Monday, April 14, 2014

DOT funding questions continue

I see that DOT Secretary Mark Gottlieb was interviewed by Mike Gousha over the weekend, discussing the meetings the DOT is holding around the state to discuss transportation needs and funding for the future. I've mentioned that the lurking $1 billion Transportation Fund deficit is a huge lurking issue that hasn't been talked a lot about in this election cycle so far, and I credit Gottlieb with doing the interview and raising awareness of it. It's also worth noting in the story that the Secretary mentions added General Fund money as an option for finding more Transportation funding.

The problem with grabbing more General Fund dollars is 1. We already have a $650 million General Fund deficit for the next budget, so any additional money being sent over drives up the deficit further and 2. This assumes General Fund dollars will be there to be taken. With two rounds if tax cuts kicking in and a decent possibility of another recession and/or stock market drop in the next 3 years, revenues already look to be very limited.

In addition, the 9 inches of snow forecast up North this week remind us yet again of the larger-than normal costs that state and local governments have had to take on from this winter. The tab from this has yet to be made. apparent, but it could limit any carryover or cushion that might have existed. So barring the release of federal disaster funds to help pay for the high costs of this long winter, there are going to be higher-than expected expenses beyond any new construction projects and highway expansions.

So with that in mind, is it possible that RTAs, wheel taxes or some other locally-based tax is the solution to this issue of underfunded roads and transit? This would be a very Walker-like move, shoving off the extra borrowing and needed costs onto the local communities, and not having to raise gas taxes or other state fees as a result.

Regardless, this is becoming a very big issue outside of the political world, and as we spend this Spring dodging potholes and construction barrels, many will be asking "Can we get these things fixed, and can we afford to?" We should start looking at the numbers, looking at the options, and seeing how we can. Before our revenues are so constrained that we can't.

Sunday, April 13, 2014

Could be a slowdown at the Funhouse

7 beeps on a laptop is usually not a good sign, so it's time to get it looked at. Don't worry, I can still post in and react to stuff. Pictures might be a bit tough, however. No big whoop.

Are our latest bubbles bursting?

Recent information and events of the first two weeks of April may have some ominous signs for our economic present, and future. This is true in both Wisconsin and nationwide.

If you pay attention to the numbers of Wall Street, you know that this month has not been a good one for stocks. The Dow Jones industrial average is down 500 points since April 1, and after a runup earlier last week, it dumped 266 points on Thursday and 143 more points on Friday. Now this could be just a correction after the Dow gained nearly 4,000 points from mid-November 2012 to the end of March 2014, but this article by Reuters via Yahoo Finance says there may be more to it.
First-quarter earnings estimates have fallen sharply as many companies have blamed the brutal winter for weak outlooks.

With high-valuation stocks under pressure, earnings could be subjected to even more investor scrutiny than usual.

"There's skepticism among investors about the outlook, and we're getting into the first-quarter earnings season, so you're going to see some positioning," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

Profit growth for Standard & Poor's 500 companies now is expected to have increased just 0.9 percent in the first quarter from a year ago, down from a January 1 forecast for 6.5 percent growth, Thomson Reuters data showed.
While a slowing in profits isn't a terrible thing in the real world (I'd argue that companies hoarding excessive profits over job and wage growth is one of the things that has kept a lid on the country's growth for the last 4 years), it also means that the big cocaine party stock market bubble we've had in the 2010s may be starting to pop. The same Reuters article notes that NASDAQ biotech companies have had price-to-earnings ratios of more than 34 to 1, which sounds a whole lot like the conditions that predated the dot-com bust of 2000-2001. Tellingly, the NASDAQ closed under 4,000 points on Friday, and is down over 8% in the 6 weeks and 6.5% in the last 10 days. If the NASDAQ drops another 5 points, it'll be at its lowest point since before Thanksgiving. With options expiring at the end of next week, it could be a quite interesting time on Wall Street.

And the other Fed-helped bubble in the States might also be deflating- this one in housing. Black Knight Financial Services does a monthly report on the amount of new mortgages, and last week they reported that new mortgages in February were at their lowest levels in at least 14 years. This is blamed on tighter lending standards, higher interest rates, and more people paying in cash to buy homes. But new home sales aren't hot either, as seasonally-adjusted sales for February were at their lowest levels in more than a year. Some of that may have been artificially low due to the polar vortex, but that doesn't mean it isn't going to eat into the real estate economy, and put pressure on coming months.

Wisconsin also had a dismal start to 2014 when it came to home sales, as the Wisconsin Realtors Association reported late last week. Home sales were down 11.5% for the 1st Quarter of 2014 vs. Q1 in 2013, and were closer to 2012's levels of 11,074 than 2013's 12,378. Again, this was an extraordinarily cold winter, but it's not like 2013 had record-warmth, especially with a miserable February and March, so you have to wonder if there's something more going on. When the Legislative Fiscal Bureau made its revenue estimates in January 2014, they based their estimates on home sales INCREASING by nearly 5%, and corporate profit growth being up closer to 6% than the 0.9% mentioned by Reuters. This rosy outlook led to the projected surpluses that led Scott Walker and the GOP-run Legislature to throw in additional tax cuts, but if these positive scenarios don't play out, it makes it much more likely that a deficit will appear, with less flexibility available to fix it.

That being said, job numbers are staying reasonably strong in the U.S. (albeit less so in Wisconsin), and I don't see the economy as a whole falling into recession. But there are definitely some warning signs of slowdown ahead, and unless things heat up with the Spring and Summer weather, the economy may not look as smooth as many were predicting when 2014 began. And that could trickle its way into a worsening fiscal picture for Fitzwalkerstan.

Saturday, April 12, 2014

Voucher mob tries to take over the 920, MPS, and anywhere else they can

Yesterday was obviously a big day in Wisconsin politics, as two long-time Fox Valley Republicans decided not to run for re-election after being pressured by extreme right-wingers in their own party. I can talk about the retirement of U.S. Rep. Tom Petri at a different time, because I want to concentrate on what a certain State Senator's retirement means, and how it illustrates just how a very specific interest group has come to take over much of the education policy and discussion in our once-strong education state.

State Senate President Mike Ellis quit yesterday after a "hidden video" recording surfaced, which caught Ellis explaining how he was planning to set up his own SuperPAC with Appleton-area oligarchs. But the real story to me with the "Ellis tape" is that it came from Breitbart Boy/Ratfucker James O'Keefe, most infamous for making racist, deceptive videos about ACORN and for being convicted in 2010 for trying to break into a Dem Senator's office in New Orleans and tamper with her phone.

So what was a right-wing scumbag like O'Keefe doing to try to take out a Republican like Ellis, who had voted for Act 10, both Walker budgets, heinous abortion bills and other ridiculous WisGOP bills the last 3 years? The answer seems to be related to billboards that a pro-voucher group put out last June, after Ellis slowed an expansion of taxpayers funding voucher schools in Wisconsin.
A tea party group in Ellis’ district recently erected a billboard depicting the veteran senator as an Egyptian pharaoh. Accompanying the ancient monarch is a baby meant to resemble the baby in E-Trade ads.

The board’s call to action: “Set our children free!”....

“There’s not a direct connection when you think of the children of our time and the Jewish children (of ancient Egypt), but from the standpoint of freedom of choice and ‘let my people go,’ that’s the key phrase that we think has some application here,” explains Ed Perkins, president of the Fox Valley Initiative, the tea party political action committee responsible for the ads.

Perkins used to sit on the board of the Lutheran Urban Mission Initiative in Milwaukee, an association of Lutheran schools that participate in that city’s voucher program.
And we know that the oligarchs that give "dirty work" money to people like James O'Keefe would love to dismantle public education, rob teachers' unions of bargaining power, and grab taxpayer dollars and profits off of voucher schools for themselves. It's a logical connection. Ellis admitted as much in his resignation letter.
Instead of being criticized from our opponents, independent thought is attacked in our own backyard. Like my dear friends Tim Cullen, Bob Jauch and Dale Schultz, I see that compromise is not valued in today's Capitol environment, and that means I don't fit in anymore. Special interests hold too much sway, instead of the voice of the people. I'm a senator from a different era, and I value my integrity too much to compromise it any more.
Of course, a lot of us wish Ellis hadn't spent the last 3 years compromising his integrity on a whole lot of the Walker agenda (for example, Ellis gave the "Wisconsin 14" some extra time to leave the State Senate in 2011 before informing others, knowing that Act 10 would be as divisive and wrong as it was. But he ended up voting for it anyway). But let's see if the old guy grows a pair over the last 7 months and reveals where the bodies are buried. With over 20% of the State Assembly not running for re-election in 2014 and at least 5 of the 17 State Senators doing the same (assuming Joe Leibham jumps into the now-open 6th-district Congressional seat), there's definitely something going on behind the scenes at the Capitol that a lot of people don't want to be part of.

And the voucher lobby isn't going to slow down, despite the release this week showing that voucher schools underperform the public schools they "compete" against in Milwaukee and Racine when it comes to standardized test scores. That's the reality and results-based world, and that's not something the voucher lobby cares about- they just want cash and power. Erin Richards in the Milwaukee Journal-Sentinel reports about how these people are trying to "train" the next generation of voucher supporters to get into office.
On Saturday in Milwaukee, the pro-school voucher group American Federation for Children is hosting a training session for would-be candidates for state legislature, school board, mayor or city council.

The training is co-hosted by the Metropolitan Milwaukee Association of Commerce and Democrats for Education Reform, and aimed at advocates for "educational choice" — the general term for voucher and charter schools. The federation supports the expansion of school voucher programs that send public funds to private, mostly religious schools.

Brian Pleva, AFC's Wisconsin government affairs associate, said the candidate training school was bipartisan, and would be more focused on the nuts and bolts of running for office, such as understanding campaign finance, campaign strategy and communication and fundraising.

"We believe in ensuring that all children see increased educational outcomes," Pleva said. "But this is a nonpartisan campaign school with bipartisan presenters, so people getting riled up is puzzling to me."

One person riled up is Milwaukee School Board Member Larry Miller.

He suspects the AFC and MMAC are gearing up to groom candidates in favor of more charter and voucher schools who could run against Milwaukee School Board members in elections one year from now.
And isn't it nice that the MMAC have their hands in this- the same pro-Walker group of oligarchs that Journal Communication's CEO Steven Smith sits on? Note also the mention of the quickly-dying "Democrats for School Choice" (a group who got swept out of the Legislature in several Milwaukee-area Dem primaries in 2012), as AFC tries to keep up the fa├žade that voucherizing education is somehow a bipartisan issue in 2014. After 20+ years of this experiment in Milwaukee with the outcomes getting worse and worse, a lot of us know better than to buy into the failed idea of "school choice," but make no mistake, these guys won't stop trying to grab power and funnel money to themselves and their buddies in Wisconsin until they and their allies are buried and destroyed as a political force. At which point they'll head to some other place where they can find more suckers to buy into their scam.

And as the forced retirement of Mike Ellis and the expansions of vouchers since 2011 in Wisconsin show, that time is no time soon. In fact, the last 3 GOP Assembly Speakers are all lobbyists for the voucher folks, with convicted criminal Scott Jensen in particular being a big player in selecting candidates and policies to give these people even more power (and you'll note that the DA who agreed to plea out Jensen's case in Waukesha County is the lead GOP candidate for Attorney General in Wisconsin- no quid pro quo there, eh?). If the Dems in Wisconsin had any brains at all, they'd be exposing the voucher lobby as money grubbers that want nothing more than to destroy the fabric of Wisconsin communities and schools in the name of a few bucks, and they'd better do it NOW, while there's still a semblance of a quality public education system left to save in Wisconsin.

Thursday, April 10, 2014

"Right" direction, Wisconsin?

It's consistently remarkable that despite all the strife and scandal that has surrounded the Age of Fitzwalkerstan, a majority of Wisconsinites continue to say the state is going in the right direction. Even in the most recent Marquette Law poll that had Scott Walker's net approval rating dropping 9 points in 2 months, 54% of those asked said Wisconsin was "going in the right direction" and only 42% said "wrong direction."

Now take a look at headlines from the last few days.

1. In the last 24 hours, Wisconsin businesses announced over 1,000 jobs will be lost in mass layoffs. This includes the estimated 760 jobs that will be lost at Oshkosh Corp. due to military cutbacks, and another 280 jobs going away due to plant closings in Appleton, Kimberly and Waunakee.

2. The Ewing Kaufmann Foundation released a survey this week Wisconsin was in the bottom 8 in the nation for lowest levels of entrepreneurship, and the Milwaukee area was next-to-last out of 18 "similar" metro areas surveyed.
In Wisconsin, 170 businesses were created for every 100,000 adults, the report said. The state saw a 0.08 percentage point decline in entrepreneurial activity in the three years through 2013 vs. the three years through 2003 — one of the worst declines in the country, it said.

The Kauffman report is based on broad surveys, so its numbers are driven by start-ups in the construction, restaurant and health care areas, said Tom Hefty, former top executive at Blue Cross/Blue Shield of Wisconsin.

"The dismal start-up numbers are in these mom and pop industries," Hefty said. The state would perform better in such measures if businesses were diversified beyond its traditional industries, he said.
Huh, you mean that allowing WMC to write influence economic policy toward them and their fellow corporate oligarchs is shutting out others from getting in and stifling the state's economic potential? You don't say....

Or as one of WEDC's top officer in charge of entrepreneurship put it last year "We suck. We're bad." And we haven't gotten any better.

3. The state has lost private sector jobs in each of the first two months of the year, is 55,000 private jobs below what it would have had if it merely kept up with the rate of growth in the rest of the nation during Scott Walker's 3 years in office, and is still having nearly 10,000 people file new unemployment claims each week (which places it in the top 10 for new claims among all states). And these stats are BEFORE the stores at American TV and JC Penney close in the next month and another 1,400 or so lose their retail jobs.

4. The Assembly's Majority Leader is facing felony charges for sexual assault, and one of our current U.S. Senators as well as other politicians are accused of covering it up. The No. 2 guy in the State Senate just got caught on tape trying to illegally coordinate with 3rd-party right-wing organizations and oligarchs ...and this was a guy who has previously decried money influencing politics. So the fact that Mike Ellis sold out into this game shows how pervasive and soiled our state's politics have become.

Oh, and have we mentioned that John Doe Deux continues, with scores of emails showing the contempt Scott Walker's staff has for the constituents that pay their salaries, and Walker and his out-of-state oligarchs doing everything in their power to try to bias the investigation and pursuing every legal trick and bought-off judge they can instead of trusting the public and coming clean? This sounds like the kind of state we used to make fun of in Wisconsin, and say "Well, we'll never be losers like the guys in those places." Here we are.

5. Lastly, the main voices we get on talk radio to discuss these topics elevate the discussion by saying classy things like this.

4 months later, that no-talent still has talk shows in the 2 largest markets in Wisconsin, and there's 6 other hours of similar hate on numerous stations in Wisconsin, with no countering voices on the air to hold these people accountable for their lies and debasing behavior.

And 54% said last month we were heading in the "right direction"? In a right-WING direction maybe, but definitely not a "positive" one.

Wednesday, April 9, 2014

More on the #voucherfail

Only have a few minutes to bang out this info, but wanted to follow up from the DPI's release on test scores, which gave information for both the public schools in the state, and the 3 different voucher programs.

John Peterson at Democurmudgeon has a good rundown of the results and I'll also include this graphic from the Journal-Sentinel which gives the Cliff's notes version.

It's worth noting that not all (or even most) voucher students may fall under the DPI definition of "economically disadvantaged/ low income", because the income limits for free and reduced lunch are well below the limits that allow students to be part in any of the three voucher programs. And I'll also point out that many of those voucher students in Racine and the statewide WPCP program already were going to these schools to begin with. Not surprisingly, the statewide program is the one that had the largest percentage of students "opting out" of the tests, so their results (for good or bad) are not measured. Let's see if that trend continues in year 2, as more "fly-by-night" voucher schools join the Racine and statewide programs (the Milwaukee ones are consistently the ones with the sub-10% proficiencies).

But in looking at these numbers, there is no debate that voucher schools underperformed the public schools in Milwaukee and Racine on these tests, and Milwaukee's voucher schools has if anything gotten worse over the 20+ years it has been in existence. This policy is failing Wisconsin, accountably stealing money from taxpayers and public schools, and denigrating the many strong teachers that produce our future learners, workers and inventors. This #voucherfail needs to be put into the dustbin of history for good. NOW.

DOT hearings on Transportation future start up (extra info added 5:35pm)

Quick PSA here, as the Wisconsin DOT is having hearings throughout the state on how to fund this state's many needs. It's called Transportation Moves Wisconsin, and there will be a series of town hall meetings this month led by DOT Secretary Mark Gottlieb that (unlike a Scott Walker "business appearance") the public is invited to attend.

Among the meetings coming up are

Today (April 9)- DOT SW Region office, Madison 5-6:30
Tuesday, April 15- WisDOT NW region office, Superior 5-6:30
Wednesday, April 16- UW-Eau Claire campus, Centennial Hall 5-6:30

Given the fact that this state has over $1 billion of unfunded projects in the next state budget that the current governor didn't take any steps to pay for, it might be worth it to check it out. And that $1 billion was before the tab from this polar vortex winter came due, including massive amounts of water main breaks and potholes that run up local expenses above what was budgeted.

It's one of the biggest issues lurking that the people who care about policy and outcomes in state government (which includes Gottlieb) know has to be addressed, but none of the politicians seem to want to touch. Stay tuned to see if something drops out of this in the coming months.

EDIT: And here's another example of the extra needs that cash-strapped local governments are facing from this winter, courtesy of the League of Wisconsin Municipalities.
Twenty-one Wisconsin cities with populations greater than 10,000 responded to a survey conducted by the League of Wisconsin Municipalities. Those cities alone estimated total additional costs caused by this past winter to exceed $5.1 million.

“The leaders of Wisconsin’s cities and villages have had to make tough decisions based on variables that are as changing as a Wisconsin winter,” said Curt Witynski, assistant director for the League. “Some municipalities haven’t factored in additional paving and pothole costs yet, and they still have to plan for November and December when the cold returns.”

For some cities, their overtime budgets for 2014 are already exhausted, and most note that they spent between 30 and 50 percent more on snow and ice control activity than in previous years. Water main breaks have been more than twice what they are in a typical year, with several public works departments noting that they haven’t seen the last of the breaks, given how deep the frost line is.
May I remind you that the only assistance our "surplus-rich" state has given for these extraordinary expenses is $43 million to speed up work on state highways- not a dime for local road repairs.

You can read all of the responses on the extra winter road maintenance by clicking right here.