In This Issue:
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1. Lipstick on a Pig
2. Land of Make
Believe
3. Trial Lawyers at
the Trough
4. Apology from the
Distant Past
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Lipstick on a Pig
Last week, the Milwaukee Journal Sentinel triumphantly praised passage of a bill meant to apply a band-aid to the state’s current financial mess. The headline blared: “DOYLE SIGNS BUDGET REPAIR MEASURE,” except the bill didn’t repair anything.
In contrast, UW-Madison’s Daily Cardinal newspaper ran this more descriptive and accurate headline: “Budget repair bill still leaves looming gap.”
According to the Legislative Fiscal Bureau, Doyle’s budget “repair” bill filled in $183 million of the $600 million Fiscal Year 2009 deficit. (Not to be confused with the $5.9 billion deficit facing the state in the next two years, 2010 and 2011.) This small down payment on the deficit isn’t paid for with program cuts – but rather from the proceeds of new taxes on businesses and hospitals, and another $125 million Doyle shell game we like to call fund swapping.
Apparently, nobody thought to ask - does Doyle’s “stimulus” bill actually stimulate anything? The answer is “yes,” if you belong to one these groups:
- Painters and Allied Trade Union, District Council 7, $325,000
- Wisconsin State Council of Carpenters, $247,000
- Wisconsin Pipe Trades Association, Local 75, $248,000
- Wisconsin Laborers' District Council, $265,000
- Wisconsin Operating Engineers, $275,000
- International Brotherhood of Electrical Workers, $270,000
In a bill that is supposed to cut state spending, Doyle managed to find $2.6 million in new funds to pay off his union pals in the name of “stimulus.” Apparently, if you do any work outside the union structure, no matter how beneficial, you’re not good enough to receive state funds. You have to be a Doyle supporter to pull down some of these valuable dollars. So congratulations to Wisconsin taxpayers – you just spent $2.6 million to stimulate union membership, in a time when the state is hemorrhaging money.
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The Land of Make Believe
Right on the heels of his “repair” bill that repaired nothing, Doyle introduced his 2009-11 proposed budget, which he claimed contained “massive” cuts. In fact, total state spending in his bill increases 7% in the first year, at the time Doyle claims he’s cutting $5.9 billion. Doyle accomplishes this feat by plugging in federal “stimulus” money where state dollars used to reside. For instance, he cuts $500 million in state money for education, and replaces it with federal money. Welcome to the land of make believe, where economic stimulus is achieved by simply paying your bills with another pot of borrowed money.
In addition to all of his faux cuts, Doyle makes up the deficit by increasing taxes by $2.2 billion over the next two years. Taxes go up on hospitals, on cigarettes, on high wage earners, and, inexplicably, on businesses. Doyle implements a new “combined reporting” proposal, which will have the effect of raising taxes on businesses by $187 million during a time when businesses are struggling to keep workers on their payrolls. Undoubtedly, this new tax will further exacerbate the state’s skyrocketing unemployment rate, as we’ll be lucky if businesses stay in the state at all.
If there’s any silver lining to the debate over combined reporting, it occurred last week when the Democrat-controlled Assembly debated the budget adjustment bill. Republican State Rep. Scott Newcomer introduced an amendment to remove combined reporting, which inspired more than an hour of debate and forced Democrats to delay action on the amendment until they could garner the votes to table it. They only did so by one vote. Newcomer implored Wisconsin businesses affected by the tax to come forward and tell their legislators how many jobs will be lost in their districts if this tax becomes law.
Ladies and Gentlemen, let’s be clear: this job killing tax---- call it combined reporting, the Las Vegas Loophole--- or whatever you want, is NOT about tax fairness. This is about government greed and the refusal of anyone in this town to consider cutting spending.
How many jobs ---- current and future---- will this tax kill? I don’t know. I don’t think you know either. I do know we’ve lost 127,000 manufacturing jobs in Wisconsin since 2000. That’s like taking away the jobs of every person in LaCrosse and Appleton.
Wisconsin has lost 30,000 manufacturing jobs in the last 12 months alone.
I know Wisconsin businesses affected by this tax are reluctant to come forward, but I’m begging you, please stand up and be counted. Don’t let these people intimidate you. Don’t apologize for your success. Don’t apologize for providing family supporting wages, for paying taxes and for contributing to your communities.
Tell us who you are and how many lives and livelihoods will be affected, because until the people in this chamber know which of their constituents’ jobs they are killing in the name of tax fairness, we don’t stand a chance.
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Trial Lawyers at the Trough
Even more confusing about Doyle's twin budget disasters are the number of provisions in each budget that have nothing to do with balancing the state's books. There are numerous special interest giveaways in each bill that have no reason to be included, other than to pay back Doyle's supporters.
For instance, there's a provision in the 2009-11 budget bill that requires consumers who purchase auto insurance to obtain higher coverage levels. Naturally, this will make auto insurance more expensive for everyone in the state, and will cause a great number of people to drop their insurance altogether. (Wisconsin is one of only two states that does not mandate auto insurance.)
As is always the case in government, you only need to follow the money to see who's behind this. Quadrupling the minimum coverage available from $25,000 to $100,000, as Doyle proposes, will force higher payouts, and thus increase the cost of plans. The big winners under such a scenario are the trial lawyers, who stand to make a lot more money when larger judgments are handed out.
But again, this is the STATE BUDGET. This provision, even if Doyle thought it was a good idea, has absolutely nothing to do with state finances. State revenue and spending won't change by a penny if this new mandate is adopted – it's merely a chance to sneak in a favor to Doyle's pals at the Trial Attorneys Association, which contributes heavily to his campaigns.
An Apology from the Distant Past
By Christian Schneider
Dear Person in the Future:
Greetings from the year 2009. As a gesture of goodwill, there are some things we need to discuss.
First, congratulations on the Brewers winning their 3rd World Series in a row, beating the Prince Fielder-led Yankees in seven games. A big atta-boy to Keanu Reeves for winning his first Oscar, playing a gay washed up ex-wrestler who ages backwards. It certainly was the role of a lifetime. I understand that, due to a federal mandate, General Motors is close to developing a car that runs on sunshine and dreams – here’s hoping the technology works out for you. And it’s nice to see that the prophecy is true – everyone actually does eat Dippin’ Dots.
The main purpose of this letter, however, is to issue an apology. Certainly, people in the future are still talking about the economic downturn of 2009, and the effect it had on the state’s finances. Believe it or not, when the economy went bad in 2009, we actually cared more about how government was hurting than how regular people were coping with losing their jobs. (Then again, the most famous woman in America in 2009 was a crazy Angelina Jolie look-a-like who had octuplets, so that might explain some things.)
You see, in 2009, we found out the state had a $5.9 billion budget deficit. In other words, the state was committed to spending $5.9 billion more than it was taking from working people of Wisconsin. Naturally, government sprung into action and did what government knows how to do best – it figured out new ways to spend more money and further micromanage our lives.
In fact, Future Person, at a time when Wisconsin state government could have restructured itself in a way to prevent future crises, it instead kicked the can down the road, preserving itself over the interests of the citizens. In his 2009-11 proposed budget, Governor Jim Doyle raised taxes by $2.2 billion, claiming that he was making the tax system more progressive by raising taxes on the top 1% of wage earners. Fortunately for him, nobody in the media pointed out that he was raising the cigarette tax, the most regressive tax that exists (and paid for by the poorest citizens in Wisconsin), by $257 million.
Actually, while Doyle promised “major” cuts to make up the deficit, his proposed budget spends 8% more in 2010 than it did in 2009. His increases are funded largely by swapping out general fund spending for federal “stimulus” aid, which constitutes a one-time budget plug. In the most egregious example, Doyle cut school equalization aid by $498 million, then replaced it with $498 million in temporary federal funds. Additionally, there are hundreds of millions of dollars Doyle plans to sprinkle over the budget like fiscal oregano, seasoning his budget to the government workers’ tastes.
Of course, since the teachers’ unions have undoubtedly improved financial education in the future, you already know what this means: funding ongoing programs with temporary funds leads to large budget deficits. And that is why, according to Doyle’s own budget document, his plan leaves structural deficits of $2.5 billion in 2010 and $2.3 billion in 2011 – barely less than the $5.9 billion he claims to have “balanced” this time around. By now, you have figured out what that meant – billions of dollars in tax increases to feed the state’s insatiable spending appetite.
So, dear Person of the Future, I apologize for waking you out of your hyperbaric slumber to deliver this apology. I know it’s enough to knock you right out of your Snuggie. We had our chance back here in 2009, we knew exactly what was going to happen, and we blew it. Not even President Miley Cyrus can bail you out of this predicament now. So when you send a killer cyborg in a time machine back to correct all our wrongs, make sure he has a good calculator.
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