Two weeks ago, the state Legislature approved and Governor Doyle signed into law a massive budget repair/stimulus bill. Governor Doyle also unveiled his 2009-11 state budget that is loaded with new taxes and spending.
As we dig deeper into both the budget repair bill and the governor’s proposed budget, we are discovering more and more details that are astounding in the damaging effects they will have on the state economy and taxpayers.
Over the next several months, please watch my blog for continuing updates on important details about state budget deliberations.
BizTimes.com is reporting that a provision in Governor Doyle’s proposed 2009-11 state budget could be devastating to Wisconsin businesses by making a significant change in civil court cases. BizTimes.com reports:
“Current state law mandates that a defendant be found at least 51 percent at fault to be found liable. However, Doyle’s budget proposes that a defendant, whether a corporation or individual resident, could be liable if they were found at least 1 percent liable.”
The impact could be dramatic, resulting in booming liability insurance costs. The change would add yet another barrier to doing business in Wisconsin that already has one of the worst business climates in the country, not to mention higher prices and fewer jobs.
Read the BizTimes.com article.
Governor Doyle’s proposed 2009-11 state budget calls for the early release of 3000 convicted felons. His proposal also would give the Department of Corrections the authority to ease up on global position system (GPS) monitoring of sex offenders.
This is not the first time Governor Doyle has played games with the critical GPS issue.
An appeal was made to Governor Doyle during April 2006 to approve GPS legislation that I co-sponsored. One month later, I stood next to the governor at the Glendale Police Department as he signed the GPS bill into law.
However, it did not take long for the governor to, as the La Crosse Tribune reported, backtrack on GPS in his 2007-09 state budget proposal. Thankfully, the Legislature worked out a compromise to keep GPS intact. Once again, it is budget time, and once again, the governor wants to water down a policy so many worked so hard on for a very long time.
If Wisconsin can use GPS to track golden eagles, the state certainly can and should prioritize using GPS to monitor the worst sex offenders, just as the public demanded, the Legislature approved, and the governor signed into law.
Governor Doyle wants to increase your auto insurance rates.
The Wisconsin Insurance Alliance (WIA) says that the governor’s budget includes an astounding 300 percent increase in mandatory auto insurance limits. Current minimums are $25,000 for personal injury, $50,000 for occurrence, and $10,000 for property. The governor wants minimums set at $100,000 for personal injury, $300,000 for occurrence, and $25,000 for property.
The WIA says the new limits would mean some motorists could experience cost increases ranging from 33-45 percent with the largest dollar increases affecting Milwaukee area motorists.
The WIA worries the increased rates will result in the dangerous scenario of more uninsured motorists on Wisconsin roads.
I agree with the WIA that the issue of auto insurance rates is not an appropriate matter to be dumped into the state budget and should be debated as a separate policy item.
Read this release from the WIA.
New Berlin West
The WIAA boy’s basketball regionals of the state tournament begin tonight. These high school teams from schools in Senate District 28 are all playing tonight and I wish them all good luck!
New Berlin Eisenhower
Greendale Martin Luther
The highly regarded Wisconsin Taxpayers Alliance (WISTAX) has examined spending in Governor Doyle’s proposed 2009-11 state budget. WISTAX reports:
“The proposed 2009-11 state budget holds general fund spending increases to under 1% but hikes by 10.7% expenditures from all revenue sources: from $56.7 billion in 2007-09 to $62.7 billion in 2009-11.”
Why the difference in the spending percentages? Because the governor, as WISTAX points out, is shifting payment for large sate programs from state taxes to federal stimulus dollars.
There is a huge risk in making that shift. Read about it in the WISTAX release.
Governor Doyle’s proposed 2009-11 state budget includes a provision that would allow southeastern Wisconsin, Dane County and the Fox Valley to develop regional transit authorities (RTA’s). The RTA’s would administer bus systems and commuter rail lines and be funded via local sales.
Last month at a meeting in Milwaukee, the governor informed business leaders that federal stimulus money might be used to construct a high-speed passenger rail system linking Chicago to Minneapolis with stops at Milwaukee, Madison and possibly Green Bay.
Who knows? There might even be talk in the not too distant future about light rail.
I would caution that before the state gets into a mass transit frenzy, a review of a column written for Caranddriver.com by Patrick Bedard during October 2008 is in order. Bedard correctly pinpoints what he calls the “intractable” problems with mass transit.
The most problematic aspect of mass transit is the cost and its funding source. Transit systems carry an expense that is far and above what participating riders are ready and willing to pay. Bedard writes, “Think of it this way. Every time a Los Angelino gets on the Metro Rail, he lays out a buck and a quarter, more or less, depending on his destination, and the taxpayers kick in about three and a half bucks. Next time you ding your credit card for gas at $4 per gallon, imagine getting back a check from the government for almost $3 a gallon.” He cites a Cato Institute study that finds three of every four dollars spent on transit comes from taxpayers.
Other mass transit problems: users fail to value the service to pay the full tab, the lure of federal funds generally results in construction of costly projects, and systems rarely stop at desired destinations.
Even if more riders materialize during, for example, a huge spike in gas prices, remember that mass transit has operating costs, too.
Here is Bedard’s column.
This may be the most egregious of all the tax increases included in Governor Doyle’s proposed 2009-11 state budget. First, some background.
Wisconsin developed a provider assessment on nursing home beds during 1991-1992. Until July 2003, the nursing home bed tax was $32 per month per occupied nursing home bed.
In his proposed 2003-05 state budget, the governor wanted to increase the bed tax to $116 per month. The Legislature reduced the governor’s request to the current $75 per month tax.
Governor Doyle proposed an increase in the nursing home bed tax in the 2005-07 state budget from $75 to $125 per month. Again, the governor was unsuccessful.
The governor’s proposed 2007-09 state budget included an increase in the nursing home bed tax from $75 to $127 per cent, a 69 percent increase. Republicans at the time controlled the state Assembly. They intervened and managed to block the increase.
Governor Doyle is proposing it again. His proposed 2009-11 state budget increases the nursing home bed tax from $75 per bed per month to $150 during the first year of the biennium and $170 during the second year. The move would increase the cost of health care, making it more difficult for employers to provide and their workers to pay for coverage.
The Wisconsin Department of Health and Family Services reports that at the end of 2005, there were 401 nursing homes licensed to provide service in Wisconsin with a total of 39,146 licensed beds. Patients and their loved ones would be impacted by the huge nursing home bed tax increases the governor is seeking.
I repeat what I stated during the 2007-09 budget deliberations: Proposing a tax increase on nursing home beds is about as low as it gets.
The Wisconsin Department of Natural Resources (DNR) received two inquiries from hunters wanting to know whether railguns were permitted in Wisconsin. A railgun is defined as a weapon consisting mainly of conducting metal rails that uses electromagnetic force to accelerate a projectile to a much greater speed than that achieved by conventional chemical propellant weapons. Last month, the U.S. Navy established a brand new world record for the most powerful electromagnetic railgun during a test shot in Virginia.
The two calls the DNR got about railguns were enough to put a question before next month’s DNR conservation hearings to be conducted in all 72 counties that would clarify the definition of legal firearm types for hunting.
DNR Chief Warden Randy Stark told the Associated Press the railgun can send projectiles seven times the speed of sound, prompting questions about the safety and fairness of using railguns.
The first of dozens of questions to be reviewed at the DNR hearings on April 13, 2009, relates to keeping young hunters safe from sexual predators. It reads:
“Allow the department to conduct criminal history background checks on individuals that want to serve as department sponsored volunteer angler education instructor or a mentor as part of a department sponsored or approved learn-to-hunt program. These instructors often and primarily serve as instructors for youth. This proposal would also remove the condition that a mentor for fishing programs may not serve as a mentor for more than 3 anglers and clarify that the applicant, instructors and mentors need to possess a valid fishing license. This will also reduce the 30 day advanced notice for applications for fishing programs to 15 days.”
Another issue to be discussed will be the proposed creation of a Youth Conservation Congress to recruit younger hunters and fishers.
All of the DNR hearings scheduled on April 13, 2009 begin at 7:00 p.m. Here are hearing locations in Senate District 28 that I represent:
Milwaukee County: Nathan Hale High School, Auditorium, 11601 West Lincoln Avenue, West Allis
Racine County: Union Grove High School, Auditorium (Use Hwy. 45 School Entrance), 3433 S. Colony Ave., Union Grove
Walworth County: Delavan/Darien High School, Auditorium, 150 Cummings, Delavan
Waukesha County: Waukesha Co. Tech. College (WCTC), Anderson Education Center, 800 Main St., Pewaukee
Here is the notice about the hearings from the DNR and an article from the Associated Press.
Last month, I predicted that one of Governor Doyle’s programs, the Wisconsin Covenant would lead to a big tax increase in the next state budget. Under the Wisconsin Covenant, eighth-graders sign a pledge to meet certain goals in order to receive a financial aid package to a UW-System school. I blogged:
“The Wisconsin Covenant was one of the many reasons I voted against the last state budget. It is yet another ornament on a Christmas tree filled with goodies the state simply can’t afford. The state creates another massive program based on a promise, and then turns once again to the taxpayers to hand over the funding. That the Wisconsin Covenant has turned into one more tax increase shouldn’t come as any surprise.”
The Wisconsin State Journal is reporting that funding for Wisconsin Covenant has, indeed, been promised, but is not forthcoming:
“In introducing his budget last week, Gov. Jim Doyle said he had "identified" $25 million for a state program aimed at ensuring a college education for students who stay straight and study hard. But what the Democratic governor’s budget proposal doesn’t do is either spend that money or set it aside for the Wisconsin Covenant program. Instead, the money in the phantom appropriation for the college guarantee program would be returned, unspent, to the state’s main account at the end of the two-year budget in June 2011.”
Governor Doyle’s Wisconsin Covenant, at this point, seems to be an empty promise.
Read more in the Wisconsin State Journal.
“Congress does not have the magic wand to help the states.”
That was the title of a blog I wrote during January 2009 and its message bears repeating.
Despite Washington’s huge gift-wrapped stimulus packages to the states, the goodies won’t be nearly good enough. About half of any stimulus money sent to a state, Wisconsin for example, cannot be used to fix a large budget hole. Some projections show the cumulative deficit of all 50 states ranges between $312 and $350 billion. The stimulus package approved by Congress would still leave the states with total deficits between $162 and $200 billion to fill on their own.
Michael Hill of the Associated Press reports on the stark reality that once the stimulus money arrives and is all spent, and once the national recession ends, many states will still suffer huge deficits. I repeat, there is not a magic wand.
Hill breaks down this mess:
“Spending increases were easier to cover in flush times earlier this decade, when tax collections jumped 40 percent over five years. Then the bubble burst. Inflated housing wealth collapsed, consumers hunkered down, businesses slashed jobs and tax collections plunged.”
Hill quotes Mark Vitner, senior economist and managing director at Wachovia who says state governments have few options:
“They're going to have to cut their budgets significantly."
Another alternative, one embraced by Governor Doyle that I reject, is increasing taxes and fees. Grabbing more money from taxpayers experiencing salary freezes or cuts, layoffs, or termination is not only difficult, it is wrong.
When jobs are lost, incoming tax revenue is reduced. Consumers filled with anxiety make fewer purchases, especially big ticket items, affecting retail sales. Recovery could take awhile, and even when the economy brightens, experts agree, state governments always lag behind in getting their fiscal houses in order. When the recession is over, hard times will persist.
You can read Michael Hill’s article that was printed in the Janesville Gazette.
The legislature’s Joint Finance Committee has announced its public hearing schedule for the 2009-11 state budget bill. All hearings are scheduled to run from 10 a.m. to 4 p.m. on the following days at the following locations:
- Monday, March 23: Sparta. American Legion Hall, 1116 Angelo Road.
- Wednesday, March 25: West Allis. State Fair Park, Banquet Room 2, 640 S. 84th St.
- Friday, March 27: Eau Claire. UW-Eau Claire Haas Fine Arts Center, 121 Water St.
- Monday, March 30. Racine. Case High School Theater, 7345 Washington Ave.
- Wednesday, April 1. Appleton. Lawrence University Stansbury Theater, 420 College Ave.
- Friday, April 3. Cambridge. Amundson Community Center, 200 Spring St.
Milwaukee Journal Sentinel columnist John Torinus made a strong case in his weekly piece in Sunday’s Business section that the public sector is unable to make responsible decisions about purchasing and managing health care.
After laying out the supporting data, Torinus puts it bluntly:
“The public sector does a poor job of managing health and health costs. Most of these plans have low deductibles and co-insurance, meaning that there is no self-discipline on the part of recipients. They just buy whatever they think they need from whomever they pick, regardless of price.”
Does the private sector do a better job? Torinus says yes, because health care decisions driven by consumer choice means the recipients take a greater involvement in their investment. Wiser, more responsible choices are made.
You can read Torinus’ column that urges a look to the private sector for guidance on health care management, here.
A bill before Congress, House Resolution 45 (H.R. 45) would establish a system of licensing for purchasers of certain firearms and would keep records of sales.
ESPNoutdoors.com says, “To many gun owners, it's the tsunami of gun control legislation, the mother of all efforts to restrict private gun ownership and the guarantees of the Second Amendment to the U.S. Constitution.”
Under the bill, a license would be required to own any type of handgun or semi-automatic firearm. Purchases must be made through a licensed dealer. Federal records of sales would be kept.
There is a word that cannot be used to describe Governor Doyle’s cuts in shared revenue to local municipalities: fair.
Wispolitics.com reports that under the governor’s proposed 2009-11 state budget, some counties get hit much harder than others. For example:
“Milwaukee County would see its shared revenue cut 0.40 percent, from $56.3 million to $56.1 million. Dane County's shared revenue would be cut from about $2.5 million to a little more than $2.3 million, a 6.75 percent reduction.”
Compare that to the cuts in other areas:
“Eight counties -- Waukesha, Vilas, Ozaukee, Oneida, Door, Burnett and Adams -- would receive 15 percent cuts under Doyle's plan.”
Could there be a political reason why Milwaukee and Dane counties get much smaller reductions in shared revenue than Waukesha County?
Read more from Wispolitics
Health Savings Accounts (HSA’s) are considered a viable health care option, far preferable in my view to the multi-billion dollar government health care plan pushed by state Senate Democrats. The Wall Street Journal finds that even low-income individuals find HSA’s attractive.
HSA’s have failed to gained acceptance from public employee unions and their employers, as reported by Milwaukee Journal Sentinel columnist Patrick McIlheran. However, McIlheran found a large union in Wisconsin that supports and recommends the HSA concept.
Read McIlheran’s column.
The tax and fee increases in Governor Doyle’s proposed 2009-11 state budget just keep coming. The governor wants to increase the fee for handgun sale background checks from $8 to $30. In essence, Governor Doyle would tax law-abiding gun owners making a legal purchase to help him fix his budget.
Here are more details from WTMJ-TV.
Who can forget the morning of September 11, 2001. Terrorists hijacked commercial passenger jet airliners and crashed two of them into the Twin Towers of the World Trade Center in New York City.
During the summer of 2006, I had a moving and powerful experience at a tour of the World Trade Center site where 2,749 innocent people were slaughtered and murdered by cowardly terrorists. I will always remember the words of retired New York City Fire Department Lieutenant Paul McFadden who led the tour:
“This was an act of war. It was not a tsunami. It was not an earthquake. It was nothing in nature. It was not an act of God; it was an act of war. And, if you think that it is over, you’re naïve, because they are out there, and they are still plotting against us.”
The murders of 9/11 led Wisconsin Congressman James Sensenbrenner to author the Real ID bill. Sensenbrenner wrote the following in an editorial published in the USA TODAY on May 9, 2005:
“On Sept. 11, 2001, 18 of the 19 hijackers deliberately used valid driver's licenses and state IDs — as opposed to their passports — as their document of choice to board the airplanes. Why? Because state IDs allowed the hijackers to avoid suspicion. A driver's license allows freedom of movement and conveys credibility.”
In describing the Real ID legislation, Congressman Sensenbrenner wrote:
“Real ID would require all states to confirm the identities of applicants, confirm that visas are valid for foreign visitors, keep accurate records, and make driver's licenses and ID cards extremely difficult to counterfeit. This legislation would prevent the next Mohammed Atta from using his six-month visa to obtain a six-year driver's license by requiring that a foreign visitor's license term ends when the visa expires. Furthermore, once these reforms are in place with more complete state records, license renewals should be faster and lines shorter.”
During November 2008, Congressman Sensenbrenner told CNS News that if Real ID had been in place before 9/11/01, terrorists would have been unable to board the planes that crashed into the World Trade Center and the Pentagon.
States need to comply with Real ID that was approved by Congress and signed into law so that their residents can board airplanes and gain entry to federal courthouses. The state of Wisconsin for more than a year has been collecting $10 per driver’s license fee in order to comply with Real ID. However, Governor Doyle’s budget proposal refrains from putting any funding toward compliance. The Milwaukee Journal Sentinel reports over $12.5 million has been collected from motorists that was supposed to go toward compliance with the federal law.
I agree with Congressman Sensenbrenner. He says, “"If he keeps the fee that was collected for Real ID and doesn't use it for that purpose, then he's stealing money from people who got licenses or renewed licenses since the fee went up."
Real ID is necessary for homeland security. The money state residents have already paid for Real ID should be used by Governor Doyle exclusively for that program.
The budget repair bill/stimulus package that was rammed through the state Legislature and quickly signed into law was ideally supposed to create jobs. Instead, state lawmakers opted to take the gigantic pot from Washington and use it to account for existing spending by offsetting the current budget crisis.
It is hard to imagine the package approved will actually “stimulate” the state economy and bring new jobs when the nonpartisan Legislative Fiscal Bureau estimates the majority of Wisconsin’s “stimulus” share, about $2 billion is going toward education and medical assistance.
If we can’t use the stimulus money in ways that would actually stimulate the economy, then it should be used on infrastructure. The stimulus money should be used on one-time projects or on projects with a life long enough that they’re almost one-time. Here’s an example: Waste water runoff problems on Lake Michigan.
The American Society of Civil Engineers (ASCE) prepares a report card that assesses 15 separate categories of the country’s infrastructure. The 2009 Report Card reports, “In 2009, all signs point to an infrastructure that is poorly maintained, unable to meet current and future demands, and in some cases, unsafe. Since the last Report Card in 2005, the grades have not improved. ASCE estimates the nation still stands at a D average. Deteriorating conditions and inflation have added hundreds of billions to the total cost of repairs and needed upgrades.”The categories of drinking water and wastewater receive a grade of D-.
The ASCE says the nation’s drinking water systems have aging facilities in need of replacement to adhere to federal water regulations. Demand for drinking water will increase over the next 20 years. Meeting the demand will be difficult because the ASCE estimates seven billion gallons of clean drinking water are lost every day due to leaky pipes.
The same holds true for wastewater. The ASCE says every year, old systems are dumping billions of gallons of untreated wastewater into America’s surface waters.
Out of all the categories examined by the ASCE, Wisconsin ranked the worst in roads, drinking water, and wastewater. We need to invest in what we are failing the worst at and that is concretely fixable with a return in health, efficiency, and effectiveness for all the residents of Wisconsin.
We in Wisconsin are all too familiar with water problems. Our water in various areas of the state is questionably unsafe. Uncontrollable contamination of Lake Michigan is profoundly reckless.
The Milwaukee Journal Sentinel reported the following on May 29, 2004:
“The sewerage district dumped an unprecedented 4.6 billion gallons of raw sewage in May—exceeding any annual dumping tally since the deep tunnel system opened in late 1993. Milwaukee Metropolitan Sewerage District officials blamed intense back-to-back storms and almost unrelenting rain for the massive sewage overflows. To visualize how much sewage was dumped by the district, consider these calculations: The 4.6 billion gallons would fill Miller Park 15 times over, from its base to its retractable roof. The sewage spill would also fill the U.S. Bank office tower on the lakefront 41 times.”
On October 7, 2004, Water & Wastes Digest reported a stunning discovery about the quality of drinking water in La Crosse:
“Prior to its chlorination, viruses from human sources occur in the La Crosse, Wisc., groundwater used for the municipal drinking water supply, a new report revealed. Although the city's treated water meets or exceeds state and federal standards for drinking water, researchers and public health officials agree that more study is needed to pinpoint the exact sources of the viruses and to determine if some viruses are surviving the chlorination process. The study found interoviruses, rotavirus, hepatitis A virus and noroviruses. La Crosse's source of water is an aquifer consisting of a deposit of glacial outwash sand and gravel approximately 170 feet deep, bounded on the east by the bluffs and on the west by the Mississippi River. Sand and gravel aquifers are among the most vulnerable to fecal contamination.”
The 2003 ASCE Report Card on Infrastructure commended Wisconsin for how it handles municipal wastewater. However, the ASCE added this conclusion: “Yet much remains to be done to maintain or enhance this position as a leader in the United States. Significant investments in this infrastructure will be required to maintain this position and to address pending and likely future regulations and requirements.”
The same 2003 ASCE Report Card reported this about Wisconsin’s municipal wastewater treatment plants:
“In year 2000, 19 plants, about 2.8%, were rated as requiring improvements and 131 plants, about 19.5%, were rated as requiring some action. Estimated future needs through 2020 exceed $3.35 billion, while actual project funding has been less than $100 million per year.”
That brings us back to the state stimulus package that was approved in just a matter of days. Note the ASCE pinpointed the cost of addressing future wastewater needs at $3.35 billion. The state of Wisconsin expects to receive just under $4 billion in stimulus money from Washington. A better use of that money would be to invest in what we are failing at the worst and that is concretely fixable. The benefit is a return in health, efficiency, and effectiveness for all the residents of Wisconsin.
The damage being done in Milwaukee does not only affect Milwaukee, but the entire state of Wisconsin. When compared to all other states we are failing the citizens of Wisconsin in providing access to clean safe drinking water and a safe waste disposal system more than any other infrastructure/education/healthcare category.
The federal stimulus package is an opportunity for us to create jobs, give every state access to safe drinking water, and build a future in our most valuable resources by fixing our water and sewage system. Think about it. We can fix our water safety, preserve a coveted resource, reduce unemployment, and repair our infrastructure. That is how we should be investing our stimulus package: in our water and sewage system.