Filed under: Budget — Christian Schneider @ 3:46 pm
Whether they’re conservative or liberal, Wisconsinites can all agree on one thing: We LOVE being from Wisconsin. We love playing cardiac Russian roulette by gorging on cheese curds. Nobody bats an eye when someone wants to be buried in a Packer jersey. And we’re proud of the fact that the sub-zero weather gives us thick skins and warm hearts.
In fact, when our nation’s founders wrote the U.S. Constitution, this sense of regional pride may have been what they had in mind. Our federalist system rewards state sovereignty, making each state what U.S. Supreme Court Justice Louis Brandeis dubbed a “laboratory of democracy.” If we think (or know, as the case may be) Illinois is a cesspool, we don’t have to live under their laws. Better yet, now that we’re done renting their quarterback, we can go back to pretending Mississippi doesn’t exist.
However, over the years, state sovereignty has begun to erode as the federal government grows in scope and reach. Each Congress births more federal programs for the states to implement, and more mandates for them to obey. And at an alarming rate, Wisconsin has been drunk-dialing Congress at 3 AM, begging for more federal aid to keep the state’s programs alive.
Until this year, Wisconsin’s loss of independent governing authority has been a slow process. But the creeping hand of the federal government has grown steadily for a quarter century. Between 1984 and 2009, federal funds as a percentage of the Wisconsin budget grew from 18% to 25%. However, this year, the floodgates have been opened.
Governor Doyle’s proposed 2009-11 budget, on the strength of a $4.5 billion increase in federal funds, increases the federal share of the state budget from 25%to 30% in one year. Commensurately, state general purpose revenue (GPR) drops from 50% of state spending to 45%. In many cases, such as school aids, Doyle merely plugs federal money in where state general fund revenue had previously been used:
The skyrocketing use of federal funds to run our state’s budget is troubling on several fronts. If the feds turn the “stimulus” spigot off after this biennium, Wisconsin is on the hook for billions of dollars that will likely be raised via tax increase. Conversely, if Congress keeps pumping money into our state budget to prop up our spending, we will have ceased to be our own sovereign entity. We might as well just shut down state government and declare ourselves the newly-created federal “Department of Wisconsin.”
The more federal funds Wisconsin accepts, the more it opens itself up for blackmail and micromanagement by Congress. We all remember the feds threatening to pull transportation funding unless states changed their minimum drinking age and minimum drunk driving standard. All this federal funding makes Wisconsin the federal government’s marionette. Whoever holds the purse strings wields unlimited coercive power.
Think about your job. If you didn’t get a paycheck from your boss, and he asked you to go through the office files and re-sort them in reverse alphabetical order, you’d probably graciously invite him to reproduce with himself. But since you need the income, you glumly put your head down, mutter to yourself, and suffer through the paper cuts.
The erosion in sovereignty exacerbated by the Legislature this session hasn’t been limited merely to the use of federal funds. A week before he introduced his current budget, Doyle signed a fiscal appetizer into law, known as the so-called “budget repair” bill. This bill contained a provision known as the “Streamlined Sales Tax Act,” which increases sales taxes on goods and services in Wisconsin by forcing our sales tax exemption code to conform to other states. Essentially, Arkansas and other member states will be determining the goods on which we can and can’t charge sales tax. If our Legislature wants to promote the sale of a certain Wisconsin-made product by granting it a sales tax exemption in the state, too bad – the Interplanetary High Court of Sales Tax Exemptions must all agree to the changes. And thus, we’ve sold our sovereign right to decide what’s best for Wisconsin in exchange for a few extra bucks.
In the early 1990s, Wisconsin was perhaps the most admired laboratory of democracy in America. Wisconsin had the first school choice program, giving poor parents the right to send their children to better schools. Welfare reform in Wisconsin was so successful, the state’s plan served as the model when Congress overhauled the federal welfare system.
In the ultimate irony, Wisconsin itself has now transformed itself into a welfare recipient. Unwilling to do the hard work to balance his budget, Jim Doyle now sits at home all day in sweatpants, working on his correspondence art school Tippy the Turtle drawing, waiting for that federal check to come through. And as long as our elected officials are willing to sell off the sovereignty that made our state great, this disturbing trend will continue.
Filed under: Budget — Christian Schneider @ 10:14 am
Ever since he was first elected to the State Assembly in 1998, Representative Mark Pocan has had a soft spot in his heart for the Wisconsin Taxpayers’ Alliance. In May of 1999, Pocan charged the WTA with being a shill for Republican interests, earning him a nice little article in the Wisconsin State Journal, which printed his charges verbatim.
A full decade later, Pocan is still at it, despite not having contradicted a single statement made by the Taxpayers Alliance over that period. Recently, the WTA’s President, Todd Berry, earned the scorn of Democrats in state government by pointing out that a large chunk of the state’s then-$5.7 billion deficit was actually comprised of agency requests that had not yet been granted. Fast forward to last week’s budget announcement, when Governor Doyle’s very own budget summary (p. 9) admitted that Doyle “cut” the deficit by $1.8 billion merely by rejecting new departmental spending requests. (The line to apologize to Berry forms on the left.)
Having apparently already solved the state’s budget deficit, Pocan yesterday sent out a glib press release instructing the media to refrain from calling the Taxpayers Alliance “nonpartisan.” Recognizing that the media likely wouldn’t appreciate being lectured on how to label certain groups, Pocan made his request vapid and lighthearted, at one point joking about his likeness to Brad Pitt. Conveniently, Pocan seems to forget about the “nonpartisan” label given to lefty front groups like the League of Women Voters, the Wisconsin Democracy Campaign, etc.
This release apparently infuriated Representative Steve Nass, who fired off an angry press release accusing Pocan of being anti-American, or something. Then Rep. Leah Vukmir issued a release that invoked Orwell’s “1984″ to defend Berry. (I have to sheepishly admit that someone had to explain the press release to me for me to understand it.)
Responding to Pocan serves two ends, neither of them desirable. It makes it appear as though legislators have nothing better to do. Also, since it will likely be exclusively Republicans running to Berry’s aid, it almost appears to strengthen his previously nonexistent point.
Todd Berry is a big boy. I think he does an excellent job of defending himself, as he has had to do for years. The work he does in explaining the budget to regular dopes like me is invaluable. Responding to Pocan is merely taking his bait, in his attempt to get the GOP to talk about anything other than the disastrous budget his caucus is about to ram through.
Filed under: Crime — Christian Schneider @ 4:35 pm
Today’s “Goofball Bill of the Day” circulating around the Wisconsin Capitol:
Re: Co-sponsorship of LRB 2074/1, charges for inmate telephone use at a jail or house of correction
From: State Rep. Frederick P. Kessler
Date: February 25, 2009
Re: Co-sponsorship of LRB 2074/1, charges for inmate telephone use at a jail or house of correction
This bill restricts the charges that may be imposed for an inmate phone call from a jail or house of correction to no more than the charges that would be imposed for a comparable call from a state institution. The rates charged in some counties are beyond all reason. For example, in 2007, Milwaukee County’s rate for a call from the House of Correction stood at $5.55 for a fifteen-minute call. The hardship to the inmate’s family is only exacerbated by having to choose between paying exorbitant phone rates to hear from their loved one, or making the difficult decision to not accept the phone call.
Tell ya what, Fred, as soon as we solve this pesky little $5.9 billion deficit, your bill to have taxpayers pick up more of the tab so rapists can call home to their mommies will be our first priority.
“The hardship to the inmate’s family is only exacerbated by having to choose between paying exorbitant phone rates to hear from their loved one, or making the difficult decision to not accept the phone call.”
Gee, if only there was a way for the loved ones to stay out of jail.
Some say it’s cruel to kick a cowboy after he’s fallen off his horse, but when the cowboy handcuffs himself to the stallion leading a stampede, he is far more likely to receive a Darwin Award than the compassion of his fellow man.
Such is the case with State Representative Jeff Wood who was recently charged with four misdemeanors including a third drunken driving offense and possession of marijuana. Wood was first elected to the Assembly in 2000 as a Republican, but switched parties to run as Independent last July. Immediately following his last minute party swap, which left the Republican caucus with a razor thin 2 seat margin and no candidate to field against him, Wood invoked the spirit of Ronald Reagan. According to the Chippewa Herald, Wood cited an abandonment of principles like limited government and fiscal responsibility as reasons for dissatisfaction with the party.
“I don’t think Ronald Reagan would recognize the party anymore,” Wisconsin state Rep. Jeff Wood told the Chippewa Herald on July 8.
Taken at face value, fiscal conservatives can surely sympathize with this sentiment, but Wood historians know the once Libertarian, turned Republican, and now Independent lawmaker, has never met a political party he liked.
Once hailed as the Father of Tabor, Wood was the arch-enemy of all who love government spending. Tabor, which stands for the Taxpayer Bill of Rights, would have limited government spending growth to the rate of inflation, but the measure was dumped by moderate Republicans who said the spending limits were too restrictive.
Wood’s legislative voting record, however, exposes him as just another politician who promises one thing and does another.
In 2007, Wood defied his party leaders by voting with the Democrats in opposition to their budget, not because it violated the principles of limited government and fiscal responsibility, but because the Republican budget didn’t include a costly new government biofuels center.
Wood’s political transformation was completed late Wednesday when he cast the 51st vote in favor of a Democratic plan to raise more than $600 million in taxes on hospitals, businesses and consumers. Democrats, who lost two of their own members in opposition to the plan, needed Wood’s vote to prevent Republicans from claiming that each of their fifty members cast the “deciding vote “to raise taxes.
Cynics have to wonder what Democrats promised Jeff Wood in exchange for his latest betrayal. Whatever the quid pro quo, Wood will soon discover that his new friends are just as two-faced and opportunistic as he.
Under those estimates, the net ending balance in the general fund for the 2008-09 fiscal year is projected to be -$600.2 million. The bill would reduce that deficit by $183.3 million to $416.9 million.
So the budget “repair” bill actually fixed 30% of the budget shortfall, kicking the remaining 70% into the next biennium. So why would the headline writer consider this to be a budget repair bill? Well, because Jim Doyle says it is. (To their credit, the actual reporters seem to get the spirit of the bill – tax increases, etc. – correct.)
Elected officials have a long and storied history of christening their bills with a favorable name, hoping nobody catches on. A few years ago, when anti-smoking groups descended on the capitol seeking a statewide smoking ban in bars and restaurants, Senator Scott Fitzgerald introduced a bill intended to thwart their efforts. Naturally, he slyly called the bill the “Smoke-Free Dining Act,” which confused everyone, as it actually guaranteed the right to smoke in a bar or restaurant, but required these establishments to have smoke-free areas for people who didn’t appreciate going home smelling like ashtrays. Drunk people in taverns routinely called their legislators in opposition to the “Smoke-Free Dining Act,” when in fact, they should have been for it.
So just because a legislator or governor calls a bill something, it doesn’t exactly mean that’s what it does. Look at how the media is covering the $750 billion federal package signed this week by President Obama. They virtually across the board call it the “stimulus” plan? And why? Well, because that’s what Barack Obama calls it. So regardless of whether the bill actually has any simulative aspects, coverage is already tilted in its favor by assuming that it does.
So beware of labels given to bills by the legislators who introduce them. For instance, there’s no question that when Congress eventually votes to drill in ANWAR the bill will be called the “Caribou Protection Act.” Yet in those cases, the press won’t buy the spin – just as they shouldn’t accept that Doyle’s toxic bill “repairs” anything.
With the state plunging into its worst deficit ever and unemployment climbing, the State Senate has decided to pull the following bill to the floor on Tuesday:
The Right to Breastfeed Act
Under current law, there are various prohibitions against lewd behavior and sexual gratification in public. These prohibitions, however, do not apply to a mother breastfeeding her child.
While state law does not classify breastfeeding as a “lewd behavior”, many mothers statewide are the subject of harassment daily because they choose to nurse their child in a restaurant, coffee shop, or shopping mall.
LRB 0154 would help to create greater public awareness of breastfeeding by allowing a mother to breastfeed in any public or private location where she is otherwise authorized to be. Additionally, this bill would prohibit any person from interfering with the right of a mother to breast feed her child. Currently, 40 states have laws which allow mothers to breastfeed in any public or private place.
The American Academy of Pediatrics recommends exclusive breastfeeding of infants for six months, and continuation of breastfeeding after solid foods are introduced through age one. It is estimated that Americans would save $3.6 Billion annually in health care costs because breastfed babies tend to be healthier babies.
You catch that last line? Americans will save $3.6 billion in health care costs if more women breastfed. It just makes economic sense. Here’s your “stimulus” package! As if passing this bill is going to convince women to start breastfeeding their children that wouldn’t normally have done so.
Clearly, legislators are creating a problem that doesn’t exist, so they can take credit for fixing it. Does anyone honestly believe that women breastfeeding in public is a problem so great that it needs state government to pass a law? Can anyone cite more than two instances over the past 10 years where a woman has been asked to cease feeding her child in public? Women who do breastfeed their children don’t want their breasts exposed to the public any more than people in a restaurant want to see them – so mothers are almost always good about covering up and being discrete.
Of course, when the State Senate does pass bills they think help the economy, they do things like raising the minimum wage, which will force more people into unemployment. So in a strange way, the more time they spend on nonsense like this, the better our state’s economy might be.
Filed under: Budget,Taxes — Christian Schneider @ 2:38 am
In the next few days, the media will go to work listing the major tax increases (see below) and policy initiatives in Governor Doyle’s proposed 2009-11 budget. Here are a few things of interest that might get lost in the shuffle:
1. In his budget address, Doyle didn’t even pretend the budget was balanced. Instead, he attempted to inoculate himself against criticism by listing all the things he would have to actually cut to get the budget back to a structural deficit of zero. As seen on page 37 of the “Budget in Brief,” Doyle’s budget leaves an accrual-based deficit of $2.5 billion in 2010 and $2.3 billion in 2011. Keep this clipping for the scrapbook for when Doyle blames someone else for the giant budget deficit facing him (assuming he’s still around) when putting together the 2011-13 budget.
2. Doyle’s budget increases the amount the state has to be in deficit before a budget adjustment bill requirement goes into effect. Currently, if there’s a shortfall of .5%, the governor has to introduce a budget fix. This bill increases that trigger to 2% – increasing the chances Doyle won’t have to be back to fix a bad budget. (p. 11)
3. The budget increases the “state aid for the arts” program by 5%, or $188,600 in general purpose revenue over the biennium. (p. 6)
4. After the recent “Public Enemies” film debacle (where the state gave a Hollywood crew $4.6 million so Johnny Depp could get nice haircuts), Doyle eliminates the tax credit program altogether ($5 million per year) and replaces it with a much more modest grant program of $500,000 per year. (p.11)
5. While the budget document is supposed to be a no-nonsense look at the governor’s programs, the section on Doyle’s proposed statewide smoking ban oddly contains this argument, as if it were incontrovertible fact: (p. 12)
“The ban will prevent thousands of premature deaths from secondhand smoke exposure and improve the overall health of Wisconsin residents. It is estimated that the smoking ban will result in over $1 million in savings to the Medicaid programs during the first 18 months after implementation.”
6. The budget adds men as eligible recipients of the Medicaid-funded Family Planning Waiver, which almost certainly means taxpayer-funded vasectomies (which are already covered in some cases by Medicaid). The bill appropriates $355,000 in FY 2010 for this change, then reduces funding by $940,300 the next year, citing the “net savings to Medicaid and BadgerCare Plus programs due to a decrease in the number of Medicaid-funded births among the eligible population.” Ask Nancy Pelosi how well this argument went over. (p. 17)
7. The 15 person board Governor Doyle set up to spend federal stimulus money gets to play with $650 million that isn’t included in other portions of Doyle’s budget. (p. 4)
8. The budget blows holes in the school property tax caps in three ways: By exempting costs related to school safety, salary and fringe benefits for nurses, and for transportation costs above the state average. The school districts with the highest transportation costs are likely to be rural districts with low property tax bases. This could be sticking a large property tax increase to taxpayers in districts that can least afford it. (p. 8 )
9. The budget slaps the school choice program in Milwaukee with all kinds of new requirements to ensure the “quality” and “accountability” of the program. In other words, they want as much bureaucracy in private schools as you get in MPS. (p. 9) The bill also allows MPS to count a portion of choice students in their headcounts, so they get more state aid (even though the children do not attend MPS schools.) This is a newspaper investigative report just waiting to happen.
10. The budget creates a sales and use tax exemption for fees associated with playing youth sports. Swing, batta batta.(p. 13)
11. Doyle’s budget clears the way for Milwaukee to offer bonds to pay for its unfunded pension obligation. (p. 7)
12. Since the state has a huge budget deficit, it makes perfect sense for the budget to… institute primary enforcement of seatbelts for drivers? (Which has zero fiscal effect for the state, incidentally.) And here’s the kicker – officers now have to undergo “cultural sensitivity training in order to prevent racial profiling or stereotyping,” as if cops have all the time in the world on their hands. This is no surprise, though, as Doyle said back in October that this would be part of his budget. (p. 11)
14. The budget expands the prevailing wage law to any private construction project that receives state money, as opposed to fully state-financed projects. This will force higher wages on construction sites and make new buildings more expensive to build.
15. While these are some of the line-by-line details, the big numbers are what matter. And while going through page by page, I started adding up some of the real trouble spots in the budget – many of which I addressed in detail in my last report. Tomorrow, I’ll double and triple check the numbers, add them all up, and explain where the problems lie.
The spending bill introduced by Democrats last week is either a “stimulus” bill or a “budget adjustment” bill, depending on what purpose they need it to serve based on the conversation they are having at the time. (Ironically, the bill is neither, as it won’t stimulate anything and only fills in a fraction of the 2008-09 deficit.) But one portion of the bill deserves extra scrutiny, as it turns our representative form of government completely on its head in order to facilitate the most naked of power grabs.
With hundreds of millions of dollars of federal stimulus funds headed Wisconsin’s way, Democrats want to spend it as quickly as possible, with minimal oversight. In order to make this happen, they have included a provision that virtually gives sole stimulus fund spending authority to three people: Governor Jim Doyle, and Represenative Mark Pocan and Senator Mark Miller, who chair the Joint Finance Committee for their respective houses. (Had Miller not stabbed Senator Judy Robson in the back and voted to remove her as Majority Leader last session, it would be someone else spending the money on behalf of the Senate. To the victor goes the spoils.)
Article VIII of the Wisconsin Constitution specifically states that “no money shall be paid out of the treasury except in pursuance of an appropriation by law.” In other words, when money is spent, it must be approved by the full legislature in the form of a law that is debated in an open and transparent way. The Constitution goes on to require that appropriation bills receive a roll call vote, rather than a voice vote.
Yet this new bill destroys that process as laid out by our state’s founders. Instead, the new bill gives two legislators the ability to decide how hundreds of millions of dollars are spent in Wisconsin. Since this authority will be granted to these two legislative leaders by a full vote of the Legislature, it appears that it is certainly a constitutional arrogation of authority. But the end result – consolidating such major spending decisions in the hands of so few people – while not “unconstitutional,” can certainly be classified as “anti-constitutional.” It goes against the entire principle of open government that the Constitution prescribes.
There’s a good reason appropriation bills must go through the full legislative process. They get a committee hearing, complete with testimony, and a committee vote. In committee, there’s an opportunity to amend the bill if necessary. Then the bill goes to the full floor of the legislative house for a vote, where it is debated, and can once again be amended by the full Senate or Assembly. Then, after it makes it through one house, it begins the process anew in the other house, where it gets even more debate and tweaking.
Not only does this process allow for public input and bill correction, it spreads the responsibility for the bill over the entire legislature. Each elected official has buy-in, and can say the interests of their constituents was represented. Yet under this new consolidation plan, only two legislators are accountable to anyone. As a result, the new scheme is replete with opportunities for mismanagement and corruption.
Ask the people of Illinois what happens when immense governmental decisions are consolidated in the hands of a few people. The alleged Blagojevich swap meet for Barack Obama’s senate seat happens. Favors are handed out with no transparency, no debate, and no public involvement. If we were to write a recipe that virtually guaranteed as much corruption as possible in the “stimulus” process, we couldn’t do any better than the Democrats’ plan before us today. A teaspoon of closed government here, a dash of undue campaign contributor influence there, and a heaping helping of hundreds of millions of dollars in federal money all make for a toxic casserole taxpayers are going to have to swallow. And like it.
Naturally, Wisconsin’s “good government” groups like the Wisconsin Democracy Campaign and Common Cause will be highly critical of Democrats for this pro-corruption, anti-transparency power grab. And on the same day, a tap-dancing dolphin will be elected to the governorship.
It is often said that the only thing worse than a government that acts too slow is a government that acts too fast. And we’re all about to learn that lesson the hard way.
Filed under: Budget — Christian Schneider @ 10:46 am
Yesterday, the Milwaukee Journal Sentinel ran a column I wrote about the disastrous state of Wisconsin’s finances, and how both parties were to blame for our fiscal collapse. This piece was intended to be a counter-argument to another column, written from the liberal perspective, which attempted to explain that our taxes really aren’t very high, after all.
This editorial, which apparently it took seven people to write, made a couple claims that popped out:
However, some argue for reduced spending, falsely claiming that profligate public outlay is the cause of today’s economic crisis. This analysis is wrong. Wisconsin has been careful in its overall taxing and spending. Between 2000 and 2006, total state taxes per person decreased from $2,740 to $2,475, when adjusted for inflation. In fact, there have been $12 billion in state tax cuts since 1999, more than twice the current deficit.
Apparently, in arriving at the fact that “total state taxes per person” have decreased, the authors used a Brookings Institution website that draws on census bureau data. When you look at the “total state taxes” numbers they use, it contradicts the state’s own data as reported on the Department of Administration’s Comprehensive Annual Financial Reports (CAFR). According to the Brookings Institution, the state brought in $14.7 billion in “total state taxes,” in 2000, and $13.8 billion in 2006 – thus, the drop in the per capita number. There is no explanation as to what “total taxes” includes. Furthermore, the population in Wisconsin grew by 3.7% between 2000 and 2006, which alone would have contributed to the appearance that per capita taxes were dropping.
Yet when the state reports its General Fund taxes, the numbers are drastically different. The state CAFR says that in 2000, sales, income, corporate, and other taxes collected $10.9 billion. Due to a combination of tax cuts signed into law by Governor Thompson in 1999 and the 2001 recession, tax receipts dropped to $10.2 billion in 2001 and 2002, steadily climbing back to 10.4 billion in 2003. By 2006, tax receipts had climbed to 12.4 billion, or a 9.9% increase over taxes collected in 2000. And keep in mind, this is in the midst of a recession in 2001 that it took the state several years from which to recover. The shrinking revenue was due, in large part, to people losing their jobs and buying fewer goods, not necessarily because the Legislature was being “careful” in our taxing and spending.
In fact, if you bypass the Brookings Institution website (which purports to use Census Bureau data) and go straight to the Census Bureau, the numbers look much different. In 2000, the Census Bureau reported Wisconsin taxes at $2,344.51 per capita. In 2005 (the most recent number available,) per capita taxes had increased to $2,375.77. And again, this is after the state suffered a 4-year lag in collections due to the 2001 recession (which may be why they only chose these specific years to make their point.)
But let’s say, for the sake of argument, they’re right. Let’s concede their point (that seems to be flatly incorrect) that somehow taxes are falling. According to the CAFR, state general fund spending increased 13.3% percent (from $11.3 billion to $12.8 billion) during this time that our taxes were supposedly dropping. This is exactly the point of my last report and subsequent column. The state is spending more money than it is taking in.
So how did we increase spending by 13.3% while our revenue was supposedly dropping by $1 billion (according to their numbers)? Our governor and legislators dumped in $2.4 billion in one-time money to balance the budget, blowing a hole in future budgets. They artificially made it look like we were spending less by offloading general fund expenses to program and segregated revenue. (Think cutting general fund aid to the UW by $250 million and replacing it with increased tuition – which makes it look like we’re cutting general fund taxes, while instead, we’re just offloading those expenses to students.) They issued debt to plug holes in the budget, committing taxpayers to decades of paying those bonds off.
As for the $12 billion in tax cuts they claim we’ve had since 1999, I have no idea where they came up with the number. But I can assure them of one thing – had the state collected this mythical $12 billion and spent it, the budget deficit would be much worse than it is now, as the spending base would be much higher. If there’s something the state has proved, none of that money would have gone to a “rainy day” fund to ameliorate recessionary budget downturns.
As an aside, it should also be noted that almost all of the authors of this column are frequent contributors to Democratic campaigns, including UW-Madison economist Andrew Reschovsky, who has contributed $7,850 to Democrats since 2000 – including Governor Jim Doyle. At one point (2002), Reschovsky was a vocal critic of structural deficits, yet now he says nothing about the current imbalance. I wonder why?