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Wisconsin club For Growth

March 04, 2009
Vol 3, Number 8

 Wednesday Update

In This Issue:

1. Walking the Walk

2. Silence of the
    Lambs

3. Mark Belling on 
    Doyle's Budget

4. Pocket Guide to
    Financial Ruin

Walking the Walk

With Wisconsin Democrats Jim Doyle and Dave Obey leading the cheer for the pork-laden federal stimulus bill, Milwaukee County Executive Scott Walker has taken to the national media to voice his objections to the $787 billion government bailout plan.

Walker penned an editorial for the Wall Street Journal, explaining why he would not be lining up at the trough for government bailout money.

Why I'm Not Lining Up for Stimulus Handouts

By SCOTT WALKER

Milwaukee

Recently, a firestorm ignited in Wisconsin when I, as Milwaukee County executive, refused to submit a wish list to Gov. Jim Doyle for items in the federal "stimulus" package.

Gov. Doyle -- like other politicians -- had lined up at the federal trough begging for billions in "free money" to cover budget deficits and to fuel new spending. He and others simply couldn't understand and were outraged that I didn't join them, and that I didn't relent even after the president signed the stimulus bill into law.

My explanation is simple. First, this money isn't free. Second, under Gov. Doyle our state has borrowed vast sums of money and avoided making tough budget decisions while expanding government programs. In three biannual budgets since he took office in 2003, new state bonding exceeded new tax revenue collections by $2.1 billion. During good times, the governor had been borrowing money to underwrite expansions of health care, education and environmental programs. If he is bailed out now, the federal stimulus funds will only enable the governor and others to go on spending and even taking on new obligations that will lead to larger deficits down the road. Third, if we grow government rather than private-sector jobs, we will not help the economy. Strong leadership, honest budgeting and tax cuts would do a lot more.

This burst housing bubble that led to the recession was created when millions of people were allowed (or encouraged) to spend borrowed money on homes they couldn't afford and were later forced into foreclosure.

Apparently Washington politicians learned nothing from this process. They rushed to spend $787 billion of borrowed money on new government programs in the name of economic stimulus. But even this loan of taxpayer money -- essentially the largest mortgage in history -- will come due. When it does, our children and grandchildren will pay for this imprudence.

As popular as the federal "stimulus" package is with Washington politicians, it is more popular among state and local politicians who view federal money as a cure for their fiscal woes.

Wisconsin is afflicted with fiscal woes. In every budget he has signed, Gov. Doyle postponed difficult decisions using accounting gimmicks and excessive bonding to pay for ongoing operational costs. The most egregious example is the damage done to the transportation fund over the past six years, which uses state gas taxes and vehicle registration fees to fund road projects. The governor has raided the segregated fund for a total of $1.2 billion to cover ongoing operational costs for government programs. He's partially replaced the raided funds with $865.5 million in bonds.

As a result of borrowing against tomorrow to live for today, the governor left Wisconsin's budget vulnerable. So in the fall of 2008 when recession caused a sharp decline in tax revenue, the state was forced into the red.

Wisconsin now faces an unprecedented $5.75 billion budget deficit, fourth-largest in the nation. Many municipalities also face deficits. My county, however, finished fiscal year 2007 with a $7.9 million surplus and will break even for fiscal year 2008 when the books are closed next month. Why? Because we made tough budget decisions demanded by the taxpayers.

State and local officials who failed to do so are looking to the federal government for a bailout. But what happens when the stimulus money is gone? Is the federal government committed to funding the projects it will now underwrite forever? I'm not willing to bet on it.

The stimulus is a classic bait-and-switch. Once the highways are built and social-service case loads have increased, Wisconsin will be left with the bill to maintain the new roads and services. This will force Wisconsin to raise new taxes. Gov. Doyle and legislative Democrats are already discussing higher taxes on hospitals, retailers, employers and even Internet downloads to feed their spending addiction.

The stimulus is also a bait-and-switch on employment. While the stimulus package might create a few construction jobs, the federal money will run out and those workers will lose their jobs. Even worse, most of the money is actually spent on new government programs and on bailing out failed state and local governments.
For the vast majority of residents of my state, the stimulus funds will not help them pay the mortgage or replenish their depleted retirement savings as they worry about being laid off.

True economic stimulus creates sustainable private-sector jobs. The fastest, most effective way to create them is to reduce taxes and implement regulatory and fiscal policies that encourage job growth and economic investment. History has shown repeatedly from John F. Kennedy to Ronald Reagan that as taxes are cut, consumers spend more and investors put more money in the economy. This, in turn, creates jobs, and grows the economy.

Too many politicians confuse more government spending with economic recovery. I believe that's the wrong approach, and I will not submit a wish list for new government spending. Excessive spending will only lead to higher taxes, and that will drive jobs away when we need them the most.

We need to use these challenging times as an opportunity to streamline government and reduce the tax burden on working families. In 2002, during my first campaign for county executive, I promised to spend taxpayer money as if it were my own. If government -- at all levels -- were to do just that, we could reduce taxes and stimulate the economy. That would put people back to work again. And that is something on my wish list.

Mr. Walker, a Republican, is Milwaukee County executive.

 

Silence of the Lambs

As President Obama and the Democratic Congress work overtime to further trash the national economy, the hits on Wisconsin’s economic outlook just keep coming.  Wisconsin’s employment picture is bleak. The state losing a record setting 72,700 jobs in 2008, bringing the state unemployment rate to 7.6%, up 2.7% from a year earlier. 

And while Doyle’s so called stimulus bill and his latest budget proposal promise to make the situation even worse, the silence from the mainstream media is deafening. 

Fortunately Congress hasn’t yet figured out a way to silence Milwaukee Talk Show host and columnist Mark Belling whose summary of Doyle’s most recent assault on Wisconsin prosperity is dead on.

 

Take Your Pick of the Worse in Doyle's Budget

By Mark Belling

My plan was to write this week's column about the most toxic element of Gov. Doyle's budget. So, do I write about:

 1) the proposal to repeal state law which requires that outside contractors be hired only when they are less expensive than using regular state employees


2) the creation of a $500 million tax on oil company profits that could drive gasoline prices up as much as 10 cents a gallon

3) the increase on the cap on mandatory auto insurance policies that will drive insurance rates much higher

4) the total repeal of tort reform legislation in Wisconsin, restoring us to a standard that allows individuals only 1 percent at fault to be forced to pay 100 percent of the damages - a provision that will immediately drive companies out of Wisconsin

5) the proposal to require judges to instruct juries in civil lawsuits in such a way that are inclined to proportion higher damage amounts against big pocket defendants

6) the elimination of the provision that limits pay of school employees to a factor linked to the cost of living, a provision that will drive property taxes and school budgets to the moon

7) the 34 percent increase in the cigarette tax that will take several hundred million dollars out of the private economy and lead to increased cigarette bootlegging and illegal black market online purchases

8) the decision to end "truth in sentencing" and bring back parole, resulting in the early release from state prison of hundreds of dangerous felons and the need to hire new parole and probation agents

9) the plan to eliminate supervision of potentially thousands of criminals on probation for misdemeanors

10) the proposal to end real-time monitoring of sex offenders required to carry GPS locators with a rule that the GPS detector be checked a mere once a day

11) the proposal to create a new tax on digital downloads of music, movies and just about anything else loaded off the Web

12) the elimination of Wisconsin's flat tax state income tax system that creates a new and higher tax bracket for small businesses and high income earners

13) the refusal to force teachers to shift from the health insurance plan offered by the teachers union to the more affordable plan given to state employees

14) the plan to give collective bargaining rights to University of Wisconsin System faculty - a move that could result in dramatically higher costs and the potential of union job actions

15) the proposal to give all gay state workers who register as having a domestic partner full health insurance and pension survivor benefits

16) the proposal to require all Wisconsin county clerks to issue domestic partner licenses to any gay couple

17) doubling the state tax on nursing home patients

18) the proposal to essentially gut W-2 by allowing mothers to avoid work for a half year every time they have another child, a measure that essentially allows women to stay on a permanent dole so long as they keep getting pregnant

19) the proposal to make state family planning money available to men who want to be reimbursed for birth control (yes, men)

20) the proposal to require that every private construction project in Wisconsin that receives any public subsidy to pay every employee the prevailing union wage scale, a measure that will drive up the costs of every corporation expanding a facility here with the help of a TIF district or public works improvements

21) the banning of smoking in every public place in Wisconsin, making smoking legal only in your own home

22) an increase in the state capital gains tax (I obviously am not writing this list in order of egregiousness)

Wait, there's more, but I'm out of space and I haven't even started the column yet.

***

"We should not, we must not and I will not raise taxes." - Gov. Jim Doyle, delivering his State of the State message in 2003

***

The stark reality is that now that the Democrats control both the state Assembly and Senate is that Doyle is likely to get all of the things on the above list. In a matter of just weeks, Wisconsin policy will be radically changed and we will be adopting the laws of California, a state that not so coincidentally is right now on the verge of bankruptcy.

 

WMC's Pocket Guide to Financial Ruin
You Can Take It With You

The State Chamber of Commerce, WMC, has come under fire lately for not supporting higher taxes and fees designed to keep Wisconsin’s government strong at the expense of the people it purportedly serves. 

Contrary to the claim made by liberal motivational speakers like Chancellor John Wiley and his side kick Paul Soglin, WMC and its members are not opposed to higher taxes because they hope to take the money with them when they die.  They are opposed to higher taxes because they know that prospective employees, clients and investors will take their money to other states where they are certain to make a higher return on their investment. 

So in response to the serial job killing plans put forward by Governor Doyle and legislative Democrats, WMC has prepared this handy dandy pocket guide to financial ruin. Who says you can’t take it with you?

 

 

 

 




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