In This Issue:
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1. Bad Budget Blues
2. A Tale of Two Cities
3. Sheboygan Says No to
Tax and Spend
4. Unhappy Tax Day!
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Bad Budget Blues
Most people think of a state “budget” as exactly that – a giant bill that dictates the state’s taxing and spending policies. But a favorite trick of recent governors has been to pack the “budget” with policy items that have nothing to do with the state’s fiscal matters. Consequently, a lot of bills that couldn’t pass if subjected to the normal scrutiny of the legislative process make it into law.
The Legislative Fiscal Bureau then goes through the bill and identifies all of the non-budget related items tucked in by the governor. Then, traditionally, all of these items are removed – only to be re-inserted later in the process by whatever house is politically in line with the governor.
Last week, the non-partisan Legislative Fiscal Bureau identified 80 non-fiscal policy items in the Governor’s 2009-11 budget. Democrats who control both house of the legislature, removed 45 minor policy items, but left in dozens of sweeping changes to Wisconsin law.
If Governor Doyle has his way, the following policy items will pass the legislature quietly in the night:
Increase the mandatory level of auto insurance coverage and make other changes that would increase the cost of auto insurance by up to $309 annually.
Repeal the Qualified Economic Offer, or QEO, used in bargaining teacher contracts, which will result in fewer education dollars going into the classroom, greatly increase the power of teachers’ unions in negotiating employee contracts, and hamper the ability of school districts to negotiate taxpayer-friendly contracts.
Expand the “prevailing wage” law on projects using any amount of state funding, drastically driving up the costs of both public and private construction projects.
Create un-elected Regional Transit Authorities with the power to raise local sales taxes for mass transit .
Reverse tort reforms, making a defendant liable for 100% of damages even if found to be only 1% responsible.
Create a union of home health care workers and dictate that seniors receiving state benefits use union workers. The plan will limit choice and significantly increase costs.
Allow unionization of University of Wisconsin faculty and staff.
Expand state pension eligibility to additional school district employees.
Not only will these changes have a devastating impact on Wisconsin’s economy, their only purpose is to pay off the trial lawyers, teachers, and organized labor unions that bankroll liberals at election time.
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A Tale of Two Cities
On Monday, Louisiana Governor Bobby Jindal announced that his state would be welcoming Sheboygan's own Gardner Denver to the City of Monroe.
Gardner Thomas’ decision to consolidate its Thomas Products Division in the Monroe location will mean a loss of 366 more jobs for Sheboygan,already saddled with one of the highest un-employment rates in the state.
According to the Sheboygan Press:
With the decision to consolidate manufacturing operations into Monroe, employment at the Monroe facility will more than quadruple from roughly 70 jobs today to at least 301 by the year 2011, including new jobs averaging $37,000 plus benefits.
One of the starkest contrasts between Wisconsin and Louisiana is how the Governors of each state responded to news that Gardner Denver was considering a consolidation of its operations.
Governor Jindal immediately created an incentive package to lure the company to Monroe. According to the Milwaukee Journal Sentinel:
Gardner Denver said Louisiana would reimburse the company for most of the cost of moving equipment and staff to Monroe, provide yearly payroll and sales tax rebates and help the company with recruiting and training.
The City of Monroe also plans to help with the construction of a 124,000-square-foot factory adjoining the company's plant.
Apparently Governor Doyle wasn't too eager to retain 366 Sheboygan based jobs. According to State Senator Joe Liebham, Doyle delegated the mission of wooing Gardner Denver to a bureaucrat from the Department of Commerce while he went to Spain to admire their high speed rail system before heading to the Masters Tournament in Georgia.
With a Governor who treats job loses with this kind of indifference, its no wonder Wisconsin lost a record 73,000 jobs last year.
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Sheboygan Rejects Tax and Spend Agenda
State Representative Terry Van Akkeren, the odds on favorite to win Sheboygan’s mayoral race last week, lost his bid to Alderman Bob Ryan by a whopping 60% to 40% margin.
Van Akkeren had recently voted to raise business taxes in Wisconsin by $200 million dollars as the unemployment rate in Sheboygan exceeds 12%.
In a preview of the upcoming legislative battle, Wisconsin Club for Growth ran a hard hitting radio spot saying Van Akkeren voted “to force business to lay off even more people” when he voted to raise taxes on businesses by 11 percent. Clearly voters are not embracing that agenda.
Unhappy Tax Day!
Don’t forget that today is the last day to file your taxes – unless you’re President Obama’s Treasury Secretary.
At the state level, Governor Jim Doyle and legislative Democrats are planning to raise taxes by another $3 billion.
In fact, Wisconsin is one of the few states actually considering raising taxes in the midst of a damaging recession. The Wall Street Journal mockingly suggested turning the tax-a-thon into a reality show:
Like the old competition to have the world's tallest building, New York can't resist having the nation's highest taxes. So after California raised its top income tax rate to 10.55% last month, Albany's politicians leapt into action to reclaim high-tax honors. Maybe C-Span can make this tax competition a new reality TV series; Carla Bruni, the first lady of France, could host.
They can invite politicians from the at least 10 other states that are also considering major tax hikes, including Oregon, Illinois, Wisconsin, Washington, Arizona and New Jersey. One explicit argument for the $787 billion "stimulus" bill was to help states avoid these tax increases that even Keynesians understand are contractionary. Instead, the state politicians are pocketing the federal cash to maintain spending, and raising taxes anyway. Just another spend-and-tax bait and switch.
So when you’re scurrying to the post office to get your taxes in the mail, consider that it could be worse: it could be next year, when you’ll be paying even more.
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