Tag Archives: corporate welfare

2015: The year Wisconsin lost itself

In 2015, Wisconsin completed a 180-degree turn away from the state’s lauded history as a model of good government. The year saw the fruition of a process set into motion in 2011, when conservative Republicans gerrymandered the state so they couldn’t lose. They stopped even pretending that we live in a democracy in which opposing viewpoints have the right to be heard. Instead they proved the axiom that absolute power corrupts absolutely.

Their changes to the fundamental character of Wisconsin have occurred so fast and furiously the media and progressive groups haven’t been able to keep up with them. Stories that would have grabbed headlines in prior years were buried in the avalanche of game-changing laws tumbling out of the Capitol.

For every legislative travesty that’s been publicized in time to stop it through public outcry — such as the measure to abolish the state’s open records law, which was slipped quietly into the budget on a Friday afternoon — there have been dozens of other reckless laws enacted. Wisconsin citizens are likely to discover many transgressive laws on the books in the coming year that no one except Scott Walker, the Legislature’s Republican leadership and a few of their corporate backers are even aware of.

There’s not enough room in this editorial to enumerate all of the new measures that go against the grain of Wisconsin’s history. But we can say with certainty that few of them have spurred our economy, which is what our current leaders vowed to do when they were voted into office.

Walker did not create anywhere near the 250,000 jobs he promised. The state has hovered near the bottom of job producers for most of his time in office. Wisconsin has the fastest shrinking middle class is the nation; median household income here has fallen at the nation’s highest rate since Walker took office.

Walker has doled out $279 million of taxpayer money in the form of tax credits — many more millions than are allowable under the law — to businesses that failed to create jobs, partly because they weren’t even required to do so in exchange for their corporate welfare. Some of that money has disappeared into thin air, leaving no trace of where it went. This is money that, along with Walker‘s tax cuts to the wealthy, was supposed to create jobs. Instead it left Wisconsin with a budget shortfall and without any way to restore Walker’s draconian cuts to education, the worst in the nation. It left the state with no way to repair its crumbling infrastructure or maintain its natural splendor. It left no money to accomplish the myriad of things required for the state to really grow its economy and maintain its quality of life.

In truth, Walker and the Republicans have paid scant attention to the economy. The majority of their efforts have gone toward appeasing corporate and right-wing special interests in order to keep themselves in power. And they’ve abused that power by getting rid of a panoply of laws passed to ferret out and prosecute political corruption. It’s impossible to believe politicians who prioritize eliminating government watchdog groups and related prosecutorial officers have their sights set on good deeds.

Instead of jobs, Walker and his GOP colleagues have focused on issues such as expanding gun ownership, fighting same-sex marriage and women’s reproductive freedom, eliminating environmental protections, telling people getting food stamps what they can buy, packing state government with inexperienced cronies, repealing laws involving fair wages, such as the equal pay law for women … the list feels endless and hopeless.

Scott Walker promised last year during his re-election campaign that he would not seek the presidency in 2016. But he was the first to throw his hat in the ring. He went on to neglect his responsibilities here and the lunacy of his public behavior and remarks made a laughingstock of Wisconsin.

He seemed to return to his lesser job angry and dejected — more determined than ever to reshape the state according to his impenetrable and conflicted ideals.

How well he’s succeeded.

The only hope for the future is that Democratic and Republican voters alike get out next year and vote for candidates they can trust to focus on the issues that are important to our collective future — and not to candidates who are intent only on furthering their personal interests and those of their patrons.

Groups compare cost of social programs to Big Oil giveaways

The newly released Fossil Fuel Subsidies Tradeoff Calculator at www.BigOilGiveaways.com compares the cost of government giveaways for Big Oil to the cost of social programs, including food stamps, higher education grants, health care for veterans and other government services.

Groups fighting for racial and economic justice are joining communities of faith and environmentalists to remind federal lawmakers that welfare for polluters is an unacceptable use of public money. As federal programs that feed the hungry and heal the sick struggle for funding, oil and gas companies continue to drain billions of U.S. tax dollars in the form of subsidies and other special interest giveaways.

Some examples:

• A tax credit for manufacturers that Big Oil unfairly claims is equivalent to 78,282 slots for disadvantaged children in the Head Start Program.

• Royalty-free leasing in the Gulf of Mexico is equivalent to 531,461 Pell Grants for low-income college students.

• Government research and development programs that benefit fossil fuel companies are equivalent to average annual medical care for 192,905 combat veterans.

“Leaving the social safety net in tatters and keeping Big Oil on the dole is not just a failure to prioritize. It is a failure of conscience,” said Lukas Ross, climate and energy campaigner at Friends of the Earth. “In the face of record inequality, crumbling infrastructure, and looming climate disruption, it is time for Congress to think hard about the government spending we need and the corporate welfare we don’t.”

“U.S. taxpayers know what the nation’s spending priorities should be — dignified jobs, resilient infrastructure, affordable health care, education without crippling debt, a clean environment,” said Janet Redman, director of the climate policy program at the Institute for Policy Studies, a Washington DC-based think tank.

“It’s an abomination that while Americans are working every day for a transition to a more sustainable, more equal and more democratic economy, members of Congress are willingly trading off our future for the short-term profits of fossil fuel executives. They should be ashamed — or better yet, fired,” she said.

“Our tax dollars should be invested in programs that lift up the American people not funneled to our country’s wealthiest corporate polluters,” added Allison Fisher, energy and climate outreach director at Public Citizen. “This calculator demonstrates the exact opportunity cost of continuing to shower Big Oil with government handouts. And those costs are less dollars being spent on education, healthcare for our veterans and other critical social programs. That needs to change.”

On the Web …

Find the calculator at BigOilGiveaways.com.

Fair play vs. corporate welfare in Milwaukee

Amid the fall political campaigns, a dynamic grassroots movement for justice in Milwaukee made headlines, reminding us that change does not necessarily come from politicians but from people working together in their communities.

The organization Common Ground is providing much-needed pushback to the steam-rolling effort by business leaders to get hundreds of millions in taxpayer dollars to build a new arena for the Milwaukee Bucks. The BMO Harris Bradley Center is just 25 years old but is said to lack the latest technology and luxury boxes necessary to make a sufficient profit and satisfy the NBA.

Wall Street titans Marc Lasry and Wes Edens recently bought the Bucks for $550 million. The NBA laid down an ultimatum for a new arena to be built in Milwaukee by 2017, and Lasry and Edens offered to kick in $100 million. Former Bucks owner Herb Kohl said he’d throw in another $100 million. It’s the remaining $200 or $300 million that taxpayers might be asked to contribute.

In the midst of an aggressive campaign to woo support for this latest corporate welfare scheme, Common Ground made waves with its own proposal, “Fair Play: A Campaign to Foster Greatness in Public Spaces.”

The basis of “Fair Play” is a devastating report about the crumbling, hazardous conditions of parks and recreation facilities in Milwaukee County and a detailed proposal for revitalizing them. That report, “Envisioning Fair Play,” is available at www.fairplaywi.org. Read it and weep. It dramatizes through quantitative data and photographic evidence the disgraceful neglect of Milwaukee’s public spaces.

In the report, architectural and landscaping plans show how improvements can be made at different sites, with startling cost comparisons. The new Bucks arena will have 18,000 seats at a cost of $27,777 per seat. Comprehensive improvements at Vincent High School will cost the equivalent of just 320 Bucks seats. Lincoln Park’s makeover can be done for only 221 Bucks seats.

Common Ground demands that if hundreds of millions of public dollars are spent to subsidize the privately owned Bucks, at least $150 million must be allocated to repair Milwaukee’s parks and recreation facilities. If you agree, tell your alderman or county supervisor ASAP.

It’s infuriating how politicians continually privilege private interests with tax breaks and subsidies while ignoring neighborhoods and public spaces — the places where most of us actually live. When owners can slap down a half billion dollars for a team at the same time that team members are paid millions annually and game tickets are unaffordable for half the people in the city, why should the public be expected to pay up?

But what about the economic impact?! 

Most studies of publicly funded sports venues — including those by the libertarian Cato Institute and the conservative Heartland Institute — reveal exaggerated impact projections and little or no economic boosts for local economies.

But Milwaukee’s image!

What kind of blinders must people be wearing to worship the image of a luxury, high-tech playpen while streets, housing, schools and parks decay around them?

I applaud Common Ground, a coalition of groups that is doing focused, effective work on this public funding issue and other fronts like rehabbing foreclosed properties and establishing the Common Ground Health Cooperative, an affordable insurance option.

Get involved

Common Ground meets the third Monday of each month at 2375 N. 25th St. For more, go to www.commongroundwi.org or call  414-751-0755.

On the Web

http://www.fairplaywi.org/fields/

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Major missteps cost the state jobs

Scott Walker ran for governor in 2010 on the promise to create 250,000 jobs using the core Republican economic strategies of cutting taxes, easing environmental and consumer regulations and reducing government spending.

As a result of those actions, however, the state’s economic performance in comparison with the rest of the nation’s has been dismal by most measures.

“Almost to the month since Walker took office, Wisconsin has fallen behind the nation in job growth,” said Jack Norman, former research director at the Institute for Wisconsin’s Future, a progressive but nonpartisan group whose mission is to educate the public about state policy issues.

Walker and his supporters are touting the state’s shrinking unemployment numbers as evidence that he’s succeeded in boosting Wisconsin’s employment market. But experts say that figure is misleading, because large numbers of people have simply stopped looking for work. People who were pushed off the unemployment rolls when Republicans reduced the length of time they qualify for benefits helped to drive the unemployment figure down, said Jennifer Epps-Addison, executive director of Wisconsin Jobs Now. 

Epps-Addison also pointed out that the unemployment figures fail to reflect the thousands of Wisconsinites who went from decent-paying jobs to service-sector jobs that pay so poorly that some cannot survive without taxpayer-supported public assistance. Ironically, while Republicans in Wisconsin and elsewhere condemn social welfare programs for “fostering dependency,” they award large tax breaks to corporations that don’t pay workers enough to keep them off food stamps and other public assistance programs. 

Progressives refer to that as “corporate welfare.”

Admittedly, the governor of a state and the mayor of a city actually have much less control over the economy than their promises and boasts suggest.

“The research would show that overall state and local policies might have an effect on the margins of the economy, but they’re not a real driver,” says Gary Green, professor at UW–Madison, whose research and teaching focuses primarily on community and economic development. “About 10 percent of business growth might be attributed to state or local policies. But we’re driven more by what’s happening in the global economy, especially in Wisconsin, where we’re so much more driven by manufacturing than other states.”

Still, “What governors can do is a little bit of tipping at a crucial time,” Norman said. The big decisions that Walker has made on the economy have tipped it in the wrong direction, he added.

Following is an assessment of some of the critical missteps that Walker made and what Democratic gubernatorial candidate Mary Burke said she would do differently.

Public-spending cuts

In what his detractors branded as a scare tactic, Walker falsely proclaimed during his 2010 campaign that Wisconsin was bankrupt. The state faced a projected budget shortfall but was nowhere near being out of funds — or funding.

Walker called his first budget a “budget repair bill.”

In fact, Walker enters into his re-election campaign after submitting a biennial budget last year with a projected shortfall of $505 million, according to the nonpartisan Legislative Fiscal Bureau.

The real goal of Walker and his tea party backers was — and is — to starve the government, which they contend saddles business activity with red tape. Walker’s inflammatory rhetoric was used to justify massive government spending cuts, which he claimed were needed to balance the state’s budget.

At the same time, Walker instituted tax cuts that disproportionately benefited the wealthy corporate interests that contributed massively to his campaign. He promised the cuts would stimulate jobs.

Walker’s spending cuts, which Democrats criticized as draconian, succeeded in yielding a budget surplus of nearly $1 billion last year. That’s more than he expected, and his supporters are trumpeting it at as Walker’s greatest achievement.

But the cost of that surplus was jobs, according to economic experts. In taking money out of the paychecks of the state’s 300,000 public workers, Walker took a massive amount of money out of Wisconsin’s consumer economy.

“Walker tripped us when we were trying to get back up,” Norman said. “It’s not like a factory shutdown that has an impact in just one community. You’ve got public school (workers) everywhere in Wisconsin, so the cuts saturated the state.”

“Some of the states that did not make some of these severe cuts seem to be doing better than Wisconsin right now,” Green said. 

High-speed rail and energy

One of the first things Walker did as governor was to renege on a deal already in the works to build a high-speed rail line connecting Milwaukee and Madison. He returned $810 million in economic stimulus money that the federal government had earmarked for the project.

The Spanish train manufacturer Talgo, which had built a manufacturing facility in the Milwaukee area to support the project, pulled out of the state and sued it for about $66 million, claiming breach of contract. 

Burke and others said the train would have brought good jobs to the state, along with increased economic activity along its route.

“In the short run, it would have created a lot of jobs and investment,” Green said. “If you look at these projects around the country, they do support a lot of development. The (Walker) administration thought it would take too much support from the state to maintain it.”

Walker is believed to have rejected the money to shore up his anti-government cred with the tea party in anticipation of a 2016 presidential run. While his action gained national headlines and the gratitude of his supporters in the fossil fuel industry, there’s no question that it hurt the state economically.

“We need a governor who will fight to bring Wisconsin taxpayer dollars back to Wisconsin,” Burke said, “particularly when they would spur economic development and job creation.”

In addition to blocking high-speed rail, Walker also prevented alternative-energy projects, especially wind energy projects, from moving forward. The alternative-energy movement not only has the potential to lower the state’s own energy costs but also is considered one of the most promising areas for creating the so-called “jobs of the future.”

Walker has never stated his reason for opposing wind and solar energy, but a number of his largest donations have come from the fossil fuel industry.

Medicare expansion

Norman said Wisconsin has traditionally ranked poorly compared with other states in getting back the federal taxes that citizens of the state pay. But when Walker turned down $100 million in Medicaid expansion money from the federal government, he became an instant hero to the tea party at the cost of health care for tens of thousands of poor Wisconsinites.

That action once again turned down jobs for the state.

Jobs in health care pay relatively well, much better than service-sector jobs. Critics say that refusing the Medicaid money cost thousands of potential jobs as well as increased economic activity that would have created other jobs. 

Education cuts

When Walker declared that Wisconsin was “open for business,” he seemed to expect companies to relocate to the state to take advantage of lower corporate taxes, a poorly paid, non-union workforce and a weakened regulatory environment.  But large companies of the sort he sought seldom relocate at all, and those that do are looking for a skilled, educated workforce and the kind of quality-of-life perks that attract the best workers, according to experts.

“Higher graduation rates and having a higher percentage of your workforce with degrees lends to creating a strong economy,” Burke said.

But, instead, Walker took a hatchet to public education in the state. His first budget stripped $2.6 billion from education at a time when the state could have taken advantage of high unemployment to re-educate workers, according to Norman and others. His cuts on a per-student basis were the nation’s highest.

An especially disastrous decision Walker made was cutting funding to technical colleges by 30 percent. Wisconsin already lagged behind the nation in terms of having workers versed in the latest production technology, Norman said. Walker’s cuts made the state even less attractive to manufacturers and knowledge-based industries, according to him and others.

“It’s absolutely stupid to defund something that’s helping manufacturing,” Norman said. “You should use your tax dollars to supporting training people with a specific job in mind. This is targeted job assistance.”

Norman said that across-the-board tax cuts can’t possibly stimulate job creation in the same way that targeted job assistance can.

Interestingly, Minnesota raised taxes by $2 billion beginning in 2011, the same year that Walker cut them by $1 billion. Minnesota used the additional money to invest in education and job creation.

Despite Wisconsin’s cuts and Minnesota’s increases, not one Minnesota business relocated across the border. In fact, from March 2012 to March 2013, private-sector jobs increased in Wisconsin by 1.1 percent, ranking the state 34th in job creation, according to the U.S. Bureau of Labor Statistics. Minnesota ranked 16th, with 2.1 percent job growth during that period.

The WEDC

When Walker took office, he eliminated the Wisconsin Department of Commerce, which Burke headed under Gov. Jim Doyle at a time when the state had 80,000 more jobs than it does today. The office was charged with helping business startups, an area in which Burke is considered a world-class expert: She set up sales and distribution operations for Trek Bicycle Corp., a company founded by her father, in five European countries and oversaw operations in seven nations.

Walker replaced the commerce department with the Wisconsin Economic Development Corporation, a public-private partnership that’s  been one of the highest-profile disasters of Walker’s administration, plagued by turnover, outrageous cronyism and the loss of millions of taxpayer dollars, some of which simply disappeared. 

“Under Walker, Wisconsin ranks 48th in new businesses created,” Burke said. “At a time when entrepreneurs and small businesses need access to capital, WEDC failed to get $35 million designated for business loans out the door. That’s unacceptable.”

Burke said even if the agency had been staffed by professionals, it didn’t have adequate funding to handle the magnitude of the economic crisis in the state. She would have allocated $200 million, she said. She also would have targeted that money to go to businesses with the greatest potential for creating jobs.

“The specific industries and businesses I would target vary by region,” Burke said. “Our state is best viewed through its various regional strengths — for example, biotech and health information in south central Wisconsin, clean water research and development in Milwaukee and forestry products and tourism in the north.”

Overall, Burke would promote investment in high-tech and alternative energy, particularly solar energy.

“As recently as 2010 we were keeping pace when it came to developing and utilizing solar power, but the last three years have seen a precipitous decline here in Wisconsin, while the rest of the country continues to move forward,” Burke said.

Sales tax increase

Walker recently floated the idea of eliminating the state’s income tax and increasing the sales tax to make up for the revenue loss. The effect would be to make Wisconsin sales taxes the highest in the nation — more than 13 percent. 

Burke said this approach “would kill jobs and raise taxes on 80 percent of Wisconsinites.”

“Taking money out of the pocket of the families whose purchasing power drives our economy to give another tax break to those at the top doesn’t make sense — it would devastate businesses near the state’s borders and potentially cause businesses to leave the state,” Burke said. 

Norman said Wisconsin tax code has been historically regressive, but the sales tax idea is the most regressive he’s ever heard. “Burke should go berserk on Walker for floating that proposal,” he said. 

Are you better off?

During a 1980 presidential debate with incumbent President Jimmy Carter, Ronald Reagan famously instructed voters to, “Ask yourself, ‘Are you better off today than you were four years ago?’”

Voters felt the answer was no, and Carter lost his re-election bid.

Democratic gubernatorial candidate Mary Burke might consider asking Wisconsin voters the same question in her race to depose Republican Gov. Scott Walker in November. Despite the strained spin that Walker and his supporters are frantically applying to his record, only the wealthiest of voters have received a boost under his administration. The main question standing in the way of a Burke victory is whether she can inspire enough of those who’ve suffered under Walker’s policies to vote in a non-presidential election year, because the wealthy and those who identify with them are likely to turn out for Walker in record numbers.

Burke is a wealthy businesswoman, and downtrodden Wisconsinites might look at the two candidates and wonder, “What’s the difference?” That perception is not going to compel them to head to the polls in November. Political analysts concur that Burke and her campaign must overcome  that image in order to win.