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Budget Numbers: Is It Really All Smoke and Mirrors?

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
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on Monday, 03 November 2014
in Wisconsin

capital-madisonSenator Kathleen Vinehout writes about a question she is often asked on the state’s budget – is it in the red or in the black. She explains the process by which the estimate is generated and has been for decades.

ALMA - Are we in the red or in the black? What’s the truth? What’s the reality?” The rural Trempealeau County woman was clearly frustrated.

“What do the figures really mean?” she asked me. “Is there a big hole? Or not? Is it all smoke and mirrors?”

Fresh off the rhetoric of the campaign trail, people are rightly confused about where the state is headed and what numbers are real. It’s hard to find someone who is not just outright frustrated at what they see as intentional distortions.

But when spring comes, lawmakers will be working hard trying to balance what is sure to be a $70 billion-plus spending plan. Somehow, they will have to balance the books.

How can we tell what’s real?

Let us begin with hard cash: money coming into state coffers. In a two-year budget, what’s real – money actually coming in – can be found in the tax returns of the first year. The state’s budget year runs July 1 through June 30. It takes a while to tally things and pay year-end bills. So numbers change a bit while accounts are tallied and then audited.

Preliminary tax returns show that individual income tax collection is down by about 2½% and corporate income tax is down by over 9%. Individual income tax makes up over half of the general fund. This puts the actual total down about 2% over the budget estimate.

A sharp drop in corporate income tax collection is important. There are different theories why. Perhaps companies are not making money; or too many dollars were given away in corporate tax breaks.

Just one tax break – the manufacturing and ag tax credit – cost taxpayers almost half the amount by which corporate income tax collection dropped. (Tax breaks passed in the last four years total over 50 separate items and will cost taxpayers an estimated $1.1 billion next fiscal year.)

So we know things did not go well in the last fiscal year. Will they get better?

This depends on with whom you talk – but let’s take the least politically minded entity in the state budget process – the nonpartisan Legislative Fiscal Bureau (LFB).

When allowed to do the math without any partisan driven assumptions – and this is important – the LFB estimates Wisconsin will begin the next budget process in the red by about $1.766 billion. You may have heard this number rounded up to $1.8 billion.

This is how much money is needed to fund the commitments in the coming budget.

The number is an estimate – as all budget numbers are estimates. But it is based on the best nonpartisan assumptions going forward and follows the conventions used in estimating past budget ‘starting points.’

In the final weeks of the campaign there were several other numbers tossed around. One used by the Governor was that Wisconsin was $535 million in the black.

The Governor used a memo prepared by LFB to buttress his claim. In this memo the nonpartisan LFB was directed by Finance Co-Chair John Nygren to make several assumptions. Namely, “let us assume Wisconsin brings in more money and spends less.” Not surprisingly, the numbers were better.

Politifact in the Milwaukee Journal Sentinel analyzed the ‘$535 million in the black’ and rated it False.

Other factors loom large in balancing the next state budget. Not included in this analysis is the mismatch between money coming in for roads and bridges and money going out.

The Governor and lawmakers voting for the last budget put nearly a billion in new spending on the state’s credit card. The transportation fund cannot support this level of borrowing.

Balancing the next budget will be a challenge. Needs are great. Tax money given away in the form of tax breaks cannot be spent on vital services.

To begin an honest budget discussion, let’s start with the best information and agree on the facts. To paraphrase Ambassador and former US Senator Daniel Patrick Moynihan: You can have your own opinion but not your own set of facts.

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Don't Believe GB Media Blitz - WI GOV Race is Still a Dead Heat

Posted by Bob Kiefert, Green Bay Progressive
Bob Kiefert, Green Bay Progressive
Bob Kiefert is the Publisher of the Northeast Wisconsin - Green Bay Progressive.
User is currently offline
on Saturday, 01 November 2014
in Wisconsin

voteLocal Press and TV media claims of a huge Walker lead in the area and Statewide based only on Marquette's "likely voters" are suspect. A conclusion based on same results could easily be "still tied with Burke closing".

GREEN BAY - Last Thursday, the local Green Bay press and TV media had a field day reporting that the Final Marquette Poll showed Governor candidate Scott Walker with a 17 point lead in the area and a 7 point lead statewide among "likely voters" over challenger Mary Burke. Last 2 minutes of the 4th quarter, Packer fans, and game over, right?

Well, not so fast. There are serious problems with that interpretation of the Marquette Poll results and there are other polls.

If you look closely at the Marquette poll, you may have noticed that among all "registered voters", Walker received 46 percent to Burke's 45. That shows a 2 point improvement for Burke over the previous Marquette Law School Poll, conducted Oct. 9-12, which had Walker with a 48-45 lead over Burke among these same voters. Based on these results, the conclusion could be still tied with Burke closing.

So the real shift in the Marquette poll was only among those they declared to be "likely voters". The Poll's director, Charles Franklin, even said as much, and that's where the results become suspect. Marquette defined "likely voters" as those who said they were extremely likely to vote when polled. Most polls we are familiar with traditionally use an actual record of voting in similar elections to define "likely voters". While this method can have problems of it's own, such as including new voters, it is generally more trustworthy than the method Marquette used.

Said simply, the Marquette poll "likely voters" might just have lied about, or at least exaggerated, their intention to vote.

The conclusion that the race is still tied is also supported by other final polls. With just three days until Election Day, the two final public polls in the Wisconsin governor's race both show the race between embattled Gov. Scott Walker and Mary Burke is a dead heat.

The final poll from Public Policy Polling (PPP), released yesterday, shows a statistical dead heat, with  Walker holding a 48 - 47 lead over Burke. The poll was taken over three days and surveyed 1814 likely voters. PPP has been one of the consistently most reliable polls both in Wisconsin and nationwide.

Also released yesterday was the final poll from YouGov, which surveyed 1494 voters, showing another dead heat with Walker leading Burke 42-41.

When asked for comment, Democratic Party of Wisconsin Chair Mike Tate said Saturday "The final public polls released over the last few days confirm what we've known for months -- the race between Scott Walker and Mary Burke is all going to come down to turnout". He went on "Wisconsin voters need to know this race is incredibly close and their vote will make a difference between four more years of Scott Walker's failed policies or a new direction with Mary Burke."

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Biggest Missed Election Story: Outsourcing Loopholes Never Fixed

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
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on Friday, 31 October 2014
in Wisconsin

scott_walkerBig Corporate For Profit Media Missed “Bait and Switch”, Outsourcing Safeguards Were Never Implemented as Walker Administration Announced But Did not Implement WEDC Outsourcing Prohibitions.

STATEWIDE - In July the outsourcing issue dominated the Governor’s race, generating wall-to-wall news coverage, and some excellent reporting on the use of public money to support outsourcing companies by Governor Walker’s jobs agency, the Wisconsin Economic Development Corporation (WEDC).

But when both candidates seemed to take strong positions against public job creation dollars going to companies engaged in outsourcing Wisconsin jobs, and WEDC seemed to enact safeguards, the issue vanished from the Governor’s race. This disappearance was so complete that it did not even come up in the two debates.

An analysis of the public record by Citizen Action of Wisconsin reveals that the strong protections announced in the media against providing state job creation grants, loans, and tax credits to firms engaged in outsourcing jobs were never implemented.

In addition, even the safeguards that were announced in the media and not implemented do not effectively prevent huge state tax breaks from going to outsourcing companies. Shockingly, Wisconsin tax policies enacted by Governor Walker and the Legislature actually could allow companies to claim large tax credits for some of the costs of outsourcing Wisconsin jobs.

“It is stunning as we witness an eleventh hour media frenzy over pseudo stories that have no impact public policy that the media is missing one of the biggest and most impactful stories of this election,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “It is scandalous that voters are in danger of going to the polls knowing all about various fake campaign stories and no knowledge that state policy still allows their tax money to go to corporations engaged in outsourcing their jobs, and even could allow corporations to write off some of the expense of outsourcing.”

Walker Administration Announced But Did not Implement WEDC Outsourcing Prohibitions

In July, as a result of an intense debate about which candidate would take effective action to deter companies receiving state job creation grants, loans, and tax credits from outsourcing jobs, the Walker Administration announced in the media a number of changes in state policy designed to prevent companies which receive state aid from outsourcing Wisconsin jobs. It was announced and reported in the media that a series of reforms, championed by Representative Peter Barca (D-Kenosha), were discussed at the July WEDC meeting and would be implemented at the next meeting.

A Citizen Action of Wisconsin analysis of WEDC Board Minutes and publicly available records finds no evidence that strong policies announced to the media were ever put in place. Instead, the policies implemented were so watered down that is still perfectly legal to provide state funding to corporations engaged in outsourcing.

There were only two changes Citizen Action could locate in the public records. First, there is now 30 days notice required for layoffs by companies receiving WEDC grants, loans, and tax credits.  Second, new WEDC contracts will require that state funds are not directly spent on outsourcing.  Given that WEDC funds large corporation such as Ashley Furniture have every ability to use non-state resources to outsource, it seems to be still perfectly legal for companies receiving state dollars to outsource jobs, and to cancel out the jobs public money is paying them to create.

Other much stronger measures reported in the media seem never to have been implemented.

One measure prominently reported as having been adopted by WEDC would have suspended funding for outsourcing companies until an equal number of jobs in Wisconsin are created.  As WKOW TV 27 reported: “companies who accept awards, then later reduce their net number of jobs in Wisconsin, cannot get any more actual money until they get their workforce back to where it was when the award was originally given out”. However,  This provision is not at all mentioned in WEDC board’s minutes or committee minutes, WEDC’s website, or in any subsequent board agendas. At the request of Citizen Action of Wisconsin, legislative staff made numerous requests to clarify the status of this policy with WEDC’s counsel, and to provide in writing the actual policies adopted by WEDC, but received no response.

The Milwaukee Journal Sentinel reported on July 29th that: “Gov. Scott Walker on Monday backed a proposal by Assembly Minority Leader Peter Barca to block state money and incentives from going to companies that shift jobs overseas.” The article goes onto state that the policy was discussed at the July WEDC board meeting and would be passed at the next meeting. Citizen Action’s review of public records, including WEDC minutes, finds no evidence this broad policy against giving state dollars to companies engaged in outsourcing was ever enacted. WEDC counsel has not responded to legislative requests for information on this policy.

Manufacturer's tax Credit an Even Bigger Outsourcing Loophole

Although the media has focused on WEDC’s connection to outsourcing, Governor Walker’s signature tax policy, the Manufacturer’s and Agricultural Tax Credit not only allows outsourcing companies to get massive tax credits, but even could allow them to write off some of the cost of outsourcing on their state taxes. The size of the tax credit is greater than WEDC funding for manufacturing. According to the Wisconsin Budget Project, it will add up to $874 million in tax credits over ten years.

The Manufacturer's tax credit represents a larger potential public support for outsourcing than WEDC grants, loans, and tax credits. The credit is available to those with manufacturing or agricultural property, but is not based on the size of the workforce. Because Wisconsin's corporate income tax is based on the sales a company has within the state, a company can still lay off or outsource large segments of its workforce and continue to be eligible for a sizable tax credit so long as it owns even one piece of property for manufacturing purposes. Recipients of this credit have no additional requirement to report outsourcing, and are not deemed ineligible for the tax credit if they outsource.

Although this massive tax credit is a major threat to Wisconsin workers, there has been no discussion during the Governor’s race about attaching job creation requirements to the credit or withdrawing it from corporations that outsource Wisconsin jobs.

“The Walker Administration's bait and switch on outsourcing is the biggest unreported story of this election,” said Robert Kraig, executive director of Citizen Action of Wisconsin. “Even the best informed voters are being left entirely unaware that it is still perfectly legal for a company like Ashley Furniture to outsource large segments of its Wisconsin workforce and claim  substantial job creation grants, loans, and tax credits while doing so. It could even be legal for them to write off some of the cost of outsourcing.”

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Walker Supporter Gary Ellerman Tries to Smear Mary Burke on TREK Record

Posted by Bob Kiefert, Green Bay Progressive
Bob Kiefert, Green Bay Progressive
Bob Kiefert is the Publisher of the Northeast Wisconsin - Green Bay Progressive.
User is currently offline
on Thursday, 30 October 2014
in Wisconsin

ellerman-walkerA Green Bay Press Gazette story gave legs to a false report that Democratic Gubernatorial Candidate Mary Burke was fired by TREK, questioning her business credentials just before the election. Our sources say the reported firing was made up by Walker friend Gary Ellerman, Chairman of the Jefferson County Republican Party and fired by TREK himself.

GREEN BAY - Several days ago we predicted that the Republican “dirty tricks” people supporting Scott Walker would save one or two of the best smear shots at Mary Burke until the closing days of the campaign. That’s how it’s often done in the dirtier regions of Milwaukee County politics. You drop the dirt bomb just before the final weekend of the campaign so it has time to sink in with the electorate while still not giving your opponent enough time to counter it.

On Thursday morning, in a front page article entitled “Burke on report of being fired from Trek: `ridiculous'” by Adam Rodewald, the Green Bay Press Gazette gave legs to a false report that “Burke was fired by her family, who founded Trek Bicycle, following financial losses and low morale among staff.” Damage done, the seed of doubt about Burke's business credentials is planted, even if there is no truth to the story. Continued on page 10.

Of course when we get to page 10, the Press Gazette goes on to say the “report relies on statements by several anonymous sources and Gary Ellerman, who the Wisconsin Reporter identifies as a former Trek human resources director and current chairman of the Jefferson County Republican Party.”

We've dealt with the Wisconsin Reporter for years, and know it to be a Madison Republican front posing as a news source. And our sources say Gary Ellerman is the man behind the latest campaign to smear Mary Burke. Ellerman is the Chairman of the Jefferson County Republican Party and is known for posing as a Democrat during the recalls to force the real Democrat into a costly primary.

Ellerman is also known for enjoying a bad joke or two at the expense of Democrats. A visit his FaceBook page by a Democratic source turned up a October 19 share of a faked picture of Michelle Obama holding a sign saying such things as “My Family is a Fake”, “Husband is a Homo”, “Kids are adopted”, and “I am a man”.

Finally FaceBook also reveals that Gary Ellerman is a friend and committed supporter of Scott Walker. The July 2, 2012 picture above that Ellerman posted of himself posing “With the Governor and a few friends Sunday” provides the evidence.

Trek President John Burke released a statement Wednesday saying the report was inaccurate and noted that it was actually Gary Ellerman who had been fired from Trek in 2004, according to the Wisconsin Radio Network.

When asked for her comments, Burke said “I read the report. It’s ridiculous,” and then “Frankly, we’re in the last six days of the election, and I think it’s a desperate attempt to undermine my credibility based on absolutely no evidence at all.”

If anyone asks him, Scott Walker will probably say he didn't know what his friend was up to. Of course, he said he didn't know what the six convicted members of his staff at Milwaukee County were up to either.

That's how it goes. You throw something out, anything, and see if it sticks. It seems to be a way of life for politician Scott Walker and businesswoman Mary Burke is new to the game. Maybe we can do a little to clarify the story here.

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Shifting Turnout Intentions, Gender Gap Put Walker in Lead Says Final Marquette Poll

Posted by Bob Kiefert, Green Bay Progressive
Bob Kiefert, Green Bay Progressive
Bob Kiefert is the Publisher of the Northeast Wisconsin - Green Bay Progressive.
User is currently offline
on Wednesday, 29 October 2014
in Wisconsin

walkerMILWAUKEE - The shifting winds of who says they are most likely to vote and the different realities of men and women voters appear to have turned back in Scott Walker's favor according to the Final Pre-election Marquette Law School Poll released today. The new poll finds Republican Scott Walker leading Democratic challenger Mary Burke 50 percent to 43 percent among likely voters in the Wisconsin governor’s race.

mary-burkeThe previous Marquette Law School Poll, conducted Oct. 9-12, found the race tied among likely voters, with the candidates holding 47 percent each, while 48 percent of registered voters supported Walker to Burke’s 45 percent support.

In Wednesday's poll, 3 percent say that they are undecided or that they do not know whom they will support, while 1 percent say that they will vote for someone else. Likely voters are those who say that they are certain to vote in the November election.

“Shifting turnout intentions have provided most of the dynamics of the race this fall,” said Marquette Law School Poll director Charles Franklin. “While the results among all registered voters have varied between a tie and a 3-point Walker edge, the likely-voter results have ranged from a 2-point Burke advantage to the current 7-point Walker lead.”

In the current poll, 93 percent of Republicans say that they are certain to vote, while 82 percent of Democrats and 75 percent of independents say the same. Two weeks ago 82 percent of Republicans, and 80 percent of both Democrats and independents, said that they were certain to vote. By comparison, in the final Marquette Law School Poll before the 2012 gubernatorial recall election, 92 percent of Republicans, 77 percent of Democrats and 84 percent of independents said that they were certain to vote.

Among registered voters this time, Walker receives 46 percent and Burke 45 percent, with 4 percent undecided and 1 percent saying that they will vote for someone else.

The poll interviewed 1,409 registered voters, including 1,164 likely voters, by landline and cell phone Oct. 23-26. For the full sample of 1,409 registered voters, the margin of error is +/- 2.7 percentage points. The margin of error for the sample of 1,164 likely voters is +/- 3.0 percentage points. This is the final Marquette Law School Poll before the Nov. 4 election.

Another factor in the final poll result is the return of the large gender gap among likely voters. After narrowing to just 2 percentage points in the previous poll, the gender gap in vote choice has returned.

Among registered voters, Burke leads 50-40 among women and Walker leads 53-39 among men. Among likely voters, Burke’s lead among women is 49-43 while Walker’s lead among men is 58-36. In the six Marquette Law School Polls since July, Burke has averaged a 49-42 lead among women and Walker a 52-40 lead among men for registered voters. Among likely voters, Burke has averaged a 52-42 lead among women and Walker a 55-40 advantage among men.

Another factor in the results may have been the deluge of negative ads launched by the Walker campaign and their allies to muddy the image of Mary Burke.

Burke’s favorability ratings have turned down in the latest poll, with 38 percent of registered voters viewing her favorably while 45 percent have an unfavorable view. In earlier polls in September and October, her favorable-unfavorable ratings were 36-35, 36-37 and 40-43. Among likely voters, her current favorable-unfavorable rating is 39-49, with the ratings in the three earlier polls since the beginning of September being, oldest to newest, 41-39, 40-44 and 44-44. Among registered voters, 17 percent lack an opinion of Burke, down from 69 percent in January. Among likely voters, 12 percent say they haven’t heard enough or don’t know their view of Burke.

Walker’s favorable rating in the latest poll is 48 percent, with 47 percent unfavorable, among registered voters. His previous ratings since the beginning of September are 49-45, 47-47 and 48-48. Among likely voters he is currently seen favorably by 51 percent and unfavorably by 46 percent. His ratings among likely voters in the three most recent polls are, in chronological order, 52-46, 52-46 and 50-48.

Given the wide swings in the last three polls, this race is still up for grabs. Early voting and absentee voting have begun and people who have already voted are much more likely to "say that they are certain to vote". Democratic voters are legendary for showing up at the polls after 6 PM on election day. Many factors could cause the wind to shift back in Burke's favor.

But this poll is not good news for the Burke campaign and the Democrats will have to double their efforts in the final days to get their supporters to the polls.

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