax money going toward the EITC has been reduced over the last three years, and the other is because of changes in the law made when Gov Walker and the Wisconsin GOP came to power in 2011. The amount that the state pays in EITC is a percentage of what the federal credit is, and Walker’s first budget reduced the percentage of the credit from 14% to 11% for people with two children and from 43% to 34% for parents of three or more children. As a result of that move in 2011, the amount of Wisconsin EITC payments dropped by more than 18% vs the previous year, and it has stayed at that lower level. Combine that with the increased TANF share, and the amount of general tax dollars going into the EITC has declined greatly over the last 5 years.

Wisconsin EITC payments
2009-10 $129.2 million total ($103.3 GPR, $25.9 TANF)
2010-11 $126.2 million total ($82.5 GPR, $43.7 TANF)
2011-12 $103.3 million total ($59.6 GPR, $43.7 TANF)
2012-13 $101.2 million total ($57.5 GPR, $43.7 TANF)
2013-14 $103.8 million total ($41.3 GPR, $62.5 TANF)

Gov Walker’s budget request keeps the $62.5 million in TANF funding for each of the two years of the budget, and asks for $43.78 million in 2015-16, and $46.53 million in 2016-17. With that in mind, those numbers seem reasonable, but it also illustrates that the state’s credit stays well below the levels that were set in 2009, despite the fact that the expanded EITC that was part of President Obama’s first moves in office are still in place through 2017.

A similar story holds for the Homestead Credit, which goes to low-income homeowners and renters. The LFB explains how it works, and what has changed about it in recent years.

For claimants with incomes below the income threshold, the credit is equal to 80% of their property taxes or rent constituting property taxes up to the maximum in property taxes or rent. Rent constituting property taxes is 25% of rent if payment for heat is not included in rent and 20% of rent if payment for heat is included.

Under 2009 Wisconsin Act 28 (Doyle-Dem budget) , beginning with tax year 2010, the three formula factors were to be indexed annually by comparing the 12-month average of the Consumer Price Index from August through July of the prior year to the comparable average from August, 2007, through July, 2008. The three formula factors were indexed for tax year 2010. However, 2011 Wisconsin Act 32 (first Walker-WisGOP budget) repealed the annual indexing of the formula factors beginning with tax year 2011. Therefore, tax year 2010 was the only year in which indexing of the credit's formula factors took place. As a result, the credit formula factors remain as follows: the maximum property taxes or rent constituting property taxes is $1,460; the income threshold is $8,060; and the maximum income level is $24,680. These factors produce a maximum credit of $1,168.

The lack of indexing means that many Wisconsinites have had their Homestead Credit payments reduced if not outright eliminated simply due to inflation. And given that low-income individuals are also people that are less likely to file taxes in the first place (either because they have paid no state income taxes, or don’t think they can claim the credit), this makes it likely that those who have earned the chance to receive the credit may not get it without adequate outreach about how it works.

With the removal of the Doyle-Dem indexing in 2011 and an improving economy during the Obama Recovery, we have seen payments for the Homestead Credit go down in each of the last three years.

Homestead Credit payments, 2009-2017
2009-10 $129.2 million
2010-11 $133.9 million
2011-12 $133.7 million
2012-13 $122.8 million
2013-14 $118.0 million

2014-15 (budgeted) $130.3 million
2015-16 (request) $114.6 million
2016-17 (request) $113.0 million

This means that the $130 million that is being asked for in this current fiscal year will likely not all be paid out (and could be lapsed to fill the current year's budget hole), and explains the lower request in Walker’s 2015-17 budget.

To have the amount paid out under these credits go down at a time when the rich and corporate have received huge amounts of tax breaks that have resulted in lagging job growth should make you question the priorities of what’s been going on at the Capitol in the last 4 years. And if things turn bad economically, as they might with many Wisconsinites who would be affected the huge cuts in this Waler budget, these credits may have to be used more in the coming two years (as we saw in late 2000s). Which would make this fragile, deficit-ridden budget implode even more.

The budget comes out- first thoughts

Here are some early notes that I have on a few provisions included in the state budget that Gov Walker released last night (you can read the monster document by clicking here).

1. We knew about the $1.3 billion that was being borrowed for transportation needs, but weren’t certain what funds would have to pay back the money, and how it would shake down. Now we do- slightly more than $279 million from the General Fund, and a little over $1 billion from the Transportation Fund. Pages 191 and 192 have that explanation.

2. On a related note, the proposed transfers to the Transportation Fund from the General Fund have been slashed back to less than $38 million in Fiscal Year 2015-16, and $39.6 million in Fiscal Year 2016-17 (noted on Page 188). This is much less than the $169 million we're sending to the Transportation Fund this year, and it helps to explain some of the need behind the added borrowing. Limiting the transfer also seem to be out of desperation, as it's the only way Walker's General Fund budget would have a chance of balancing, even with the expectation of revenue growth. Also worth mentioning on that page is the fact that more than $681 million in lapses is expected in year 2 of the budget – approximately 4% of appropriations.

3. Going back to debt- there’s a whole lot more refinancing in this budget, as Walker plans to “reschedule” up to $1.5 billion in debt over the next two years. The idea is to take advantage of low interest rates driven by the reduction in the federal deficit and strength of the U.S. dollar (THANKS OBAMA! THANKS FED!), but of course the problem with this is that we have to pay off more of it further down the road. Of course, Walker isn’t planning to be in office when that bill comes due (heck, he’s not planning to be in the STATE at that time), but it means that those of us left behind have even more pieces to pick up from.

4. Walker is helped by the lower interest rates in another way, as GPR (general tax) debt service costs are way down- from $723.3 million estimated for this current Fiscal Year, to $631.4 million in 2015-16 to less than $582.2 million in 2016-17. Walker will likely take credit for this admittedly impressive drop in debt service, but he will likely not tell people in other states that a lot of the savings stem from the fiscal policy of President Obama and the easy money from the Fed. Oh, and I’m very certain that Walker won’t bring up his strategy of kicking the can down the road via billions in refinancing.

5. I am skeptical of Wisconsinites actually seeing further property tax reductions. Walker’s claim of lower property taxes is due to higher credits for schools (which aren’t being paid for) and the lottery (because more people are playing). But that claim of taxes being lower is in comparison to what they would otherwise be, and going back to the Kaukauna lie of 2011, that often doesn’t mean that you’ll end up paying less, or that things won’t be worse off due to Walker policies.

There’s obviously a whole lot more in this 1,800+ page document to discuss in the coming weeks and months, but I wanted to focus on these items, even though they aren’t as sexy as UW funding cuts (and literally purging the Wisconsin Idea from the UW System’s mission), or the destruction of K-12 public schools through privatization and a “separate but equal” system intended to favor voucher schools. These key provisions make the fragile numbers in the budget add up, and as revenues get finalized over the near future and reality sets in, let’s compare to where Walker’s poses match up to situation on the ground and in the state’s Treasury.

EDIT: Oh hey look, we already have a modification to the budget!

The Wisconsin Idea will continue to thrive. The final version of budget will fix drafting error - Mission statement will include WI Idea.

— Governor Walker (@GovWalker) February 4, 2015

Yes, this is definitely the type of detail-oriented person we should trust with his finger on the Button. I will now hammer my head on the table for the next 5 minutes.

To borrow, or not to borrow?

As word keeps leaking out about the budget that Gov Walker is going to release tomorrow, I wanted to close in on a couple of items related to debt in the upcoming budget. Wispolitics has printed a summary of the details released last Friday afternoon, and it includes a whole lot of new borrowing for highways and other Transportation needs, but not so much for other departments. It’s the non-Transportation funds I want to talk about first.

* There will be no new bonding authorized in the capital budget. Residual bonding authority will be used in the capital budget for projects.

* This is possible while maintaining a robust capital building program because of $858 million in leftover projects to be approved from the 2013-15 Budget.

This is an intriguing change from the 2013-15 Capital Budget, which planned to borrow $1.3 billion to pay for that budget’s projects (this is separate from the nearly $1 billion in borrowing that was done for Transportation in that budget). This amount gets added to the state’s allowance of how much General Obligation borrowing it can do, with funds parceled out to various projects. Theoretically, as those projects come in under budget and/or don’t happen, these funds can be “refunded” and used on other projects.

And a check of Appendix B of the most recent bond disclosure form (for $260 million in refinancing that’ll happen later this Winter), shows that this amount of money is available to be used.

G.O. bond issuance information
Total debt authorized for projects $28.82 billion
Amount of unissued debt $4.24 billion

A sizable amount of that unissued debt is for projects that haven’t started and/or completed yet, so it will be issued in the near future, and it is largely concentrated in some departments, (the UW System has a total $1.08 billion of these funds, and the state’s Stewardship Fund has $382.5 million, for example). But it is also plausible that some of these funds could be freed up for the 2015-17 budget, and you can see where such a strategy might be drawn from.

The problem with this is that it taps into reserve funding that could be needed if the state’s needs change or its finances require more borrowing, and it could also be perceived as a back-door way to reduce funding for various state agencies, since there is a lower amount of “base” borrowing for projects in future budgets. Not necessarily a bad thing, unless you think maintenance and upkeep of infrastructure is a priority.

The other item I want to look into is the borrowing in the Transportation Fund. This is apparently the strategy Walker will do in lieu of the nickel increase in the gas tax that the Wisconsin DOT included in its budget request, and the Walker Administration’s document explains that there’s also a change in how the debt for this borrowing will be paid off.

*Pledge the motor fuel tax to the Transportation Revenue Bond program, which will increase the debt service coverage in the program and likely lead to a higher bond rating.

*This will be structured so the motor fuel tax amount will be used for program coverage while TRB debt service will continue to be paid primarily with vehicle registration fees.

* Overall level of new transportation bonding is $1.3 billion.

I’d have to see the budget document to see how this exactly would work out, because the 1st and 2nd bullet points seem to be in conflict. Right now, the debt in the Transportation Fund is paid off entirely by vehicle registration fees, to the tune of nearly $235 million for this current fiscal year. But this initiative to use gas taxes to "increase the debt service coverage in the program," confuses me as to how it is different. Is the idea that more debt is paid off than is currently planned, which would be something that reduces the debt load in the short term. But of course, this would be offset by the additional borrowing of $1.3 billion in this budget, and require more debt service in later years.

Another worry I have about this is that designating any gas tax money to pay off debt inevitably takes it away from being spent on other projects and/or aids to local communities. So it makes me wonder where those funds will be made up…if at all. Since the Walker Administration’s document claims that “there are no new taxes, fees, or increases in the transportation budget,” it seems like something has to suffer if the funds aren’t going to current revenues. Given that Walker has never been kind to funding transit (either as the Milwaukee County Executive or as Governor), it makes me wonder if that’s a target for reductions.

I suppose we’ll find out soon enough, but it is interesting to see that the Walker Administration is claiming that this budget will reduce the amount of debt and debt costs for the state’s Capital projects, reduce the amount of outstanding debt in its Transportation Fund, but also add to the amount of borrowing it does for transportation projects. Like most things with this crew, looks like we’ll have to read the fine print to figure out just how this plan is supposed to work…if it does at all.

Business is great at the books in Nevada

On this snowy Super Bowl Sunday, let's take a look at a certain industry that's coming off a strong 2014- the sports gambling business. It's telling that sports betting has gotten mainstreamed enough that ESPN.com now has its own gaming industry writer, David Purdum, and there's even ESPN Chalk, which goes over betting lines, poker, and related gambling.

Purdum had an interesting column this Friday reviewing 2014's year-end report to Nevada Gaming Control, and it shows that the sports book business is very good.

The state's 187 sportsbooks won $227.04 million off of the $3.9 billion wagered on sports in 2014. Both amounts are all-time records, according to Nevada Gaming Control.

Football, per usual, carried the load. The sportsbooks won $113.73 million on college and pro football in 2014, a giant 40.73 percent increase from 2013. Overall, $1.74 billion was bet on football in 2014, (actually, closer to $1.75 billion) $12 million more than in 2013. Nevada Gaming Control does not track pro and college football separately, but sportsbook managers estimate the NFL accounts for around 55-60 percent of their annual football handle.

The year got off to a big start, with the books winning a record $19.6 million on Super Bowl XLVIII between the Seattle Seahawks and Denver Broncos. It continued into this season. From September through December, the books are up $98.16 million on football.

Purdum's article quotes a research analyst from Nevada Gaming Control (now THERE'S a cool bureaucratic job!) as saying that the state's sports books have taken in record profits the last three years, and that betting volumes have been up each of the last five. And that doesn't count all the extra money that these casinos are making off of lodging, food, drink, clubbing, and related amenities that you inevitably shell out for in Vegas, Reno, and wherever you want to game in the Silver State.

Nevada Gaming Control heavily regulates and reports on all forms of gambling, and the state of Nevada gets some of these profits to help run governmental operations (which is part of the reason they can get away with no state income tax). The information then comes out in monthly reports, such as the December one that came out last month that Purdum reported on, and it breaks down the gambling stats any way you like. Give it a click and see what stats you want to check out, including the type of sport being bet on, which type of table game takes in the most for the casinos (it's baccarat), and that penny slots are much tighter (10.1% profit) than the $25 dollar ones (4.5%).

On the sports betting side, I imputed the amount of money bet on the "win total" (profit) for the book, and the numbers broke down as follows for 2014.

Sports betting stats, Nevada 2014
Football - $1.75 billion bet, $113.73 million profit- 6.5% "win total"
Basketball- $1.11 billion bet, $54.2 million profit- 4.9% "win total"
Baseball- $721.8 million bet, $21.3 million profit- 2.95% "win total"
Parlays- $57.8 million bet, $21.3 million profit- 36.8% "win total" (!)
Other- $267.0 million bet, $16.5 million profit- 6.2% "win total"

"Other" seemed to have a bigger year in 2014, and I'm guessing that was related to soccer's World Cup, which you'd think would attract some new action. But as Purdum's column notes, sports betting profits are very small compared to the $4.15 billion that table games take in from casinos, and the nearly $6.75 billion for slot machines (including $2.6 billion from penny slots!).

There are a couple of other interesting notes in sports betting news that have come up in recent days. One includes U.S. Sen. John McCain signaling that he'd be OK with expanding sports betting on individual games to states outside of Nevada. It may be one of the few good things to come out the GOPs taking the Senate, since Nevada's Harry Reid can't protect his home-state's growing industry by blocking as many gambling bills now that he's not Majority Leader. Likewise, it's hardly a coincidence that McCain comes from neighboring Arizona, which features plenty of short, cheap flights and buses from Phoenix and the rest of the state to Vegas.

Also, there's some big news from the books over the last few days that have moved today's Seahawks-Pats line.

Big, influential money on the Seattle Seahawks showed up Saturday in Las Vegas, causing sportsbooks to adjust the Super Bowl point spread heading into game day.

The MGM, Caesars, Westgate, Golden Nugget, South Point, Station's and CG Technology sportsbooks moved the line from New England minus-1 to pick 'em Saturday, as money poured in on the Seahawks. Most books reported still having more money on the Patriots, but the gap was narrowing.

"We're taking more bets on the Patriots, but the more substantial money has been on the Seahawks," Jason Simbal, vice president of risk for CG Technology, said Saturday. "What we've been seeing lately is for every two-, three-, four- or five-hundred dollar bet that comes in on New England, we'll then take a five-figure bet on Seattle."

But because the big early money was on the Pats, especially when the line opened at Seattle -2.5, it still means that Vegas books want a Seahawks win, because that would mean a nice profit for those guys, just like in last year's game.

It's what makes Gov Walker's positioning as a "free market" guy all the more bullshit when you look at his refusal to grant the Menominee a gaming license in Kenosha last week, because there are few businesses more transparent and free-market than a casino. And this is especially true on the sports betting side, where not only are the lines supposed to reflect true supply and demand regarding opinions on how the game will go, but the winnings and bets are tracked and players monitored, with any distortions like point-shaving being revealed due to odd betting patterns. Sure a lot more legitimate than the insider-information plagued stock market....or the "no-strings attached" mentality of handouts from WEDC.

GDP still pretty darn good

Today’s big economic story is that GDP figures came out for the 4th Quarter of 2014, and a lot of the financial media is portraying the 2.6% growth shown in the release as disappointing. Apparently the “experts” were thinking growth should have topped 3% after the blowout growth in the 2nd and 3rd quarters (4.6% and 5.0% growth, respectively), but a look inside these figures indicate the economy was still on good footing as 2014 ended.

If you take a look at the Bureau of Economic Analysis’ release, you can break out the four large GDP components. What this shows is that U.S. consumers spent strongly in the last 3 months of the year, and the only things that held 4th Quarter growth under the 3.0% figure were cutbacks in government spending (particularly military spending) an increasing trade deficit. Table 2 of the BEA release has these figures if you want to follow along.

Contributions to GDP growth, 4th Quarter 2014
Consumption +2.87% to GDP, (+4.3% vs Q3)
Investment +1.20% to GDP (+7.4% vs Q3)
Federal Gov’t -0.54% to GDP (-7.5% vs Q3)
State/Local Gov’t +0.14% to GDP (+1.3% vs Q3)
Exports +0.37% to GDP (+2.8% vs Q3)
Imports -1.39% to GDP (8.9% more imports than Q3)

The increase in imports makes sense, given the increase in consumption along with the increasing strength of the dollar (which makes imported items cheaper for Americans to buy). Even with that, private sector GDP expanded by more than a 3% annual rate for this quarter, and remained headed in the right direction.



Overall growth for the year from the end of 2013 to the end of 2014 is now estimated at just under 2.5%, which isn’t that bad, and keeps overall GDP on the modest but relatively steady growth line that we’ve seen for the 4 ½ years of the Obama Recovery.



Looking ahead, it’ll be interesting to see what effect the dropping price of gas will have on overall consumption numbers (both of gas itself and on other goods with the extra money left over), and also if the lower inflation numbers start helping to make real GDP growth go higher. On the flip side, the improving dollar and bad overseas economies may raise the trade deficit, and make that Net Exports number be even more of a drag on GDP than the -1.02% it was in this quarter.

But despite the naysaying from the Wall Street and DC media, I think today’s report shows that U.S. GDP growth was in a good place at the end of 2014, with a strong final 3 quarters of increases of both jobs and output. But now we start looking ahead to what the beginning of 2015 holds, and with high volatility in both jobless claims and the stock market, it feels like things could go either way for growth over the next few months.

For more analysis on the GDP report, I'll forward you to Econbrowser with thoughts from James Hamilton, who notes that GDP expanded at an annual rate of growth over 4% for the last 9 months of 2014, and also UW-Madison's Menzie Chinn.

More hints that Wisconsin finances are slipping away

As we await the release of Governor Scott Walker’s budget, we continue to get clues as to the direction of the state’s finances. I’ll direct you to the quarterly General Fund Cash Forecast report that came out this afternoon. While not a direct match for the status of the state’s General Fund, it usually goes in the same direction, and what’s worth comparing here are the numbers that came out with what was predicted three months ago.

Cash balance, forecast vs actual Oct –Dec 2014
Oct 2014
Actual beginning balance $1,729.1 million
Predicted ending balance $2,154.3 million
Actual ending balance $2,072.5 million
Difference -$81.8 million

Nov 2014
Predicted ending balance $1,874.4 million
Actual ending balance $1,847.9 million
0Difference -$25.5 million

Dec 2014
Predicted ending balance $1,318.9 million
Actual ending balance $1,202.0 million
Difference -$116.9 million

That’s not a good sign, and even worse is the predicted direction for the coming months. The same documents cash forecast predicts the gap between the October report and the January one to widen in the next three months, as taxes get filed.

Jan 2015
Actual beginning balance $1,202.0 million
Predicted ending balance Oct ’14 $2,197.5
Predicted ending balance Jan ’15 $2,043.0 million
Difference -$154.5 million

Feb 2015
Predicted ending balance Oct ’14 $1,915.9 million
Predicted ending balance Jan ’15 $1,738.8 million
Difference -$177.1 million

Mar 2015
Predicted ending balance Oct ’14 $1,234.4 million
Predicted ending balance Jan ’15 $1,011.0 million
Difference -$233.4 million

And the reason for why the state’s treasury keeps falling short? Lower revenues, as the three months for October through December 2013 missed on cash receipts by $105.5 million, and all of the additional $116.5 million change in predicted cash balance in the first three months of 2015 are due to a lowering of expectations for receipts.

With the month ending on Saturday and tax season beginning, we will start to see very soon if these numbers have any chance of making up these deficiencies in receipts over the last five months of Fiscal Year 2015. But given the last year of lower-than-predicted tax revenues leading to increasing budget deficits not just for this year, but for the 2-year budget after that, I sure wouldn’t bet on it. Somehow I’m guessing this information about these lower revenues and higher deficits isn’t being told to the suckers GOP supporters that might be attending our Governor’s latest out-of-state speaking engagement.

P.S. It's also interesting that these numbers are not included in the disclosure for the state's attempt to refinance $260 million in debt in the coming weeks. They cut it off in November. By the way, this refinancing is in addition to the $279 million in borrowing that's going to happen next Tuesday- the same day that Walker reveals his budget.

Koo-Koo and Dingbat want to treat MKE like a third-world country

State Sen. Alberta (Dingbat) Darling and State Rep. Dale (Koo-Koo) Kooyenga are two suburban Republicans who have Milwaukee County constituencies, but due to gerrymandering, rely on votes from outside of Milwaukee County to stay in office. But that's not stopping them from believing they have the solution to inner-city Milwaukee unemployment and poverty. These two have teamed up to produce a paper titled the New Opportunities for Milwaukee Agenda, a piece that I am sure had no input whatsoever from the Bradley Foundation or Wisconsin Manufacturers and Commerce (no, not at all...).

Naturally, much of this agenda features calls for school privatization and related giveaways to corporations. But perhaps the most heinous part is where Koo-Koo and the Dingbat decide that the solution to unemployment and low opportunity in the inner city is to lower wages beyond the legal limits.

Similar to a state’s tax burden, a state’s status as right-to-work influences a company’s decisions. The businesses considering investment, or additional investment, are increased with regularity if the state is right-to-work. Approximately twenty-four of the states in this country are right-to-work and the other twenty-six still require all employees in a union shop to be part of the union.21 It is important that Wisconsin is competitive in luring businesses by providing a right-to-work zone.

It is not our intent to make the proposal a battle over right-to-work. However, when targeting new investments, Wisconsin will be competitive with the most economically dynamic states if policymakers are able to offer no taxes and a right-to-work zone. When coupled with the DWD and the WTCSs ability to offer on-site job training, Milwaukee and Wisconsin will be in an advantageous position to bring significant investment to Wisconsin.

Reform: Create a 5-person governor appointed board that could grant a company’s employees the right not to be mandated to join a union. The board would have to certify the business does not directly compete with an existing Wisconsin business.

That's right, Koo-Koo and the Dingbat want to eliminate labor laws that apply to the rest of the state, and allow businesses to exploit the inner-city Milwaukee work force by paying them subpar wages and removing their rights. Oh, and there's another great part in the document where they say they would "streamline" licensing requirements for certain services, specifically mentioning "African hair braiding" as a skill the underprivileged in Milwaukee should be especially apt to do. Niiiiiice.

Reading that plan led me to look up this term in Wikipedia.

Colonialism is the establishment, exploitation, maintenance, acquisition, and expansion of colony in one territory by a political power from another territory. It is a set of unequal relationships between the colonial power and the colony and often between the colonists and the indigenous population....

Collins English Dictionary defines colonialism as "the policy and practice of a power in extending control over weaker people or areas."[1] The Merriam-Webster Dictionary offers four definitions, including "something characteristic of a colony" and "control by one power over a dependent area or people."

Yeah, that seems to fit.

Naturally, this document doesn't call for added investment and stabilization from government services for those areas, but instead is entirely based on a private sector that has neglected this area of the state for decades. Even better is that the document is "authored" by people whose own suburban lifestyle is based on utilizing the resources and amenities of the large city while not paying any of the taxes and investment that come with maintaining such an urban core. The mentality would be laughable if these people weren't in power in this state, but because they are, and because they have media access that the residents of inner-city Milwaukee don't have, this type of crap gets a hearing in the public square, and has a chance to become law. In fact this arrogant, borderline racist "improvement" plan for inner-city Milwaukee is given huge amounts of air time and exposure on Milwaukee media, and today's editorial in the pro-suburb Journal-Sentinel says that it "holds promise."

No, it does not hold promise. It's the same, top-down privatization BS that has failed Milwaukee for decades, except with lower wages, and much of it is not a plan worth of serious discussion. It's based on the same trope that cultures who think they're superior have tried to impose on other cultures for centuries, and it rarely has made the other culture better off. But that trope sure got a select few of that (usually white) empire/colony-overseer very rich, and the white business community in the Milwaukee area see an opportunity to repeat that history with disaster capitalism plans like this. That's Koo-Koo's and Dingbat's real goal with this policy, even if they're too dense to fully understand that.