Friday, January 22, 2010

The cost of a promise

One thing I’ve learned in my years on Joint Finance is that words have a price. It’s easy to say things and make promises that sound good without realizing -- or at least without explaining -- what kind of hit it would mean to the state budget in extremely tight financial times.

One such vow in the newspaper a few months back caught my eye. Milwaukee County Executive Scott Walker told an editorial board that if he were to ever run this state, he would eliminate Wisconsin’s tax on retirement income. Here’s what the resulting
article in the La Crosse Tribune stated:

“[Walker] also promises to eliminate Wisconsin’s tax on retirement income, which he says hurts investment in Wisconsin because wealthy retirees flee to more tax-friendly states.”

So what would be the cost to keep wealthy retirees from fleeing? In such matters, the best answer comes from the Legislative Fiscal Bureau. There is a detailed three-page answer you can read here, but it boils down to this:

A loss of $460 million per year.

That's $920 million we'd need to replace in a biennial budget. To put that in perspective, that is almost the equivalent of running the entire state Department of Corrections for one year.

So how would he cover that cost? Walker doesn’t say.

Wednesday, January 20, 2010

The Governor's Black Friday

Governor Doyle must have been in a serious Friday funk last week. His office put out two press releases Friday that completely struck out.

First, the Governor’s office put out a release announcing the filing of the state Race to the Top application. The state put together a solid application hoping to be one of the lucky 15 states to get some federal, one-time dollars for education. That is a good thing.

What isn’t so good is the Governor’s Don Quixotic obsession with the mayoral takeover of the Milwaukee Public School district. Somehow a positive press release about bipartisan state efforts to get millions of dollars for education devolved into the Governor’s obsession with mayoral takeover of MPS.

In the second to last paragraph of his press release, he buried an attack on Democratic lawmakers for not lining up to jump the cliff with him on his, thus far, inadequately proposed plan for Milwaukee public schools. Does the Governor really believe he has lined up enough Republican votes for passage? Not from what I hear.

Governor, remember it was you who launched an inadequately laid out plan without the forethought of allies or a direction you were going. If there is fault to assess, that is where you should look. Perhaps you need to reassess the launch and execution of your “plan” for mayoral takeover.

Also of note was the media release sent out at 4:34 pm on Friday announcing the Recovery jobs report. Yes, I will say it again: The Governor announced 44,000 jobs retained or created through recovery dollars at 4:30 pm on a Friday, the black hole of media times to get coverage. Doh!

It’s time to get back to the legislative Democrats’ #1 priority – jobs. I think the Mayoral takeover plan in its current form is on self-induced life-support.