Saturday, May 31, 2014

Recession or expansion? Both for U.S. and Wisconsin

This week featured a number of economic reports that I wanted to touch upon. First was the surprising downward revision in Q1 2014 GDP that said the economy shrank at an annual pace of 1.0% in the first three months of this year. That's quite a turnaround from the 0.1% gain that was first reported, but the Bureau of Economic Analysis adds that the change is due to two "backroom" figures in particular.
The second estimate of the first-quarter percent change in real GDP was revised down 1.1 percentage points, or $43.7 billion, from the advance estimate issued last month, primarily reflecting a downward revision to private inventory investment and an upward revision to imports that were partly offset by an upward revision to exports.
In fact, reducing inventories subtracted 1.62 percentage points off of 1st Quarter GDP, meaning that final sales were actually up 0.62%. That's still not great, and this chart shows we've been on a downward trend the last two quarters, but it also doesn't indicate recession to be imminent.

And the year-over-year growth in GDP still remains decent, at just over 2.0%, due to good growth in the 2nd and 3rd Quarters of 2013. If growth bounces back in the Spring and Summer(as most experts have been saying it will), then we'll be in the same slow-but-steady expansion that we've generally been in for the last 4 1/2 years.

And job growth remains decent, as 288,000 jobs were estimated to have been added in April, and U.S. unemployment claims have continued to drop in May, down to the lowest seasonal-adjusted amounts in nearly 7 years. Wisconsin's claims have fallen in tandem with this, with a year-over-year drop around the 10% amounts we've been seeing nationwide.

The last week noted had the lowest new unemployment claim amounts in Wisconsin in several years, but you gotta think some of that is related to the fire that broke out in the building that houses the Wisconsin Department of Workforce Development, and that like workers' comp claims, some unemployment claims weren't processed.

Another indicator we received in the last week was the Federal Reserve Bank of Philadelphia's 50-state survey of the economy. You may recall that this index was being touted by Gov Walker and other WisGOP flacks when the numbers predicted strong economic growth last Summer and Fall. Well, we haven't heard that line from this group in recent months, and there's a good reason why. Because the "rocketing" growth didn't quite happen in Wisconsin, and it hasn't dug the state out of the last-place hole that it's been in since the Fitzwalkerstani policies began in January 2011.

And just this Thursday, the Philly Fed released its leading index, predicting economic growth over the next 6 months. This doesn't look as good either, as Wisconsin's economy is predicted to grow at a mediocre 0.92%, which would be just over half the national rate. What this means is that Wisconsin would remain a clear laggard to the rest of the Midwest as the nation as a whole throughout Scott Walker's full term in office, and that might be on the mind of Wisconsinites as they go to the polls in November.

So one of the biggest cheerleaders for a rebound in U.S. economic growth for Q2 and Q3 has to be Scott Walker and the Wisconsin GOP, as decent U.S. growth has been the only reason the state has stayed out of recession and has gained the modest amount of jobs that it has (and even then, it's not even halfway to Walker's goal of 250,000). And with tax revenues on track to fall short by more than $200 million, which will lead to higher deficits in the next budget, Wisconsin certainly can't afford the country not to rebound from that 1.0% decline in GDP that it had through the polar vortex winter.

Thursday, May 29, 2014

John Doe update- sorry Scotty, it's not going away

After a word-salad answer from Gov Walker in light of the John Doe developments yesterday (basically, Scotty said "I can't talk about it, and others shouldn't talk about it," without saying why), the Walker Campaign decided to clarify today. And didn't quite succeed, as Jason Stein in the Journal-Sentinel accurately reported today.
The statement by Friends of Scott Walker was attributed simply to the campaign and not to any individual, and appeared to deal only with the federal lawsuit, not the state investigation in which both the Club for Growth and Walker's campaign are targets.

"Neither Governor Walker nor his campaign committee are parties to the federal lawsuit. This means they have no legal standing to reach a settlement or deal in their lawsuit," the statement reads in full.

A spokeswoman for Walker did not respond to questions clarifying the statement.
Good catch Mr. Stein. The folks in the Walker campaign are absolutely running scared right now, and as I mentioned yesterday, there's no way they can end up looking good in this, settlement or no settlement.

And their buddies at Club for Growth also are running scared, as they ducked questions for two weeks from the prosecution asking what parts of the John Doe could continue to be prosecuted and discussed with others, and what couldn't. For example, the John Doe prosecutors (who are the Defendants in the suit mentioned) mentioned that Club for Growth lawyers (the "Plaintiffs" mentioned below) previously indicated that their case on "First Amendment" issues was different than the state cases which deal with potential criminal breaking of coordination and other election laws.
As you know, our client is a named party in state court proceedings arising from the John Doe investigation. Those state court proceedings now include State of Wisconsin ex rel. Francis Schmitz v. Honorable Gregory Peterson, et al., (2014AP000417-W, 2014AP000418-W, W2014AP000419-W, 2014AP000420-W, 2014AP000421-W); State of Wisconsin ex rel. Three Unnamed Petitioners v. Francis D. Schmitz, et al. (2013AP2504-W, 2013AP2505-W, 2013AP2506-W, 2013AP2507-W, 2013AP2508-W); and State ex rel. Two Unnamed Petitioners v. Francis D. Schmitz, et al. (14AP296-OA)

Based on the language you used in your letter of May 14, 2014 – “we do not believe . . . that the injunction precludes your client’s participation in legal proceedings” – you have led me to believe that Plaintiffs do not believe the injunction precludes our client’s participation in the above-listed state court proceedings. Please confirm that is Plaintiffs’ position. Of course, regardless of the developments in these above-listed state court proceedings, our client and my firm have and will fully comply with Judge Randa’s order.
Now the Club for Growth people are claiming that's not what they meant, and that basically they should be allowed to associate with whoever they wish. It shows again that the Club for Growth people are trying to make John Doe an excuse to further gut campaign finance laws, particularly those involving disclosure of donors and "independent issue ads." And that might be a very different direction than Scott Walker wants to go, as he cares more about staying in power and keeping his buddies in power by any ways necessary over having any core ideology (as we've seen throughout this guy's career).

This thing feels like there is more info to come, regardless of how much the Walker campaign wants it to go away. The Koch-related leakers that gave the info that became part of the Wall Street Journal's editorial Tuesday night have made sure this John Doe issue WON'T go away, and will drag on Scott Walker's re-election chances no matter how it ends up.

Wednesday, May 28, 2014

Is John Doe about to blow?

For a while, it seemed that the John Doe investigation was quietly playing out in courtrooms and making its way through the court system. And then THIS ARTICLE dropped in the Murdoch Wall Street Journal's editorial page, and I was stunned by it. Not only because of the transparent spin and downright false premises being allowed to be printed in a national newspaper, but because of the message behind them. A couple of the key excerpts follow
We've learned that Steven Biskupic, who represents Friends of Scott Walker, has been negotiating with Wisconsin special prosecutor Francis Schmitz to settle the state's investigation. The understandable concern among the direct targets of the John Doe is that Mr. Biskupic will cut a deal that would exonerate Mr. Walker while wresting concessions from some of Mr. Walker's allies.

The secret John Doe investigation began with raids and subpoenas in October 2013 in pursuit of a theory of illegal coordination between the Walker campaign and conservative groups. In recent weeks the politicized investigation has been pummeled by judicial rulings that undermine the prosecutors' entire legal case.
Uhhh, not in the real world, Murdoch Journal. In fact, you may recall federal judge Rudolph Randa getting smacked down within 24 hours of giving his partisan, absurd order to halt the investigation and have prosecutors turn over evidence. And the fact that Walker is even considering a settlement is obvious proof that prosecutors have the goods on him, or else he'd just ride it out and claim "there's nothing to see here." Scotty's not acting too "Unintimidated" if this is true, now is he?

And of course, how did the Wall Street Journal learn of this potential deal? Probably from Eric O'Keefe and other Club for Growth scumbags who illegally leaked to the Journal that there was a John Doe Deux 6 months ago.

On this latest editorial, the WSJ, speaking for O'Keefe and other oligarch groups, seems to give an ominous warning to Walker.
The backstage legal wrangling is even more troubling because prosecutors have limited scope to cut a deal under Judge Randa's preliminary injunction, which explicitly froze prosecutors from actions against the Doe targets (for the time being). Any face-saving attempts by prosecutors to settle under terms that vindicate their campaign finance theories violate the spirit of the injunction and may put them in contempt of court.

On Tuesday a very clipped Mr. Biskupic told us that he was "not going to comment on anything related to any John Doe in Wisconsin because doing so would be a violation of court orders." But after he hung up with us he warned other friends of Scott Walker about our call. (How the hell would they know, unless someone told them...) Sounds like Mr. Walker has to decide whose side he's on—his own, or the larger principles he claims to represent.
I'll let Mike Ellis answer that last statement- "WALKER IS FOR WALKER." And that means he'll do whatever keeps him afloat, no matter what happens to anyone else. The prospect of a settlement definitely seems to have the Club for Growth spooked, as they have written a letter demanding that no settlement with Walker or other possible John Doe figures be allowed under Randa's ruling. (I would call that letter "a tell".)

With that in mind, does the Wall Street Journal piece indicate the right-wing oligarch groups threatening to cut Walker off of funding if he throws them under the bus as part of a John Doe plea deal? And conversely, are they promising to throw big bucks behind him if he doesn't give them up before the election? And is it a similar message to judges like Rudolph Randa, who (as PR Watch revealed yesterday) has taken several junkets paid for by the same Koch-related groups he was trying to clear in his Milwaukee courtroom? Seems like these guys operate under the "I'll take care of you if you take care of us, but don't you fuck me over" doctrine. Very Mob-like, isn't it?

Even if Walker is cleared, he now looks guilty of at least being helped by crooks without asking any questions. And if Walker's not charged by November and John Doe Deux is ongoing, he looks even guiltier, because that means he could be getting a "bomb" dropped on him at any time. Good luck asking people to give you another 4 years on their dime with THAT hanging over you head, kiddo.

PS: One item to keep in mind- if candidates want to be on the August primary ballot, nomination signatures are due to the General Accountability Board by Monday, and Walker's campaign hasn't handed in the signatures yet. If Walker's cornered, takes a settlement, and pulls the plug on a November campaign as a result(so he can be a Fox/WTMJ contributor and get other types of wingnut welfare), he'd have to do so in the next week.

Tuesday, May 27, 2014

Should big-time bands go to Milwaukee? And where?

With Memorial Day weekend now over, we're into the Summer season for entertainment options in Wisconsin, and that often means live music. Not only is there Summerfest and other outdoor music venues in the area, but the Bradley Center also recently announced two shows with a couple of bands that made my ears perk up - the Black Keys (in September) and Pearl Jam (in October).

With this topic in mind, the Journal-Sentinel had a thorough article on Sunday regarding the Bradley Center as a concert destination....or lack thereof in recent years. This is while other venues in the city have seen more people going through the gates to see shows.
Venues were rocking all over town last year. Summerfest attendance increased by 4.3% to 840,356. The Marcus Amphitheater had four ticketed events outside of Summerfest, including a sold-out Mumford & Sons show, and Miller Park hosted concerts for the first time since 2010. Two of them, Kenny Chesney and Paul McCartney, sold out.

But the number of national live music tours that played the Bradley Center in 2013? Just three: Carrie Underwood,Blake Shelton and the annual holiday season appearance by the Trans-Siberian Orchestra. In terms of quantity, it was the arena's poorest performance since 1989, its first full year of operation.

"Generally speaking, 12 to 15 shows at an arena level, that's what I think is midline," said Mark Campana, co-president of North America concerts for Live Nation. "That is way below the midline.
So what's causing the Bradley Center not to be used by artists on their tours? A recent Rolling Stone article offers a clue, as financially it may better off for bands to do shows at large festivals in front of audiences with numerous musical tastes, instead of headlining a multi-city tour. As an example, Rolling Stone brings up Outkast, who'll be at the Marcus Ampitheatre during Summerfest.
Welcome to the strange economics of the modern rock festival, where every summer, defunct or dormant bands reunite to earn more for a few gigs than they did in years of touring and recording. Outkast, who haven't released so much as a new song in eight years, are the most extreme example yet: Unlike many big festival acts, they're not famous for their live performances. "For the good bands, there's always going to be demand if you're away a long time," says Charles Attal, a partner with C3 Presents, which produces Lollapalooza and Austin City Limits. Outkast's success reflects a new reality: Thanks to huge competition for "event bookings" that sell $300 tickets and even more expensive VIP packages, festivals can afford to pay headliners up to $4 million.

All of this is possible because festivals have come to dominate the music industry, with more than 60 slated to take place in the U.S. this year. Fifteen years ago, when Coachella organizers got 25,000 people to see Rage Against the Machine and Beck in the California desert, nobody could have predicted that an event like Las Vegas' Electric Daisy Carnival would draw more than 400,000 people for a single weekend. "Festivals have become a huge part of American culture," says Pasquale Rotella, chief executive of Insomniac, promoter of Electric Daisy, which began as a rave in 1997. "When we first started, it was really foreign – all people could remember was Woodstock. It made it really difficult to explain. That's no longer true."

Festivals have changed the way music is experienced – and released. A fan with a Spotify account and a Bonnaroo ticket can sample hundreds of bands, live or on record, in one weekend. "It's a good time to be a fan, if you just want a piece of everything," says Ben Dickey, manager of indie band Spoon, whose new album coincides with a tour that includes dates at Governors Ball and Shaky Knees this summer. "[Spoon] is going to play to tens of thousands of people at each festival – that's a pretty huge promotional platform for new songs."
And on a related note, the Journal-Sentinel article brings up that festivals are often the only way that many bands can get large crowds to see them on their own. So if anything, the Bradley Center's large size becomes a disadvantage.
"the growth area is not in arenas, but in 5,000 seats or fewer venues," said Gary Witt, executive director of the Pabst Theater Group, which oversees the Pabst Theater, Riverside Theater and Turner Hall Ballroom. Sales grew 40% last year, Witt said.

"The Internet has given people the ability to find music from many places and opened people up to think Bon Jovi isn't the only band in the world."

"My arena-level show business was probably down," [President Fred] Frank [of Madison's Frank Productions] said of 2013. "My small arena business and theater business was way, way up. Would you rather see a favorite band at a 17,000-seat arena or a 2,000-seat intimate theater?"
Legitimate question, isn't it? Especially in an age of higher ticket prices for arena shows and many other things for people to spend their time on compared to when the Bradley Center opened 25 years ago?

That being said, would a new Bucks arena have a side benefit of encouraging more artists to show up and do arena shows in Milwaukee? The article brings up that the new basketball arena on the University of Nebraska campus hosted Bon Jovi, Elton John and Jay-Z in the first 3 months it was open, and speculates that a new Bucks arena would have a similar "Honeymoon" interest that could drive some larger-than-usual acts to play the arena. I recall a similar item happening with the Kohl Center in Madison in the first few years it was open, with acts like Aerosmith, Elton John/Billy Joel and Dave Matthews Band (at their late '90s peak) playing. But the KC hasn't hosted a big-time concert in quite a while, and I can't see concerts being a major reason to build (or not build) the new arena in Milwaukee.

In fact, maybe we should understand that with some big-time tours, Milwaukee is simply not a "needed" concert stop. Chicago is 90 miles away, and cities like Madison and the Twin Cities are within a few hours to get people in other parts of the state, so many promoters conclude that Milwaukee-area concert goes can just go to other places instead of bringing shows to them. In the Journal-Sentinel article, Live Nation's Capana describes the thinking behind one such decision.
"I did four nights with Roger Waters at the United Center (in Chicago). The fourth night in the run was supposed to be at the Bradley Center, but it kept selling and selling and selling, so I said, 'Let's go with the 4th night (at United).' The cost of moving the show, taking the chance to sell tickets, it wasn't worth it."
So perhaps instead of thinking about having Milwaukee host large arena shows for the cold-weather months that the Marcus Ampitheatre is available, an improvement of the mid-size venues in the Wisconsin Center District could be more useful when it comes to the city wanting to attract artists that draw well. Improvements to the U.S. Cellular arena and/or convention center could be done to make the venue in the 8-to-10,000 seat range, but with modern amenities that some of the older fans of established bands may find desirable (I am including my 39-year-old self in that "older fans" category). Maybe that should be done as the "stage/concert performance" aspect of any downtown arena package.

I applaud the Journal-Sentinel for discussing this aspect of how the Milwaukee area's entertainment dollar is spent, along with where the city fits in the overall live music business scene, because I do think it needs to be considered as part of the ongoing arena issue. I also believe we need to look into how to maximize the ability of Wisconsinites to see top-level musicians, without shooting too big, and possibly missing out on a better situation for both artist and music fan, which is a discussion that goes beyond the arena question.

Sunday, May 25, 2014

Thoughts on the troops for Memorial Day

On this Memorial Day weekend, we should not only remembered who has fallen in service to this country, but we should also remember the living. The mistreatment and underfunding of our troops over the last 13 years is a national disgrace, and should be kept in mind when you see certain people waving the flag this weekend.

With that in mind, let me give you three notes

First, here's two segments of Jon Stewart on his last show before the holiday weekend. Part 1 talks about how Senate Republicans (and only Senate Republicans) played partisan games that underfunded veterans' benefits and services, which has now led to the sickening situation that exists today.

But it's not only in the 21st Century that this has happened in. Stewart reminds us that not giving back to the vets has been an American tradition since our founding. The not-funny speech Jon gives at the end is especially poignant.

Back in the 21st Century, some of our own Congress members in Wisconsin have kept with this tradition of talking a big game about "supporting our troops", but not putting the money where their mouths are. Capper at Cognitive Dissidence takes apart Rep. Sean Duffy, Sen. Ron Johnson, and their fellow TeaBaggers for deciding that opposing President Obama is more important to them than all other priorities. Here's a small list of some of the bills these people have voted against.
H.R. 466 – Wounded Veteran Job Security Act (became H. R. 2875). This bill would actually provide job security for veterans who are receiving medical treatment for injuries suffered while fighting in defense of their country. It would prohibit employers from terminating employees who miss work while receiving treatment for a service-related disability.

H.R. 1168 -- Veterans Retraining Act – This bill would provide for assistance to help veterans who are currently unemployed with their expenses while retraining for the current job market.

H.R. 1171 – Homeless Veterans Reintegration Program Reauthorization – This bill would reauthorize programs in support of homeless veterans, to assist them with job training, counseling, and placement services through the Department of Veterans Affairs through 2014.

H.R. 1172 -- Requiring List on VA Website of Organizations Providing Scholarships for Veterans which does nothing more than direct the Department of Veterans Affairs to include information about scholarships for veterans.

H.R. 1293 -- Disabled Veterans Home Improvement and Structural Alteration Grant Increase Act of 2009 – Here’s another bill in support of those who have fought for their country, passed by House Democrats and blocked from becoming law by Republicans. This would increase the amount paid by the VA to disabled veterans for necessary home structural improvements from $4,100 to $6,800 for those who are more than 50% disabled, and from $1,200 to $2,000 who are less than 50%, disabled. This means, if a veteran lost the use of his legs in service of his country, the country will pay for the wheelchair ramp so that he can live at home. By the way, the last time this ceiling was lifted was in 1992. There isn't even a fiscal reason for being against this bill, as the total cost of this bill, according to CBO estimates, would be a “whopping” $20 million. That's about a quarter (25 cents) per family of four.

H.R. 1803 -- Veterans Business Center Act – This bill would set up a Veterans Business Center program within the Small Business Administration, which would specialize in such programs as grants for service-disabled veterans, help them develop business plans and secure business opportunities. In other words, folks, it would create jobs and offer opportunities those who have fought in defense of our country.

Oh, but they do wear their flag pins, while us who oppose putting the troops in unnecessary danger are the ones who "don't believe in America" and want the country to fail. Riiiiiight. So much for a country that believes in pay any price, bear any burden, meet any hardship, support every friend." (Spoken by a veteran, by the way)

With that in mind, I'll end with this quote from one of the few good people in the U.S. Senate reminding us that the effects of going to war linger long after the last shots are fired.

Let's remember the troops and their well-being after Memorial Day, and vote accordingly, shall we?

Saturday, May 24, 2014

Told ya. Wisconsin tax cuts= budget shortfall

I had mentioned previously that the April 2014 Wisconsin revenue report was important, as April includes all late filings of tax returns and would tell us if the shortfalls we'd been seeing at the start of 2014 were going to continue. And they didn't just continue, they got worse.

The monthly release was dumped on a pre-holiday weekend Friday afternoon, and one look at the numbers shows why the Walker Administration wouldn't want you to know about it.

Year-over-year change in Wisconsin revenues, April 2013 vs. April 2014
Income tax -31.2%
Sales tax +3.6%
Corporate tax -13.2%
Excise tax -0.2%

A 31.2% drop in income taxes and 13.2% drop in corporate taxes is no small thing. Yes, I understand that a number of items came together to reduce April's tax haul for the state- including updated withholding tables, a new round of tax cuts, and additional 2013 tax refunds from the first round of (Koo-Koo) tax cuts. But the first round of tax cuts were already accounted for in the Legislative Fiscal Bureau's revenue estimates from January that led to the one-time state surplus which was promptly wasted on a second-round of election-year tax cuts. And since the LFB has also quantified the second round of tax cuts, we can take a look at how we're shaping up compared to where we should be.

The newly-adjusted withholding tables (you know, the ones that allow you to take home an extra $10 or so each paycheck) and second round of tax cuts was expected to cost $156.5 million in revenue for the three months they were in effect for the 2013-14 fiscal year, so let's be generous and say 1/3 of that hit in April, so it'd be a $52.2 million drop. In addition, another $11.3 million for the fiscal year was expected to be written off due to another business tax cut, and $2.1 million in additional moves, so let's assume it all hit in April, to give the Walker folks the benefit of the doubt, and our extra April 2014 reduction comes to $65.6 million.

So let's add $65.6 million back into the April 2014 income tax revenue numbers, and compare the January-to-April numbers for both 2013 and 2014.

Adjusted tax revenues, Jan-Apr 2013 vs. Jan-Apr 2014
Income tax - DOWN 14.99% (-$361 million)
Sales tax- UP 2.98% (+41.7 million)
Corporate tax- DOWN 15.25% (-$52.2 million)
Excise- UP 1.05% (+2.2 million)

As you can see, the drops in Income tax and Corporate tax are larger than any increases in sales and excise taxes. And if you go back to the January revenue estimates, you see that Sales and Excise taxes were already projected to go up in this fiscal year, and corporate taxes were supposed to be up 11.22%, not down 15.25%.

So let's plug in the following numbers for the next 2 months. We'll assume may income taxes are the same as they were in May-June 2013 (even though they're running behind those figures so far), and we'll use the LFB's January-June projections of a 11.22% increase in corporate collections, a 3.34% increase in sales taxes, and assume excise taxes to come in on target at an increase around 1%.

2013-14 revenues with above assumptions vs. LFB projections
Income tax- DOWN $112.8 million
Sales tax- DOWN $9.2 million
Corporate tax- DOWN $89.5 million
Other taxes/ excise- UP $10 million
TOTAL SHORTFALL $201.5 million

So put this $201.5 million revenue alongside the failing record of tax cuts in other Koch/ALEC/GOP-run states, such Kansas ($94 million revenue shortfall in April alone), and North Carolina (which has a projected shortfall of $445 million). All of these states used a 2013 one-time bump in revenues (due to moves at the end of 2012 in fear of impending "fiscal cliff" changes which increased incomes. Instead of banking the money in a rainy-day fund, or using it to preserve or improve the level of services in their states, the ALEC govs and legislatures used it as an excuse to cut taxes.

As a recent Rockefeller report on state revenues showed,
many states saw a revenue slowdown at the end of 2013 to make up for that one-time bump at the end of 2012,
and the polar vortex winter helped delay any rebound that might be coming in 2014. Barring record hiring and tourists visiting the Dells in the next two months, Wisconsin will start off fiscal year 2014-15 in the hole, as we only had a $100 million cushion before this shortfall showed up. There needs to be hard questions asked of Gov Walker and the GOP Legislature how they plan to make up for their Dubya-like fiscal stupidity, as hoping for "economic growth" to dig us out of that hole doesn't seem to be working out, just like it hasn't for the last 30 years of trickle-down stupidity in this country.

Or we could elect Dems this November, and have them be the adults in the room to take on our fiscal issues- as they've had to have been for at least a generation now.

Thursday, May 22, 2014

Connecting the dots- school funding style

1. The Census Bureau released their rundown of public education funding in all 50 states for 2012 today, and our state is a notable standout for it. If you go to the last table on Page 28, you'll see this stat.

Largest reductions in spending per pupil, U.S. 2012
Wis. -6.2%
Fla. -5.4%
Tex. -4.7%
S.D. -4.1%
Maine -3.5%
W. Va. -3.4%

That's right, Wisconsin cut public school funding per pupil more than any other state, cutting further than a number of places you son't want to be mentioned with when discussing education. Even worse, Wisconsin was 1 of only 2 states on this list to see their school enrollments decline in 2012, making the cuts per student a double-whammy for the bottom lines of the districts who still need to keep the lights on in their buildings.

2. On the flip side, the WisGOP governor and Legislature expanded the state's voucher program statewide, diverting even more funds from public school districts of voucher applicants. Just this week, the state's Department of Public Instruction reported on the application results for schools and students wishing to be part of the voucher program for the next school year, and it showed that most who want to be in these types of schools....already have chosen to attend those schools.
Of the 2,834 student applications for the 31 eligible private schools or school systems, 75 percent (2,115) are attending a private school this year, including students currently participating in the statewide voucher program. Nineteen percent of student applications for eligible private schools or school systems (537) are from students attending a public school this year.
So for 3/4 of the applicants to the voucher program, this will serve as a straight cash subsidy to the parents, who in turn give that subsidy to the schools (and the churches that run those schools, as all of the schools in the 2014-15 statewide expansion are religious-based). And those funds inevitably come out of the pockets of the public schools, since the amount of taxpayer dollars is a fixed amount that's now being spread to more places. And even the parents who don't get vouchers will get a tax break next year that defrays up to $10,000 of private school tuition, while also being able to write off their property taxes that pay for the local public school. Nice double-dip, isn't it?

3. In addition, these cuts to public schools led to a one-time cash surplus, which is now being blown on two rounds of tax cuts (including the private school tuition write-off noted above). These cuts are a major factor in the Legislative Fiscal Bureau saying there is already a General Fund deficit in the next state budget. Their most recent projection came out today, and showed a $642 million General Fund deficit from 2015-17, which goes along with more than $1 billion in Transportation projects over those two years that we don't have money for. This also doesn't count the extra funds required to pay for the larger-than-expected enrollments under Gov Walker's Medicaid "reform", which also haven't been budgeted for.

Inevitably these deficits will lead to more calls by the ALEC crowd to cut public education further, claiming it is "unaffordable." The ultimate goal of which is to deform the system so badly that additional vouchers are floated as a "cheaper solution" to this budget crisis. Which means more money goes out of public schools and into the pockets of campaign contributors voucher school operators- religious and otherwise. Then rinse and repeat.

That is, unless we remove those who responsible for screwing things up with step 1, 2 and 3 in the first place. Which we can do in 5 1/2 months. Your choice, Wisconsin.

Wednesday, May 21, 2014

That's right- EXPAND Social Security

Greg Sargent had an interview with Ohio U.S. Sen. Sherrod Brown in today's Washington Post, and these passages were quite interesting.
Dem Senator Sherrod Brown, a member of the Finance Committee, tells me that GOP Senators have requested hearings into Social Security Disability Insurance this summer. Dems expect Republicans to attack the program as wasteful and fraudulent, in part because conservative media have already done so, and in part because at least one GOP proposal in recent days took aim at the program.

Brown says Dems should seize this occasion to get behind a proposal that would lift or change the payroll tax cap, meaning higher earners would pay more, while adopting a new measure for inflation that would increase benefits for all seniors. Instead of getting drawn into debates about “Chained CPI” and other entitlement cuts, Brown says, Dems should make the case that stagnating wages and declining pensions and savings demand an expansion of social insurance.

“We should stop playing defense on Social Security, and instead talk about why Social Security is a public pension that we should be proud of, that has lifted tens of millions of people out of poverty,” Brown tells me. “The three-legged stool — Social Security, pensions, private savings — has seen two of the legs sawed off for a large number of people. It’s time to look at expanding Social Security as an issue of retirement security.”
EXACTLY. This is adjusting to the realities of the workplace of the last 35 years, and giving people the FREEDOM to decide whether they wish to stay on the job, or leave and receive the benefits they have earned. And I dare Republicans to stand up for allowing people who earn six figures to continue to get a tax cut that the rest of us do not.

And please, GOP, try to cut Disability Insurance and imply that everyone on it is a lazy abuser of the system. That'll go over REALLY well with a lot of those recipients and the family members taking care of them - middle-aged white people in rural areas.

I sure wish more Dems in DC talked like Sen. Brown and Sen. Warren. Tammy Baldwin, take note.

Monday, May 19, 2014

More in Wisconsin getting health care- which makes Walker's choice look worse

With April being the first month that had Wisconsin expanding BadgerCare Plus to all childless adults and removed all coverage for low-income parents and caretakers that were above the poverty line, as part of the state's policies in light of the Affordable Care Act (aka Obamacare). So you could expect big changes, and that the results of those changes would be looked at closely.

There is a wealth of information at the Wisconsin DHS's Medicaid Stats page, and a number of ways to break down the numbers. I would strongly suggest you give a look and do so. One of the ways to slice up the data is to look at the various categories of people enrolling in Medicaid, and the changes in those categories each month. And that certainly was the case.

Change in Enrollment, BadgerCare Plus, April 2014
Childless Adults +82,217
Children +3,140
Parents/Caretakers -44,089
Income Extensions -6,782 (these are people allowed to stay on for a few months even if their income is over the BadgerCare thresholds, since they may not have health care immediately at a new job)

This now means that more people are enrolled in BadgerCare Plus since June 2012, reversing a relatively steady decrease in BadgerCare enrollees since Governor Walker took office in 2011. Interestingly, Walker decided to crow about this, as some kind of proof that his "reforms" of Medicaid were working.
“Our entitlement reforms make sure Medicaid is a safety net for our state’s neediest citizens and protect Wisconsin’s taxpayers from the uncertainty surrounding the federal government’s implementation of the Affordable Care Act,” said Governor Walker. “Due to our reforms, 81,731 people living in poverty now have health care through Medicaid, and Wisconsin is the only state to not take the [Affordable Care Act's] expansion with no health coverage gap.”

In addition, DHS announced 62,776 people with incomes above the federal poverty level needed to transition into the marketplace at the end of March. Individuals above the poverty level are able to access federal subsidies and can choose to purchase plans through the federal exchange or in the private market.
While Walker is correct that Wisconsin stands alone among the Confederate states that refused to accept Obamacare's Medicaid expansion while still allowing all of its poverty-stricken to be covered by health insurance, that hardly leaves him off the hook for turning it down. In fact, Walker's "creative" reforms now look like they'll cost Wisconsin taxpayers even more than originally thought.

This is because the 82,000+ enrollments are well beyond what was expected, and budgeted for, when Walker and the WisGOP Legislature signed off on these "reforms."
[A]pproximately 83,000 childless adults who expected to begin enrolling in MA on January 1, 2014, would remain ineligible through March 31, 2014. Under Act 20 [the state budget], it was assumed that 50% of these individuals would enroll in the first month of eligibility, 20% in the second month, and 5.8% in the third, with the percentage decreasing in subsequent months until all newly eligible individuals would be enrolled by December, 2014. The current estimate is based on the Act 20 assumptions regarding the rate at which newly-eligible individuals enroll in the program, but enrollment would begin on April 1, 2014, rather than January 1, 2014.

When compared to Act 20, this delay in enrollment for childless adults would result in approximately 253,200 fewer member months that would be funded during the 2013-15 biennium. The average PMPM for these individuals, after premiums and drug rebates is estimated to be $368, so the savings resulting from the three-month delay are estimated to be approximately $76.0 million ($31.1 million GPR and $44.9 million FED) in 2013-14 and $19.0 million ($7.8 million GPR and $11.2 million FED) in 2014-15.
In other words, Walker's DHS projected 41,500 childless adults would sign up in the first month of the modified BadgerCare Plus, and that number was only projected to be at 63,000 by the end of June. We had double the projected amount of enrollments in the first month, and more is sure to follow as others move into the system in the coming months. And given that we're paying nearly 42% of those costs, this will throw away a whole lot of those projected "savings" in 2013-14 from delaying enrollment for three months, and lead to higher costs in the next fiscal year.

Another positive effect of Obamacare will lead to Walker's decision to TeaBag it even more costly for state taxpayers. The attention given to the signup period for the ACA seems to be driving more people into finding out what benefits they are entitled to, and this also has added to the number of people getting coverage, even if it's not directly through the Affordable Care Act. As a recent article from the Miami Herald took note of.
New Medicaid signups were expected in the 26 states that implemented the so-called "Medicaid expansion" that extended program coverage to working-age adults who earn up to 138 percent of the federal poverty level.

But in 17 of the 24 states that didn't expand their Medicaid coverage, program enrollment also increased thanks to the "woodwork effect," created by heightened public awareness of the health law.

The woodwork effect refers to Medicaid-eligible residents who weren't enrolled, but came "out of the woodwork" to do so amid national efforts to get newly-eligible Medicaid residents to sign up.
This certainly has happened in Wisconsin, as the DHS reports show a sizable increase of Wisconsinites in poverty in addition to the 82,200+ childless adults that got coverage.

BadgerCare recipients at or below poverty line
Dec 2013 290,802
Apr 2014 309,044 (+18,242, +6.3%)

Parents/ Caretakers
Dec 2013 150,646
Apr 2014 170,442 (+19,796, +13.1%)

So there's another 38,000 added to the rolls with state taxpayers shelling out 42% of those costs. And given that these people and their families are in poverty, there aren't much in terms of premiums and co-pay to offset those costs. So the $96 million in projected extra costs that state taxpayers are taking on in this budget due to the decision to TeaBag Obamacare in Wisconsin could well go higher.

It is also ironic to hear Walker try to portray himself as an expander of health coverage, because these moves reverse what he had done to childless adults in Wisconsin before this "reform." Childless adults made up 34,047 of the state's BadgerCare Plus recipients in July 2011, but it had steadily gone down to 13,923 by March 2014- a drop of more than 20,000 in no small part because of premium increases and various cuts to BadgerCare services in the name of "budget balancing."

In addition, over 65,000 parents and caretakers were on BadgerCare Plus in December 2013, and all were taken off of the program over the next four months. These were the individuals Walker "traded" for the expansion of Medicaid to adults without children, and while Walker claimed they were still able to get insurance through the federal exchanges, it still is a major, unnecessary disruption of people's lives for a most cynical reason- to overload the federal exchanges and make Obamacare "fail."

Instead, Obamacare seems to be succeeding in Wisconsin, despite Scott Walker's attempts to screw it up. Nearly 140,000 Wisconsinites were able to get insurance through the exchanges, and thousands of others came out of the woodwork to find out that they could get BadgerCare, even with Gov Walker's changes. This is a good thing, but Scott Walker deserves no credit for it happening. In fact, Walker's idiotic refusal to take Medicaid expansion seems likely to cost Wisconsin taxpayers tens of millions of dollars in the near future, and much more if the state's voters are dumb enough to keep him in office.

Sunday, May 18, 2014

Untie Milwaukee's and Madison's hands and let em tax!

A constant concern in Wisconsin is how to fairly fund the state's numerous municipalities and government sources, and nowhere is that more evident than in the two largest counties in the state- Milwaukee and Dane Counties. Not only are these areas filled with the widest mixture of poverty and riches out of pretty much anywhere in Wisconsin, but they also are sources of income, derision, and resentment. A couple of recent reports showed how these areas are going in different directions than much of the rest of the state, beyond the fact that they disproportionately vote for Democrats.

Milwaukee and Dane Counties are one of the few areas with favorable demographics for future growth, as illustrated in the recent Wisconsin Taxpayers' Alliance report.

In addition to the good demogrpahics, Milwaukee and Dane Counties also provided more than half of the state's population growth in the last 3 years.

Population change, Wisconsin 2010-2013
Dane County +21,866
Milw County +8,288
TOTAL +30,154
Rest of State +25,576

Doesn't exactly seem like places that are in decline, are they? So why are GOP legislators always trying to knock them down and keep them from becoming even more desirable and favorable for growth? Would any business owner do such a dumb strategy?

In addition, Milwaukee and Dane Counties are by far the two largest draws of tourism dollars of anywhere in Wisconsin, as the recently-released state tourism report shows. These two counties account for 1/4 of the state's tourism dollars, and the 4th name on the list also draws a sizable amount of "their" tourism income from events in Milwaukee.

Top Counties for tourism spending, Wisconsin 2013
Milwaukee $1,692 million
Dane $1,044 million
Sauk $888 million
Waukesha $665 million
Brown $558 million

You'd think that these strongly-performing areas would be backed by the state Legislature as an economic engine to be helped, but instead they are constantly put under limitations by the 262-controlled Legislature. Bruce Murphy mentioned in late 2012 how badly the City of Milwaukee has been cut over the last two decades in this category, which probably isn't the way to treat the state's largest economic engine when you're trying to attract talent to it.
In 1995, Milwaukee’s $224 million in shared revenue was enough to pay the entire cost of Milwaukee’s police and fire departments, plus another $38 million for other costs. By the time Barrett was running for mayor in 2003, shared revenue to Milwaukee had dropped to the point where it was only enough to pay for the police department’s budget.

...nine years into Barrett’s service as mayor [in the 2013 budget], shared revenue to Milwaukee doesn’t even pay for the police; it now falls $114 million short of paying for the police and fire department budgets.

If it had risen at the rate of inflation, that shared revenue payment of $224 million in 1995 would be $340 million today; in fact, Milwaukee now gets $218 million. That’s a drop of 36 percent in real dollars in state aid to Milwaukee.
That $218 million was unchanged for 2014 in Milwaukee, but that's not the biggest screwjob of a blue city this state has been pulling in shared revenues. The City of Madison's state shared revenues are way less than Milwaukee's, or pretty much anywhere else when you consider it has a population of nearly 250,000, and its home county has nearly 500,000 people.

2014 Wisconsin shared revenues
City of Madison- $6.20 million
Dane County- $3.88 million

City of Racine $25.11 million
City of Green Bay $16.53 million
City of Beloit $16.18 million
City of Sheboygan $10.96 million
City of Appleton $9.74 million
City of Superior $7.60 million
City of Port Washington $2.65 million
City of Oconto $1.77 million

Marathon County- $5.51 million
Chippewa County- $2.55 million
Ozaukee County- $1.68 million

So instead of tying their hands with revenue cap limitations, shared revenue cuts, and underfunding road aids, these numbers indicate that the Legislature could come up with a win-win that would adequately fund growing destination areas like Milwaukee and Dane Counties, without having statewide taxes go to these places. That is by allowing these areas to come up with more tax revenue if they so desire. When tourists buy things, they're paying sales taxes, so why not give our two biggest tourist draws the right to raise their own sales taxes to pay for the extra services that the high levels of tourism require? This also allows for the BS from right-wing world about how "Milwaukee gets all our money" to fall even flatter.

This also could be a workable strategy for Brown County (5th for tourism dollars), which currently doesn't have its own sales tax, but does have a 0.5% Lambeau Field tax that is slated to end next year. And they'd be a logical place to put in such a tax, because why shouldn't that area get a little more funding into its coffers when tens of thousands of people descend on their area 10 times a year for Packer Game Days? Even with that area having its share of Baggers, I bet they'll have a hard time justifying having to raise local fees and property taxes to pay for services that often help people from outside the county.

And we already have a mechanism in place for this type of extra local government flexibility in the Dells-Delton area (which includes 3rd-place Sauk County) and in the Up North Cities of Bayfield and Eagle River. It's called a Premiere Resort Tax, and it is described by the Wisconsin Department of Revenue as
a local retail sales tax which was authorized by the Wisconsin Legislature and is administered by the Wisconsin Department of Revenue. Under law, the sponsoring municipality or other political subdivision may only use the proceeds of this tax to pay for infrastructure expenses within this jurisdiction.
It makes sense- these places don't have a lot of population and don't want to unload the cost of all of the extra services these tourist-driven areas demand on the few thousand people that live there year-round. But why can't we do the same principle to make the large amount of people who spend money visiting Milwaukee and Madison keep those cities in good shape? Milwaukee and Dane Counties have the extra advantage of have a large amount of everyday commuters, suburbanites and others from outside the counties who use the streets and other services on a daily basis, but don't pay a dime toward them.

The shared revenue system works for relatively isolated, smaller areas that don't have a lot of regional interdependence, like much of rural Wisconsin. But it's an archaic concept for a 21st Century metropolitan area that needs to be regionally coordinated, where suburb and city has interconnecting fates. Besides, I thought having locally-generated sales taxes pay for services was preferable to sending statewide taxes to "those people" in right-wing world, so this would work well under that belief.

Unless the righties' real game is to denigrate and mess up the blue-voting cities of Milwaukee and Madison, and to allow their suburban supporters in the 262 to leech off of those cities without having to contribute to their futures. It would be a typical modern-day GOP "have your cake and eat it too" mentality to allow suburbanites and small-towners to feel superior to those cities, but also lets them take in the best of those cities without having to pay anything for it.

Well, they aren't known as Robbin' Vos and Scotty Walker-shaw for nothing, are they?

Saturday, May 17, 2014

Don't celebrate those "strong jobs reports" yet in Walkerland

I was going to let the analysis of the April jobs report go with my last post, but then the Walker Administration had to open up their mouths in light of Friday's state-by-state jobs release from the BLS. At first glance, the Walker folks have a right to crow, as for once the numbers shape up pretty well compared to the rest of the other states.
Highlights of today's Bureau of Labor Statistics (BLS) report of state-by-state employment and unemployment estimates include:

- Wisconsin's unemployment rate had a statistically significant decrease between April 2013 and April 2014. (2014 5.8% v. 2013 6.8%). Wisconsin's unemployment rate has fallen for nine consecutive months.

- Wisconsin's year-over-year increase in manufacturing jobs was 10,400 jobs, ranking 4th highest across the country.
Wisconsin has a statistically significant private-sector job (Current Employment Statistics) increase between April 2013 and April 2014 was 44,000, which ranked 16th nationally.

- Wisconsin had a statistically significant total nonfarm job (CES) increase between April 2013 and April 2014 at 54,100, which ranked 10th nationally and the best of total nonfarm job growth rate of any neighboring state.
And I suppose having these stats beat having jobs go away, but that release leaves out a lot of important context that will put this record in proper perspective- one that makes this look a lot more mediocre than the DWD's press release spin job. First of all, having a "statistically significant" increase in jobs or decrease in unemployment over the last 12 months isn't all that special as the Obama Recovery continues. As the BLS report shows. 29 of the 50 states had statistically significant increases in jobs, and 33 of the 50 states in the nation had statistically significant drops in unemployment. And some of the 17 states that didn't have significant unemployment drops were already near full employment by April 2013, so they didn't have far to go. These states include Iowa (at 4.3% unemployment for April 2014), Minnesota (4.7%), North Dakota (2.6%), South Dakota (3.8%), Utah (3.8%) and Oklahoma (4.6%).

Also, we know from the recent QCEW submission that the CES monthly job reports that DWD is quoting in this release is off. When compared to the Walker-described "gold standard" QCEW report, the monthly reports overestimated job growth by nearly 11,700 jobs in 2014.

Private sector job growth, Wisconsin 2013
CES monthly- +39,700 (+1.66%)
QCEW quarterly- +28,006 (+1.20%)

Interestingly, this difference in year-over-year job growth was just a little more than 1,300 in April 2014, which means that more than 10,000 jobs were overestimated for the last 8 months of the year. So if you use the QCEW numbers for job growth through the end of 2013, and then combine them along with the 4 months of 2014 reports, and you get around 34,500 private sector jobs, not 44,800. Still not bad (it's about the same as the 2010 and 2012 years for job growth, instead of 2013 "worst in the Age of Fitzwalkerstan" number), but not as impressive as Walker's DWD wants to make it sound.

3. Lastly, even with this overestimated "great growth" in the last 12 months, Wisconsin still lost ground compared to the rest of the nation, with the Walker jobs gap growing another 6,800 private sector jobs in that time period.

In fact, the only reason that the overall Walker jobs gap hasn't grown that much is that Wisconsin has added 10,000 government jobs in the last year while the U.S. as a whole has shed 6,000 government jobs. Interesting how DWD Secretary Reggie Newson doesn't say that in his press release, isn't it?

But maybe Scott Walker's folks are realizing that investing in government and hiring people pays off in other sectors of the economy, eh? Their record levels of spending, increased borrowing, and record debt in the most recent budget also indicate that (as recently noted by State Sen. Kathleen Vinehout). The Walker folks and the WisGOPs just redirected where taxpayer money went - taking from public schools, public workers and local governments, and sending it to voucher schools and the road builders, as well as paying more state costs for rail and Medicaid instead of taking federal money. They don't want people to make that connection, but it's definitely there.

And even more hilariously, the Walker Admin's crowing about April's jobs numbers look to be a short-term blip, explainable by April 2014 growing by 8,000 jobs vs. April 2013 retreating by 7,300 jobs. That seasonally-adjusted lower base in 2013 (which makes the last 12 months look good for now) snapped back in May and June, with 10,600 jobs being added back (9,300 in the private sector), so in order to maintain these higher job growth numbers, we need to grow by at least that much for May and June of 2014. Right now that would seem a tall order for May, as last week's Wisconsin's new unemployment claims number came in similar to the levels they had this time last year, (that number staying high despite numerous complaints about DWD not processing unemployment claims in a timely manner, resulting in a legislative audit). In addition, the mass closings at American TV and JC Penney have happened since the April jobs report survey week, in a time period when retail ususally hires up. These jobs hadn't been eliminated in April, so the 4,100 increase that month in Wisconsin's "Trade" sector (of which retail makes up a lot of) seems unlikely to stay around for May.

But it's obvious that the Walker Administration needs to hang onto some kind of positive job news, as the state's media (surprisingly to me) ran with the news that the QCEW numbers indicated Wisconsin's 2013 private sector job growth was the worst since Walker took office, and now they're desperately trying to change the storyline. But when you look inside the numbers, even that positive news isn't all that much to speak about, and it doesn't deflect from the overall FAILURE that has defined Walker's and WisGOP's jobs record.

Thursday, May 15, 2014

April Wisconsin jobs- good news and not-so-good news

Today's Wisconsin jobs report for April had two big points of news to look at. One showed some good things going on in Wisconsin, and the other...not so much.

1. First, let's talk about April's numbers. 7,600 private sector jobs were added, and 8,000 overall, so a very good number there. March was also revised up by 900 private sector jobs (400 overall), so we are 8,500 private sector jobs above where we thought we were before today. Combined with March's increases, it makes for a couple of decent months since the horrible February numbers (where 13,000 jobs were lost, and 5,300 in the private sector), and we're back to 9,400 private sector jobs gained for the first 4 months of the year. It's a moderate pace, similar to what we've seen in recent years in Wisconsin, but even the strong April figures did little to cut into the Walker jobs gap, since the U.S. also had strong job growth for March and April. As a result, Wisconsin is still more than 54,000 private sector jobs below the U.S. rate since Walker took office in 2011.

2. Also included in the Wisconsin jobs report was the preliminary figures for the Quarterly Census of Employment and Wages for the last 3 months of 2013. And those numbers came in lower than the monthly reports were indicating, as barely more than 28,000 private sector jobs were added in the QCEW, compared to 39,700 that was reported through the monthly numbers. Not only does this put the lie to the Walker Administration's claims of "fastest 2-year job growth in more than a decade," (itself a function of timing more than sustained job growth) but it makes for the LOWEST amount of private sector job growth since 2009, which included the depths of the Great Recession. This includes the final year of Jim Doyle's tenure in 2010, which was the only full year Wisconsin was under the budget passed by the Democratically-controlled legislature.

QCEW private sector job growth, Wisconsin
2010 33,658 (+1.50%)
2011 29,800 (+1.31%)
2012 33,872 (+1.47%)
2013 28,006 (+1.20%)

And even with the stronger showing in Wisconsin over the last 2 months, 2014 is currently on a pace to gain....28,200 jobs, so no improvement at all. Even the argument of "having unemployment of only 5.8% shows its working" falls flat, because the U.S. unemployment rate fell to 6.3% in April, making Wisconsin only 0.5% better than the U.S. And as UW Professor Menzie Chinn has noted, being 0.5% below the U.S. rate means Wisconsin is underperforming its average "advantage" of 0.9%.

Still, the decent numbers in April show that the cold, dreary weather didn't hold back job growth like it did last year, when 7,300 jobs were lost. It also makes the May job figures extremely important in seeing if these last two months are the start of a real Wisconsin boom (and a boom to Walker's re-election chances), or merely a short-term blip like many other months we've seen in the last 3 years, and we'll go back to the stagnation we've seen in many other months during the age of Fitzwalkerstan.

Wednesday, May 14, 2014

WMC and Realtors say they want worst economy in Midwest to continue

In advance of tomorrow's Wisconsin jobs report, I wanted to give a look at a couple of other economic indicators to see how we're measuring up compared to everyone else.

The first stat I wanted to check in on was the Philadelphia Federal Reserve's Coincident Index, which gives an indication of economic growth (or contraction) in all 50 states. You may recall that last Summer, Walker and his buddies at Wisconsin Manufacturers and Commerce were talking up the Philly Fed's leading indexes, which claimed that Wisconsin would have the 2nd-fastest growing economy in the U.S. for the next 6 months. In fact, WMC ran a large amounts of ads last Fall with this stat as the centerpiece of their claims that "Scott Walker's policies are working."

Well, we've gotten a little more than 6 months of data since then, so let's see how that prediction ended up. Let's start one month before the numbers the commercial's claims were based on, in July 2013, and go 1 month after that 6-month stretch, into March 2014 (the last month the index has measured).

Change in Philly Fed Coincident index, July 2013- March 2014
Mich +3.76%
Ind. +3.01%
Ohio +2.93%
Minn +2.09%
U.S. +1.94%
Wis. +1.92%
Ill. +1.60%
Iowa +1.28%

So we were the Midwest, and had a slower economy than the U.S. rate. Guess WMC was wrong....again. But they got the propaganda out there ahead of the facts coming in, so their mission is accomplished (unless you know, the media might want to hold them accountable. Just asking).

And even with the recent growth in Wisconsin, they're still behind everyone else in the Midwest in the Philly Fed index over the 3+ years that have made up the Age of Fitzwalkerstan.

That graph does explain why you haven't heard the Walker folks propping up the Philly Fed index recently, doesn't it? You can also see that most Midwestern states flattened out during the polar vortex winter, so that excuse-in-waiting doesn't work either.

The other economic indicator I want to bring up is the monthly home sales reports from the Wisconsin Realtors Association. The start of 2014 for the home sellers has been as chilly as the weather, with all 4 months being down compared to the year before, and the decrease being in the double digits for each of the last two months.

Year-over-year change in home sales, Wisconsin
Jan 2014 -4.5%
Feb 2014 -7.7%
Mar 2014 -10.1%
Apr 2014 -11.8%
Year-to-date -9.1%

So in light of this decline, who did the Realtors endorse for governor last week? Scott Walker, of course!
“REALTORS® understand the challenges facing Wisconsin families and the communities in which they live,” added Michael Theo, President and CEO of the WRA . “They need affordable housing, thoughtful residential and commercial development and enhanced consumer protections,” Theo said. “That’s why, with the leadership of this administration, we have fought for lower property taxes, elimination of unnecessary regulations and stronger real estate license laws.”

“Gov. Walker and Lt. Gov. Kleefisch supported these and other efforts to help Wisconsin families and the REALTORS® who work with them every day,” Theo said. “That’s why we support them.”

“We believe Wisconsin’s economy, budget, communities, and property owners are clearly better off today then they were four years ago,” said Steve Lane. “This administration has earned our support.”
The graph above and your own sales data shows you to be dead wrong, Mr. Realtor.

Wisconsin is falling behind our neighbors and our country under Walker by most legitimate economic measures, but the Realtors would rather continue their racket with unimitigated sprawl, gutted local services and a large state budget deficit with one-time tax giveaways over a strong economy that works for many more Wisconsinites (including themselves). Their loss, I guess. Then again, do you think greedheads like WMC and the Realtors really care about improving Wisconsin's economy and attracting talent? HELL NO. They're all about short-term profit by any means necessary, and they don't care what kind of long-term damage is done to our state in the process. And that's why they're spending their time and money supporting the losing economic policies of Scott Walker.

Tuesday, May 13, 2014

An update on stadium taxes and Milwaukee buildings

As the idea of a new Bucks arena and related facilities continue to develop, let's take a look at a couple of other Midwestern places and what's going on with the funding of their pro sports buildings.

1. In Cleveland, voters agreed to extend the city's "sin tax" to help pay for the relatively new arenas for the Indians, Browns and Cavaliers. The local tax is on cigarettes and all forms of booze, and it's administered by elected officials in Cuyahoga County.
Now that the issue has passed, the matter at hand will be to decide how to distribute the money, estimated to be at least $260 million over 20 years, between the Browns' FirstEnergy Stadium, the Indians' Progressive Field and the Cavs' Quicken Loans Arena.

The teams – and some of their supporters – have said they hope it will be split evenly between the three stadiums. But that decision ultimately rests with county council.

The Cavs and Indians have shared an estimated $135 million worth of fixes -- including $23.9 million for scoreboard-related upgrades -- they are expected to request over the next decade. The Browns, via the city, have requested $23.7 million in sin tax revenue to repair FirstEnergy Stadium over the next 10 years.
The Cleveland case led Milwaukee Mayor Tom Barrett to be asked about the possibility of such a local tax in the 414, and Barrett said such a tax was "not feasible" under Wisconsin law. This led the J-S to pull their Politi-crap "analaysis" on Barrett's statement, and Politi-crap decided to act as the arm of the MMAC that they are- refusing to give Barrett full credit for telling the truth.
Barrett said that using a surcharge on the cigarette tax to help pay for a new downtown sports arena "is not feasible under state law." A spokeswoman said meant that the tax wasn’t allowed under state law as it presently exists.

But that doesn’t mean that state law can’t be changed. (Jake is facepalming)

Indeed, state approval is likely going to be needed for any mix of higher taxes that could be used to fund an arena expansion or renovation. In that respect, there is nothing different about the approval required for a cigarette tax increase, a funding option that’s used in other parts of the country.

Our definition for Half True is a statement that's partially accurate but leaves out important details. That fits here.
Sure it COULD happen later, Politi-crap, but Milwaukee can't use a cigarette or other "sin" tax to pay for a new Bucks arena AS IT STANDS TODAY, which is what Barrett was pointing out. And it is important to note that it would be the state that would have to pass a bill allowing it- it's not something the Milwaukee City Council or Milwaukee County Board could do on their own. And good luck getting Robbin' Vos or Scott Walker to do anything in the next 8 months to help Milwaukee on any subject, let alone letting them put in a new tax. So we're waiting until at least 2015 before the "local sin tax" option would be debated.

2. Another Wisconsin local tax that pays for facilities may be going away soon, as the 0.5% Brown County sales tax that is going to Lambeau Field improvements may be ended next year. The money goes to a local district board that administers the funds (much like the Wisconsin Center District and the Miller Park District in Milwaukee), bonds that helped to pay for Lambeau's renovations were paid off in 2011, and the last step is to have enough money set aside for Lambeau upkeep through 2031.
The district was set up by state law after Brown County voters in fall of 2000 approved a plan to fund improvements to Lambeau Field with the 0.5 percent sales tax. When the tax produces the $92 million to cover its maintenance responsibilities, the district board has several decisions to make, including whether the board itself will continue to operate and what would need to happen if the tax generates more money than is needed. [District Executive Director Patrick] Webb has stated any excess money should be returned to Brown County’s taxing entities, and he would like to see it paid back annually, but legislation as it is written seems to require that it be paid back in a lump sum when the Packers’ lease expires.

Webb has said in the past that the board was at least a year away from being able to certify that it has set aside enough money to meet its legislatively mandated responsibilities. State statute says the tax will be terminated "after the last day of the calendar quarter that is at least 120 days" after certification with the Department of Revenue that sufficient money is collected.

The tax supported renovations done in 2003, and the district has [set] aside about $50 million so far. The tax produces about $20 million annually. No study has been done, but at least a quarter of that annual income likely comes from outside Brown County, Webb said.
The questions that remain once the tax ends in 2015 is to figure out if the Board should continue administering the funds (if not, it goes to the City of Green Bay to take care of, much like the "sin tax" in Cleveland), and should Brown County put in their own sales tax as a revenue-raiser to replace this? They didn't have one before this, but with the sales tax being at 5.5% for over a decade, there could be an argument made that locals are used to that tax rate, and taxes generated by Packer tourism could be used for something other than Lambeau Field.

3. The Wisconsin Center District's facilities were back in the news this week, as the District hired a consultant to discuss the city's convention center and needs in hosting major nationwide conferences. The Milwaukee Business Journal was able to get their hands on the information ahead of tomorrow's WCD meeting, and the consultant said the city would be left behind if it didn't improve what it currently has.
The study, obtained by the Milwaukee Business Journal in advance of a Wisconsin Center District board meeting Wednesday, offers preliminary plans for a $200 million expansion of the Wisconsin Center, Milwaukee’s largest convention space. The Wisconsin Center District owns and operates the center, as well as the Milwaukee Theatre and U.S. Cellular Arena downtown.

It recommends expanding the center’s exhibit space from 189,000 square feet to nearly 250,000 square feet; its ballroom from 38,000 square feet to 50,000 square feet; and its meeting space from 40,000 square feet to about 75,000 square feet....

Officials from the district and Visit Milwaukee have long argued the convention center is undersized when compared with convention centers in peer cities. The study compares the Wisconsin Center to venues in 12 similar-sized cities and found it is the third-smallest at 266,000 square feet. The largest convention center in the study, the Indiana Convention Center in Indianapolis, is 738,000 square feet. (NOTE FROM JAKE: The Indiana Convention Center includes the former RCA Dome where the Colts used to play, and was added onto the former convention center when Lucas Oil Stadium was opened for the Colts in 2008)
The consultant adds that Milwaukee's Wisconsin Center currently hosts about 200 events with 600,000 people a year today. That number would decline to 172 events with 556,000 if nothing is done, or it could grow to 220 events and 701,000 people if it's expanded.

Expanding the convention center should also be a part of the discussions on the future of the Bradley Center and/or a new Bucks Arena. The case in Indianapolis tells me that perhaps one of the current facilities in the Wisconsin Center District could be considered for remodeling and/or re-use to solve one of these concerns. The recent news that U.S. Cellular is pulling their naming rights (and revenue) from the former MECCA also seems to indicate there could be some synergies to gained out of what is a growing number of needs for downtown Milwaukee facilities. And it could lessen the tax blow from the smaller projects before we start talking about "the big one"- which would be the new Bucks arena.

The cheese is definitely binding when it comes to this topic, and we should make sure we know of all the options that are out there before a plan gets railroaded by us. The last week's developments have provided some additional insight and experiences that we should not ignore.

Monday, May 12, 2014

More on Wisconsin demos- lack of pay = lack of people

I wanted to go back to the Wis Taxpayers Alliance's "Impending Storm" report. I talked last week about the fact that the population numbers in much of Wisconsin will stagnate over the next 25 years, and I said that perhaps the rest of the state could get a clue from the younger, growing areas in and around Madison and the Twin Cities, and maybe try to be a bit more like them by approving of more liberal social policies and backing public education, in the hopes that more younger workers could want to move into the state and add to the availability of labor.

But I want to also take on the claim that those "bad demos" help to cause the state's alleged skills gap. As noted in a summary of the WTA report.
“Employers really haven’t experienced labor shortages to the degree that we’re expecting,” said Jeff Sachse, an economist with the state Department of Workforce Development. “The labor force is essentially going to be flat, and basically what we’re going to see is an employer base that’s going to struggle to find a sufficient amount of workers to remain in operation, much less to expand.”

Sachse said state-level economic discussions on the skills gap — the lack of workers with the training to fill high-tech positions — has “to an extent over-shadowed and masked some of the demographic issues.”

David Egan-Robertson, a demographer in the University of Wisconsin’s Applied Population Laboratory, said the median age in Wisconsin was 38.4 in 2010, compared to a national average of 37.7. By the 2040 the gap is expected to triple, with Wisconsin at 42.4, two years older than the national median.
Well, sounds like the state and its employers needs more workers in certain "skilled trades" to replace the ones retiring, and they're worried about finding the younger folks to take those jobs in the future.

UW-Milwaukee Labor Professor Marc Levine has written extensively on this topic, and his most recent update from last year mentions that the alleged "skills gap" for welders in Milwaukee is no gap at all.
In 2010, Milwaukee ranked 4th among the nation’s 50 largest metro areas in the percentage of welders holding at least a high school diploma; 5th in the percentage of welders with at least some college; and 16th in the percentage of welders with at least an associate’s degree. In short, the data on educational attainment suggest that rather than facing a competitive “disadvantage,” on skills, Milwaukee ranks near the top of metro areas in the skills of its welding workforce. These data, combined with the analysis of the wages, employment, and educational attainment of Wisconsin welders in our original working paper – especially the analysis of [former Bucyrus CEO Tim] Sullivan’s move to low-skill Texas because of the alleged Milwaukee “skills gap” – leave little doubt that the welding “skills gap” is, indeed, a fake skills gap.
The skilled work force is here is Wisconsin, so let's not fall for the CEOs line about the fact that they can't find workers. The solution seems pretty obvious to me - TRAIN THEM AND PAY THEM.

The WMC crowd has been mostly allergic to shelling out to train these workers themselves to productivity and shrink this "skills gap", instead allowing state taxpayers to foot the bill for initiatives such as expanding the ability of technical colleges to give scholarships and adding space in those schools for certain "high-need" fields. And state employers continue to refuse to pay competitive wages to attract labor to the Badger State, as Wisconsin continues to battle Iowa for the lowest average weekly manufacturing wage in the Midwest. Why would a young skilled worker stay in small-town Wisconsin when that same person could go to Minnesota, Illinois, or Michigan and make an average wage of $4 an hour more? You want to expand the chances of getting a skilled Wisconsin labor pool that's conducive to growth? Then pay what the market is bearing.

If our state's employers refuse to step up to the plate to pay skilled workers a decent salary, and if the state decides not to tax those employers to help pay for the investments that are required to provide a well-skilled work force, then the rest of us will be allowing the WMC crew to freeload off of their own negligence. In other words, to overcome these "demographic challenges" that the Wisconsin Taxpayers' Alliance describes, we as taxpayers are going to have to shell out to try to "solve" a problem that only exists because of the selfishness of the very Wisconsin oligarchs and the right-wing politicians that the WTA's directors overwhelmingly support.

More workers dead in states that are red

I made an innocent tweet a few days ago noting this stat, and nearly 30 others re-tweeted it with no real urging from me. So I wanted to let you know where I got it from.

I took a look at the AFL-CIO's latest "Death on the Job Report," which rates all 50 states for workplace safety (or lack thereof). If you take a look at the 15 states with the highest ratios of work-related fatailities (starting around page 113), you'll notice an obvious trend.

Highest work-related fatalities per 100,000 workers, 2012
N.Dakota 17.7
Wyoming 12.2
Alaska 8.9
Montana 7.3
W. Virginia 6.9
S. Dakota 6.7
Iowa 6.6
Louisiana 6.4
Oklahoma 6.1
Kansas 5.7
Mississippi 5.5
Arkansas 5.4
Nebraska 5.2
Kentucky 4.9
Texas 4.8

Why is Iowa in italics? Because EVERY OTHER STATE IN THIS LIST VOTED FOR ROMNEY IN 2012. 14 out of 15. Hmmm, high levels on-job deaths tend to correspond to places that favor Republican deregulation, especially ones that have high levels of oil, coal and other types of mineral extraction? NOOOOO WAYYYYY!

Wisconsin was close to making this list, as they were 19th-worst for fatalities, at 4.0, just behind Indiana's 4.2 for 3rd-worst in the Midwest. Guess which three states had the lowest average private sector wages in the Midwest at the end of 2013? Yep, Iowa, Wisconsin and Indiana. And if we get 4 more years of Fitzwalkerstani anti-worker policies, we may be heading toward the top 15 list soon enough. After all, Diane Hendricks told Gov Walker she wanted us to be a "completely red state." Dead workers seems to be a part of that.

It doesn't happen in a vaccuum folks. States that support Republicans have lower standards of living, higher levels of workplace fatalities, and related measures that happen when the balance of power tips toward corporations and away from workers. Keep it in mind as the election season heats up.

Your morning oligarch/ John Doe links

Been a busy weekend, but wanted to forward your attention to two excellent articles on John Doe, McCutcheon/ Citizens United , and their effect on Wisconsin campaign finance.

The first is from longtime Milwwaukee labor reporter Dom Noth, who notes that Federal Judge Rudolph Randa's partisan idiocy in trying to halt John Doe Deux may instead blow the whole thing wide open.
May 8 he fell into this carefully laid trap by the federal appeals panel, two of whom were appointed by GOP presidents and quite likely reflect the majority conservative view of the full 15 member court of appeals. He offhandedly agreed he had no right to order destruction of evidence and declared the original complaint frivolous, opening the door to broad investigation of whether it was frivolous.

Though lawyers for Club for Growth immediately crowed that this second Randa decision was extremely embarrassing for the prosecution and “a very good day for us and a very bad day for them,” the DAs involved laid low, perhaps chuckling. In fact they may be delighted to have their reasons for the probe put under a more public spotlight.

What Randa has unintentionally done is allow various groups of judges, state and federal, to hear testimony and information about why the pursuit is not frivolous and why prosecutors are allowed to gather evidence under previously granted legitimate court authority – something no judge has the right to throw into the river.

I’m simply an observer, not a lawyer, but it could be the expensive team assembled by Club for Growth has now misfired twice. First, by letting the case into federal court, where any approval allows the investigators to spread out into jurisdictions denied them as state prosecutors. And second in allowing many judges in court sessions to hear the reasons why their right to search is inviolate and whether the evidence for the search is frivolous or not. Which, of course, also allows the public and journalists to get deeper clues into the reasons for the investigation free of the partisan reporting and taints that have surrounded the John Doe from the start.
Also interesting to me is that while Randa rants about the "First Amendment", he never orders the laws against campaign coordination to be illegal. Maybe he's counting on the Supreme Court to do that dirty work, but because the whole issue of illegal coordination is linked into these Koch groups and others ducking taxes and disclosure by being "social welfare" organizations, you've got a very different set of issues as opposed to how much money can be spent in an election.

Speaking of money and elections, that's what the Root River Siren was writing about. The Wisconsin Department of Justice quietly decided to remove campaign donation limits last week in the wake of McCutcheon and other federal court decisions. In doing so, they went along with the wishes of Fred Young Junior, the son of a former Racine "job creator" (it's always second-generation money that's the worst). And the Siren uses her local knowledge and background to remind you what a scumbag this oligarch is.
Now, rich guys like Fred Young can give to as many candidates as they want, in as many races as they want - even if those candidates are hundreds of miles from where they live. They can also give as much as they want to PACS and issue organizations - even if they create them themselves - and they will.

Democracy is saved.

Fred Young didn't want to spend his money on employing people in Racine - in fact, he made millions by firing them. He even fired over a hundred workers just before selling his company to make it look more attractive to potential buyers and squeezing out a few more million from what his father had created.

Fred Young wants the kind of democracy he and a few of his friends can purchase, because that is what freedom looks like to him. If YOU can't afford that kind of freedom - well, that's your problem.
Ypu just wonder when the tipping point hits in Wisconsin, and people finally demand an end to the "old money and old boys club" from trying to use their (often inherited and ill-gotten) fortunes from running roughshod over the rest of us.