Monday, September 22, 2014

Madison economy thriving in spite of the WMC/Walker Way

This week's Isthmus featured an intriguing and in-depth article from Mark Eisen explaining how Wisconsin Manufacturers and Commerce ignores the growing tech industry in the state. Take a look at this set of quotes from actual job creators- people who have started and successfully run new tech businesses in Wisconsin.
"I only know about WMC because their building is near my house," says Niko Skievaski, the cofounder of tech-focused 100State and 100Health. "I walk by it and wonder: 'What the hell do they do?' I haven't heard of any of their representatives reaching out to entrepreneurs."

Skievaski's colleague in Milwaukee, Matt Cordio of Startup Milwaukee, says the same: "Nobody from there has ever reached out to us. I have no idea of what they really do."

Ditto Matt Younkle, a principal in the music storage service Murfie.com and a cofounder of Capitol Entrepreneurs, the influential tech-leaders group in Madison: "I've never been approached by WMC -- I don't know much about it."

And, yup, Forrest Woolworth, a cofounder of both PerBlue mobile gaming and Capitol Entrepreneurs, tells the same story. "WMC is pretty much in a whole different world from us," he says. "We've had no interaction with them good or bad."
And while the WMC types whine about Madison’s “anti-business attitude” (because it believes in horrifying things such as paying taxes for services, strong city planning and worker’s rights), it’s worth noting that this “anti-business” area keeps growing jobs. Eisen points out data from researcher Joel Kotkin that notes the Madison area had jobs go up 3.6% between 2008 and 2014 (which account for the Great Recession and its current recovery), while cities such as Milwaukee and Chicago still aren’t back to where they were six years ago. The recently-released Quarterly Census on Employment and Wages also showed that Dane County is the place to be when it comes to job growth in Wisconsin, with nearly twice as many jobs added as the second-place county.

Most private sector jobs added, Wisconsin Mar 2013-Mar 2014
Dane County 4,218 (+1.8%)
Marathon Co. 2,290 (+4.0%)
Waukesha Co. 1,850 (+0.9%)
Sheboygan Co. 1,710 (+3.4%)
Kenosha County 1,363 (+3.1%)
Milwaukee Co. 1,130 (+0.3%)

The same trend holds when you expand it back to the last 3 years. While much of the rest of the state has floundered to the worst job growth in the Midwest, Dane County has stayed strong.

Top Wisconsin private sector job growth, Mar 2011- Mar 2014
Dane County 14,120 (+6.4%)
Milwaukee Co. 8,869 (+2.2%)
Waukesha Co. 8,790 (+4.4%)
Marathon Co. 3,856 (+6.9%)
Brown County 3,729 (+3.0%)
Rock County 3,551 (+7.3%)
REST OF THE STATE 51,614 (+4.5%)

As Eisen’s article in Isthmus notes, WMC (aka, where GOP staffers and hacks cash in) is overloaded with old Wisconsin businesses and oligarchs, and don’t really talk too much about how to attract new business and entrepreneurship to the state. Hilariously, WMC President Kurt Bauer is quoted in the story as saying Judy Faulkner, CEO of the fast-growing Epic Systems in Madison, won’t even meet with him when it comes to talking about to attract young up-and-comers into Wisconsin. Maybe it’s because Judy knows how the Old Boys Club does business in Wisconsin, and decided she wasn’t all that interested in dealing with the “Mad Men” mentality that these guys have.

There's another telling statement in Eisen's companion article that talks more about the younger leaders in Madison's tech scene and the politics involved. And it's an older guy on the scene that illustrates how Walker's policies don't really do much to help up-and-coming businesses.
Mark Bakken, 49, is a leader in the new Wisconsin economy. His Nordic Consulting, which counsels medical facilities on optimizing Epic's electronic medical records, has proved a huge success. Nordic's revenues this year are expected to hit $120 million just four years after the company launched. The company's workforce totals 430, including 190 in the Madison area.

"Tax credits are worthless," Bakken says. "They're just handouts. They will not sway one person on whether or not they're going to invest in a startup."

Bakken, who is a serial entrepreneur, explains that investors put their money on the strength of a company's business plan and the savviness of its management team. "If there happens to be a freebie from the state, great. But it's a freebie," he says. "I've personally invested in 15 different startups. I'm not doing this because of some crazy law."
In other words, it's about good ideas, cultivating TALENT, and having the market for it to work. Tax credits change next to nothing in that equation, and often make it worse by decreasing investment in the very factors that make a start-up more viable.

And let’s be honest, WMC isn’t really about “raising the game” or “improving competitiveness” when it comes to Wisconsin business. It openly advocates for candidates that have voted to disinvest in public schools, destroy local services (in the hopes that they’ll be privatized for profit), back regressive social policies on issues such as abortion and marriage equality, refused to take advantage of federal assistance to develop new initiatives such as solar energy, rural broadband, and high-speed rail, and WMC has no problem with taking money out of the pockets of hundreds of thousands of workers. Instead, all the WMC types care about is maximizing profits for themselves, and they don’t care whose expense that comes at, or if it eliminates the quality of life metrics that would make the state better for business.

WMC is filled with disgusting greedheads and nepotism cases that care more about hiring politicians than employees, and they not people that should be listened to when it comes to figuring out a strategy to move the state’s business climate ahead. It is telling that Scott Walker trusts these types to organize much of his economic strategy, and that Wisconsin is dead last in job growth over the 3 ½ years that strategy has been carried out.

Hmmm, maybe Scott Walker shouldn’t rip on “Madison liberals” and have his puppetmasters file lawsuits to screw over Dane County public workers. Maybe instead he should thank us from keeping the state from being either further in the hole on jobs than we already are, and learn something from Dane County’s success. Maybe we need someone from that overeducated socialist city of Madison to lead this state out of the doldrums. After all, we seem to be one of the few places in the state that are doing well when it comes to 2010s-style capitalism.

Sunday, September 21, 2014

WisGOP leggies can't lie their way out of exploding budget deficit

Boy, the Republicans must really be feeling the heat from the exploding Wisconsin budget deficit. Take a look at the crap that GOP Joint Finance Chairs John Nygren and Alberta Darling are trying to pull. They decided to take Department of Revenue Secretary Rick Chandler’s claim about “no revenue shortfall” (mentioned in the pathetic spin job DOA Secretary Mike Huebsch gave to Dem legislators earlier this week), and then they threw a set of rosy assumptions at the Legislative Fiscal Bureau, and asked them to “score” it.
1. Tax collections in 2014-15 would be $14,725, as suggested by Secretary Chandler.

2. Net appropriations would be reduced, on a one-time basis, in 2014-15 by $116 million in order to end the fiscal year with a gross balance of $0.

3. Revenues in 2015-16 and 2016-17 would increase annually at the rate of tax collection growth over the previous five fiscal years. The average annual growth in tax collections in tax collections for the five-year period (since 2008-09) has been 2.9%.

4. Net appropriatons for 2015-16 and 2016-17 would remain at the 2014-15 level, adjusted for one-time amounts and 2015-17 commitments
And so Bob Lang did his job, crunched those numbers, and said if all this happened, it would mean a balanced budget in 2014-15, and a surplus of $535 million to play with in the next budget. So the GOP co-chairs used this to say “Crisis? What crisis?”

One problem. THOSE ASSUMPTIONS AREN'T REALITY. For many reasons.

GOP Fallacy Number 1 “Secretary Chandler assumes FY2015 revenues will be at $14,725.” As mentioned before, that would mean revenue growth of 5.57%, well above the LFB’s own projection for 2015 of 3.49% revenue growth. And the “better revenues” that Chandler says happened in July and August 2014? Matt DuFour of the State Journal reported that those numbers were still 0.16% below the same months in 2013.Explain to me how that projects to 5.6% revenue growth?

So let’s stick with the LFB’s original projections of 3.49% revenue growth for this fiscal year, and that’s probably being charitable given the reduced job growth we’ve seen in 2014 and the disappointing revenue numbers that have hit since the second round of tax cuts were passed earlier this year. This means that the revenue shortfall would be around $290 million in year 2 of the budget, which means a budget deficit of roughly $406 million to make up.

GOP Fallacy Number 2 $116 million in “net appropriations will be reduced.” This is an additional step that will have to happen on top of the huge increase in revenue (which likely won’t happen, but for this, let’s assume they will). So these cuts will just magically be imposed? Ok, in which departments? We already have $317 million in lapses built into the 2014-’15 budget. So this’ll just be increased to $433 million? And given that we may well be overspending as it is (with programs with budget shortfalls- like Medicaid), there’s going to have to be overcompensation somewhere else. NAME THE CUTS, or admit you're going to tap the $270 million Budget Stabilization Fund to fill out the deficit.

GOP Fallacy Number 3 Revenues in 2015-16 and 2016-17 would increase annually at the rate of tax collection growth over the previous five fiscal years. OK, we’ll roll with this one. I won’t even assume that 2.9% figure for 2014-’15, and leave it at the LFB’s 3.49% (I’m a nice guy that way). Let’s see what we get, and I’ll also include the changes in tax laws listed on the LFB’s 2015-17 projections from May.

FY 2014 Revenues- $13,948.1 million
FY 2015 Revenues-$14,434.9 million
FY 2016 Revenues- $14,853.5 millon +$122 in changes = $14,967.5 million
FY 2017 Revenues- $15,284.3 million + $44 in changes = $15,328.3 million

Then you add in $559 million in extra revenues to the General Fund (gaming compacts, other items) with no changes to expenses, that means the budget balance in the following years looks like this.

FY 2015-16 -$205.5 million
FY 2016-17 +143.3 million
TOTAL -62.2 million + $65 mil reserve = $127.2 million deficit

OK, so Nygren and Darling were off by $662 million, but it’s a minor deficit that can be easily modified, right? Uhhh, no.

GOP Fallacy Number 4 Net appropriatons for 2015-16 and 2016-17 would remain at the 2014-15 level, adjusted for one-time amounts and 2015-17 commitments. THIS IS FANTASY, and it’s been proven by the budget requests that have come in so far the Department of Administration. Those numbers (which are merely to continue doing what we’re currently doing) are nearing $1.1 billion over current expenses before we even discuss items such as state aid to public schools and any General Fund money that goes to our deficit-riddled Transportation Fund. Nearly 75% of that number is due to a Medicaid shortfall resulting largely from the WisGOPs’ TeaBagging of Obamacare, and with Scott Walker running ads against Obamacare today, I’m guessing he wouldn’t be too keen on saving Wisconsin tax dollars by expanding Medicaid.

And as State Senator Kathleen Vinehout mentions, much of these requests are for services THAT HAVE TO BE GIVEN, and will continue to be given without changes in the law. So with that in mind, we need to count these requests, and rack up the figures.

$127.2 million revenue deficit
$1.1 billion in extra expenses
TOTAL $1.227 billion General Fund

If you split up the $1.1 billion in added budget requests over the two years, it comes to $820 million having to be made up in year 1, and $407 million in year 2, meaning there will be massive damage in calendar year 2015 in particular. And that’s using the WisGOPs’ assumptions of 2.9% revenue growth. If that continues to fall short…..the Scott Walker budget ditch will take more than a regular-size ladder to get out of. I'm not even mentioning the $1.1 billion likely needed to shore up the Transportation Fund, which means that even with normal revenue growth, we will likely need to make up at least $2.3 billion in the 2015-17 budget when the Legislature gets back into session in January 2015, and an estimated $406 million by the end of June.

Now you can choose to beLIEve Nygren and Darling’s spin job of a "surplus" if you want to stay in your little bubble. You can also choose to beLIEve the Brewers still have a chance to win the NL Central, despite being down 7 games to the Cardinals with 7 games to play. But those of us who are in the adult, above-ground world know better, and need to deal with the fact that unlike Karl Rove, we can’t create our own reality. And since the GOPs refuse to deal with the budget mess they’ve made, looks like we need Mary Burke and others to clean it up.

Saturday, September 20, 2014

Yeah, the updated jobs figures don't look so great for Walker either

Been tied up taking advantage of a great football weekend in Wisconsin, but here's quick rundown of stats from the state-by-state jobs report released yesterday by the Bureau of Labor Statistics. First of all, only 5 states lost more private sector jobs in August than Wisconsin’s 4,300. They were Michigan (-9,200), Ohio (-8,000), Massachusetts (-6,800), Mississippi (-5,200) and New Hampshire (-4,700). Interestingly, Midwest neighbors Illinois (+13,000), Minnesota (+5,700), and Iowa (+2,800) each had sizable private sector job gains last month while we were falling behind.

But obviously one month is a small sample size. Let’s see where we’ve been since March, since that was the end date of the Quarterly Census on Employment and Wages, and put these two figures together to get a big-picture comparison over the last 3 ½ years. We’ll start with the private sector job figures since March 2014, and then work back from there.

Total private sector job change, March 2014-August 2014
Ind. +28,100
Mich +27,300
Ill. +17,800
Iowa +9,200
Minn +7,000
Wis. +7,000
Ohio -2,800

Given that Minnesota has fewer people employed than Wisconsin (although the gap is closing), this means we are 6th out of 7 in the last 5 months for private sector job growth- still in the ditch. So now let’s add it to yesterday’s “gold standard” report, and see what this brings us to. Ohio’s drop becomes pretty obvious on this chart.



Yes, that red line is Wisconsin, and we’re still DEAD LAST since Act 10 was jammed through the Legislature. In fact, we’re a little further behind the FIBs than we were when I ran the March numbers on Thursday (0.07% behind Ill vs 0.01% through March). And no matter how many right-wing memes Dan Bice chases and gives a megaphone to on the pages of the Journal-Sentinel (what a disgrace that guy’s becoming), it can’t hide the fact that Scott Walker has failed miserably at the one thing he promised to do in 2010 and 2012- add jobs by making Wisconsin “Open for Corruption Business.”

Heck, even Politi-crap had to admit this week that their boy Scotty will fall far short of his signature promise of 250,000 private sector jobs, and you know it had to have killed editor Greg Borowski and writer Tom Kertscher to do that. And even in that Politi-crap admission, they try to include the Madison area as having "weak growth", but the QCEW shows that us dirty socialist hippies in Dane County have added 14,100 private sector jobs in the last 3 years- more than 1/6 of the state's total. Not bad for a place that's still less than 1/10 of the state's population. Maybe instead of denigrating Mary Burke as a "Madison liberal" and knocking Dane County for refusing to use the tools of Act 10, maybe the rest of the state could learn something from the place that's growing a whole lot better than much of the rest of the state.

And maybe we need to remind folks that Scott Walker's policies of ignoring reality and deciding to use trickle-down and "pay-for-play" as a job-development strategy isn't a very good idea. Maybe we need someone in charge who believes in a high quality of life that attracts TALENT and ENTREPRENEURSHIP instead of giving handouts to greedy corporations in the hopes that they might one day give the average person a crumb or two. Just a thought.

Thursday, September 18, 2014

Wisconsin- still DEAD LAST for jobs, and dropping in 2014

Both Wisconsin jobs reports that were released today gave some added information on the failures of the Fitzwalkerstanis. We'll get to the "gold standard" report in a minute, but let's start with the current-day, as the Wisconsin Department of Workforce Development released the August jobs numbers this morning. Not surprisingly, the Walker Administration's report promoted a drop in the state's unemployment rate of 5.8% to 5.6% (it's actually a drop of 0.12%, from 5.77% to 5.6499%, but as you'll see, the Walker boys need all the breaks they can get). And the reason they led with the change in the unemployment rate is because of this other part of the report.
...The number of private sector jobs declined by 4,300 from July to August on a preliminary basis (seasonally adjusted), which is within the margin of error for the monthly series.
Let's repeat that. WE LOST 4,300 JOBS LAST MONTH. That's the fifth time in the 8 months of 2014 that Wisconsin has lost private sector jobs in this survey, and even with an upward revision in July of 2,100 jobs, that still leaves us 2,200 jobs below where we thought we were going into today. This means we've only added 8,800 jobs in the first 8 months of 2014, putting it on pace to be by the state's slowest job growth in Walker's 4 years. And it blows the Walker jobs gap up to near 73,000 in the 3 1/2 years of this guy's reign of error.



We'll see where that 4,300 job drop compares to the rest of the nation when the state-by-state numbers come out tomorrow, and I may also look to see where we shape up compared to the rest of the country for 2014 so far. It probably won't be very good for either stat.

Now, let's take a look at the QCEW numbers, and the spin by Walker cheerleader and DWD Secretary Reggie Newson is quite pathetic.
"Our ongoing efforts to grow Wisconsin’s economy and develop the workforce helped the private sector create jobs at a faster rate than two of our Midwest neighbors – Minnesota and Illinois – during the 12-month period ending in March 2014," Department of Workforce Development (DWD) Secretary Reggie Newson said. "The addition of over 28,700 private sector jobs during this time means more opportunities for Wisconsin's workforce and is in line with many other indicators showing our state's economy continues to grow and add jobs."
Wow, we beat two states in our region over these 12 months! How'd we do against the other 4? Oh, not so good.

Private sector job growth, QCEW, Mar 2011-Mar 2014
Mich +2.18%
Iowa +1.75%
Ohio +1.56%
Ind. +1.51%
Wis. +1.26%
Ill. +1.24%
Minn. +0.84%

So the Walker Administration is trying to claim that having slightly more private sector job growth than Illinois and Minnesota means that we're doing OK and that we've somehow "turned the corner" when it comes to job growth. Uhhh, NO. We still trail the rest of the Midwest over the last 12 months measured, and as you can see Wisconsin's private sector job growth is still well short of what it was before Act 10 was passed in March 2011.



As you'll also see, Minnesota's low job growth from March 2013 to March 2014 is a case of taking a breather after a hot job market in the previous two years, as they were second in the Midwest for private sector job growth from 2011-2013, and are middle of the pack for the last 3 years. By comparison, Wisconsin is still DEAD LAST in the three years since Act 10 was jammed through the Legislature in March 2011.



Geez, with these crappy numbers, no wonder Walker's releasing two desperate ads today, including one against Obamacare (despite the fact that strong majorities of Wisconsinites want expanded Medicaid), and one touting "tax savings." Well, we've seen the result of all those Walker "tax-savings" moves- well below-par job growth and a budget deficit that seems to be blowing up by the day.

Keep talking WisGOP. You look more failed by the day.

Wednesday, September 17, 2014

Tomorrow's coming job attractions in Wisconsin

We get a two-fer here when it comes to Wisconsin jobs tomorrow. The morning will feature the release of the "gold standard" jobs report of the Bureau of Labor Statistics' Quarterly Census on Employment and Wages (QCEW). This will compare the March 2013-March 2014 job growth standards, and the Walker Administration tried to hide the state's QCEW figures to the public last month until they were shamed into it by leftie bloggers and Dem legislators. And while the Department of Workforce Development's release on jobs was light on details, you could still put enough together to see that the state's projection of 28,653 private sector jobs added in those 12 months continued a stagnant trend, and a lower amount of job growth compared to when Walker took office in 2011.



The big thing with tomorrow's release is we get to see how the state matches up with the rest of the nation, and to see if it can get out of the "bottom third" standing for job growth that it's had for much of the last 2 years. In addition, I might compare the 3 years of Wisconsin job growth with the other Midwestern states, as March 2014 would 3 full years since Act 10 was jammed through the Legislature, and we'll see if the state can climb out of the "last in the Midwest" standing that it was in for the Age of Fitzwalkerstan through December 2013.

Then in the afternoon, we'll see the DWD release the monthly Wisconsin jobs report for August. Nationwide, August was a bit of a disappointment job-wise, with only 134,000 private sector jobs added and 142,000 overall- the lowest monthly addition in 2014. However, that was after a strong start of the year nationwide, and combined with Wisconsin's tepid addition of only 11,000 private sector jobs through July in this survey, meant that the Walker jobs gap has ballooned further in 2014. We need to add 2,900 private sector jobs in this month's report in order to keep up with the "disappointing" numbers in the rest of the nation, and to keep the Walker jobs gap from becoming even larger than the 68,000 jobs that it was at in July.



So keep your eyes open for both of these jobs releases, and they'll be big ones. It'll be the last QCEW report to come out before the November election, and the next-to-last monthly jobs report from DWD. You can bet there'll be plenty of spin (including from yours truly), but the numbers are the numbers, and having them in front of you will separate the BS from the honest smack.

Turnout matters- in the Marquette Law School Poll

My immediate reaction to seeing today’s poll from Marquette Law School was to give a giant “WTF?” The Walker campaign had been acting increasingly desperate in recent weeks as round after round of bad news hit almost daily, but this poll says Scotty was doing BETTER among likely voters than he was a month ago? On its face, it made no sense, but given that you’re dealing with small samples and the fact that Walker led by 3 points among registered voters in the previous poll, maybe there was something to it.

Then I noted a comment by Marquette Law School’s Charles Franklin, and it set off my BS detectors



That comment about "increased enthusiasm" made me want to look inside the numbers at the crosstabs, to see what he meant by that. And when I did, the answers behind Walker’s “improvement” became obvious. The poll sample added a ton of Republicans to the mix.

Take a look at the question of “Are you a Democrat, Republican, or Independent?” in the September Marquette Poll, and then compare it with the answers to the same question in August.

Dem, Republican, or Indy? Reg. voters
Aug 2014 Marq. Law Poll- 30.9 D, 27.0 R, 37.9 I
Sept. 2014 Marq. Law Poll- 27.9 D, 28.8 R, 40.7 I

So that sample went from D +3.9 to R +0.9. Yet at the same time, Burke IMPROVED by 3 points among registered voters, from -3 to a tie. The "likely voter" poll was even more GOP-leaning, at R +3.7 vs D +6 in August- no wonder why Burke lost 5 points. So there's a lot of your change right there- it's not Walker gaining support. And to pollster Charles Franklin's credit, he admits this party ID stat is a huge factor.
“It is unusual to see a 5-point net shift in partisan composition,” Franklin said. “People should be appropriately skeptical since it is always possible this sample is simply an outlier. However, the shift to more Republicans and fewer Democrats occurred across all regions of the state and most demographic groups, demonstrating that it was not a localized difference in response rates.”

In fact, if anything, Walker is losing some of his core backing. Previously, polls had had the Dem and GOP vote going around 90-5 for each party’s candidate, and Walker slightly favored among Independents (because a sizable amount of them are TeaBaggers). Well, there was a slight change in this breakdown for the September poll.

Sept. 2014 Marq. Law Poll by party
Democrats- Burke 93.2-3.4
Republicans- Walker 88.8-8.0
“Indys”- Walker 44.1-43.0

Scotty then got about an extra 1% from a scattering group, so that’s where you get the 46-46 Registered Voters result from. It shows a bit of erosion from Scotty’s own GOP. I think that's a result of some of them seeing the light, and realizing a crony capitalist that blows a gigantic hole in Wisconsin’s budget is no old-school, good government conservative.

Now with this in mind, let’s use those same Dem-GOP-Indy responses, and plug it into the August sample of registered voters in the Marquette Poll. The result? Burke leads by 4.6 points, 47.3- 42.7.

I understand that sometimes party IDs do switch and reflect people latching onto certain “teams” as they get more fired up for an election. It also reflects who is more or less likely to vote in a certain election (the voters more likely to drop out at a midterm are generally young, single, and/or minority- all three of which lean Dem). But let’s take a look at the gov exit polls from 2010 and the recall election of 2012 along with the 2012 presidential exit poll , and see what’s more likely to be the electorate in Wisconsin in November 2014.

Party ID, Wisconsin exit polls
2010 Gov- Dem 37, GOP 36 (D+1)
2012 recall- Dem 34, GOP 35 (R+1)
2012 presidential- Dem 37, GOP 32 (D+5)

And casual Dems are likely more fired up in 2014 than they were in 2010, or even 2012, as some wussed out on the idea of a recall (how’d that idea work out for you?). At the same time, the September Marquette Poll shows some GOPs probably aren’t as likely to “Stand with Walker.” So a D+4 electorate (as was done in the August Marquette Poll) seems to be a more likely outcome in November than an R+1 electorate (which was in the September poll). which would give the advantage to Burke.

That being said, maybe the Marquette Law Poll is closer to right this time and was off the last. Their record in 2012 was pretty good when their final polls came out for the recall and presidential election. And I’m also aware that this sounds pretty close to the “unskewing” phenomenom that GOPs fell victim to in 2012, where those dingbats beLIEved that Romney was going to win, all the way to Election Night (which made their crash all the more hilarious).

But these figures are striking, and help explain why Walker and his supporters are trying to so hard to suppress the vote with the increasingly insane ramifications from an all-GOP Appeals Court panel’s decision to reinstate voter ID for the November election. Walker and WisGOP can’t win a statewide election unless the Democratic electorate is shrunken or discouraged to the point that it’s near even on Election Day. If it’s a strong Dem turnout- Walker’s done.

Which is what makes it all the more important to educate and assist Wisconsinites with getting that ID (at least until the ruling is tossed due to not being workable), and in making them know that it’s the Republicans that don’t want them to vote. And that anger and outreach effort is why the voter ID decision could prove not to be a boon to Republicans (like the suburban slimeballs think it will be), but instead could be one of the final blows to their chances in the Fall.

So instead of despair, today’s Marquette Law Poll tells me IF WE GET OUT TO VOTE IN NOVEMBER,WE WILL WIN IN WISCONSIN. Period. So make it happen!

Tuesday, September 16, 2014

DOA Secretary keeps digging hole on budget deficit spin

Another day, another dishonest statement on the budget by the Walker Administration that has to be refuted. This time, it’s from Department of Administration Secretary Mike Huebsch, who oversees the State Budget Office, and is clearly feeling the blowback from the current and future budget deficits that are projected due to Walker policies.

Huebsch sent a response letter to a request that Dem Senators made last week demanding to know what cuts the Walker Administration was planning to make to the budget between now and June 2015, in order to make it balance. Naturally, Huebsch ignores that question, but does bring a bit of news in his response.
….to help satisfy your inquiry, I asked Revenue Secretary Rick Chandler to provide me with a written update regarding collections in the first two months of fiscal year 2015. We are in a stronger financial position than forecasted with tax revenues $48.8 million higher than expected for July and August 2014, which keeps us on track to meet the Legislative Fiscal Bureau’s May 2014 projections for the current fiscal year.

As I’m sure you are aware, State revenue tax collections typically fluctuate month-to-month throughout a two-year budget cycle, and Governor Walker and the Legislature prepared for this variability when building the biennial budget. It is important to remember that the Legislative Fiscal Bureau forecast assumes zero revenue growth in this biennium or the next.
One problem with Huebsch's comments- that last sentence is FALSE. One look at those May 2014 Fiscal Bureau projections shows that there is revenue growth forecast for the current biennium.

General Fund tax projections, LFB May 2014
FY 2014- $14.229 billion (actual number $13.948 billion)
FY 2015- $14.725 billion
Projected rev. growth in May 2014 projections- 3.49%
Growth needed based on FY 2014 actual for $14.725 billion- 5.57%

As Sen. Dave Hansen noted last week, a 5.57% revenue increase is extremely unlikely, given the state’s past history. In addition, what does Huebsch mean when he says revenues were “$48.8 million higher than expected” in July and August? Compared to what? The end of June? July-August 2013? I’d like to see the actual numbers on that one (which of course, are not provided). Also worth noting is that the month of August got 1 extra day of the Labor Day weekend in 2014, which in a tourist-based state like Wisconsin is kind of a big deal when you’re talking sales taxes and related revenues. Let me see the September revenue numbers before I start thinking this budget is anywhere close to back on track.

For another clue on the budget, I found it interesting that Huebsch and DOA released the General Fund Cash Report to the Joint Finance Committee today. This is a regular report that gives a look at the state’s cash flow, and while it is not an exact match for General Fund revenues and expenses, it’s not a bad proxy. This cash balance number goes up and down throughout the year based on when certain bills come in and get paid, and it had slipped earlier this year, portending the revenue shortfall and bad budget numbers that followed.

Projected opening cash balance forecast for October 2014
April 30, 2014 +$1,785.5 million
July 30, 2014 +$1,260.4 million (down $525.1 million)
September 16, 2014 +1,537.3 million

Sept. #- UP $276.9 million vs. July. DOWN $248.2 million vs April.

So maybe there’s some truth to Huebsch’s claim that the current budget isn’t in as dire shape as it seemed last week. But it also shows that we’ve only made up a little more than half the hole that was dug in the earlier part of the Summer after two rounds of Koo-Koo tax cuts hit.

There’s also this interesting whine that Huebsch throws in for the Dem Senators in his response letter.
The only exercise more negligent [than to assume no revenue growth] would be to add the new agency 2015-17 budget requests DOA has recently received and proclaim that we now have a new financial crisis on our hands.
OH REALLY? So we can ignore the $760 million in extra state Medicaid spending and the $831.5 million in total state tax dollars that are needed just to keep the Department of Health Services operating at the same level as today? We shouldn’t add those figures to the base expenses for 2015-17, because this situation magically will be magically fixed over the next 9 months? And we should assume revenue growth will happen over the next two years but throw out any extra costs due to inflation or population or additional Wisconsinites in need of assistance?

Sorry Mike, it doesn’t work that way. Especially when in your letter you repeat the Walker Admin’s lie about a “$3.6 billion budget deficit” in the next paragraph- a number based on the same type of budget requests that Huebsch says shouldn’t be counted! I seem to recall you guys claiming that all these unmet needs meant there was a budget crisis in 2011, which is why the “bomb” of Act 10 had to be dropped. Were you lying then about a crisis, or are you lying now?

Sometimes it’s better to lay back and let the complaints drop instead of answering them, because trying to talk your way out of it just makes your dig your hole even deeper. And speaking of digging holes, look what’s hitting the airwaves….



Keep talking, WisGOPs. The spin on your failed record looks lamer by the day.