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January 16, 2008

Wednesday Update

Wisconsin Club for Growth  January 16, 2008 Volume 2, Number 3 The Wednesday Update  In This Issue 1. Commuter Rail     Raises Taxes 2. School Choice     Under Seige 3. Tempting Fate 4. Security Breach Make a Donation today! Keeping Free Marketers Current on the Issues   Thanks for your support of Wisconsin Club for Growth! We hope you enjoy the newsletter. Our goal is to be brief, informative and bit provocative. We welcome your feedback. Please feel free to contact us anytime by emailing staff@wifg.com , or come visit us on the worldwide web. Wisconsin Club for Growth Website  Back to top Local Commuter Rail Line Means Higher Taxes Before the $210 million Kenosha-Racine Milwaukee rail project is even off the ground, it appears to be sucking tax money away from Waukesha County and other counties throughout the state.  Despite not being a part of the KRM proposal, Waukesha is a member of the Southeastern Wisconsin Regional Planning Commission (SEWRPC).  Under SEWRPC's current federal funding formula, the rail line will redistribute more money to Milwaukee, costing Waukesha $500,000 in state funds, according to the Waukesha Freeman newspaper.  In fact, even before the rail line is approved by the state Legislature, it will cost county and city transit systems a combined $800,000 a year by shifting federal transit funds to the Milwaukee County Transit System. According to the Freeman, The KRM commuter rail project is estimated to cost $12.9 million annually and is assumed by SEWRPC to receive $2.3 million in federal funding.  To help pay for the rail line, the state Senate is resurrecting a plan to increase the tax on rental cars by $13 or 650%.  The tax on rental cars is estimated to raise $4.2 million annually to provide the local funding portion of the project.  The state would provide $4.4 million with 23 communities losing money to pay for the deal.  That will result in more automatic property tax increases. Underlying the whole issue of funding the KRM is the assumption that we should fund it at all.  According to the Cato Institute's Randal O'Toole, rail systems have seen diminished ridership for decades - at great public cost, and the costs of maintaining these systems has diverted funds from road and other transportation projects.  Still KRM enthusiasts are willing to grab millions of taxpayer dollars with a specious promise of future economic development. Back to top School Choice Under Seige  Wisconsin's trailblazing school choice program is once again in the news, as a Milwaukee-area lawmaker Fred Kessler is kicking around ideas to dismantle the program.  In a memo to fellow legislators, Kessler announces his intention to reduce the number of children in the voucher program by 40%, which could very well end the program by closing schools with a large number of choice students. Kessler apparently believes that eliminating the Milwaukee Parental Choice Program, which allows low income parents to choose a private school for their children would "save" money.  But Kessler's math doesn't add up.  It costs $6,500 to educate a child in the popular parental school choice program.  That cost soars to $13,000 if the student moves into the Milwaukee Public School system.  It is unclear how paying twice as much to educate a child "saves" anyone money, especially when you consider MPS's dismal test scores and high school graduation rates.  What's newsworthy about Kessler's attack on school choice is the brazenness with which it is being delivered.  Even the most ardent school choice opponents privately recognize the popularity of the program, and merely recommend changes on the margins; more testing, more regulation, more teacher training, etc.  Kessler's attempt to shut the program down completely, casting thousands of poor black kids back into failing schools, is unique in its temerity.  Governor Jim Doyle, no ally of choice himself, has distanced himself from Kessler's plan - canceling a meeting with Kessler and other local legislators earlier today.  If anything, Kessler's proposal serves as a lesson that pawns of the teachers' union will always be working behind the scenes to dismantle one of Wisconsin's crown jewels.  We must remain vigilant in protecting poor families' right to choose the same education that Fred Kessler was able to provide his own privately educated children.    Back to top Wisconsin Tempts Fate Wisconsin is woefully ill-prepared for an economic downturn, according to a report out this week by the Wisconsin Policy Research Institute.  The report calculates that if Wisconsin were to see an economic slowdown similar to the recession of 2001, the state could face a budget deficit of up to $4.2 billion.  That lost revenue would need to be made up by raising taxes or cutting programs.  The most recent state budget raised taxes by over $1 billion, so it's not difficult to see what course Governor Doyle and the Legislature are likely to take should there be a revenue shortfall. One way of preventing these tough choices is for the Legislature to set aside more money in a "rainy-day" fund to use when future revenues drop.  However, Wisconsin has been abysmal in saving money for fiscal emergencies.  While most states keep budget reserves of between 5% and 10% on hand, Wisconsin has less than 1% of expenditures on reserve. Reports about fiscal responsibility aren't exactly coffee table reading but the issues presented are vital to the state's future well-being.  Failing to prepare for an economic downturn is a recipe for more big tax increases in the future.  By acting now, a fiscal crisis can be averted. Back to top        State Breaches Personal Security       But The Buck Stops Over There  Like a Sports Illustrated swimsuit model, it appears the State of Wisconsin is beginning to show us a little too much.  Unfortunately, much to the chagrin of teenage boys everywhere, the state is exposing something much more serious - your Social Security number. On Tuesday, the state announced that it had sent out its third mailing with recipients' Social Security numbers exposed for everyone to see.  State officials immediately blamed the vendor who completed the mailing, but failed to explain why it was necessary for the vendor to have access to the social security data or why additional safeguards weren't put in place. State Senator Ted Kanavas of Brookfield suggested Administration Secretary Michael Morgan be fired instead.  Naturally, the state offered to pay for free credit reports and counseling for the victims of their foul-up.  This will no doubt end up costing all of us more than it would cost to hire some guy to say "hey, it looks like there might be some Social Security numbers on these envelopes." As if it isn't hard enough to get a check from the government.  Now they punish you for getting your money back. Back to top