Taking the Hysterical Out of Hysterical Anti-Tax Message

(UPDATED BELOW)

Steve Walters of the Journal Sentinel captures a back-and-forth that took place yesterday between state Revenue Secretary Roger Ervin and WMC president Jim Haney on the role of the state's corporate lobby.

The harsher tone the Doyle administration is taking with the WMC this year is noticeable. Not only did the WMC run ads against Doyle, it also poured a ton of money into the attorney general race to keep Kathleen Falk -- Doyle's preferred candidate -- out of office. And lately the group has been speaking out against the revenue increases in Doyle's proposed budget.

Ervin said that WMC focuses too much on taxes at the expense of other factors that also impact economic development and business climate. Haney responded by saying that while the Doyle administration would like WMC to say taxes aren't bad, "That's not true."

Of course, not all WMC members would agree with Haney. According to Northwestern Mutual Life CEO Edward Zore at a forum in Milwaukee in February: "Taxes for us are not bad." And WMC board member Randy Smith, president of City Brewing Company, noted last month: "Sure, taxes are important but they don't make or break us."

And that comment by Smith really sums up what Ervin was saying. It's not that WMC needs to completely abandon its anti-tax message; but to fully address the varying needs of businesses in the state, it should balance it with other messages, even if that means backing issues that rely on public revenue such as job training and university research.

For instance, the results of WMC's annual survey on the Wisconsin economy are in for 2007, and while the group hasn't released the full results on its website, the press release on the survey emphasized the high demand for skilled workers in the state and the overall strong confidence Wisconsin manufacturers have in the future of the state's economy.

In fact, according to the survey, almost 60 percent of respondents said they couldn't find qualified candidates to fill job openings in the area of skilled production, and 43 percent said they plan to increase hiring in the future.

Doesn't this seem to be a great time to put the weight of the state's biggest lobby group behind the budget initiatives aimed at increasing research and retention funding for the UW, along with pushing for more state funding for the technical college system?

A Wisconsin Taxpayer Alliance study just last month found that the technical college system is one of the biggest economic drivers in the state with an annual economic impact of nearly $7 billion, and its an entity that's tailor-made to churn out the skilled production workers our state's businesses need. According to the study, taxpayers get a return of $3.62 for every $1.00 put into the tech colleges.

Likewise, in Milwaukee, UWM chancellor Carlos Santiago is fighting to revitalize Milwaukee as the state's economic engine by expanding the university's engineering and biotechnology fields, the effects of which would undoubtedly benefit state manufacturers.

But all of this takes money. And this money comes through the state biennial budget.

As long as WMC's sole message on the state budget is opposition to revenue increases, it's, in effect, arguing against some of the very funding that could help its members get the skilled workers and research opportunities they need.

This doesn't mean, of course, that the WMC needs to back everything in the budget or even the majority of revenue increases. But press releases like this one that simply shoot down any and all revenue increases without any consideration for what those increases could help fund is overly-simplistic at best and harmful to the state's economy at worst.

Where's the press release arguing that the technical college system should be made a higher state budget priority? Where's the radio ad urging legislators to back UWM's research growth initiative or funding for bio-fuels research at UW-Stevens Point? Where's the television spot aimed at preserving the Wisconsin Shares child care program so parents can go to work and know their kids are safe?

It's time WMC takes the hysterical out of its hysterical anti-tax message and starts positively contributing to the varied solutions that are needed to further our state's economy.

UPDATE: The WisPolitics Budget Blog is reporting that the JFC decided today to cut half of the budget funding for a $6 million tech college grant initiative that was intended for, according to the governor's proposal, "targeted job training for the state's major growth industries in the manufacturing and business services sectors."

This is a perfect example of something WMC should be putting its weight behind. Does anyone think that the $3 million would've been cut if WMC stood up for this modest, yet economically important, initiative?

LATE UPDATE (5/3): Still nothing out of WMC on the JFC's move yesterday to cut funding for skilled worker training. But the group did take the time to release a memo to the JFC urging legislators to cut more revenue from the budget.

It just defies logic. WMC releases an internal survey that found 60 percent of responding members couldn't find enough skilled workers to fill jobs in the last year. Literally one day after the survey results were released, legislators cut funding in half for a skilled job training initiative and WMC doesn't say a word.

Core Questions on DOT Story Remain Unanswered

There are some questions arising in the last few days about DOT secretary Frank Busalacchi's decision to send state attorneys to help resolve out-of-state tax disputes regarding Dennis Troha's trucking firms.

It's no surprise that this is being made into a political issue. It seems reasonable enough to believe that at least part of the reason the attorneys were sent is because of Troha's donations to the Doyle campaign.

After all, the last trucking firm known to get this type of treatment was Schneider National in 2001, when the state sent attorneys to Georgia to settle an out-of-state tax dispute for the Green Bay trucking giant.

And a quick look at campaign finance records shows that Schneider CEO Donald Schneider has been a major donor to Tommy Thompson, Scott McCallum, and a number of other GOPers since the 1990s (although the JS, WSJ, and other news outlets haven't seemed to notice that, yet).

McCallum, of course, was governor when the state sent an attorney to Georgia in 2001 to help settle Schneider's tax dispute, though much of the administration was probably still Tommy's, who would've just left in January of that year to become DHHS secretary.

It would be little surprise to me that the Schneider donations to Thompson/McCallum or those made to the Doyle campaign by Troha impacted the decision to send state attorneys to settle the out-of-state tax disputes. Any major business in the state is surely going to get heard on some level by the administration regardless, but I bet a little donor love can go a long way toward cutting through some of the red tape that otherwise might exist.

And a big wild card for the issue of whether anything blatantly improper was done is something mentioned in a WSJ article yesterday (emphasis mine):

Trucking companies pay taxes on the fuel purchased for their vehicles in various states as they drive across the country. Under a multistate compact, the home state for a given company, in this case Wisconsin, is responsible for auditing company reports and making sure the correct amount of taxes goes to each state in which the trucks are operating.

It seems to me that this multistate compact is a pretty big piece of the puzzle. WKOW in Madison also noted the compact, called the International Fuel Tax Agreement (IFTA), in a recent story, but important questions still remain.

What are the specific expectations for states participating in this compact when disputes arise? Do those expectations entail sending state resources out-of-state? Has any other state sent resources to Wisconsin or another state in the compact to help settle disputes? Has a company ever been denied state services pertaining to the compact? These are all rational questions, and I'm sure there are others, that our media should be answering.

The IFTA section on the DOT website gets the ball rolling on the basics of the compact, but more pertinent info on the issue of resolving disputes surely could be gained through a minimal amount of media digging.

Instead, much of the media has opted to engage in more speculation over the issue -- such as whether it's right for the state Senate to proceed with confirmation hearings for Busalacchi next Tuesday -- rather than spending time finding answers to the core questions of the story.

A cynic would almost think some media outlets believe it's more beneficial to leave those core questions unanswered -- stories about them are not nearly as enticing.

The Troha Indictment: It's the Institution, Stupid

Allow me to get out of the way up front that I'm not happy about Doyle's acceptance of campaign funds from Dennis Troha's family members. I think the campaign knew all of the money was really from daddy and not any of the kids.

But I don't think there's going to be any evidence to actually convict Doyle or any of his top campaign staffers of wrongdoing. And setting aside that legal question, as Brian Fraley points out, it's the court of public opinion that most politicians need to consider first and foremost when news like this hits.

In many ways, the standard for conviction in the court of public opinion is lower than in a court of law. There are rules and regulations in a courtroom that don't exist in the realm of public discourse. And courts of law are presided over by judges who often have a level of respect for fairness and equity, while the court of public opinion is presided over by the media that is -- more and more, as a recent Frontline series pointed out -- after an eye-catching and, subsequently, money-making headline.

That said, my guess is that this story will have little to no political impact on Governor Doyle. And that has nothing to do with Doyle himself, but rather the Office of Governor in the State of Wisconsin.

After Doyle beat Mark Green in November -- so much so that the GOP didn't even bother using Doyle's cash advantage as an excuse -- many conservatives in the state were at a loss for words to explain why. Indeed, Doyle had been hit and hit hard for months on ethical questions.

I had conservative commenters showing up on nearly all of my election-related posts from last spring on telling me to "just wait until November" when Georgia Thompson and all of the other messes thrown at Doyle would finally hit the fan (and I'm sure I'll get the same about Troha).

And the Journal Sentinel easily has enough coverage of its own to dedicate a special section on its website to all of the front page stories it ran against the governor.

But not only did Doyle greatly expand his margin of victory from 2002 across the state, as Jay pointed out shortly after the election, the governor went from losing the 5-county Milwaukee area to McCallum in 2002 to winning it in 2006. That means in spite of the incessant JS attacks, Doyle actually picked up votes in the area where the paper is most widely read.

And this isn't to say that Wisconsin voters don't care about ethics, as some conservatives assumed after the election. Rather, most simply see it as part and parcel of the institution of governor in the state. For most, ethics was going to be just as questionable under Green as it was under Doyle. In short, ethics was a wash.

To be sure, does anyone think that Troha and others who skirt campaign laws would simply stop donating to the Wisconsin governor in the event that Green won the election? People can talk all day about how Green is a "good guy," and I'm sure he is. After seeing his webmercial where he played basketball with his kids out in the driveway, I thought he seemed like a pretty good guy myself.

But, again, ethical questions are not as much about the person as they are the institution. Green didn't talk at all about how he'd change the institution of governor in Wisconsin, and so voters were left to believe -- and I'd say rightfully so -- that he wouldn't have changed it.

For more evidence, take a look at who Dennis Troha was giving his money to between 1991 and 2000: Tommy G. Thompson.

Of course, ethical bombshells that dominate even TV news -- where most people get their info these days -- can play a role in the outcome of gubernatorial elections, but as riled up as conservatives got over Georgia Thompson and as riled up as they'll get over Dennis Troha, those stories simply don't constitute bombshells in the general public's eye.

To put it bluntly, the bar for what constitutes an ethical bombshell for governors in Wisconsin is so high because the bar for public expectations of gubernatorial ethics is so low.

So where does that leave us? For me, it's about getting back to the point where the ethical expectations for the governor in Wisconsin aren't at the basement level.

Wiggy argues that the issue is about the play side of pay-for-play. He writes:

With the news of the Dennis Troha brouhaha, we have yet another reminder that if we really want clean elections without campaign contributors trying to buy influence, then the surest way would be to remove the power of the state to reward campaign contributors. Putting the governor as the main arbiter in handing out casino licenses is just an invitation for abuse.

I just don't see a solution there. After all, the issue is not simply about the governor's control over casino licenses. Even if stronger checks were given to the legislature on that issue, it may disburse the level of stink by spreading out the donor love to more legislators, but the process as a whole would still stink just as much.

And this issue isn't just about casinos. It's a problem that pervades public policymaking. Unless the plan is to stop elected officials from setting public policy -- in other words, doing their job -- then no amount of futzing with the legislative process in relation to the campaign donation process is going to change the fact that elected officials are accountable first and foremost to those who help their chances at re-election the most. That is, those who give them the most amount of money.

The solution, rather, is to focus on the pay side of pay-for-play. If politicians are going to be accountable first and foremost to their donors and the goal is to make them accountable first and foremost to the public, then you need to make the public their donors, plain and simple.

Elections and the representatives that are created by them are public entities, and they should be funded that way.

UPDATE: The Recess Supervisor nails it, as usual.

Assessing the Proposed Hospital Assessment

Reading through some of the press coverage of Doyle's budget proposal from around the state, it's pretty clear that the governor is in for a battle over the hospital assessment.

Opposition in the La Crosse Tribune. Opposition in the Manitowoc Herald Times Reporter. Opposition in the Wausau Daily Herald.

Granted, all of the opposition is coming from hospital executives who would be the ones accounting for the assessment. But, the thing is, hospital execs seem to have a bit of an edge over other business execs when it comes to public perception since their facilities provide such an obvious benefit to the public good.

When Exxon Mobil execs complain about a tax, for instance, it isn't going to be looked upon with nearly as much public sympathy as when complaints come from the place that helped grandma get better after her fall or little Timmy after he stuck a pencil in his ear.

And when you add to that recent reports that the Wisconsin Hospital Association was third in lobbyist spending during the last legislative session -- just a hair behind WEAC -- the hill that the governor needs to climb looks even steeper. Indeed, I imagine $1.5 million goes a long way in a single legislative session at the State Capitol.

But at least one health care provider organization in the state is backing the hospital assessment. According to the president of the Wisconsin Federation of Nurses and Health Professionals (WFNHP), "Non-profit hospitals enjoy a special tax status which means they pay no taxes. Governor Doyle’s proposal to require hospitals to pay a small fee based on the number of beds is one way the hospitals can give back to the community."

Makes you wonder about the differences in priorities between those providing the facilities for health care and some of those actually providing the health care. Yet, it may not be too surprising, since it's arguable that the WFNHP simply isn't made up of the people who would be cutting the assessment check, so it follows that the group wouldn't be as concerned about it.

On the other hand, it shouldn't be assumed that the WFNHP doesn't have an interest in the financial viability of the facilities where its 3000 statewide members work. And, the fact remains, most health systems and independent hospitals in the state would be getting more money back, at least in the short run, than they would be putting into the assessment pot due to matching federal dollars.

That's where my concern still lies, however. Tying your hopes to federal dollars is a risky business. Just look at the Wisconsin Shares program. When the feds catch wind that the state has set up a system designed explicitly to generate federal money, a few simple regulation changes could throw a major wrench into the works, which appears to be what happened in Connecticut.

That's why it would be comforting to see some assurances that this proposed set-up is a short term plan, not a system for the long haul -- one biennium, maybe two.

And it would probably also help the plan's chance of passing to establish some sort of mechanism for ensuring that no health systems or individual hospitals loose money on the deal. In other words, everyone would either get more back than they put in or at least break even on their assessment charges. According to this chart of how systems and independent hospitals would fair under the proposed assessment, it would take about $18 million over the biennium to get everyone out of the red.

But I still wonder if it's worth all of the trouble to fight for and establish a system that may only be stable for a few years. And, on the whole, the plan still amounts to just tinkering with our existing broken system.

As I noted last week, if we're tinkering with anything, it should be the fundamental health care reform proposals that currently sit before the legislature, not our fundamentally flawed health care system.

Budget Talk is Cheap

It's very typical for members of the opposite party to attack the governor's budget proposal. It's a large document that can be picked apart from a number of angles using a variety of calculations that suit the attacker.

For instance, while the GOP was glad to quickly estimate the total amount of new taxes and fees that Governor Doyle's budget includes, they are not so quick to consider how the new tax breaks for health care, child care, etc., will offset those increases.

Nevertheless, in spite of how commonplace this is, it's still worth pointing out that it's ridiculous at best and counterproductive at worst.

Taking a trip down memory lane, it's interesting to look at how Governor Doyle's budget proposal, on the whole, compares to the last Republican governor's budget proposal, which would be Scott McCallum in 2001.

That year, McCallum released his budget proposal to the legislature on February 20. The next day, Steve Walters of the Journal Sentinel opened his article titled "Governor Seeks to Curb Spending" with the following:

Republican Gov. Scott McCallum on Tuesday handed lawmakers the smallest budget increase in 30 years -- balanced with $350 million from the one-time sale of future tobacco industry payments -- and asked that future spending be tied to increases in personal income.

Walters followed up by noting that the "smallest budget increase" line was in reference to a 3 percent increase in GPR spending in FY 2001 and a 2.9 percent increase in FY 2002. And, later in the article, then-Assembly Speaker Scott Jensen (R-Brookfield) praised McCallum for "hold[ing] the line on spending and taxes."

Fast-forward to earlier this week, the day after Doyle released his budget proposal to the legislature, Steve Walters, Stacy Forster, and Patrick Marley of the JS wrote in their article titled "Doyle Seeks Tax, Fee Boosts":

The governor proposed $57.7 billion in total spending, including state and federal funds, over the next two years - a 9% increase over the current budget.

And the current Assembly Speaker Mike Huebsch (R-West Salem) added that Doyle "outlined a number of priorities to a lot of different groups tonight, but the one priority he seemed to forget was the taxpayers."

Seems like two completely different budget proposals, right? Well, not so much.

While McCallum's budget proposal did only include a 5.9 percent increase in GPR spending, as Walters noted in his article, the total budget increase -- which was the figure Walters, Forster, and Marley noted in their recent article on Doyle's budget -- was 9.6 percent. That's 0.6 percent more than the increase in Doyle's current budget proposal.

And while Doyle's budget proposal does include a total revenue increase of 9 percent, when only considering the increase in GPR spending -- which was the figure Walters noted in his 2001 article on McCallum's budget -- the increase is only 3.5 percent. That's quite a bit less than the 5.9 percent increase that McCallum proposed in 2001.

Thus, it's fairly clear that Doyle's budget proposal, on the whole, isn't out of step with previous state budget proposals, even the one that came under the last Republican governor who was openly praised for his proposal's fiscal restraint.

So can we move past the attempts to score cheap political points on the budget proposal and get on with using it to craft the actual budget that will get adopted this summer?