Wednesday, June 22, 2005

Budget Update Day Three: Cut My Pay - As Long As it Goes Up 6%

One quick unrelated observation:

Nobody can credibly say that Paul Barrows wasn't living up to his former job title - Vice Chancellor of Student Affairs. In fact, he should be paid more for doing his job so well, by having affairs with as many students as he could.

This morning, as expected, the Assembly approved the budget on a primarily partisan vote. The vote took place at 5 AM after an all night session highlighted by tons of Democratic amendments, which I talked about yesterday. The vote was followed by the usual hyperbole, including this gassy release from Minority Leader Jim Kreuser. If hyperbole had a street value, we could full the budget deficit just on post-budget releases. One observation - Leah Vukmir's move to the right (she voted "no" on the budget) should perhaps concern Senator Tom Reynolds. Can anyone say "primary?"

If you’re enough of a political/techno geek to make your way to this blog, then you no doubt have seen the title topic covered in numerous other posts. The issue of what is a cut and what isn’t is as old as budgets themselves, and all depends on your point of view.

As you have heard by now, the Legislature’s budget provides $458 million in new money for local school districts, which is roughly $400 million less that Governor Doyle proposed. The Legislature tries to alleviate a shift to property taxes by limiting increases in spending by school districts to $120 and $100 per year, respectively, while the increase would be nearly $250 per pupil in Doyle’s budget. Whether you see this as a cut or not depends solely on your political perspective.

Republicans, of course, point out that the $458 million is the single largest increase of any budget item, and it is applied to an appropriation that already makes up nearly 50% of the entire state general fund budget. In a tough budget, you can’t say children aren’t a priority with a straight face after an increase like that, says the GOP.

Democrats correctly counter that it is $400 million less than the governor proposed. They say that the per pupil increases amount to a 1% allowable spending increase, while school districts' built-in costs (salaries, benefits, debt service, fuel, plasma TVs), go up between 3% and 4% in the best case scenarios, and if per pupil spending is capped at 1%, “devastating” cuts must be made.

While trotting out the kids to make their point about school spending is easy, to ignore the irresponsible way in which Doyle reached the $850 million increase cheapens the Democrats’ rhetoric. To ignore the damage Doyle’s budget tricks would do to the state budget is like ignoring that the Hulk is large, green, and may have a bit of a temper problem. To raid funds, use one-time money, and to take out a mortgage to plug budget holes puts the state in an impossible situation two years from now, which will likely result in tax increases or further cuts to services. In a way, this is why Doyle’s budget is such a politically great budget – his liberal constituency doesn’t care where the money comes from or what long term damage it could do to the state – they just want to make sure the money is there now, consequences be damned. In a campaign, a soundbite about Republicans cutting education is a lot more effective than Scott Walker or Mark Green trying to explain the structural deficit during a debate. Teaching the average voter about school financing is akin to teaching a monkey how to play the harmonica.

Some Republicans voted against the budget in the Assembly because they believe it spends too much. What a lot of people don’t realize is that the amount of taxes collected by state government generally goes up without any legislative action at all. As people earn more income and buy more products, the government collects more in revenue without having to change tax rates. In some ways, increased government spending is a sign of a healthy economy, because people are making more money, buying more Britney Spears CDs, and the government is collecting more as a result. The problem occurs in these good times when the government spends all the money it is taking in, thereby artificially increasing base spending on programs. When the economy slows down due to lower incomes, more people out of work, and fewer people purchasing goods, suddenly the state can’t support all the inflated spending and has to pull back on the increases seen in the good times.

That is what has happened in the last two Wisconsin budgets. For the 2003-05 biennium, there was a $3.2 billion budget hole to fill. For this budget, the number was near $1.6 billion, due to stagnant income growth. This creates a Catch-22. When incomes drop, the government takes in less money, but at the same time, more people need government services because they are out of work. Afraid to raise tax rates, Jim Doyle can actually claim to have held spending down to a reasonable level, because he has been forced at gunpoint to, due to dwindling new revenues. Everyone knows that given good economic times, Doyle would be spending money like, as Jonah Goldberg put it, “a pimp with a week to live.”

The best way to fix this conundrum would be to hold down government spending during the healthy economic years, which has been too tough a task in past budgets for the governor and legislature. Having a couple extra hundred million dollars left over and unspent is too tempting for politicians seeking re-election, thus it pumped into school aids, shared revenue, and other programs in the name of “property tax relief.”

Tomorrow, I’ll talk about the property tax freeze in the budget, and why it is necessary.

FOLLOW UP FROM YESTERDAY:

On Tuesday, I made the point that Democrats push debate late into the night, so they can then go to the press and say it was passed "under the cover of darkness" or "in the middle of the night." Xoff, Wispolitics.com's Democrat blogger, said I was claiming the Democrats were trying to "dupe" the press.

After a quick Lexis/Nexis search of the words "middle of the night" over just a year or so, here's what I came up with. Now tell me with a straight face that this isn't a media tactic. Sometimes the Dems say it themselves, sometimes the reporters take it upon themselves to drop it in the story:

THE RISE AND FALL OF GARY GEORGE; A BRILLIANT CAREER, IN ASHES - August 7, 2004 Saturday

BYLINE: Todd Richmond Associated Press

“Last summer, he left his fellow Democrats fuming after he voted for a
Republican-drafted state budget that included $3 million for a Hmong cultural center in George's district. The measure was slipped into the budget in the middle of the night.”


HEADLINE: Hmong Cultural Center Idea Revived in Wisconsin Legislature for Debate
BYLINE: By Steven Walters Milwaukee Journal Sentinel

“The vote continued a controversy that began in June, when state Sen. Gary George (D-Milwaukee) cut a middle-of-the-night deal with Republicans, who control the Legislature, that would have spent $ 3 million for the Hmong center at a site on Milwaukee's south side.”


HEADLINE: Senate approves marriage bill; Doyle critical, but doesn't vow veto (add-on section about Hmong Cultural Center)

BYLINE: AMY RINARD Milwaukee Journal Sentinel

“The center was added to the state budget bill as a middle-of-the night deal earlier this year to win the vote of Sen. Gary George (D-Milwaukee), who supports the center.”


HEADLINE: GAYS LOSE ROUND 1; ASSEMBLY OKS MARRIAGE BAN AFTER ALL-NIGHT FILIBUSTER

BYLINE: Anita Weier The Capital Times

“Democrats accused Republicans of trying to delay a debate and vote until the middle of the night, but then launched a colorful and very long filibuster of their own.”


HEADLINE: Senate Democrat opposes tax cap; Lawmakers battle for position in veto override

BYLINE: NAHAL TOOSI Milwaukee Journal-Sentinel

"No promises. No pressure," Marotta said. "We don't make deals like the
Legislature does. We don't cut deals in secret in the middle of the night that result in pork."


HEADLINE: Concealed-Weapons Bill's Passes, but Wisconsin's Governor May Veto

BYLINE: By Steven Walters Milwaukee Journal-Sentinel

“MADISON, Wis.--Assembly Republicans during an overnight session rewrote parts of the concealed weapons bill to attract more Democratic votes, and it worked in a way that raises questions about whether Gov. Jim Doyle's promised veto of the bill would stand.

Minutes after the changes were made, seven Assembly Democrats joined 57 Republicans at 2:40 a.m. Thursday in voting for the bill that would allow those 21 and older to obtain permits authorizing them to carry handguns, stun guns, non-switchblade knives or billy clubs.

The middle-of-the-night concessions "make a lot of folks in this (Assembly) feel more comfortable" with repealing the ban of concealed weapons passed in 1870, said Rep. Scott Gunderson (R-Town of Norway).”

...And there were more. Imagine if I would have searched for "late night" or other terms.

One last note on this - the idea that Gary George's budget vote was a deal "cut in the middle of the night" is ridiculous. To believe that, you have to believe that Senate Republican leadership somehow scheduled the most important bill all session without having the votes to pass it. This is absurd. I would bet my life that the deal with George was cut well ahead of time, they just didn't get to it because of the 120 or so Democrat amendments. But you can see how this delay tactic works like a charm.

UPDATE: Here's Doyle's release today blasting the budget. Notice anything, say, in the first line?

“Today, in the early morning hours when no one was watching, Republicans in the State Assembly forced through a budget that does not represent Wisconsin’s values."