Doyle Announces That Wisconsin Government is Overtaxing Residents by at Least $100 Million

From the Governor's Press Office this week:

Governor Jim Doyle today announced the recipients of more than $100 million worth of affordable housing tax credits throughout the state...

Wisconsin has about 5.6 million people. That means that we are spending about $17.86 per person. I support three people. That means I am contributing a little over $50. I want it back.

What an Idea: Spending Cuts to Fix the Budget Shortfall

Every politician has suggested she or he has "common sense" somewhere ins ome campaign brochure. How come we almost never hear this (from The Sheboygan Press):

Editorial: Spending cuts best way to fix state budget

The Wisconsin Taxpayers Alliance isn't too optimistic that Wisconsin lawmakers and Gov. Doyle will come up with long-term solutions to the $650 million budget deficit the state is facing.

Todd Berry, head of the non-partisan watchdog group, said as much in a news release this week after analyzing the proposal made by Gov. Doyle and the subsequent measures passed by the state Senate and Assembly.

The taxpayers' alliance found that all three want, to varying degrees, to spend surplus, borrow, use accounting "tricks" and transfer monies from other sources to balance the general fund budget.

Berry concluded, "Whatever the ultimate solution, the state is likely to face a 'structural deficit' of $700 million ... or more in early 2009."

Worse yet, no one has adequately addressed these structural budget problems since they began in 1997.

Unless the state and national economy turn around quickly and substantially, Wisconsin is going to see the amount of tax dollars flowing into state coffers continue to lag. Without a significant cut in state spending, the deficit between what comes in and what goes out will only increase.

But only the budget repair measure passed by the Republican-controlled Assembly calls for a significant cut in spending — $361 million. The governor's spending cuts, according to the taxpayers' alliance, are $87.4 million and the Democratic-controlled Senate's proposed cuts are $40 million.

Much of the fix-up work comes from fund transfers — transportation gets hit for $243 million by Gov. Doyle — and borrowing. There is also the slick trick of spending $125 million school aid in one fiscal year, but not putting the money into the account until the next. This classic smoke-and-mirrors method of budgeting is included in measures passed by both the Senate and Assembly.

One item not in the Assembly plan is higher taxes. Assembly speaker Mike Huebsch criticized Gov. Doyle and Senate Democrats for proposing a tax on hospitals and increased corporate taxes.

We're not in favor of increasing taxes, either.

But we're equally opposed to merely shifting the current budget problem into the future through IOUs and shell games — which everyone seems to be willing to do.

Until the governor and the Legislature make the hard choice to cut spending when tax revenues decline, the state's budget problem will only continue.

Waste, Fraud and Abuse in Government

Patrick McIlheran makes a point truly worth repeating (and repeating and repeating). It is a truth, however, most voters really do not want to hear (and few elected officials - even Conservatives - admit). I took the liberty of replacing "the county" with "government."

[T]he grim reality is that waste, fraud and abuse are not part of government only because of slackness -- but because waste, fraud and abuse are intrinsic to systems driven chiefly by political, as opposed to economic, considerations. One can and should lessen waste, fraud and abuse, but one cannot expect to ever purge them completely, not without expecting people to march outside your office carrying signs dubbing you Larry the Hatchet.

...[C]iting waste, fraud and abuse, a decent starting point, is never sufficient as a funding source. It isn’t here. [Government] needs to do one of several things: Truly rethink the scope of the services it provides and the ways in which they’re provided, or come up with new tax revenue.

High Taxes Come from Expensive Choices: A School District Example

I admit that I am one of the rare conservatives who believe athletics are an integral part of a well-rounded high school education. Perhaps it is only because I played high school football and was on the track team. But I believe that athletics help teach teamwork, camaraderie and discipline.

Nevertheless, I believe there are ways to provide athletics for less money.

In today's MJS Sports section, there is a full page chart of all of the metro-area high schools by conference. The chart indicates where the schools play football.

Most schools play at the stadium at their school. We have become accustomed to that. It is part of our own "Friday Night (or Saturday) Lights."

Shorewood, a community of only about 13,250 people, is undertaking a new $4.9 million athletic facility. There are only about 730 kids at Shorewood High School.

This is happening while some people in Shorewood are unhappy about the funding for their schools. Like many others, the school searches for ways around the state's budget cap.

Granted, a large part of the Shorewood stadium money has come from private sources. But much of it is taxpayer funded. $465,000 is coming from the Village of Shorewood, $350,000 is coming from the School District out of money that was assessed as part of a 2002 referendum for a new science building and $250,000 is coming from the Village's Community Development Authority from a tax-incremental financing district. That's over $1 million from taxpayers. And the proponents still have not figured out where to get the full $4.9 million (even though they are breaking ground next month).

I also concede that, if Shorewood had not decided to build this stadium, the School District would not necessarily have this money to solve its funding concerns.

Nevertheless, in an era when governments at all levels are facing difficult budget choices, is a $4.9 million stadium really a top priority?

Why not join forces with neighboring communities to have a multi-community stadium (Shorewood currently rents space to Messmer, but there is nothing to keep more than two teams from using a stadium).

This holds true for every school district. The eight schools in the North Share conference have eight stadiums - eight stadiums to pay for, maintain and replace. What prevents Homestead and Cedarburg, or Cedarburg and Grafton, from sharing a stadium (other than creativity and foresight)?

For decades, Marquette and Wauwatosa East have shared Hart Park in Wauwatosa for their games. It worked when they belonged to different conferences, and it works now that they belong to the same conference. Similarly, the 17 schools (13 football teams) in the City Conference share four stadiums.

Governments spend lots of money. If they would only look for ways to do it smarter, and spend less, we can have many of the things we want and still hold the line on taxes.

"Judged by the Color of Their Skin"

Not surprising:

In 23 years, state government has not once met a target in state law for buying 5 percent of its goods and services from minority-owned businesses.

The number of minority-owned businesses in Wisconsin has grown rapidly in recent years, but the state is actually buying less from those companies than it did just a few years ago, according to a Wisconsin State Journal review of state records.

State officials acknowledge they 're falling short on the program, which is meant to encourage the growth of often badly needed businesses and entrepreneurship among minority communities. City of Madison and Dane County officials also said they need to do better to meet their own goals for minority business.

In the year that ended in June 2006, Wisconsin spent $1.7 billion on goods and services ranging from computers to construction but directed only about $48.4 million of the money to minority businesses. That left the state $37.8 million short of its 5 percent goal.

The market rarely reacts adequately to irrelevant criteria.

Buried in the article is the following explanation:

Despite the recent gains, however, minority firms still make up only a tiny part of the state market, making it challenging for state officials to find qualified firms able to do work to the state 's standards, Bugher said.

As an added hurdle, these firms also have to be certified each year that they are still
minority-owned and "actively managed " by a minority.

To attract these scarce firms, state agencies in Wisconsin can give minority businesses a 5 percent price break to help them compete. They can also break larger jobs down into smaller chunks to help tiny firms get a piece of the work, or they can require mainstream firms that win a contract to direct some of the business to minority-owned subcontractors.

I suggest that the fairest method of awarding contracts is based on price, qualifications and efficiency. Contractors should not win bids simply because they are white or because they are not.

However, if we are going to maintain this pedantic racial preference program, I have an idea. Let's meet the goal by decreasing spending so that $48.4 million is 5% of goods and services purchased. I know - wishful thinking.

And We Wonder Why Our Taxes Are So High

Might it be the Spending?

Democratic Gov. Jim Doyle continued his criticism of the budget adopted by state Assembly Republicans today, saying it includes too little for the Stewardship program that issues bonds to buy recreational land and keep it from being developed. ...

Doyle has recommended setting aside $60 million a year for three more years, then raising it to $105 million a year through 2020, for example. Recreational land now costs about 600% more than it did when the program started in 1990, according to Department of Natural Resources officials.

Assembly Republicans want to cut the funding authorization to $25 million a year over the next 13 years.

The Legislature provided $23.1 million annually for the inception of the Stewardship Fund in 1990 and increased annual funding to $46 million in 2000 and to $60 million in 2002.

Think about this. Janesville, the 10th largest city in Wisconsin, has a general fund budget of less than $40 million. Therefore, Janesville is able to provide its police, fire, ambulance, roads, parks and other services for two thirds of what Doyle wants to spend each year for "open space preservation." Even the Assembly's $25 million is outrageous.

Housing Trust Funds: What is MJS Thinking?

In an editorial on Monday, The Milwaukee Journal gives us this sage advice:

Build more affordable housing in the areas around Milwaukee, and do it through a trust fund that would be used to build low-cost homes, rehabilitate apartment buildings and improve other housing opportunities for people of modest means. It's a good idea that government officials in Waukesha, Washington, Racine and Ozaukee counties should follow up on. ...

But governments in the counties around Milwaukee also need to step up and start supporting housing that workers of modest means can afford. Starting a trust fund - as Milwaukee was persuaded to do last year - can be a good start. Organizers of the recent meeting at Unitarian Universalist Church West said trust funds provide new opportunities for families and stimulate the economy by spurring investment in infrastructure and creating jobs in the building trades.

How to finance the trust fund can get tricky and should be left up to each local government. Milwaukee, for example, has issued $2.5 million in bonds.

Huh? We need a double-speak dictionary to discern what MJS is suggesting:

"Housing trust funds" means subsidized low income housing.

"Spurring investment in infrastructure" means local government (or local taxpayers) will need to pay for more roads and public facilities, not to mention police services, social services, and so forth.

"Creating jobs in the building trades" means that contractors, many of whom will not work or reside in the communities paying for this bad idea, will make some money off of local taxpayers.

"Bonds" means local government has gone further into debt.

"How to finance the trust fund ... should be left up to each local government" means even MJS cannot figure out how strapped local taxpayers can pay for this, but it suggests that they do it anyhow.

Liberals have lots of hair-brained ideas, but this registers extremely high on the looney-meter.

Why would Mequon, or Menomonee Falls, or Cedarburg consider this? What is in it for the taxpayers of those communities? $2.5 million (the amount allocated by Milwaukee) equals about 18% of Cedarburg's total expenditures to for an entire year. For what? It would provide housing for perhaps 50 workers (or a little more than the number of people employed by the typical McDonald's). If the communities are lucky, rent for these units might cover the interest on the bonds. If this is such a good idea, why aren't employers in those communities pulling together to provide this housing.

Funny that they ran this editorial on the same page they question business subsidies. Apparently, business welfare should be accountable but not social welfare.

(By the way Jay, MJS isn't liberal?)

Thank You Sen. Mary Lazich

Our friend Patrick Milheran at MJS directs our attention to a post by Sen. Mary Lazich (R-New Berlin) in which Lazich lists a few of the gems in the Democrat's Senate budget.

A few examples from Sen. Lazich's lsit:

Allocate $35,000 annually from the current law pupil transportation aid appropriation to reimburse school districts for 75% of the cost of transporting pupils to and from an island over ice.

Provide one-time funding of $50,000 in 07-08 to fund parking lot and road improvements at the Cleghorn Community Center in the Town of Pleasant Prairie, Eau Claire County.

Require a grant of $160,00 from the Wisconsin Development Fund to the NanoRite Facility at Chippewa Valley Technical College.

Restore the governor’s provision that would specify that a school board could construct or acquire, borrow funds to construct or acquire, operate and maintain a wind electricity generation facility.

Provide $35,000 in one-time funding to the Community Connections Free Clinic in Dodgeville to expand the clinic’s capacity to provide dental services to low-income residents of Iowa County and surrounding areas.

For more (lots more), click here.

We elect people to make good decisions; however, informing us of what our government is doing is a big part of the job description (one that is often overlooked). Thank you Sen Lazich.

Wheelchair Student Accessibility and Convenience are Different Things

No sane person can argue against school accessibility for students who use wheelchairs. Wheelchair use does not preclude brilliance or achievement (e.g., Steven Hawkins, Franklin Roosevelt, Teddy Pendergrass and, of course, Elliot Stearns of From Where I Sit). We live in a society that can afford to educate physically challenged students (or, better said, a society that cannot afford to fail to educate them).

That being said, there is a difference between accessibility and convenience.

MJS reports that Elmbrook School District is considering improving Brookfield Central High School to make it wheelchair accessible. Currently, district high school students using wheelchairs attend Brookfield East.

The cost of the renovations? $2.9 million.

I do not know how many students would take advantage of these renovations. I have reviewed dozens of on-line articles and reports that address improvements to Central, and none provides that information. For example, click here. The silence on this essential bit of information is deafening.

I will guess (and am more than willing to be proven wrong) that Central would have no more than seven, and probably substantially fewer, students using wheelchairs. Central currently has a total student population of 1,425. According to the University of California, San Francisco's Disability Statistics Center, very few children (88,000, or 0.1 percent of the population under 18 years of age) use wheelchairs. If, to ensure that we do not underestimate, we assume that the area of the Elmbrook District that uses Central has five times the national average, there would be a total of seven students in wheelchairs. Based on the national average the number would be one or two.

Assuming the useful life of the improvements are 30 years, and Central teaches seven children who use wheelchairs (five times the national average) each year for all 30 years, the per year, per student cost of these improvements is about $13,800. And that totally ignores the time value of money. Of course, that also assumes Elmbrook keeps Central for 30 years (a bad assumption considering that the district, just this past April, held a referendum to replace, among other schools, Central).

Wheelchair using high school students currently get a great education at East. It would be more convenient for some to attend Central, but they certainly have access to the Elmbrook schools.

In an era when schools cry that they do not have enough money, is it fair to devote this level of resources for the convenience of such a small number of kids?

Biomass or Budget Mess?

Compare this:

Republicans on the Joint Committee on Finance have blocked Doyle's proposal to direct more than $30 million over the next two years to entrepreneurs and companies developing renewable technologies. ... Citing U.S. Department of Energy estimates, Doyle said Wisconsin could replace more than 13 million tons of coal if it converted the state's 15 million tons of biomass into energy. Sources of biomass include byproducts from corn and other crops, waste from food and beverage processing, pulp remnants from the paper and lumber industries, and switchgrass and other forest products.

With this:

Gov. Jim Doyle may have committed $250,000 in state funding to the development of a 62,400-square-foot biodiesel plant that will be built here over the next year, but it's Wisconsin investors that have really made it possible. The $60 million plant, to be developed by North Prairie Productions, LLC, an alternative fuel producer, will generate 45 million gallons of fuel per year. In addition to the state funding, the company has thus far raised more than $25 million, mostly from Wisconsin investors, in an equity drive. The $25 million threshold was the minimum amount needed to break escrowand begin construction. ... [A]bout 800 investors, all Wisconsin residents, have committed an average of $30,000 to the company as part of an equity drive that will close on April 5.

Biomass research might very well be a good thing (provided that it does not include mandated use of E-85 or other such intrusions). But if the private market is stepping forward (as described in the second story), why do we need the government to spend money (as described in the first)?

Private markets will step forward when there truly is a viable product to produce.

As importantly, should government really get involved to either prop-up or compete with the budding business North Prairie and others are creating?

The $30 million of government give-aways Doyle suggests violate The Crocodile Cage's fourth rule for new laws and spending (see, on the right, "Five Questions That Should Always Be Asked Before Enacting New Laws or Spending Programs"): If private industry or markets can do it better than the government, then the government should stay out of it.

Questioning Owen: To Boldly Go Where Conservative Bloggers Dare Not Tread

I admittedly am an Owen Robinson fan. But, regardless of the contribution one makes, from time to time it is good to be questioned.

Owen recently wrote an article in which he questioned four sacred cows of the state budget: shared revenue, two-thirds funding for schools, transportation and the stewardship fund. He concluded that his proposals would "would cut the state budget by about a third, solve the budget deficit, and allow for huge tax cuts."

In a vacuum, Owen's proposals sound great. In practice, we need to take care.

Before addressing my concerns, I will set one of the four aside. Getting rid of the stewardship fund is a no-brainer. Even ignoring the "it's the way we've always done it" crowd, the fund has an odd combination of advocates - eco-liberals, hunters and country club Republicans. Therefore, I question whether it can happen, but it should.

The other three are a whole lot more complex. Assuming we could gather enough votes to get them done, we would need answers to the following questions before embarking on these ambitious proposals:

Shared revenue

Can we really cut $4 billion in spending on the local level? If so, where? If not, how do local governments replace that money? Are we willing to allow real estate taxes to rise to replace the funds?

I know that does not sound very conservative, but being conservative does not equate to wiping out local services. In many communities, police, fire, ambulance, local roads and state mandates make-up most of local spending. Getting rid of all parks, community parades, picnics, community centers and so forth, even if acceptable, would not cover the gap.

I believe local governments can cut. I believe shared revenue was a bad idea in the first place, and entails significant administrative costs. But before we just wipe-out the current system, we better have a plan and understand the consequences. We need to provide local government tools to allow meaningful cuts (collective bargaining reform, elimination of state mandates, etc.).

Two-thirds funding for local schools

Many of the same issues apply, and it is even more complicated.

To make this work, we would first need to amend the state constitution and get rid of the current Supreme Court. The rule in Wisconsin is that all districts need to be able to provide comparable schools (it does not happen, but theoretically that is the rule).

Again, we would need collective bargaining reform and elimination of state spending mandates, as well as local control. We would need sound policies, or guidance for local policy makers, on how to decrease non-classroom spending.

We also would need a plan to deal with districts that just do not have the resources. West Bend, Mequon and Whitefish Bay would be fine, but as a state there should be some concern for poorer school districts.

Instead of getting rid of state spending on local schools, how about replacing the system with state-funded universal school choice? This would actually further Owen's goal of joining spending decisions and the revenue source while at the same time improving education and reducing property taxes. It might also reduce overall educational costs. If you are going to be bold, you might as well be truly bold (and effective).

Transportation

Owen states that "[t]ransportation spending accounts for about $5.3 billion of the budget. By eliminating wasteful projects and prioritizing by real needs, Wisconsin could easily cut that by $1 billion without suffering any significant negative consequences."

I don't disagree with the general premise. However, where does the $1 billion figure come from? Is this wishful thinking or is it based on a study or other report?

There are big ticket items the state can and should do. But, before we advocate for sweeping changes, we better be sure that the cure is better than the disease.

Travel Green Wisconsin

I came across the following site while following up on Governor Doyle's new "Manufacturing Certification Program."

Travel Green Wisconsin is a voluntary, affordable program that reviews, certifies and recognizes tourism businesses that have made a commitment to continuously improve their operations in order to reduce their environmental and social impact. This program helps businesses evaluate their operations, set goals and take specific actions towards environmental, social and economic sustainability.

I have not yet concluded whether there is any merit to the manufacturing program, but does anyone really believe that awarding tourism businesses for being "green" improves either the tourism industry in Wisconsin or the environment?

Even if it sounds good, there is a cost. It took many to create the program, it takes money to administer it, and it takes money to give awards.

Government should ask three questions when it spends money. First, is this really necessary? Second, can private industry or markets do it better than government? And third, is this really one of the state's top priorities?

In all three instances, the answer for Travel Green Wisconsin is a resounding "No." This is simply popular feel good legislation. Unfortunately, it takes money away from more important programs, such as schools and roads, and away from taxpayers. That should make no one feel good.

A Conservative Budget Plan

The Joint Finance Committee is at work muddling through the Governor's budget, reports from the Legislative Fiscal Bureau and a load of proposals. The JFC is made up of eight Republicans and eight Democrats. Therefore, it takes at least one Democrat to overrule anything the Governor has proposed. That will happen, but not in any significant way.

Republicans will have to wait until the budget bills get to the floor. They can make changes in the Assembly, although their margin there has gotten smaller, so on specific issues they will have defections. Of course, considering that they do not control the Senate, they will make little headway there.

So, what to do?

Go through the motions. Allow members to vote for individual spending initiatives without arm-twisting. That will affirm who the conservatives are, and save political capital for the finish line.

State law provides provides that, if the legislature fails to enact a new budget by July 1 of the odd-numbered year when the previous biennial budget is due to expire (July 1 of this year), the existing appropriations remain in effect until amended or eliminated by legislation, so government can continue to operate.

If the GOP leadership arm-twists throughout the process, many individual Republicans will at some point believe they have gotten the best deal they can, and decide to enter into a grand compromise to save the headway they have made. That would be a tremendous mistake.

Instead, let the current budget rollover, and hold tight. Eventually, the Democrats will be ready to engage in a true give-and-take. It makes the existing budget the base, rather than the disaster proposed by the Governor. If they want more money for X, they need to concede Y.

At the same time, conservatives should have their own agenda. Republicans need to make it an affirmative process, both because there are things government should do, and there are things voters expect. For example, Republicans can argue that they did not give in to the governor's spending increases so they could fulfill the state's commitment to fund 2/3 of the cost of local schools. Republicans can take that issue away from the Democrats, truly make a difference, and put a halt to the expansion of so many government programs and the myriad of tax increases the Governor has proposed.

This proposal is a bit Utopian. It could work, but too many Republicans believe there are "important" things they need to deliver back home (there are a few, but not many). And too many Republicans fear taking a stand. They fear the media backlash. They fear leading. They will cave, and we will have a compromise that is no compromise at all but, instead, a capitulation.

Republicans, do something different. Show you have a backbone. Voters will respect you for it.

State Spending: I Thought We Had a Budget Problem?

With all of the gnashing of teeth about the state's deficit for the next biannual budget, you would think the state's budget had been slashed to the bone. Guess what? Not exactly.

The spending in this year's budget ranges from the ridiculous to the sublime. Here are a few examples just from those items that the legislature's Joint Finance Committee have reviewed:

$2.5 million for two Hmong Cultural Centers
$0.5 million for the Kenosha Public Museum's Civil War Exhibit
$3.525 million for development of the Governor Thompson State Park
$3.25 million for shelving for the State Historical Society
$775 million for various UW System Building Projects (some of this might be necessary, but $775 million?)
$1.63 million for the Youth Apprenticeship Program
A tourism impact study

This is from a cursory review of wispolitics' notes of the proceedings. Of course, this is just the tip of the really deep iceberg.

We need tax limits (GOP, how you squandered the opportunity to enact TABOR!). Maybe that would put the brakes on some of this. However, we also need to elect legislators who recognize that the state cannot afford everything everyone wants.

Which of the preceding expenditures fulfill the state's primary responsibilities (prison/court system, highways, primary and secondary education)? Perhaps the legislature should start with those programs, adequately fund them and then decide what is left.