So Raise The Damn Gas Tax All Ready!

Wisconsin continues to debate how to increase funds for transportation (in Wisconsin that translates to build more freeways) as gas tax revenues continue to fall as cars get more fuel efficient or don’t use gasoline at all. Instead the governor continues to put highway construction on the credit card or extends the completion dates for major projects (which increases their costs through inflation and often overlooked, loss of utility and increased travel times for users) to balance the transportation budget.

There have been a number of discussions in the legislature around increasing the gasoline tax, vehicle registration and just recently, converting state freeways into toll roads.

Of course Governor Walker continues to stick to his no tax increase pledge by threatening to veto any gas tax increases if they aren’t balanced by tax cuts in other areas. This brings up a number of points. If gas increases are balanced against other tax cuts, those paying increased gas taxes aren’t necessarily the people getting the new offsetting tax cuts. I can’t imagine that will make drivers very happy.

And second, how is reducing other taxes to balance gas tax increases not essentially the same as using general funds to pay for transportation? And isn’t using general funds for transportation now verboten? I am sure many of you can either correct me on that or support my statement.

So about those toll roads…that is a very very slippery slope. Somebody is going to have to spend the initial capital to build the infrastructure to measure and collect tolls. Where’s that money going to come from? Wisconsin already doesn’t have the funds to fix the roads, build new ones, etc….how can it add tolling facilities? (this all assumes the federal government would permit the conversion of freeways to tollways…not unlikely under the President Trump regime)

But the talk is that private investors would pay for the new infrastructure…and then reap benefits from the tolling. And how many years would it take to implement? If we look at the Zoo interchange, years maybe decades. Hmmmm. Who controls the fees and determines the profit margins when private enterprise controls public utilities?

But if you are going to be ‘Open For Business’, you had better have first rate infrastructure, not just a low tax rate…businesses need to get their employees to work on time, need to get their raw materials to their businesses, and need to get their finished products to market. Subpar streets, roads and highways don’t work for them.

So for the quick and dirty, the current Wisconsin gas tax is 30.9 cents a gallon. Take a quick 5.1 cent increase and gas tax revenue jumps 16.5% and takes a lot of stress off of the transportation budget. Increase it 10.1 cents and it’s an increase of 32.7%. When I first suggested this gas in Milwaukee was around $2.00 a gallon and even now at $2.29, a 5 or 10 cent hike isn’t going to be that discernable.

You want some simple background into the issue, please read Ernst-Ulrich Franzen’s article on the resignation of the Secretary Mark Gottlieb from the Wisconsin Department of Transportation…he apparently got tired of speaking truth to power.

Not All Democrats Seem To Get It

NPR ran an item earlier this week about Donald Trump’s ‘saving’ of jobs at Carrier in Indiana. They interviewed former Michigan Governor Jennifer Granholm (D). She said she agreed with the move in Indiana and thought it was great that Mr. Trump wanted to renegotiate trade agreements. And that she is in favor of federal leverage to force jobs to stay in the United States come hell or high water.

I have no issue with keeping jobs in America…but the reality is low skilled manufacturing is going to continue to move overseas to low labor nations (and there will be plenty of those for generations to come) or labor will be replaced by automation. I don’t wholly subscribe to the supposed service economy model but at some point the US is going to have to step up our game at education and research and development and stay the innovative economy that we’ve been since World War II or perish.

But we can’t continue to have one state steal manufacturing from another state via tax incentives…nobody wins. And we can’t continue to give away tax money to keep every low skilled job in the US. And how many jobs can we keep by threatening corporations via twitter? How fast will they all learn to step up their game and blackmail the federal government to gain concessions? The Carrier deal is the first drop in that bucket.

anyway…from former Gov. Granholm:

It is an amazing thing to see on a federal level – the president doing this. Democrats and Republicans are pursuing job providers constantly and trying to lure them or keep them in their states through the only tool they have really, which is state tax credits.

And so to have the president chime in in some way is pretty interesting. You know, you’ve got to – despite the fact that there’s some controversy over how many jobs are created, you’ve got to give him credit for trying.

[by the way: her repeated reference to Mr. Trump here as the president really pissed me off…Mr. Trump is president-elect and we still have another president in the White House currently. A Democrat dissing our president!]

I am all about anybody who’s obsessed with trying to keep jobs in America in a global economy. Now, can the president do this indefinitely – calling up every job provider across the country and trying to persuade them if they threaten to leave – of course not. But what he could do is to see a national policy that helps governors try to keep and create industrial clusters in their states. You just have to make sure that it is a policy that works overall and not just on one-off deals.

Renegotiating trade agreements – that’s great. Do it. Negotiating the ability for governors, for example, to offer training packages that are specific to job providers – you could consider helping – like Germany does – helping to subsidize people to learn on the job working, doing apprenticeship programs that are really focused on the jobs of the future. All of those are things that you could do and that he could be working on.

Manufacturing is here. We’re going to have stuff, and it’s going to be made somewhere. And all of that stuff is becoming very sophisticated. So for the United States to be going after manufacturing products that are complex, that are sophisticated, that require a level of training, those are opportunities for us.

She finally got it right with her last sentence! The US needs to continue to lead in the manufacture of sophisticated products just like we already do. And that will require amounts of training beyond the skill sets of many of our current laborers. But we are never going to make shirts here again. Or toasters. Or book shelves.

Remember That Post I Had About Kansas a Bit Ago? Wisconsin is on track:

So my previous post about Kansas Governor Sam Brownback and the dismal failure at economic rejuvenation from supply side economics was supposed to be a warning for Wisconsin…but it looks like we are already headed down that same road:

Gov. Scott Walker faces a $693 million hole as he draws up his 2017-19 biennial budget plans, the Department of Administration reported Monday.

It is nearly six times more than the $117.4 million projected shortfall from the 2013-15 budget — which featured broad income tax cuts.

Of course the budget hasn’t been finalized so there is a chance the GOP can head off a calamity but I am not going to hold my breath!

Kansas: The Canary in the GOP Goldmine

Governor Sam Brownback of Kansas was the poster boy of supply side economics…cutting taxes to stimulate the Kansas economy in a pure experiment of Reagan economics. Only it hasn’t worked out the way he and the GOP planned…in fact it has turned out exactly as you would expect when you cut tax revenues: record deficits and little business growth:

In February 2015, three years into the supply-side economics experiment that would upend a once steady Midwestern economy, a hole appeared in Kansas’ finances.

To fill it, Gov. Sam Brownback took $45 million in public education funding. By April of this year, with the hole at $290 million, Brownback took highway money to plug it. A month later, state money for Medicaid coverage went into the hole, but the gap continued to grow.

Today, the state’s budget hole is $345 million and threatens the foundation of this state, which was supposed to be the setting for a grand economic expansion but now more closely resembles a battleground, with accusations and lawsuits flying over how to get the state’s finances in order.

The yawning deficits were caused by huge tax cuts, championed by Brownback and the Republican-dominated Legislature, that were supposed set the economy roaring. They didn’t.

To those of you who live in Wisconsin, some of these things may sound familiar to you…although WI hasn’t yet sunk this deeply into the trickle down sink hole. But there are already complaints around funding for education from around Wisconsin and they are just getting going. But here’s what we can expect if things don’t change here:

“The finances are making it hard to meet the needs of our kids,” he (Steve Jameson,the principal of Columbus Kansas’ Park Elementary) said. “The climate makes it hard to recruit good teachers. If you hear the legislators bashing you all the time, the governor bashing you all the time, you can choose to go to another state.”

And this Reagonomics is exactly what Donald Trump is promising on a national level and economists are warning about trillion dollar increases in the deficit if he reduces tax revenues…something like we are seeing in the test bed of Kansas:

It was a risk Brownback ran when he overhauled the state budget based on an interpretation of fiscal conservatism that dramatically cut personal income taxes.

The state would thrive, he pledged, because the tax cuts would help keep businesses and smart, young Kansans in the state, not fleeing “to Houston, or Dallas, or Chicago or somewhere else.”

“It will pave the way to the creation of tens of thousands of new jobs, bring tens of thousands of people to Kansas, and help make our state the best place in America to start and grow a small business,” Brownback wrote in 2012. “It will leave more than a billion dollars in the hands of Kansans. An expanding economy and growing population will directly benefit our schools and local governments.”

Well it hasn’t been happening…so what do you do in this situation? Repeal the tax cuts? Hell no:

Unwilling to scale back the income tax cuts, the state did increase the sales tax. Now Kansas has the second-highest sales tax in the nation, and such reliance on sales taxes has saddled the state with additional problems: Deflation is dropping the prices of goods and the taxes the state collects on them.

Kansas has the second highest sales tax in the nation? Kansas? Wha?

Is this where Wisconsin is heading now that the GOP has solidified it’s hold on the state capitol? Is this the path that Donald Trump will lead the nation down? Pay attention to the ailing canary in Kansas. Supply side is an interesting theory but we can’t afford to live there.

But you know, how could anything go wrong?

“We’re going to continue to grow the economy,” Brownback has said in response to questions about each new revenue shortfall.

Ivanka’s Baubles Bangles and Beads

Apparently Ivanka Trump wore jewelry from her namesake line of jewelry while accompanying Donald Trump for his interview on “60 Minutes”. And someone from her firm sent out info touting it. And some people are making a big stink about it.

Really? I mean Really?

Donald Trump is about to destroy the legacy of President Barack Obama, destroy international trade, destroy safety net and entitlement programs for US Citizens, destroy the economy by removing 11 million working residents, destroy the environment and possibly start the biggest recession/depression since Herbert Hoover and we a getting out of joint over some over priced costume jewelry?

Get your heads out of your posteriors…we have some real policies we have to stand up against…and you are worrying about this?

The Irony Around Judge Recusals

This morning’s Milwaukee Journal Sentinel has a little side story to the recent court cases around water pollution resulting from factory farming, particularly large dairy farms housing thousands of cows. It seems one of the judges who recently ruled against big farming has in the past, donated to one of the environmental groups involved in the case…an environmental group who won reimbursement of legal fees from the farm in question in the hearing before the judge.

A judge who has directed the Department of Natural Resources to pay nearly $45,000 in legal fees to environmental groups in a case involving the expansion of a large dairy farm declined to remove himself from the case after disclosing he made past donations to one of the groups.

But now several groups from the right who support big business and oppose environmental regulation are complaining that the judge should have recused himself from the case. One has to question the late date of the complaint since the judge made his contributions known nearly ten months ago as part of the hearing:

The dispute over Markson’s contributions began when he notified parties in the case on Dec. 21 that, as he was making year-end charitable contributions, he realized he made annual contributions to Clean Wisconsin “for many years.”

Markson told the parties he would not make contributions in 2015 and while the case was pending. An attorney for the Justice Department who was representing the DNR said his past contributions raised concerns. She asked Markson recuse himself.

Markson declined.

Now here’s the irony (or in this case hypocrisy). Judge Markson apparently donated about $50 per year for a number of years to Clean Wisconsin. So this is several hundreds of dollars. For money he DONATED to a non-profit organization. OMG…it’s a big deal.

Yet when Wisconsin Supreme Court Justices refuse to recuse themselves from major cases that include organizations who provided hundreds of thousands of dollars to their CAMPAIGNS, well of course it’s no big issue.

So let’s see…hundreds of dollar in charitable notations…big todo….hundreds of thousands of dollars in campaign contributions…crickets. One might be a bit of gray error…the second one a total red flag.

If you want a more elegant take on this…see Bruce Murphy over at Urban Milwaukee!

An Open Letter to British Petroleum

I am sorry for your loss…your gasoline station at Sherman Blvd and Burleigh in Milwaukee is apparently a total loss.

But here’s what you should do next:

I don’t know if the station operator was a lessee or franchisee…but whoever gets the insurance money…take it and throw down a few BP dollars and find them a new station…somewhere else.

Begin immediate plans to raze the rubble and build a bright new state of the art gasoline station. Sherman Park deserves it.

Perform a search for a new operator from the immediate neighborhood. And then provide him/her with an apprenticeship or internship or whatever you want to call it…at one of your most successful stations…and pay them.

When the new station is ready for occupancy put them in place. Provide them with management assistance for however long both of you deem appropriate.

Sell it to them on a land contract at under market rates.

Invest in this neighborhood. You can afford it. You can earn respect. You can earn a reputation as an investor in the economy and neighborhoods.

You can earn your investment back.

You can help return stability and normalcy to a shattered neighborhood.

You can help at least one minority owner begin to build some personal wealth.

You can help that owner provide neighborhood jobs…I don’t know how many that would be in a modern gas station…but it would be solid, visible, worthwhile jobs.

Are you up to the task?

Now About Those Street Cars Anyway!

As the debate continues around the fait accompli of the Milwaukee street car…it is interesting that Tucson AZ stole about 200 engineering jobs from Caterpillar’s South Milwaukee plant…and in order to convince engineers to accept a relocation to Tucson…what was one of the first things Caterpillar showed them?

Caterpillar Inc. employees in South Milwaukee have already been shown a streetcar map of downtown Tucson, and this week they will learn more about the southern Arizona city where some of them could be living as early as this year (emphasis mine).

BTW: Where is Governor Jobs on all of this?

An open letter to Governor Walker

Dear Governor Walker,

I’ve read that you’re touring the state to hear from constituents as a way to get caught up after spending so much time out of state during your presidential campaign last year, and since I live over 250 miles north of Madison, I thought I’d address you on Blogging Blue rather than expect you to travel all the way up here.

I know that two of your biggest problems since you took office in 2011 seem to be job creation and overall business climate. Wisconsin has kind of been circling the drain on both counts for many years now, but I have some good news for you.
Minnesota, right next door, is leading the nation on both counts! Last June CNBC rated Minnesota #1 in the nation for business, and over the weekend a new report shows that the Gopher state is #1 in job creation as well.

This is great news, because not only is Minnesota very similar to Wisconsin in a number of ways, but Mark Dayton took over as Governor there the same year you did here, and with an even bigger budget deficit than you inherited!. In spite of all that, they’re now leading the nation in a pair of top economic indicators, and have a budget surplus of 2 billion dollars. That’s a lot of scratch, man!

I’m no scholar, and I can’t make an in-depth argument about how all this happened, but I can lay out some general points that I think can help you turn Wisconsin around pronto.

1. The CNBC report cites Minnesota as a ” union friendly ” state, so you might want to consider repealing Act 10 and that god-awful Right to Work bill since neither could, by any stretch of the imagination, be considered union friendly.

2. I know you went out of your way to repeal Wisconsin’s living wage law, but you should restore it immediately. Minnesota raised their minimum wage to $9.50 an hour, which isn’t nearly enough, but it’s better than the meager $7.25 workers are making over here.

3. Governor Dayton campaigned in 2010 on raising taxes on the wealthy, (something that seems to have escaped the attention of Wisconsin Democrats), and that’s just what he did, though none of the scare mongering about how everyone would leave actually came to pass. And Minnesota is #1 in business climate, job creation, AND they have a 2 billion dollar surplus! Woo Hoo!

4. Minnesota took the federal bucks to expand their Medicaid program, (Minnesota Care), since it was tax money Minnesotans had already sent to Washington DC, and they also created their own state exchange to maximize the benefits of the Affordable Care Act for their residents. I think they probably embraced the wildly experimental notion that a healthier population is happier and, as such, better able to get up and go to work in the morning. I don’t know for sure, I’m just taking a stab in the dark.

I’m sure there’s a lot more to all this than I’ve listed, and I know you have a ton of staff who could dig into it and sort it all out, but I just wanted to fill you in on some of the basics. I know how much you love Wisconsin and all of its people, but I also know what a busy guy you’ve been , what with all that presidential nonsense and the Koch brothers retreats and so forth.

So I just wanted to give you a hand. You’re welcome.

Johnson Controls About To Leave Wisconsin?

Breaking news from JSOnline says Johnson Controls is about to merge with Ireland’s Tyco International. Tyco is a fire protection and security company. Although the article says that local miscreant and current CEO of Johnson Controls, Alex Molinaroli, will run the new combined company, will JCI’s legal headquarters end up in Ireland for tax purposes? Will they be the largest example of the Wisconsin business loss trend that Governor Walker’s ‘Open for Business’ policy has become?

Wisconsin’s largest public company, Johnson Controls Inc., is in advanced talks to merge with Ireland-based fire protection and security company Tyco International, according to a report Sunday by the Wall Street Journal.

Citing people familiar with the talks, the business publication said a deal could be announced as soon as Monday.

Financial terms of the potential transaction aren’t known.

Alex Molinaroli, chief executive of Johnson Controls, would be expected to run the combined company, the newspaper reported.

Update 1/15/2016 6:18 PM Some of you are getting a bit carried away. I never suggested that JCI would move their manufacturing jobs and overall operations out of Milwaukee. The gist of the post was that JCI would use Ireland as their legal corporate HQ and do a ‘tax inversion’ to avoid taxes. And I got ragged on over on Facebook for wild speculation last night…when the actual announcement actually bore out my supposition. Go figure