In This Issue:
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1. Oil Franchise Phooie
2. MPS: Mardi Gras
3. Running with Scissors
4. WMC - Moving Us
Forward
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Oil Franchise Phooie
In the summer of 2007 gas prices were rising at a record rate and heading for an all time high of more than four dollars per gallon. Of course state politicians, who take it upon themselves to solve every possible human problem, stepped in to make oil companies “pay” for higher gas prices. Governor Doyle proposed raising the gas tax by 7 cents a gallon to “punish” oil companies, saying his oil company franchise fee was unlike other taxes because he would make it illegal for companies to pass the tax on to consumers. The tax, if passed, would have allowed the Governor to take a cheap shot at big oil while providing new cash to plug a gaping hole left by his earlier raids on the transportation fund.
From the outset, Doyle’s gas tax proposal was rife with problems and inaccuracies. Doyle attempted to insert a provision prohibiting oil companies from passing the cost of the tax on to consumers despite various legal opinions that the provision was unconstitutional. To make matters worse, once the pass through prohibition is eventually declared illegal, the state will have to pay the money back with interest.
Further, Doyle’s own Department of Revenue didn’t believe the State could keep oil companies from passing the tax on to consumers. In their communications to Doyle’s budget office, the DOR said:
A supplier could argue that any number of factors other than oil company assessment were the cause of a price increase. Prices are determined by a complex, interdependent set of economic factors. The Department's auditors may have no rational basis to isolate the cause of a price increase as the oil company assessment. The supplier may recover the assessment from purchasers by a gradual increase in the price and in some cases may not be able to bread down all the reasons why the price is increased. Therefore, actions to penalize suppliers for passing the tax through to purchasers may not be sustained.
Governor Doyle has all but promised that he will include the oil company tax in his 2009 budget, only now gas is in the mid-$1.60 per gallon range. Since Doyle’s proposed tax applies as a percentage of the cost of gas, Doyle will have to raise the tax from 2.5% to a whopping 7% of oil company profits to reap the same return. So what happens if gas prices go back up? That’s right, taxes go up too.
Governor Doyle will, in effect, punish oil companies for cutting gas prices by jacking up their tax rate. Oil companies will simply stop shipping their products to Wisconsin, choosing instead to ship more oil to states that don’t punish them for making a profit. With a shortage of refineries and pipeline capacity, the oil franchise fee would be dangerous choice for a state that is already hemorrhaging jobs.
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MPS: Mardi Gras of Preposterous Spending
When Citizens for Responsible Government posted the full database of Milwaukee Public School spending several weeks ago, everyone knew it was just a matter of time before citizens and journalists began uncovering astonishing spending abuses. It appears the product of those database searches have exceeded expectations.
Last week, MPS was found to have bought almost $30,000 worth of iPods for its students, apparently as an incentive to coerce them to sign up for a free breakfast program that drew down more federal money for the district. In essence, the district used iPods as bait to artificially increase a program to siphon more taxpayer money.
This week, Badger Blogger dug up more frivolous, or should we say scandalous spending?
MPS spent over $126,000 on products from the Oriental Trading Company, including Mardi Gras beads, rock shaped balls, foam snowman doorknob hangers, race car sun catchers, smiley face yo-yo’s, and a deluxe Santa Claus suit.
So while the district continually begs for double-digit property tax increases because it just can’t make do, MPS staff are out buying $126,000 worth of junk. To put it in perspective, that’s enough money to hire three entry level science or math teachers – something that might actually educate a child in the failing district. Of course, you can never have too many Mardi Gras beads.
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Running with Scissors
This week, the Pulaski School District announced it would be studying implementation of a 4-year old kindergarten program, which has become all the rage in Wisconsin. Over three fourths of the state’s school districts currently have a 4 year-old kindergarten program, most likely because Wisconsin is one of the few states that actually funds these glorified daycare operations.
It’s no coincidence that school districts usually implement 4 year-old kindergarten programs when they run into financial trouble. It may seem counterintuitive to add more programs when the district has money troubles. But under the state funding formula, a 4 year old student is listed as a half of a full time student. State aid is based largely on pupil membership, which means if a district can make it look like it has more students, they get more taxpayer money from the state. Additionally, 4 year-old kindergarten programs are fairly inexpensive to run – so the district can take the aid increase from the state and spend it in other areas it deems more important.
They will, of course, claim that implementation of such a program is “for the kids.” In fact, this taxpayer subsidized daycare is more about funding teacher salaries and benefits than it is about making your four- year-old a genius. Then again, what four- year old couldn’t improve their cutting and pasting skills?
WMC - Moving Wisconsin Forward
The state’s largest business group has become the favorite whipping boy of the liberal establishment because they advocate for lower taxes and a more favorable regulatory climate. Some have even suggested that Wisconsin Manufacturers and Commerce (WMC) is out of touch with its members. Right, 4000 of the state’s largest employers actually want increased regulation, higher taxes, and expensive product liability litigation.
Despite the left's well coordinated effort to demonize them, WMC has extended an olive branch to Democrats by offering their “Moving Wisconsin Forward” plan. Through it they seek to build a common agenda with organized labor by:
- Reaching out to all stakeholders, business, education, government, labor, community leaders, and the media for input on how best to grow the economy and create jobs.
- Building a broad coalition among business to support a common policy agenda aimed at making Wisconsin competitive and prosperous once again.
- Helping the public and policy makers understand the connection between a strong economy and better jobs for our families, our communities, and Wisconsin’s future.
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