Tuesday, January 31, 2017

Property tax rates up under Walker, and dollars heading up too

A common refrain from Governor Walker is “I reduced property taxes in Wisconsin for the average homeowner,” as a means of justifying his theft of take-home pay from public employees and his gutting of city and county services. It frequently includes this type of chart

If you look at the Legislative Fiscal Bureau’s paper on property taxes in Wisconsin, theis skin-deep claim is true – the typical Wisconsin homeowner is paying less in property taxes than they did when Walker took office after the 2010 elections (although your own situation may vary).

Property taxes, median-value home, Wisconsin
2010 $2,963
2011 $2,953
2012 $2,943
2013 $2,926
2014 $2,831
2015 $2,849

Of course, there has been a significant price to pay for that, including an unfunded $406 million-a-year giveaway to Technical Colleges which could only be used for property tax relief instead of instruction or facilities, and hundreds of millions in added property tax credits which also haven’t been paid for. This drives up state spending, and combined with revenue shortfalls hitting the state’s General Fund in each of the last 3 years, this has meant further funding cuts and potholes throughout the state.

But if all you care about is how much your property tax bill is, maybe you’re cool with all that. But there’s a second reason this “lower property tax bills by all means” policy by Walker and WisGOP isn’t all it’s cracked up to be- because despite the lower number, you’re actually paying more of your home’s value in property taxes.

How is this so? Because while the typical Wisconsin homeowner was “saving money” in property taxes, the value of their home went down nearly $20,000 in 7 years as Wisconsin’s housing market deflated during Bush’s Great Recession and the immediate aftermath. And the recovery in the Age of Fitzwalkerstan was slow through 2015.

So these lower values means that the property tax RATE in the state has jumped significantly in the same time, rising by more than 19% between 2008 and 2013, and it’s still up more than 12% since 2008.

(chart reflects property taxes per $1,000 in value)

The flip side of this is that if your home wasn’t one of those which lost value, you’re very likely paying more in property taxes than you did 5 years ago, and Walker’s claim of “lower property taxes” is already BS to you (I feel ya).

You’ll note that Wisconsin property values finally started to make a comeback in 2014, and this trend seems to be accelerating because, as the pro-Walker Wisconsin Realtors Association was happy to point out, 2016 was a record year for Wisconsin home sales and prices.
Wisconsin’s housing market ended a record-setting year with solid growth, pushing annual sales to an all-time high and driving prices up well above the pace of inflation, according to the most recent analysis of the existing home market by the Wisconsin REALTORS® Association (WRA). December home sales rose 4.1 percent compared to December 2015, and median prices rose 7.4 percent to $161,000. Home sales for the year 2016 increased 6.1 percent compared to 2015, making this the strongest year for sales since the WRA recalibrated its tracking system in 2005. Median prices for the year rose to $165,000, which is 5.9 percent higher than 2015. By comparison, the average inflation rate for 2016 was just 1.3 percent according to the U.S. Bureau of Labor Statistics.

“This has been a truly remarkable year for housing in the state with sales exceeding 81,000 units for the first time on record,” said WRA board chairman Erik Sjowall. The previous peak recorded using the current tracking system was last year when just over 76,000 homes sold. Comparing 2016 sales to the previous year, solid growth was seen in every region of the state. The most robust sales were seen in the North region, up 7.8 percent; the Southeast region, up 7.2 percent; and the Northeast region, up 6.8 percent. Home sales were also healthy in the West, which was up 5.9 percent; the South Central, up 3.7 percent; and the Central, up 3.6 percent. “We’ve been experiencing very low inventory this past year, and the supply continued to tighten in December, which makes these record sales all the more impressive,” said Sjowall. Statewide, there were just 4.9 months of inventory in December, with the available homes dropping to 33,560. While inventory levels naturally fall during winter months, this is the lowest level seen since the WRA began tracking these figures in late 2009.
Sounds great, except now you have to pay higher property taxes on those higher-valued homes. And that will be especially true in western and northern Wisconsin, where home sale prices were up 8.1% and 6.8%, respectively- with several of those counties seeing prices jump by double digits. Wonder what all the voters in the many Obama/Trump counties in those regions will think in November 2018 when their property taxes are jacked up and their wages still suck?

Now combine those increased home prices (and associated higher assessments being given out) with continued state shared revenue cuts leading to a massive amount of school referenda, and you’ve got two items that are likely to make property taxes go up this December. Now here’s a third- there will be an inevitable drop in the lottery tax credit, after the State Legislature decided to cash out a windfall in the Lottery Fund that resulted from one-time extra sales due to the $1.4 billion Powerball jackpot that we had this time last year (a move I criticized when it came up in October).

Sure, the bump up in the Lottery credit is nice for me this year compared to last year - we got $150 taken off our taxes compared to $127 the year before - but this also means that if the Lottery Credit reverts to its more-typical 2015 amount (which it is projected to do), then I have a built-in $20+ increase into my property tax bill next winter even if everything else remains the same.

With the current housing bubble comeback in Wisconsin and these other forces working to make property taxes go back up, it makes me wonder if Gov Walker and the GOP might finally do the responsible thing, and use a part of the savings that we might have in this year’s budget to give more shared revenues to communities on a one-time basis for 2017. Such a move would limit the coming property tax hikes, while also finally allowing local communities and schools get back some of the funding that has been taken from them over the last 6-8 years. This would seem especially prudent given that the LFB paper on property taxes notes that local governments in Wisconsin are disproportionately reliant on getting money from other levels of government like the state and the feds (44.0% vs 36.3% average for the US).

Or, maybe this time they’ll listen to rural members of both parties, and allow local communities to levy a sales tax to help pay for their roads, taking pressure off of the property tax and reducing the need to put in wheel taxes (which many Wisconsin communities have already had to do in the past few years).

HAHAHAHA!!! Who the hell am I kidding? We all know that they’ll blow it on some stupid tax cut gimmick that sounds good to non-thinking rubes in a campaign ad, but will further restrict local government and cause things to fall apart even more. Silly me, why would I ever expect honesty and big-picture thinking from this crew!

Monday, January 30, 2017

The importance of civil service illustrated again

This seems to be important to note, in light of the Monday Night Massacre being carried out by this scared, fascist administration in DC.

This is why we have civil service, because we need people with actual knowledge of their subject to be part of government, and we need people that value the outcome of their policies on people, and those who serve the people over the temporary political hacks that occupy various offices. And it's why Republicans hate civil service, because they don't like any semblance of checks and balances on their powers.

Know this, and react accordingly.

More proof that Wisconsin is the model....of failure

With all of the idiocy and mayhem flying out of DC, some other news flies under the radar. One of these things was Friday’s release of the coincident indexes of economic activity in the states, as compiled by the Federal Reserve Bank of Philadelphia.

To review, these indexes are measured in the following way.
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
Since this most recent report goes to the end of 2016, it seems instructive to give this a look and see where Wisconsin shapes up in it - not only for 2016, but also for the 6 years that Gov Walker and the Wisconsin GOP have been in power. First, let’s see how the state did compared to our Midwestern neighbors, and the US as a whole.

As you can see, for 2016 Wisconsin had the 5th highest increase in the Philly Fed index out of 7 Midwestern states, and our 2.04% growth rate lagged the US rate of 2.88% growth. Not good, but also not disastrous, as it illustrates how the Obama Recovery continued to drag Wisconsin along into a better situation than the year before.

More interesting is how this growth figure changed throughout 2016. If you split up the Philly Fed index’s growth rates into the 1st half of 2016 and the 2nd half, the story looks a bit different.

Look at how states like Wisconsin, Illinois, Ohio, and (especially) Michigan saw their growth fall over the last 6 months, with Wisconsin, Illinois, and Michigan falling below 1%. The US fell as a whole by a smaller amount (1.35% vs 1.51%), Minnesota stayed around 1.4% for both halves, and Iowa and Indiana bounced back after bad 1st halves.

But that’s just the last year. If we go out to the last 6 years, which covers the time period when many new Republican governors and legislatures rose to power, we see that the 3 Midwestern states hit worst by the Great Recession (Michigan, Indiana and Ohio) had the greatest snap-backs of growth under the Obama Recovery, although their growth rates have slowed in the last couple of years. But also cast your eyes to the lower end of the chart, and take a look at that red line.

That’s “national model” Wisconsin under Scott Walker, taking up the rear in the Midwest, and even finishing below the dysfunctional train wreck in Illinois. In fact, Wisconsin has been dead last for cumulative growth in each of the 6 years that Scott Walker and WisGOP have been in power. And with stagnant population growth, underfunded schools and colleges along with deteriorating roads, explain to me how that’s going to turn around in 2017.

And yet Walker is running around America and making media appearances trying to claim that Wisconsin is some kind of leader that the Trump Administration should copy, to the point that he flew out to DC this weekend to hang with President* Trump, VP Pence and his old WisGOP buddy Reince? Maybe GOPs could look to Wisconsin when it comes to consolidating power, developing a media propaganda machine of alternative facts, and legalizing corruption on an unprecedented level (that does seem to be their main emphasis these days). But we sure aren’t the ones to follow if Trump is serious about raising the wages and economic fortunes of the many downtrodden white guys who voted for Trump to “Make America Great Again” for less-educated blue collars like them.

Makes me wonder what Trump’s “economic speech” in Milwaukee is going to be about this week. Is he going to again remind people how badly things are going in the state under Walker, like he did two years ago (after which Walker’s presidential campaign collapsed)? After all, the lagging economy in Midwestern ALEC states like ours helped get Trump elected! And what will Trump say he can do which will somehow change that bad direction?

I think some enterprising media and Wisconsin Democrats should bring up those subjects and ask about that in the next few days, don’t you?

Sunday, January 29, 2017

Today's events makes Trent requried Sunday listening

As protestors swarm airports and injunctions are passed to allow green card holders to come back to the country that they call home, I get torn between outrage that should make me take actions that might have real consequence (good or bad, or both), and shrugging my shoulders and saying "Well, what did you expect? Do you dimwits get it now?"

Yes, the majority of this country doesn't agree with this crap, and we can be naïve enough to think that the checks and balances that have already stopped some of these detentions will work out. But Trump and his puppetmasters don't care about checks and balances, and there are 25-35% that largely agree with them, because they only think government and the economy should work FOR THEM, without concern for anyone else.

This song has defined the mindset of the small-dicked GOP authoritarians for more than 10 years, and seems as relevant as ever.

Less concerned
About fitting into the world
Your world, that is
'cause it doesn't really matter
Any more
No, it doesn't really matter
Any more
None of this really matters
Any more

Yes I am alone
But then again I always was
As far back as I can tell
I think maybe it's because
Because you were never really real
To begin with

I just made you up
To hurt myself
I just made you up
To hurt myself
I just made you up
To hurt myself
And it worked
Yes it did

There is no you
There is only me
There is no you
There is only me
There is no fucking you
There is only me
There is no fucking you
There is only me

Only only only
Trent Reznor wrote this song appears on after kicking drugs and in the nadir of the Bush Administration's "War on Terror" attacks on civil liberties and the nation's fabric. Which explains a lot about the album it appears on, as he mentioned in this 2005 interview.
"After I got clean it felt like I'd landed on a different planet somehow. It looks the same, kinda, but everything is different," [Reznor] explains. "Learning lessons from listening to people, realising the humbling truth that I don't know everything and that my way isn't necessarily the best way. The idea was for the record to start from a place of panic and fear and gradually find a sense of acceptance. It's a difficult journey that begins with a nightmare, the nightmare of what I was going through. Shortly after I got clean 9/11 happened," he sighs, tackling another key influence. "It feels like we're in this weird police state now. The government isn't telling us the truth, fear is now being pumped into our homes as a great motivator to just do what you're told."

This sentiment is most clearly expressed on the brutal martial force of With Teeth's first single, "Bite The Hand That Feeds". It's as close as Reznor feels he can get to a hectoring anti-Bush track, and one he admits "is very close to bashing people over the head with the message". As a protest song - and as a NIN song, also - it's fine, a Molotov collision of fist-pumping rhetoric and pneumatic noise.

Like so many NIN tracks, it is the sound of sensitive souls stung into action by an all-enveloping disgust.

And yes, "The Hand that Feeds" seems to stand up as well. Especially as it goes out to the downscale white people who'd rather kick down and repress the "others" rather than fight for a better life for everyone, and kick out the corporatists and GOP politicians that are holding them down.

Saturday, January 28, 2017

Ye shall be known by the company you keep

Well, it looks like our Governor is feeling better after hiding from the media coming down with a "cold" as the scathing LAB audit on the state's horrible roads came out.

Nice timing to hang out with these guys as they shred the Constitution. Scotty's such a class act! Such a core of morality and strength!

By the way, who's paying for this previously unannounced trip out to DC, and the state bodyguards that are likely accompanying Scotty? Is it the oligarch donors to the Republican Governors Association, who paid for Walker and his family to curse the Packers' sidelines in Atlanta last Sunday?

Had enough of this amoral, self-absorbed crap representing our state? I'm well past "enough", myself.

We get new maps, but same GOP slime get to draw them? Lame

Originally, I was quite pleased when I saw this news drop yesterday morning.
In an order released Friday, the judges say Wisconsin must devise a new redistricting plan for the 2018 election and have it in place by Nov. 1, 2017.

State officials pledged to swiftly appeal the order to the U.S. Supreme Court. Should it withstand appeal, the ruling could reshape the 2018 legislative elections, giving beleaguered Democrats — now badly outnumbered in the Legislature — hope to win more races.
Cool, so we're goimg to get rid of this biased monstrosity.

OK, what standard are the judges going to use to draw up the new maps and when are they going to do it? Oh wait, they're NOT going to do it?
The plaintiffs nevertheless urge that providing the Legislature an opportunity to enact a remedial plan is impracticable here because Wisconsin’s elected branches have compiled an “objectionable” record of defending its unconstitutional plan. In some cases, such an exception to the general rule may be appropriate. The record in our case, however, contains no evidence of the malice or intransigence that would justify our abrogating such a fundamental principle. Although the state actors in this case certainly intended the partisan effect that they in fact produced, the record does not permit us to ascribe to them an unwillingness to adhere to an order of this Court or to conform the allocation of seats in the state legislature to constitutional requirements.

The plaintiffs further submit that, if we permit the Wisconsin legislature to redistrict, we should give it “[d]etailed [i]nstructions.” Several considerations militate against such a course. Consistent with our approach to remedying other constitutional violations, our only interest in the redistricting of the State is to “correct … the condition that offends the Constitution.” Swann v. Charlotte Mecklenburg Bd. of Educ., 402 U.S. 1, 16 (1971). “[A] state’s freedom of choice to devise substitutes for an apportionment plan found unconstitutional, either as a whole or in part, should not be restricted beyond the clear commands of the Equal Protection Clause.”...This very basic principle is grounded not only on the constitutional limitations of federal authority but also on the practical reality that it is the state legislature, not the federal court, that is “the best institution ‘to identify and then reconcile traditional state policies within the constitutionally mandated framework of substantial population equality.’” Gorin v. Karpan, 775 F. Supp. 1430, 1445–46 (D. Wyo. 1991) (quoting Connor v. Finch, 431 U.S. 407, 414–15 (1977)). The record in this case makes abundantly clear that the drafters of the 2010 reapportionment labored intensely over their project. Although, in the end, they produced what we have found to be an unconstitutional result, they wrestled along the way with many legitimate political considerations. Indeed, the record reveals that they produced many alternate maps, some of which may conform to constitutional standards. In any event, with the benefit of our ruling, state officials should be able to produce a map that, while conforming to the Constitution, will allow them to attain their legitimate political objectives. In our ruling on the merits, we set forth, at length, the nature of the constitutional violation at issue and the basis for our determination. Within this framework, it is the prerogative of the State to reapportion as it sees fit. It is neither necessary nor appropriate for us to embroil the Court in the Wisconsin Legislature’s deliberations.
With all due respect, judge- ARE YOU SHITTING ME WITH THAT??? Let's recall that when the Wisconsin GOP was redistricting in 2011, they went off-site so they could avoid open records requests, and literally swore members to secrecy as to the deliberations and plans for the maps. Those maps have now been found to be unconstitutional because it was one of the largest gerrymanders in US history that made Republicans "virtually 100 percent" guaranteed to stay in power, regardless of how the state voted as a whole?

Oh, and now we're going to trust these scumbags to "do it the right way"? On what fucking planet are these judges living on? I'm sick and tired of elected officials and judges thinking that "trusting the system" is an adequate remedy with these amoral fucks. They don't care about fair play and following rules, they just care about attaining and retaining power and money. You get that part, "wise judicial panel?" The only way these guys will EVER stay within the law is if they are forced to, or the consequences of breaking the rules and breaking the law are so severe that they have little choice (i.e. massive fines, jail time, and/or removal from office).

Look, it's nice that it's on the record that the Wisconsin GOP cheated and that a court has basically said their large majorities in the Legislature are not legitimate. But what's going to stop them and Walker from trying to pull a similar form of rigging on the new maps that are due on November 1? And since the federal court didn't give any guidance on the maps as to what was an acceptable level of "efficiency gap", it seems likely that the new maps will end up back in court anyway for an "up or down" vote. I don't even see any requirements for this new process to be open, something that Dem Assembly Leader Peter Barca and Dem Senate Leader Jen Shilling both noted, and both warned the GOP against.

While I have no confidence in the Republicans to produce anything close to a fair map, that doesn't mean we should just shrug and walk away. We know that the state's districts are out of order with the wishes of the state as a whole, and Jeff Singer at Daily Kos just broke down just how different these districts are.
In 2012, Obama defeated Romney 53-46 statewide, but only carried 16 of the state’s 33 Senate seats and 43 of its 99 Assembly districts. Trump, meanwhile, won the state by just 1 point, but ran away with an amazing 23 Senate seats and 63 Assembly seats. (Trump traded two Assembly seats that Romney won for nine Obama districts in the chamber.) In other words, by winning statewide by just a 48-47 margin, Trump carried 70 percent of the Senate and 64 percent of the Assembly. That’s insane.

Another way to look at this is to sort each seat in each chamber by Trump’s margin of victory over Clinton and see how the seat in the middle—known as the median seat—voted. Trump carried the median Senate seat 53-42 and took the median Assembly seat 52-42. That means that, under the current maps, Badger State Democrats would need to carry a ton of red turf to even have a chance at seizing a bare majority, no easy proposition.
Those changes in the 2016 election vs 2012 might also change the calculus that WisGOPs use when it comes to devising their next gerrymander (in addition to showing just how badly the Clinton campaign and the DPW dropped the ball in rural Wisconsin), and we need to prepare for that reality, as well as recognize the opportunities that happen if things snap back in 2018.

Bottom line- I'm happy the maps wil be changed, but really tired of crooked Republicans not facing real penalties for their disgusting behavior. Consequences must follow, and since the formal checks-and-balances of government aren't working to do it, I guess it's up to us.

Friday, January 27, 2017

Friday funnies...that aren't so funny

From Alan Talaga and Jon Lyons at the Isthmus

Thankfully, the LAB audit showing how bad our roads are and how much we're overspending on highways may change the calculus. NAHHHH! Who am I kidding?

Thursday, January 26, 2017

CBO shows slower economy, shows WisGOPs shouldn't rely on big revenues

With this week's release of the Congressional Budget Office's new economic and fiscal forecasts, we got a better picture of what the Trump Administration has walked into economically. A lot of the talk in media came from the CBO's projection of a slight shrinking of the US budget deficit from $587 million in 2016 to $559 billion in Fiscal 2017, but then growing in future years and reaching $1 trillion by 2024.

I also wanted to see what the CBO predicted for the country's economy, and compare it to the strong economic outlook that was a main reason behind the Legislative Fiscal Bureau's surprisingly positive budget projections. I expressed skepticism of the LFB's higher levels of growth, and indeed, the CBO predicted relatively lower growth and slightly higher unemployment over the next 2 years.

Real GDP projections
LFB 2.3%
CBO 2.3%

LFB 2.6%
CBO 1.9%

Nominal GDP
LFB 4.7%
CBO 4.1%

LFB 4.8%
CBO 3.8%

LFB 2.5%
CBO 2.3%

LFB 2.1%
CBO 2.3%

Average unemployment rate
LFB 4.6%
CBO 4.6%

LFB 4.3%
CBO 4.4%

In addition, the LFB estimates say that employment continuing will grow near its 2016 pace for the next 3 years, with 5.4 million jobs added between now and the end of 2019 (around 150,000 jobs a month). Compare that to this prediction from the CBO.
Over the next five years, the monthly increase in nonfarm payroll employment, which is estimated to average 160,000 jobs in the first half of 2017, is projected to settle down to an average of 64,000 jobs. That slower pace of job growth primarily reflects relatively slow growth in the labor force, which is affected by the ongoing retirement of the baby boomers. In CBO’s projections, the unemployment rate averages 4.9 percent over the later part of the [5-year] projection period.

Now why so different? One reason may be due to this paragraph in the CBO report
CBO’s budget and economic projections are predicated on the assumption that current laws generally remain in place. Budgetary and economic outcomes are difficult to project, however, and thus rather uncertain—even if there are no changes to the laws that govern federal taxes and spending. The agency strives to construct 10-year budget and economic projections that fall in the middle of the distribution of possible outcomes, given both the fiscal policy embodied in current law and the availabilityof economic and other data.
Compare that to what the LFB (actually, an economic forecaster named IHS Markit) based their economic predictions on.
The 2017 forecast is based on the following key assumptions. First, the forecast assumes that the new Trump administration and Congress will lower the average effective personal income tax rate from 21.0% to 19.5% and lower the statutory corporate tax rate from 35% to 20% (partially offset by reducing tax deductions and credits). Second, the forecast also assumes a $250 billion increase in federal infrastructure spending over the next ten years. Third, the 2017 forecast assumes that the Federal Reserve will increase the federal funds rate by 75 basis points in each of the next three years to 1.50% by the end of 2017, 2.25% by the end of 2018, and 3.00% by the end of 2019. Fourth, the Brent spot crude oil price is projected to average $54 per barrel in2017 and $57 per barrel in 2018. Fifth, the inflation-adjusted, trade-weighted value of the dollar for the broad index of U.S. trading partnersis expected to increase 3.3% between fourth-quarter 2016 and fourth-quarter 2017, where it will reach its peak value at 5.5% above the 2016 average, followed by a steady decline. Finally, real GDP growth of major and other important U.S. trading partners is assumed to average 1.7% annually and 3.5% annually, respectively.
Now that’s quite a lot of “ifs” for the LFB to base their figures on. Sure, all of these things might happen, but does it seem wise to base a tax cut or alleged “surplus” on a number of assumptions of events that have yet to happen? This is especially true when the IHS Markit assumptions didn’t seem to take into account the lack of economy stability that might occur for large numbers of Wisconsinites if Trump and/or the GOP Congress really do repeal Obamacare (especially with no replacement plan to follow) or if they cut Medicaid, Medicare, or Social Security. And apparently IHS Markit feels there won't be any negative economic consequences from a potential trade war or other Trumpian idiocy.

Somehow, IHS Markit feels they can follow some of the words of Trump and the GOP Congress, but other parts are conveniently forgotten or disregarded. So yes, as more of this data rolls in and we have other analyses to compare, I find myself skeptical of the rosy assumptions for the US economy under the Trump presidency, and the high revenue estimates that the Legislative Fiscal Bureau put out as a result of that. I also don’t count on posers like Walker and WisGOP legislators to do the responsible thing in light of all of this uncertainty, which would be pass a budget with plenty of cushion, enabling it to react to whether or not there actually is a Trump Bubble Boom, and waiting to see what the effects of new Federal legislation and funding would be in late 2017-early 2018.

No, they’ll try to score nice headlines to trick the rubes who have continued to vote for these guys despite the state’s lagging results. Which gives me a sinking suspicion how this plays out.

1.Wisconsin GOP and Governor Walker blow some of the extra revenues on some stupid tax cut for the rich.

2.They throw in a little extra state money for the next budget to K-12 education, local roads and other places so they can claim they are nice guys.

3.The rosy revenues fail to materialize, but there’s just enough money carried over time before the 2018 November elections to avoid having to take formal action to fix the problem, leading to a massive looming hole in early 2019 and the 2019-2021 (in other words, a repeat of 2014, which led to all the cuts and screw-ups of the 2015 budget).

The scathing LAB audit which showed overspending at the Wisconsin DOT and deteriorating state roads may start to put that reality into people's minds. Combine that with the likelihood that Wisconsin’s economy isn’t going to boom over the next 2 years (given that we're a stagnant-population state that’s graying, allegedly at full employment, but still repressing wages), and it's going to take bombs like the LAB audit are needed to force the WisGOPs into something resembling responsibility in the 2017-19 budget.

So I don’t want to be put in a position to do this, but I have little choice. We may need the economy to stagnate and tank sooner than later, so we don’t have a 2017-19 budget based on pie-in-sky bullshit that is extremely unlikely to materialize. Because you know the posers in WisGOP Bubble Land can't help themselves otherwise.

DOT Audit double-whammy- Walker/WisGOP overspending AND having roads fall apart!

Overnight, Gov Walker suddenly announced that he couldn’t make taxpayer-funded campaign appearances at several rural schools around the state because he had allegedly come down with a cold. I found that....interesting.

And around 9:15 am, my suspicions were confirmed, and we found out the real reason Gov “Unintimidated” wasn’t feeling well.
The Wisconsin Department of Transportation significantly underestimated the costs of major highway projects and did not do all it could to manage expenses, an audit [from the Legislative Audit Bureau] released Thursday shows.

The DOT underestimated cost estimates for 16 ongoing major highway projects by a total of about $3.1 billion and did not adequately account for the extent to which inflation and unexpected expenses could contribute to cost increases, the audit found.

Costs for 19 completed projects exceeded estimates by $772.5 million, the audit found.
Oops! Sorry about that, taxpayers!

Among the big misses in the $3.1 billion of underestimation was the Highway 41 upgrade between Neenah and De Pere, which was estimated at $430 million in 2003, but whose cost has ballooned to $1.4 BILLION. In addition, Highway 10’s improvements between Appleton and Marshfield more than quadrupled from its 1989 enumeration- going from $125 million to $547.4 million.

There were also exploding costs on projects that had been set aside, planned and started during the 5 years of the Age of Fitzwalkerstan, including the I-39/90 expansion between Madison and the Illinois state line (from $715 million to $1.2 billion), the Verona Road reconstruction on the southwestern edge of Madison ($150 mil to $283.3 million), and Highway 10/441 in Appleton (from $390 mil to $482 mil).

The LAB says most of those overruns happened because the DOT claimed at the time that they could do these jobs for relatively cheap, and didn’t account for contingencies.
At enumeration, DOT did not sufficiently take into account unexpected cost increases on major highway projects. We examined the four projects enumerated in 2011 in order to determine the extent to which estimated costs increased after enumeration, other than as a result of inflation. According to DOT’s semiannual reports, as of August 2016 unexpected costs accounted for:

§$362.5 million of the $485.9 million increase in the cost estimate for the I-39/90 (Madison to Illinois) project, or 74.6 percent;

§$101.0 million of the $133.3 million increase in the cost estimate for the USH 18/151 (Verona Road) project, or 75.8 percent;

§$50.0 million of the $92.0 million increase in the cost estimate for the USH 10/STH 441 (County Trunk Highway CB to USH 10) project, or 54.3 percent; and

§$12.0 million of the $21.0 million increase in the cost estimate for STH 15 (STH 76 to New London) project, or 57.1 percent.
The LAB mentions that underbudgeting for current projects drives up costs in later years, because other projects fall behind schedule, and require a lot more money to fix later on.
Although accurately estimating actual inflation and determining a contingency amount for a project is challenging, DOT should examine previously enumerated projects and determine why those projects increased in cost after enumeration and assess why its cost estimates did not anticipate the total costs of these projects. Knowing this information can help it to determine more-accurate cost estimates of future projects. At enumeration, DOT should provide the Governor and the Legislature with cost estimates that presume the actual inflation associated with projects will likely be higher than CPI-measured inflation and that include more-accurate contingency amounts. Doing so will allow the Governor and the Legislature to know with greater certainty how much projects will cost and will allow DOT to plan future project work that can be completed with program funding that it presumes it will receive in future years.
And while the billions in cost overruns have received the most media attention from this LAB audit, there’s another key part that should be pointed out, which is that Wisconsin’s local and state highways have been deteriorating while Walker and WisGOP have been in power. Sure, the big-cost major projects have allowed the state’s heavily-traveled “backbone” highways to stay relatively up-to-snuff, but everything else has gotten worse since Walker and WisGOP gained control of state government in 2011.

Non-backbone highways in “good” condition
2011 48.5%
2015 35.9%

Non-backbone highways in “fair/poor/worse” condition
2011 21.6%
2015 40.0%

FHWA “Condition of State Highways” 2014
Amount of highways in good condition
Ind. 75.5%
Ohio 75.4%
Mich 73.8%
Ill. 66.1%
Minn 64.6%
U.S. 63.4%
Iowa 55.3%
Wis. 32.2%

Amount of highways “Not Acceptable”
Ohio 0.7%
Ill. 0.9%
Ind. 4.4%
U.S. 5.3%
Mich 6.2%
Wis. 9.1%
Minn 11.6%
Iowa 15.0%

And in contrast to WisGOP’s refusal to raise revenues for its roads, Michigan and Indiana raised their gas taxes at the start of this year, and Iowa raised its tax by 10 cents a gallon in 2015 to help deal with their substandard roads. Minnesota Governor Mark Dayton also wanted to raise that state’s gas tax in 2015, but the combination of Minnesota’s $1 billion + budget surplus and a lack of support in the Legislature ended that idea (although Minnesota’s Corn Growers association just called for a 10-cent-a-gallon increase ).

So the moves in other states mean we are likely going to be even further behind our Midwestern neighbors now and in future years. And that won’t change as long as Governor Walker and the Wisconsin GOP continue to care more about satisfying DC lobbyist Grover Norquist’s “no-tax, no-fee” pledge than the state’s economic competitiveness.

I keep going back to this Wisconsin State Journal cartoon from Phil Hands, and it continues to be true. Maybe this was what Scotty was dreaming of today, as he hid under the covers at the Governor’s Mansion while he was “fighting off his cold.”

Wednesday, January 25, 2017

Walker Admin tries to spin sucking less as success. It's not

As Gov Walker's budget address and inevitable re-election campaign nears, his Department of Workforce Development used the recent occasion to release another bit of propaganda trying to convince Wisconsinites that things are doing great in Wisconsin.
•Wisconsin ranked 1st in Midwest and 14th in the nation in manufacturing growth rate compared to December 2015.
•Wisconsin ranked 1st in the Midwest and 11th in the nation in manufacturing growth rate when compared to November 2016.
•Wisconsin's net gain in manufacturing jobs over both the month and the year were the highest in the Midwest and ranked 3rd and 7th in the nation respectively, according to the data.
That sounds impressive...until you actually look at the recent state-by-state jobs report that these statistics are drawn from. Sure, Wisconsin added 3,000 manufacturing jobs on a seasonally-adjusted basis in December, but we had actually lost 400 jobs in manufacturing in the 11 months before then.

And that "1st in the Midwest" ranking in the Midwest for manufacturing growth? That's because almost everyone else was in a manufacturing recession in 2016.

Change in manufacturing jobs, 2016
Wis. +2,600
Mich +2,500
Ind. -1,200
Minn -1,500
Ohio -2,900
Iowa -7,000
Ill. -11,000

In a similar vein, many Midwestern states saw tepid job growth throughout 2016.

Private sector job growth, 2016
Mich +1.91%
Minn +1.68%
Wis. +1.16%
Ind. +0.87%
Ohio +0.82%
Ill. +0.52%
Iowa +0.51%

If you didn't know better, you'd think Wisconsin looks pretty good from this perspective, coming in 3rd out of 7 Midwest states for private job growth last year. But here's the problem. Wisconsin didn't rise from 6th to 3rd on this list because our job growth improved form 2015 (it actually declined from 1.28% to 1.16%), but did so because most of the other Midwest states fell by more than we did.

Those declines back up a theory I have mentioned before- where the slowdown in the Midwestern economy could help explain why enough people were angry enough to vote for Donald Trump out of frustration (gee, thanks guys!). Pennsylvania also works in this theory, as their private sector job growth was a measly 0.71%, behind all Midwestern states except Iowa and Illinois.

And even with Wisconsin moving "up" on the list of Midwestern job growth, we still badly trail most of our neighbors in job growth since 2010 because of the hole that the first 5 years of the Age of Fitzwalkerstan put us in.

So don't get tricked by the Walker Administration's spin jobs trying to intimate that "it's working" and that Wisconsin is some kind of Midwestern economic leader. When given the long view of Scott Walker's reign of error, nothing could be further from the truth. And saying "We're sucking less than the other guys over the last year" isn't something to hang your hat on- it's like saying "Well, the Pack did better than the 3-13 Bears this season."

LET'S DEMAND MORE out of how this state is performing, shall we?

Tuesday, January 24, 2017

"Big [tax] giveaway" proves even more of a fraud on Wisconsinites

You may remember that the Wisconsin Budget Project did a great write-up last June on what they called "The Big Giveaway." This was the state's Manufacturers and Agriculture tax credit, which was passed by the WisGOP Legislature and signed by Gov Walker as part of his first budget, with the effects slowly being phased in between 2013 and this year. The M&A tax cut has no requirements for job creation, and doesn't even have to go to businesses, as the original June memo to State Rep. Gordon Hintz showed that most of the time, the tax credit was claimed on a filer's individual income tax return (though corporate taxes also had a nice write-off).

Hintz asked the LFB to update the figures for 2017 and the latest budget, now that more information is known, and it turned out that the M&A tax cut is blowing up bigger than ever, with the vast majority of the windfall continuing to go to the richest Wisconsinites. Hintz used the new memo to call for the end to this handout, which would make it easier for the state to pay its bills and improve quality of life.
“I agree that we should be doing everything in our power to encourage economic growth. Effective, targeted tax cuts should certainly be a part of the equation,” said Rep. Hintz, “However, this expensive, regressive tax cut is the exact opposite of that. Wisconsin’s economic performance remains well below the U.S., even as this credit continues to exceed its budget.

“The 2017-19 budget presents an opportunity to restore some of the cuts in programs the Governor used to pay for this giveaway,” said Rep. Hintz. “However, based on past budget priorities such as this, I am not confident Governor Walker will invest in the people of this state the programs that provide opportunity and enhance the quality of life, such as funding for public education and our communities.”

Rep. Hintz also released an LFB memo showing that over 75% of the credit ([when] claimed as income tax) goes to individuals making more than $1 million per year. The memo also showed that $22 million of the credit went to a mere 11 individuals who all made $30 million or more per year.
Even worse, if you add in the LFB Informational Paper which includes the income levels of all Wisconsinites who file income tax, you get this remarkable stat.

% of total Wis taxpayers using M&A credit
Income over $200,000 5.02%
Income under $200,000 0.22%

In other words, if you make over $200,000 in Wisconsin, you are 23 times more likely to use the “Manufacturers and Agriculture” tax credit than the other 97.3% of Wisconsin taxpayers. So as it stands today, the M&A credit is a flat-out giveaway to the rich and the corporate that most of the rest of us have no chance of getting.

And as Hintz points out, the price tag for this giveaway keeps going up- well above what the Legislative Fiscal Bureau projected for the Legislature when the tax credit was approved in 2011.

M&A tax cut, projections vs actual use
Proj $ 10,100,000
Actual $ 15,600,000
Difference $5,500,000

Projected $ 44,200,000
Actual $ 81,700,000
Difference $37,500,000

Proj $ 72,300,000
Actual $ 152,700,000
Difference $80,400,000

Proj $ 104,400,000
Actual $ 218,400,000
Difference $114,000,000

Proj $ 128,700,000
New Proj $ 299,000,000
Difference $170,300,000

Proj $ 128,700,000
New Proj $ 320,200,000
Difference $191,500,000

Proj $ 128,700,000
New Proj $334,000,000
Difference $205,300,000

So this tax cut has cost the state's Treasury an additional $804 million beyond what was projected when it was passed into law in 2011. Think the state's education or roads could have been put in better shape with some of that $804 million, instead of just giving it away to

And if this actually translated into growing the state’s economy, then maybe you could accept the price. But that hasn’t happened either, as Wisconsin’s job growth has actually fallen as the M&A tax cut has become fully phased in, with 2016 having the lowest rate of private sector job growth (1.16%) in Scott Walker’s 6 years as Governor.

If WMC and Walker are squawking about this giveaway being brought to light (like they were this afternoon) and are trying to justify it, you know they're vulnerable on this one. And rightfully so, because after 6 years of taking from workers and the poor and giving to the rich, Wisconsin's budget and economy aren't much better off, despite having the benefit of the Obama Recovery to ride on top of. After taking from everybody else for all these years, doesn't WisGOP and WMC and the rest of these oligarchs have to pay back something, especially since their moves haven't done anything to help the average Wisconsinite? And why aren't more Wisconsinites demanding that these scumbags stop getting a free ride at the expense of everyone else?

Monday, January 23, 2017


The first fast-tracked measure in the 2017-19 Wisconsin Legislature heats up tomorrow. No, it doesn’t deal with the special session Governor Walker has called on dealing opiod addiction- there are no days scheduled on the Assembly or Senate floor for that yet.

Something else has higher priority, which means we will have hearings in the Assembly Labor Committee on Tuesday and Senate Labor and “Regulatory Reform” Committee on Wednesday on a bill that would prevent local and state government from certain pro-union requirements on construction projects, commonly known as Project Labor Agreements (PLAs).
Under this bill, the state and local units of government are prohibited from engaging in certain practices in letting bids for state procurement or public works contracts. Under the bill, the state and local governments may not do any of the following in specifications for bids for the contracts: 1) require that a bidder enter into an agreement with a labor organization; 2) consider, when awarding a contract, whether a bidder has or has not entered into an agreement with a labor organization; or 3) require that a bidder enter into an agreement that requires that the bidder or bidder's employees become or remain members of a labor organization or pay any dues or fees to a labor organization.
GOPs and other (cheap) labor businesses are claiming that such a bill would open up competition for projects and result in both cheaper costs and more employment (raise your hand if you’ve heard that line before).

Dave Branson, the executive director of the Building and Construction Trades Council of South Central Wisconsin, disagreed with that mentality, and explained earlier this month in the Daily Reporter how Project Labor Agreements work. Branson notes that these PLAs often end up being a win-win for government as well as workers.
When Wisconsin public agencies look to invest taxpayer dollars in construction projects, they — just like corporations in the private sector — essentially have two distinct business models from which to choose.

The first relies on project-labor agreements, commonly called PLAs. It’s a business model that offers increase jobsite efficiencies through the use of a 21st century labor-management approach that fosters cooperation, harmony and partnership. It ensures that construction owners will have a steady, local supply of the world’s safest, most highly skilled and productive craft workers. And it ensures these workers will receive a pay and benefits package that is reflective of their skill and productivity.

PLAs further promote employment opportunities for local residents — particularly military veterans, women and minorities. PLAs can help people in these groups gain access to career training in the skilled trades through the use of apprenticeship-readiness programs and formal apprenticeship education and training.

PLA arrangements present a stark contrast to the “race to the bottom” business model that permeates the U.S. construction industry today. Advocates of this system appear to staunchly believe that contracts in the construction industry should be awarded primarily to contractors who are able to assemble the lowest-cost workforce possible. Workers in this group tend to be among the most vulnerable and exploitable.

In the public realm, where there is oftentimes an ironclad “low bid wins” requirement, disreputable employers are increasingly misclassifying employees as “independent contractors” or using undocumented workers, in order to reduce their labor costs and win contracts.
Call me crazy, but maybe quality should play a factor in a construction project, given that cutting corners and performing shoddy work often result in the need to spend more in further repairs and improvements in later years.

But of course, there’s a bigger ethos at work with Hutton and the rest of the ALEC/GOPs that are supporting this, and it involves trying to reduce the power of Wisconsin workers to obtain and maintain decent wages, and keep them more "in line" with politicians and bosses. This has been the theme of most WisGOP labor “reforms” over this 6 year Reign of Error, starting with Act 10 on public employees, then moving onto right-to-work (for less) for private workers. It also includes a number of behind-the-scenes moves, such as erecting barriers to receiving unemployment and welfare benefits (and making people more desperate, causing them to accept lousy jobs and wages), changing who is on the Wisconsin Employment Relations Council (WERC), and eradicating professor tenure at the UW System.

All of these moves are designed to make the average Wisconsin worker to be more at the mercy of their current and future employers, and have to settle for smaller wages and benefits as a result. It’s a straight-up transfer of money from the working classes to the owning ones (or worse, the owning classes put those extra profits into their pockets or use the extra money for less productive measures like kickbacks to politicians and asset gambling).

So are all of you blue-collar Trump voters who were looking for better jobs and wages, and the ones cheering now-President Trump for signing an order today removing the US from the Trans-Pacific Partnership, are you cool with this Wisconsin GOP plan to limit your wages even more? If you want real change that might improve your life, and more freedom to earn a decent living (goals that I completely agree with and think you deserve), how about rising up against this anti-PLA bill, and recognize that guys like me who work with our heads in big cities aren’t the ones keeping you down?

Now do you see which people are really screwing you over? It’s the anti-worker WisGOP legislators and the anti-worker Governor that are the real villains in stagnating your life. So are you going to speak up and boot them out, or continue to blame "those “elitists and takers" in big cities, and continue to lose? Your call, blue-collars.

Sunday, January 22, 2017

A Wisconsin budget geek's Bible- and a Big Lie on DOT funding

As we go through the state budget, it's important to know exactly what all of these programs are, and how much funding they get (and have gotten).

With that in mind, let me forward you to the Legislative Fiscal Bureau's Informational Papers, which you should consistently refer back to over the coming months.

And given that Transportation Funding is going to be a big deal in this budget, with many choices and directions that can be taken (as evidenced by a good, in-depth article from Mark Sommerhauser in the Wisconsin State Journal today), let me throw this bit out there from the Informational Paper on Transportation Finance. Because you know WisGOP and GOP-perganda media will try to perpetuate a Big Lie on how "the Transportation Fund is only in trouble due to Jim Doyle's raids."

One look at Page 13 of the PDF of this informational paper shows that WisGOP talking point is 100% FALSE.

Transfers between Transportation Fund and General Fund 2003-2017
$1.42 billion Trans. Fund cash to Gen Fund (all between 2003-2011)
$43.9 million Trans Fund debt service paid by Gen Fund ('03-'05)

$1.56 billion borrowing from Gen Fund to pay for Trans. Fund projects (all budgets from 2003-2017)
$446.1 million General Fund cash to Trans. Fund (all since 2011)

NET TRANSFER 2003-2017

That's right, nearly $561 million more has been sent over from the General Fund to the DOT than was ever "raided" by Jim Doyle. And even worse, that $1.56 billion in borrowing for DOT projects continues to be paid back with interest, so the total tab is likely to be much higher than that. And since the General Fund includes the vast majority of other state spending, including schools, aid to local communities, and Corrections, all of those sources are getting squeezed by this need to use the General Fund to pay off debt for these DOT projects.

And now the Assembly GOP's floated budget plan indicates that they are planning to shift another $600 million from the General Fund to the Transportation Fund for 2017-19. If true, that would mean the state would have shifted a net total of $1.16 billion dollars to the DOT over 16 years. Think our schools, or the UW, or local services could have used some of that money?

Keep these stats in your back pocket, as I have little doubt that WisGOPs will try to float the "alternative fact" that the "Doyle raids" caused the DOT fund to be in a deficit. It is a bald-faced LIE, and in fact, more money has been stolen from the General Fund to pay for the DOT.

Saturday, January 21, 2017

Tens of thousands speak in Madison. WILL DPW LISTEN?

I was one of the 75,000-100,000 people in downtown Madison this afternoon, showing our displeasure with the illegitimate (and already-flailing) president and GOP agenda.

That's me on upper right at the edge of the Capitol lawn.

There's definitely something happening here, and I think people have fucking had it with being told that Trump was elected legitimately or that the GOP agenda is something a majority of people approve of. The numbers of people don't lie, especially in contrast to the pathetic crowds that witnessed Trump being sworn in, and you can already tell that fact is driving Drumpf crazy. Which tells me we need to keep up the pressure and make that boy crack.

I was also fired up by the comments a Teabagging dimwit made on a friend's Facebook page, and I may have hurt his soul a bit by reminding him of his mediocre, dead-end life and BS takes. I feel no shame in being that rough, by the way. I read his comments around the same time that I was finally able to find a parking space downtown (in the 3rd ramp I tried), and as I did, WJJO was blasting this song on their "Nothing but '90s" Saturday. And no song seems to fit better when it comes to describing the typical non-rich, weak-minded Trump voter than this one.

No more the crap rolls out your mouth again
Haven't changed, your brain is still gelatin
Little whispers circle around your head
Why don't you worry about yourself instead

Who are you? Where ya been? Where ya from?
Gossip burning on the tip of your tongue
You lie so much, you believe yourself
Judge not lest ye be judged yourself

Holier than thou
You are
Holier than thou
You are
You know not

Before you judge me take a look at you
Didn't you find something better to do?
Point the finger, slow to understand
Arrogance and ignorance, go hand in hand

It's not who you are, it's who you know
Others lives are the basis of your own
Burn your bridges and build them back with wealth
Judge not lest ye be judged yourself

Holier than thou
You are
Holier than thou
You are
You know not

Ya, who the hell are you?
Ya, ha you

Holier than thou
You are
Holier than thou
You are
You know not, not
And right before that, JJO was blasting this great one from my college days.

Which led to me think- maybe what the WisDems need more of in the Age of Trump and the Age of Fitzwalkerstan is a whole lot less of "they go low, we go high." Those people think that 2010s politics is still some kind of friendly debating society, and that appealing to reason is all you need, with the party decision-makers being political lifers in suits.

Maybe the Dems need a lot more White Zombie/Metallica listeners that have worked real (and often crappy) jobs in real places, and are willing to tell the Walkers and Ryans and Trumps of the world "FUCK YOU, STOP LYING AND STOP BEING A FASCIST PIECE OF CRAP!" and willing to (figuratively) break the baseball bat over the heads of liars and scumbags, and outwardly taking on the GOP-perganda lie machine on Wisconsin's AM radio station. Who cares if the bluntness and confrontation hurts the feelings of a few soccer moms? Things are unacceptable today, and playing patty-cake with these GOP piles of shit will not succeed.

You can't deny the energy and feeling of "You will NOT pull this bullshit anymore!" that permeated the Capitol Square this afternoon. And it's well past time that the DPW stop "trusting the data" and start listening to what the people are doing and saying. It feels like the door is opening to a large-scale awakening and uprising against the regressive GOP, and people are done with laying back and "trusting in the system/trusting in the leaders", especially after doing so failed in the 2016 election.

The Dems and the DPW better recognize, join in and ride along, instead of trying to blunt this energy by trying to put it through the "proper channels", because the rules have changed.

Friday, January 20, 2017

Assembly GOP claims there's a bunch of money to cut taxes. There isn't

Just as I predicted, Assembly Republicans came out yesterday claiming all of the benefits of higher predicted revenues in future years, while not dealing with the higher costs. They based this BS out of a rigged request that they gave to the Legislative Fiscal Bureau, which was released yesterday.

Basically the Assembly GOP asked the LFB to make these assumptions.

Use the revenue predictions for FY 2016-17 of $15,503.6 million in tax revenues, and have that be a two-year “base” for this budget.

Then use the difference of the FY 2018 and FY 2019 revenue figures, and add in the projected year-end balance of FY 2016-17 to find out how much extra we have to “play with” in this budget.

Ass. GOP math- “extra” money
FY 2017-18 $16,033.4 million ($529.8 “extra”)
FY 2018-19 $16,616.0 million ($1,112.7 “extra”)
Proj. end balance FY 2016-17 $427.2 million

And sure enough, the AssGOPs sent out a press release yesterday saying “See, there aren’t any budget problems, we’re in great shape!”, and used the memo as an excuse to propose a tax cut/road funding package that they will work on as part of the next state budget.

Um, a few problems with the AssGOPs’ thinking.

1.In the real world, you don’t get to take all the benefits of higher revenues and then ignore higher costs. Just because I might (key word: MIGHT)be getting a raise it doesn’t mean I have all of this “extra money” that I can magically blow and/or not need over the next 2 ½ years. My house payment/rent, taxes, gas, food, entertainment, loans, and lots of other things are also likely to go up….or I need to spend more to pay them off.

Well the same thing works in budgeting. The LFB memo that counted on a “Trump Boom” to raise revenues also is counting on higher inflation now, and in the future.
The consumer price index (CPI) increased by 1.3% in 2016. IHS Marki! expects the CPI to increase by 2.5% in [State Fiscal Year] 2017, 2.1% in 2018, and 2.5% in 2019.

Although a strong dollar is expected to depress the price of imports, the CPI is nevertheless expected to slightly increase due to higher oil prices and wage inflation from a tighter labor market. Overall, the rate of core (excluding food and energy) inflation, which was 2.2% in 2016, is forecast to remain steady at 2.2% in 2017, 2.1% in 2018, and 2.2% in 2019. Food prices, which grew only by 0.3% in 2016, are expected to increase by 1.2% in 2017, 2.4% in 2018, and 3.0% in 2019. Energy prices, which fell by 6.3% in 2016, are expected to grow by 8.1 % in 2017, 1.3% in 2018, and 4.0% in 2019.
If anything, this number has been understated in Fiscal Year 2017, as this week’s CPI figures from the Bureau of Labor Statistics showed that US prices rose by 1.4% in the last 6 months of 2016, an annual rate closer to 3.0% than 2.5%.

So let’s play the same game the AssGOPs played and assume that total costs projected by LFB for FY 2016-17 increase at the rate of inflation, and I’ll even be kind enough to figure that FY’s 2016-17 higher inflation won’t drive up this year’s projected costs.

Wis General Fund costs with inflation 2016-19
2016-17 total costs $15,950.8 million
2017-18 total costs $16,285.7 million (+334.9 mil)
2018-19 total costs $16,692.9 million (+742.1 mil)

Well, there goes more than half of your “$2 Billion to play with”, AssGOP.

And of course, if they’re going to throw $300 million a year away on a tax cut to “offset” $300 million in higher taxes that would partly fill the $880 million deficit in the Transportation Fund (enabling themselves to stay in the good graces of DC lobbyist Grover Norquist), there goes another $600 million for this General Fund budget. Equally freaky is that the AssGOPs gave no detail what that tax cut would be, nor do we know the form that the Transportation Fund tax hike would be (Gas tax? Registration fee? “Hybrid tax”?).

So let’s see where we stand after accounting for inflation and this unnamed tax cut.

“extra revenue” $2,070 million
MINUS Inflation $1,077 million
MINUS tax cut/shift $600 million
MINUS Gen Fund Reserve Requirement $145 million

That $348 million is barely more than what LFB says we’re projected to carry over into the 2017-19. And over two years $348 million accounts for somewhere around 1.5% of the total budget, leaving very little breathing space in case the Trump Boom never happens and revenues fall short.

Now gander over to the budget requests for all state agencies, and you’ll notice a few standouts on the list with requested increases well beyond the 5% of inflation that we are slated to have over these two years.

Biggest % increase in Gen Fund budget requests over 2016-17 base
Elections Commission +56.4%
Historical Society +27.2%
District Attorneys +24.9%
Supreme Court +10.2%
Public Defenders +9.5%
Educat. Commun. Board +9.2%
Dept. of Justice +6.4%
Health Services +6.0%
Corrections +5.6%

And while the DOJ, Health Services and Corrections are on the low end of this “request above inflation” list, they are also two of the largest agencies in Wisconsin, which means they need more money to fill in that small percentage.

Extra Funding requested above inflation
Health Services $77.6 million
District Attorneys $17.8 million
Corrections $12.2 million
Public Defender $7.6 million
Historical Society $6.7 million
Others $5.1 million

Note that the UW System and the K-12-based Department of Public Instruction are NOT on this list, meaning that merely giving these people an increase of 5% to cover inflation could be spun as a “generous giveaway,” while still not coming close to reversing the damage of a decade-plus of cuts that those institutions have taken on. So now we’re down to around $220 million.

I’m not even bringing up the current gaps that exist, such as the Veterans Trust Fund (do we really want to keep taking $12 million a year from Veterans Homes then covering up the bad consequences of not keeping those homes up?), or the need to cut the cord on the money-leaking Local Government Property Insurance Fund. Maybe we don’t need to be carrying over all of that $427 million to the next budget, and pay our bills now…...unless you’re not all that confident in seeing 2017's revenue shortfall being limited to $150 million or in actually seeing the $312.5 million of Medicaid savings actually happen.

Now, the state does catch a break with a large decline compared to 2017's base funding that needs to be set aside for the Wisconsin Department of Administration, due to a debt swap last year which pushed off a $363 million balloon payment that was to be made in May 2018, and spread it out over the next 20 years (plus interest). But that doesn’t change what will actually be spent to pay off that debt in FY 2016-17 (it was offset by hundreds of millions in lapses, so net was $0), so there’s no benefit to the state’s bottom line in this analysis. And it goes to another problem that the AssGOPs refused to mention- rising debt payments in this budget and future years as the result of can-kicking and related Walker/WisGOP budget tricks. Wisconsin’s debt is at an all-time record $8.07 billion, and more funds will be needed to be set aside and shelled out in the coming budgets as those debts come due.

So maybe it’s not such a great idea to try to use the hope of a Trump Boom to cut taxes on revenues that haven’t been realized yet, and instead keep some funding around if/when that Boom doesn’t happen, so another budget hole doesn’t open up in the next 24 months. And especially given that we don’t know what Commander Cuckoo Bananas and the rest of the GOP Clown Show might do to domestic spending and money coming down from DC in the coming months, I’d think having some money lying around would be a wise insurance policy, in case the state is left to pick up some of the burdens of Trump/Ryan Fantasyland economics.

Of course, that would require forethought and a mentality where governing properly trumps cheap political headlines and trying to pull another over on the rubes. And that isn’t anything that today’s WisGOP will ever be interested in, so expect more gimmicks and prayers in the coming months, and expect our job growth and quality of life to continue to decline as a result.

Thursday, January 19, 2017

Meh December means 2016 has worst job growth yet under Walker

In between all of the points and counterpoints about yesterday's release of the Wisconsin revenue figures, we had another monthly Wisconsin jobs report come out this afternoon. And not really much to discuss here, beyond the typically pathetic Walker Administration spin job on the figures.

Total jobs-
DOWN 3,700, November revised UP 3,000. NET -700.

This is a bit misleading because 5,100 of the decline in December and 1,500 of the revised increase in November is due to "local government." This is likely due to one-time hiring for the November election, and the subsequent reduction of those workers in the December report. But still stagnant, even if you adjust for the election workforce items.

Private sector jobs-
UP 900, November revised UP 1,500. NET +2,200.

Again "Meh," especially as the nation added 144,000 private sector jobs in December and also had upward revisions. What is noteworthy are the increases in Manufacturing by a seasonally-adjusted 3,000 and Construction by 2,700 (actually, Construction was the result of lower-than-normal seasonal layoffs, but it works). On the downside the Trade/Retail sector had a bad drop of 4,900 jobs on a seasonally-adjusted basis. Not a good sign when you should be hiring up for the Holiday shopping season, and indicative of what has been a soft Fiscal Year 2017 for sales taxes in Wisconsin.

The bigger story is that this December report continued a 2016 trend of bad job numbers in Wisconsin. While the nation has been still consistently adding around 150,000 jobs a month for the last 9 months, Wisconsin actually has fewer people working now than they did in March.

Job change, Wisconsin March 2016 - Dec 2016
Total jobs -3,400
Private sector -2,100

In fact, 2016 had the least amount of total jobs gained in Wisconsin since 2011, and the lowest RATE of private sector job growth since Walker was elected in 2010! Bet you won't see that fact mentioned in many places. 2016 also added more than 16,000 jobs to the total Walker jobs gap, and now Wisconsin is more than 110,000 jobs behind the rest of the country's pace since the Age of Fitzwalkerstan began in 2011.

Oh, but now that Trump will be president, this will all change. And our budget will balance and somehow we'll finally reach 250,000 jobs in the next year. Riiiiiight.

Well, in fairness, US job growth will likely flatten out under Drumpf, but I bet the gap is still well over 6 figures when 2017 ends as well.

Further digging shows LFB "surplus" estimate shaky as hell

When you dig further into yesterday’s revenue estimates from the Legislative Fiscal Bureau, the evidence they use to support their higher revenue projections for the next Wisconsin state budget becomes even more questionable.

Let’s start with the largest part of General Fund taxes, the individual income tax. The LFB admits that a few accounting tricks and (ab)uses of Walker/WisGOP tax cuts will reduce total income taxes that come in, but that the economy will do so well under Trump that it won’t matter!
Although individual income tax collections are currently 4.6% above 2015-16 collections on a year-to-date basis, collections are estimated to increase 3.5% in the rest of 2016-17 and end the year 4.0% higher than 2015-16. A lower growth rate in the second half of 2016-17 reflects some taxpayers accelerating estimated payments in December, 2016, as opposed to January, 2017, and an increase in refunds in the Spring months due to law changes.

The law changes include increasing the standard deduction for married filers, federalizing exemption amounts under the alternative minimum tax, the final year phase-in of the manufacturing and agriculture credit, and the capital gains exclusion for Wisconsin assets. The capital gains provision was enacted as part of 2011 Wisconsin Act 32 (Walker’s first budget), but its initial impact will occur in tax year 2016 due to a five-year holding period requirement. Law changes will also affect future collections as their impact, relative to 2015-16, is expected to grow from -$77.7 million in 2016-17 to -$123.6 million in 2017-18 and -$150.7 million in 2018-19. Otherwise, individual income tax collections are expected to increase over the coming biennium, reflecting the continuation of the national recovery from the 2008-2009 economic downturn.
WHOA! So not only is the bump in December income tax revenues a one-time fluke due to (mostly rich) people paying now to increase their refunds next year, but there are a number of new tax cuts that kick in that’ll reduce revenues by another $350 million between now and June 2019. Even scarier is that the LFB admits this is guesswork because we haven’t seen a tax year with provisions like the capital gains one on the books- that revenue loss could well be more than $350 million (much like what happened with the M&A cut).

And yet the LFB anticipates a “Trump Boom” will more than make up for this, and raise individual income taxes by 3.9% in Fiscal Year 2018 and 4.2% in Fiscal Year 2019? Give me a break. Another questionable prediction from LFB comes from their thoughts on corporate taxes, whose collections have crashed in the first 6 months of Fiscal Year 2017- down over 20% according to the LFB, and over 19% according to the Wisconsin Department of Revenue. The LFB’s claims the drop in corporate taxes is due to a handful of companies getting huge refunds, and says the coming Trump Boom will turn this year’s projected loss will turn into corporate tax growth of 4.4% in FY 2018, and 1.1% in FY 2019.
However, collections this year have been affected by certain large one-time refund payments (for what? Sure ain’t job growth!). According to IRS Marki!, growth in both economic profits and adjusted before-tax book profits are expected to be higher over the remainder of the state fiscal year as compared to the six-month year-to-date collection period. Similarly, IRS Markit's national measure for state and local income taxes is expected to reverse from a small year-to-date contraction to moderate growth over the next two quarters. Projected corporate income/ franchise tax revenues for 2017-18 and 2018-19 reflect the forecast for adjusted before-tax book profits through the remainder of the forecast period, as well certain state tax law changes that are anticipated to have an impact on future corporate income/franchise tax revenues.
Again, color me skeptical. Let’s assume the Trump Boom doesn’t happen, and we merely continue with the decent-but-not-great US GDP growth and lagging state job growth that we’ve seen in the last year, and we continue to grow revenues at the same 2.69% rate that LFB is now projecting for this Fiscal Year. Here’s how much difference that makes to the estimates.

Revenue “miss” from LFB at 2.69% growth
FY 2017-18 -$112.8 million
FY 2018-19 -$267.1 million

So much for the revenue “gain” that was touted yesterday. And there’s a flip side to the rosy scenario that LFB went along with that few have mentioned- rising inflation. Take a look at this part of the revenue estimate analysis (note, in this section, the “year” is actually the State Fiscal Year, so “2016” really means July 2015 - June 2016).
The consumer price index (CPI) increased by 1.3% in 2016. IHS Marki! expects the CPI to increaseby 2.5% in 2017, 2.1% in2018, and 2.5% in 2019. Although a strong dollar is expected to depress the price of imports, the CPI is nevertheless expected to slightly increase due to higher oil prices and wage inflation from a tighter labor market. Overall, the rate of core (excluding food and energy) inflation, which was 2.2% in 2016, is forecast to remain steady at 2.2% in 2017, 2.1%in2018, and 2.2% in 2019. Food prices, which grew only by 0.3% in 2016, are expected to increase by 1.2% in 2017, 2.4% in 2018, and 3.0% in 2019. Energy prices, which fell by 6.3% in 2016, are expected to grow by 8.1 % in 2017, 1.3% in 2018, and 4.0% in 2019.
Now here’s the budget trick that Scott Walker, the Wisconsin GOP, and most of the media aren’t telling you- most budget requests that Walker asked for had 0% inflation for Fiscal Year 2018 and 2019! This is even accounting for energy costs for fleet vehicles and state buildings, and pretty much everything else that didn’t have to deal with program growth. But the CPI prediction in these revenue estimates says that prices by June 2019 will be up a good 5-6% compared to today.

In other words, don’t allow Walker folks to pull a trick where they 1. claim a revenue boost related to the hopes of a Trump Boom without 2. adding expenses from inflation that is part of such a Boom. I have a strong suspicion they will try to pull this kind of double-standard when the Governor’s budget is released in the coming weeks, and we need to be ready to call BULLSHIT on it when it does happen, and remind people that projecting costs to stay the same for 2 years will likely be a sizable cut in the real world.

Let's see how things develop over the next month, and then the 4 months of deliberations after that, and assess whether my prediction of a budget hole and/or sizable unmentioned cuts still crops up once you make an adjustment for real life. Bet it does.

Wednesday, January 18, 2017

SURPLUS? In GOP's Bubble, sure. In real Wisconsin? Don't bet on it

You start to head home from work, flip open the Twitter feed, and sometimes the topic is chosen for you.

WHAT? I'd been expecting revenues to go down, based on the disappointing figures to date in Fiscal Year 2017, and even Governor Walker's own Department of Administration reduced their revenue estimates two months ago vs what LFB predicted in 2016.

So what's going on here? Well, let's click on the actual LFB document and take a gander.
Our analysis indicates that for the three-year period, aggregate general fund tax collections will be $454.6 million higher than those of the November 21 report ($63.4 million in 2016-17, $145.3 million in 2017-18, and $245.9 million in 2018-19)....

Table 3 shows general fund tax revenue estimates for 2016-17 and each year of the 2017-19 biennium. Over the three-year period, these estimates are $454.6 million (0.95%) higher than the projections released by the Department of Revenue (DOR) last November. By year, the new estimates are higher than DOR's projections by $63.4 million in 2016-17, $145.3 million in 2017-18, and $245.9 million in 2018-19. The estimates for all three of the state's major tax sources (the individual income tax, general sales and use tax, and corporate income and franchise tax) are greater than DOR's estimates in each year. The new estimates are based on the most recent national economic forecast and tax collections data, both of which are generally stronger than in November. The estimates also incorporate all law changes enacted to date.
I will agree that the revenue picture brightened earlier today when the Walker Administration released a nice bounce-back in December's numbers, bumping year-over-year revenue growth for Fiscal Year 2017 from 1.2% to 2.6% (and they released those numbers ahead of schedule, what a concidence!).

Of course, even with that improved picture, the LFB says the state will still come in more than $150 million BELOW what we needed to raise to match the LFB's own projections from last year. So how are we not in need of a budget repair bill? Lower spending in Medicaid, due to lower enrollments and different types of usage (I'll leave it up to you as to why that might be). The LFB says that Medicaid spending will come in $312.5 million below what was budgeted 2 years ago, and that lapse in spending along with others will allow for the state to carry over $427 million into the next budget (but, you know, Obamacare is in a "death spiral" and destroying the country fiscally).

But what about the future years in the 2017-19 budget? The LFB says that's because the economic analysts they follow are indicating that Donald Trump truly will make America Great Again!
Under the January, 2017, forecast, IHS Marki! predicts real GDP growth of 2.3% in 2017, 2.6% in 2018, and 2.3% in 2019. The main drivers of growth are expected to be consumer spending, business fixed investment, and residential investment. However, the trade deficit is forecast to increase due to an appreciating U.S. dollar and growing domestic demand for imports, thereby dampening real GDP growth.

The 2017 forecast is based on the following key assumptions. First, the forecast assumes that the new Trump administration and Congress will lower the average effective personal income tax rate from 21.0% to 19.5% and lower the statutory corporate tax rate from 35% to 20% (partially offset by reducing tax deductions and credits). Second, the forecast also assumes a $250 billion increase in federal infrastructure spending over the next ten years. Third, the 2017 forecast assumes that the Federal Reserve will increase the federal funds rate by 75 basis points in each of the next three years to 1.50% by the end of 2017, 2.25% by the end of 2018, and 3.00% by the end of 2019. Fourth, the Brent spot crude oil price is projected to average $54 per barrel in 2017 and $57 per barrel in 2018. Fifth, the inflation-adjusted, trade-weighted value of the dollar for the broad index of U.S. trading partners is expected to increase 3.3% between fourth-quarter 2016 and fourth-quarter 2017, where it will reach its peak value at 5.5% above the 2016 average, followed by a steady decline. Finally, real GDP growth of major and other important U.S. trading partners is assumed to average 1.7% annually and 3.5% annually, respectively.
Yeah, surrrrre!!!!! We'll have growth jump from the 1.6% rate we're at today to the fastest 3 years of sustained growth in over a decade, now that Trump and the Republicans are in charge! And I might be elected governor of Wisconsin in 22 months! (what? It could happen)

And in an analysis filled with rosy scenarios, this part may be my favorite.
IHS Marki! forecasts that real GDP growth will lead to steady improvement in the unemployment rate to 4.6% in 2017, 4.3% in 2018, and 4.1% in 2019. IHS Marki! anticipates that stimulative fiscal policy will boost job gains in 2018, which would otherwise have been forecast to decelerate. Total nonfarm payrolls are expected to continue to increase, albeit at a slower pace, by 1.9 million in 2017, 1.8 million in 2018, and 1.7 million in 2019. IHS Markit also forecasts that the labor force participation rate will continue to increase to 61.7% by the end of 2019. The largest job gains are forecast for health care and professional business services. Manufacturing employment is expecting to grow by 0.2% in 2017, 0.9% in 2018, and 1.6% in 2019.
5.4 million more jobs? 4.1% unemployment? And manufacturing growing in a time when the dollar gets even stronger than it is now? Is that an analysis, or Donald Trump throwing shit against the wall in one of his speeches?

Oh, and by the way - the US labor force participation rate is currently at 62.7%, so how would it go "up" to 61.7%? Do these IHS Marki! folks (whoever they are) mean the Employment-Population Ratio instead? And if so, do they really believe it would magically rise by 2% in a time when Boomers are retiring by the day and we are already near full employment?

Equally amazing is that this same analysis assumes rising inflation, with prices going up between 2.1% and 2.5% over each of the next 3 years. But somehow their analysis says that consumer spending, personal incomes and nominal GDP will rise even faster, with each figure rising between 4.4% and 5.3% each year!

Look, if somehow all that happens, then yes, we will likely have a nice revenue bump that could cover the requests in Wisconsin's 2017-19 budget. A quick check indicates that the state would still be spending slightly more than it takes in under that scenario, but the projected carryover would let them squeak by (this does not take into account the $880 million deficit in the Transportation Fund, which is a whole 'nother can of worms to deal with).

That reality is why I wouldn't recommend blowing any of these projected extra funds on tax cuts - it's not likely that the cushion will ever materialize, and a far wiser move (if one is to be made) would be to fill in prior holes made due to cuts in education and state shared revenues. This is not only a worthwhile investment to make, it's also one that can shield Wisconsinites from sizable property tax hikes and/or severe service cuts in 2018 and 2019 if these rosy scenarios fail to pan out.

But watch for the GOPs to try to claim there's a "surplus" and that things are somehow booming in Wisconsin because of Scott Walker and Wisconsin GOP policies along with the prospect of Republicans running everything in DC. And watch for too many media members to be suckered in by those words, and parrot them without explanation, making them seem as foolish as the average shriveldicked white guy who fell for this.