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June 18, 2008

Wednesday Update


Wisconsin Club for Growth 

June 18, 2008
Volume 2, Number 27

The Wednesday Update 

In This Issue

1. Working Overtime to 
    Rob Taxpayers 

2. Wake Up and Smell
    the Asphalt
 

3. Top Shelf Prices for
    Taps

4. The Audacity of Truth




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Working Overtime in Robbing Taxpayers


 A few weeks ago, we caught wind of a scam in which state Department of Corrections employees were paid overtime rates for hours they never worked.  According to a new Legislative Audit Bureau report, those abuses were only the tip of the iceberg.


According to the LAB:

  • State workers earned $187.3 million in overtime over the past 3 years.
  • 59 state employees were paid over $100,000 in overtime during that period.
  • The two state departments with the largest overtime payouts were Corrections and Health and Family Services.
  • Total overtime paid in 2007 was 15.2 percent greater than that paid in 2005.
  • One nurse at a correctional institution near Milwaukee earned $262,000 in overtime between 2005 and 2007.
  • Some of the extensive overtime used by health care workers may jeopardize the health of the patients in those health care facilities.
  • Some state employee contracts allow overtime wages to be paid to employees who work more than 40 "pay status" hours.  This means that an employee can work a full 40-hour week, then use their vacation or sick time as overtime, when they're not actually working those hours.  As a result, correctional workers Correctional officers and sergeants used an average of 13.25 sick days a year compared to an average of just over eight days for state workers in 2007.

Naturally, the departments argue that the antidote to spending all this money is..wait for it..spending more money.  They think hiring more employees will help keep costs down.  Until, of course, all those new employees exercise their contractual right to cash in on the overtime boondoggle.
 

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Wake Up and Smell the Asphalt

Late last week, the Wisconsin Transportation Builders Association (WTBA) began grousing about potentially losing $196 million in federal funds for road construction.  They compare the jobs lost due to this funding cut to the General Motors plant that just closed in Janesville.

Yet instead of moaning about federal funding, the WTBA may be better off ripping Wisconsin's governor, Jim Doyle, for his incessant raiding of the state's transportation fund to plug the perennial hole in the general fund.  Since 2003, Doyle has shifted over $1.1 billion out of the transportation fund to prop up funding for things like school aids and local government aids.  In doing so, he has created a huge hole in the fund, which he has back-filled with bonding - meaning, the state has to pay it all back with over $1 billion in interest.

On top of that, Doyle signed the repeal of Wisconsin's automatic annual gas tax increase into law.  Yet, instead of ripping Doyle for the funding loss, WTBA aggressively targeted Republican state senators who eventually lost their seats.  Republican legislators in both houses found it impossible to defend the automatic gas tax increase once Doyle transformed the segregated transportation fund into his own personal slush fund.
 

So while WTBA continues to target elected officials who really have very little to do with their financial troubles, they continue to support Jim Doyle, who is driving them into one of his self-inflicted potholes. 

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Top Shelf Prices for Taps
 

If there’s anything that Wisconsin history has taught us, it’s this:  Don't mess with our booze.

Yet Wisconsin continues to have a law on its books that actually makes beer and liquor more expensive.  Essentially, the law requires beer and liquor to be sold through a wholesaler, and not directly from the manufacturer.  This adds cost to each drop of alcohol we consume.

In Washington State, a similar law exists - one that was recently challenged in federal court by Costco, who wanted to be able to buy directly from breweries.  The savings could then be passed on to consumers.  Unfortunately, Costco last week dropped their lawsuit, leaving the wholesaler protection law in place.

So, as a result, we will continue to pay inflated prices for our hooch. 
 

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  The Audacity of Truth


Like every successful snake oil salesman, Barack Obama understands that people are more likely to buy his magic salve if they believe they are desperate for relief - and have no reason to doubt that the salesmen is credible, knowledgeable and sincere.  With gas prices now passing the four dollar a gallon mark, the time is right for snake oil salesmen.

Whether Americans are truly in despair or merely anxious, their distress is clearly about the economy.   Survey after survey confirms the vast majority of the public is most concerned about the economy in general, jobs, and the increasing cost of gasoline in particular. 

Enter Senator Barack Obama: the silky smooth, new kind of political leader offering hope as an antidote to the country's despair. Hope, and a plan to tax the so called "windfall profits" of oil companies.
 

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois Senator said.

So while ordinary Americans suffer at the gas pump, Obama's plan is to put more money in the federal treasury and dole it out through unspecified new social programs.  Obama and his colleagues, who failed to pass the measure in the U.S. Senate last week, are hoping that voters will give them credit for trying to poke oil companies in the eye with a sharp stick, inflicting pain on Big Oil as the masses suffer through the crisis.  The problem for Obama and other Senators is that most voters are inconveniently pretty savvy about how the oil market really works.  They also understand that the cost of growing government through any tax will far exceed the value promised from the so called relief.

In Wisconsin, Governor Jim Doyle and the Senate Democrats proposed a similar scheme to tax the profits of oil companies and use the money to pay for transportation projects.  While most people had no problem sticking it to Big Oil, they had no faith whatsoever that Big Oil wouldn't stick it right back to them at a cost of 7 cents per gallon.  And cutting into the oil companies' profits in Wisconsin would likely result in lowering our supply and driving prices up more as a result.

As Washington's snake oil salesmen are continuing a decades old energy policy of finger pointing and pontificating, it might seem as though the state's snake oil sales force are powerless to offer relief.  But are they?

True, Governor Doyle and the legislature can't authorize domestic exploration of oil, which would increase supply and reduce our reliance on foreign oil.   But what they can do will have a more immediate impact.  The legislature and the Governor can remove the ridiculous, antiquated 9.18% minimum mark up on gasoline in Wisconsin. At four dollars a gallon, the markup increases the price at the pump by almost .40 cents a gallon. A reduction of that magnitude would bring some relief to the state as area residents, businesses and farmers face the devastating economic impact of flooding, tornadoes and other storm damage.

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