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May 13, 2009

The Wednesday Update

May 13, 2009  Volume 3, Number 18  IN THIS ISSUE: "Penny Pinching" Lt. Gov. Goes Hollywood;  Trollling for Lawsuits

May 13, 2009 Vol 3, Number 18	Wednesday Update
In This Issue:   1. Penny Pinching? 2. Trolling for Lawsuits 3. The Business Death Spiral 4. Another One Bites the Dust	"PENNY PINCHING" LT. GOV. GOES HOLLYWOOD       As if to punctuate their negligence in dealing with the current $6.6 billion budget deficit, the Legislature’s Joint Finance Committee began their deliberations by adding a new staff position to Lieutenant Governor Barbara Lawton’s office, and increasing state spending by $118,000 to pay for it. Republican Representative Phil Montgomery said his Democrat colleagues were obviously not serious about cutting spending, while Representative Robin Vos said the Democrat’s “priorities are totally screwed up."  In his mellow-dramatic retort, Democrat committee co-chair Mark Pocan said Republicans were being disrespectful to the office of the Lt. Governor which is "a heartbeat away from running the state." According to WisPolitics.com: Rep. Montgomery asked the Legislative Reference Bureau to describe the duties of the Lt. Gov.'s office. Pocan said Montgomery has been in the Legislature for 10 years, and the fact that he had to ask what the Lt. Gov. does either means Montgomery is "stupid" or he is being willfully insulting to the office. We weren’t satisfied with Pocan’s response so we decided to look into the matter ourselves. We found that Lieutenant Governor Lawton herself once publicized a state website devoted to teaching Wisconsinites how to “pinch their pennies,” so that “hard-working Wisconsin people will have the information they need to live a little better for a little less.”  So how has Lawton pinched the pennies in her state office?  Lt. Governor Barbara Lawton has: • Visited the Sundance Film Festival • Visited the set of “The Watch” TV show in Milwaukee • Welcomed Robert Redford to Wisconsin • Visited the set of “Public Enemies” • Bronzed the Fonz • Opened RDI Movie Studio with actor Tony Shaloub Apparently Lt. Governor Lawton believes “penny pinching” includes spending state resources to suck up to Hollywood celebrities.   Perhaps the residents of Wisconsin would do best to eliminate the Lt. Governor’s entire staff and travel budget.  Then she can stand at the ready in Madison while she waits for Governor Doyle’s heart to fail.         TROLLING FOR LAWSUITS                                Governor Jim Doyle included  dozens of items in his budget that have absolutely nothing to do with state finances. Among the non-fiscal policy items in Doyle’s budget were several provisions related to automobile insurance coverage and changes to the rules in personal injury cases, all to the benefit of personal injury lawyers. If passed, Doyle’s budget will increase the cost of auto insurance by as much as $309, and could force someone who is barely connected to an accident to pay the entire amount of a lawsuit.  The Milwaukee Journal Sentinel’s Dan Bice provides some insight into as to why Doyle included these changes in his budget:   Trial lawyers have been showing the love to Gov. Jim Doyle ever since he took statewide office, and now he is returning the affection. Just consider Habush, Habush & Rottier, the biggest personal-injury firm in the state. Over the past 15 years, Habush staffers and their spouses made more than 160 donations totaling a staggering $245,500 to Doyle's campaign fund.You don't give that kind of money without expecting something in return. Then take a look at the provision in the current budget proposal that would change the liability rules in personal injury cases. Right now, those sued for injuring somebody else would have to pay all of that person's medical expenses only if they are determined to be more than half at fault - 51% or more. Under Doyle's plan, somebody might have to cover the full amount even if he is as little as 1% responsible in some cases. For example, you are in a multi-car accident and found to be only slightly responsible for what happened. Doyle's plan would mean that your insurance might have to pick up the entire cost for another's injury if you were the only one in the wreck with enough money or insurance to pay damages.   Bice noted that Habush, Habush and Rottier was so excited by the prospect of suing more people under the Governor’s budget, the firm advertised the proposals on their website.    In a blog posting on the Habush Web site earlier this year, the law firm touted the budget proposal under the headline: "Liability may become easier to prove." "Instead of proving a majority of fault, victims will only have to prove that the fault is there in order to hold the defendant liable," said the item posted Feb. 25. "If this is signed into law, liability cases will change a great deal."   Habush removed the blog post after they were criticized by their colleagues for gloating.   Who says trial lawyers are shameless?                 THE BUSINESS DEATH SPIRAL This week, the Legislative Fiscal Bureau announced that tax receipts would be $1.6 billion less than anticipated, increasing the state's current budget deficit to $6.6 billion. Christian Schneider at WPRI wonders whether all the tax increases passed in the last year are actually harming state tax revenues: It doesn’t take a genius to figure out that this punitive new business tax (the $186 million combined reporting tax) may have actually cost us as much revenue as it created.  New business taxes force higher unemployment, which gives us fewer taxpayers.  Higher business taxes also lead to more expensive goods, which could harm state sales tax receipts. Furthermore, higher corporate and franchise taxes also force businesses to either move to another state (or country) or scale back their operations, thereby diminishing revenues on which they pay taxes.  (The same phenomenon occurs when states drastically increase cigarette taxes - fewer people buy cigarettes - at least legally - and tax receipts actually drop.) But this is a dream scenario for lefty groups, which sets a spiral of taxation into effect.  They raise taxes on businesses, which causes business tax receipts to drop.  Then, they argue that businesses aren’t paying their fair share, and lobby for even more business taxes.  The circle is complete - and forces the remaining individual taxpayers in the state to pick up the tab when unemployment skyrockets and business tax receipts drop to virtually nothing.     ANOTHER ONE BITES THE DUST     Last month, State Representative Terry Van Akkeren lost his bid to become Mayor of Sheboygan after he voted to increase taxes on Wisconsin businesses by $200 million.  Last week Van Akkeren’s colleague Representative Bob Turner faced a similar fate in his bid for Mayor of Racine.  And once again, Wisconsin Club for Growth was there to educate Racine taxpayers and preview the upcoming legislative battle in Madison.   Van Akkeren and Turner lost their Mayoral races by 60%-40% and 56% - 44% respectively.