In This Issue:
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1. Stop the Train
2. Chrysler Star Fades in
Kenosha
3. Welfare State
4. Doyle Can't Stand the
Heat
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STOP THE TRAIN
The legislature’s Joint Finance Committee (JFC) hid behind closed doors Thursday to make changes to the transit plan included in Governor Doyle’s budget. The JFC members emerged in the wee hours Friday morning and passed a proposal creating three unelected Regional Transit Authorities (RTA). The RTAs will have the power to raise sales taxes and spend hundreds of millions of dollars on commuter rail and other transit projects.
Milwaukee county taxpayers get pummeled twice as the proposal includes a Milwaukee County RTA funded by a full percent sales tax increase, and a Kenosha, Racine and Milwaukee RTA funded by a $16 car rental tax.
Committee members added insult to injury by refusing to require voter approval when the RTA’s raise sales taxes to fund their commuter rail and street car systems. Racine and Milwaukee taxpayers were further disenfranchised when the JFC granted RTA appointing authority to Democrat Kenosha County Executive Jim Kreuser while denying the same authority to Republican County Executives Bill McReynolds and Scott Walker.
This is a clearly a case of taxation without representation.
Even the Milwaukee Journal Sentinel was critical of the back room deal cooked up by the Joint Finance Committee:
A commuter rail line linking Kenosha, Milwaukee and Racine and adequate funding for Milwaukee transit moved a step closer to reality this week, but in a way that only a legislator could love. The compromise that the Legislature's Joint Finance Committee reached in the wee hours Friday morning has all the earmarks of public policy created by desperate legislators making after-midnight political deals. And it's likely to be just as conducive to the public good as that sounds.
So Joint Finance came up with a convoluted political compromise Friday that stumbles forward but could end up falling flat on its face. The full Legislature and the governor should rectify that and return to the original proposal.
Gone is any pretense of the Legislature working on our behalf.
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CHRYSLER STAR FADES IN KENOSHA
Wisconsin lost a record setting 112,000 jobs in 2008. With state unemployment at 9.4%, and recent reports that Harley Davidson and Thomas Industries will cut hundreds more Wisconsin jobs, no employment news might be considered good news.
The announcement that Chrysler will close its Kenosha plant is particulariily hard to take.The Milwaukee Journal Sentinel reported:
Although the city has felt the sting of plant closings in the past, news that its Chrysler engine factory is likely to shut down by the end of next year - while work is sent to Mexico - created reactions ranging from surprise to rage.
The suddenness of the disclosure, which surfaced in Chrysler's bankruptcy filing in New York, upset Mayor Keith Bosman. Chrysler filed for bankruptcy protection Thursday and, upon emerging, will form a new company in alliance with Fiat.
Kenosha Alderman Patrick Juliana blames the Obama Administration for the job losses:
"We were sold out by the Obama administration and the people that he appointed to negotiate this for us," Juliana said. The administration, he said, "couldn't negotiate a milk contract with second-graders."
Kenosha State Representative Peter Barca says the state should step in and negotiate to keep the jobs here. Too bad Barca didn’t feel this concern over job losses in February when he voted to raise taxes on Wisconsin business by 11%. The tax increases Barca approved included a business tax increase known as combined reporting, which forces companies like Chrysler to pay Wisconsin income taxes on income the company earns in other states.
Instead of wringing their hands over Chrysler's decision to pull out of Kenosha, Barca and Doyle should work to undo combined reporting before it costs Wisconsin any more good paying jobs.
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WELFARE STATE
 Governor Jim Doyle’s budget contains a number of controversial provisions that loosen requirements for the state’s W-2 welfare program. Under Doyle’s plan, mothers will be able to get checks from the state for up to five years, as opposed to the current two-year limit. The Doyle budget rolls back a number of the welfare reforms passed in the 1990’s.
David Dodenhoff of the Wisconsin Policy Research Institute argues that many of the proposed changes benefit the bureaucrats who administer the program, at the expense of the recipients:
State officials say that these changes will result in greater efficiency, effectiveness and focus. The opposite, though, seems more likely.
Consider one example. Currently, W-2 consists of four work tiers. As participants move from the lowest tier to the highest, the experience becomes more and more like actual, unsubsidized work - that is, like a regular job.
To ensure continual progress toward the ultimate goal of employment, participants are limited to two years within each tier. Doyle, however, wants to end this two-year limit. Why? The official answer is that the program ought to have more flexibility and fewer arbitrary deadlines.
The unofficial answer, I suspect, is that keeping track of two-year time limits for thousands of participants spread across four separate work tiers, some of which have time limits within time limits (no more than six months in any one work assignment, for example) is a lot of work.
Duly noted. But with no time limits on individual work tiers, participants may be allowed to languish, effectively treading water for years on end within the same tier, all the while exhausting their limited months of lifetime eligibility.
A government truly dedicated to the well-being of the poor would not allow this to happen. A government seeking to ease its own administrative burdens might.
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DOYLE CAN'T STAND THE HEAT
On April 25th, Wisconsin Manufacturers and Commerce (WMC) Vice President James Buchen wrote an editorial in the Milwaukee Journal Sentinel decrying the state’s anti-business climate:
Wisconsin does not have a competitive business climate to begin with and is lagging in developing initiatives to attract and retain jobs for its workers. In fact, policies pending today at the Capitol will make it harder for manufacturers to grow and create jobs - billions in higher taxes, expanded liability, increased insurance premiums, mandated wage increases and increased litigation regarding workplace complaints.
There's an odd disconnect between the 9.4% state unemployment rate and the hemorrhaging manufacturing sector, and the governor's proposals to increase taxes, regulation and litigation for employers.
This editorial apparently didn’t go over well with Governor Doyle’s Secretary of Commerce, Dick Leinenkugel, who took nearly two weeks to issue a response:
"When you make disparaging comments not founded in fact, you do damage to the state's overall economic development efforts," said Leinenkugel in his letter to WMC and legislative leaders.
The Doyle Administration just doesn’t get it. Apparently they believe that merely talking about the state’s anti-business climate is what’s pushing jobs out of the state, rather than the $300 million combined reporting business tax increase Governor Doyle just signed into law.
WMC begged Doyle to reject the $300 million tax increase. Now Doyle wants to blame WMC for the lousy business climate the he helped create.
Despite the fact that Wisconsin has the 43rd worst business climate in the country, Leinenkugal maintains that Wisconsin is competitive with other states. He also accused WMC of trying to profit from recent job losses.
"Wisconsin's loss should not be WMC's political gain," Leinenkugel wrote.
But WMC President Jim Haney wasn’t about to take another cheap shot at his organization’s credibility lying down. Haney fired off a response in which he asks Leinenkugel some pointed questions about Governor Doyle’s budget and its potential impact on Wisconsin’s economic climate.
"As commerce secretary, what is your take on the economic impact of the various budget proposals?" Haney asked in his letter.
"Do you think a 25 percent hike in corporate income taxes will make Wisconsin more competitive?
"Do you think a 50 percent increase in the capital gains taxes will help us retain or attract new investment in Wisconsin businesses?
"Do you think opening the litigation floodgates will help small businesses survive in a tough economy?"
A Department of Commerce official said Leinenkugel and Doyle were in Chicago Tuesday to try to lure wind-energy jobs to Wisconsin. One has to wonder what they’re using for bait.
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