[source]
For Further Reading:
Saturday, February 13, 2016
Monday, February 8, 2016
Under Sanders, Income & Jobs Would Soar
Under Sanders, income and jobs would soar, economist says
If Sanders became president -- and was able to push his plan through Congress -- median household income would be $82,200 by 2026, far higher than the $59,300 projected by the Congressional Budget Office.
In addition, poverty would plummet to a record low 6%, as opposed to the CBO's forecast of 13.9%. The U.S. economy would grow by 5.3% per year, instead of 2.1%, and the nation's $1.3 trillion deficit would turn into a large surplus by Sanders' second term...
"Like the New Deal of the 1930s, Senator Sanders' program is designed to do more than merely increase economic activity," Friedman writes. It will "promote a more just prosperity, broadly-based with a narrowing of economy inequality." ...
Friedman, however, argues that Sanders' plan would be more stimulative because it is pouring money into the economy, as opposed to cutting taxes. Several of Sanders' proposals -- such as spending $1 trillion on infrastructure -- will happen in the first few years of his administration.
Sunday, January 31, 2016
Another Wisconsin Corporate Welfare Failure
Caterpillar (and former Bucyrus) has received $40 million in state and local awards (subsidies) in Wisconsin. [source]
Caterpillar closing Wisconsin plant, expects declining 2016 sales in mining and $400M more in restructuring costs
Caterpillar closing Wisconsin plant, expects declining 2016 sales in mining and $400M more in restructuring costs
The Bigger-Is-Better Racket
Since Reaganomics began eviscerating the middle class, mergers and a bigger-is-better attitude has dominated our development and economic thinking. Economies of scale were going to trickle down riches on each and every one of us.
But, it turns out, much of this was just merely oligopoly power solidifying itself. Big companies became too big to fail, and the wages of most workers stagnated.
In our haste to believe that all we'd learned from the Great Depression was wrong, we marched ahead cutting taxes, cutting regulation, getting government out of the way of all-knowing business. Zoning laws changed and development intensified.
The small mom-and-pops, which were the hubs of smaller communities throughout the nation, were inefficient and antiquated. Travel patterns were changed. The off-ramp economy was the path to prosperity. A new automobile-dominated society was deemed superior. Big boxes and one-stop shopping were supposed to transform daily life, for all, for the better.
But what happens when the oligopoly changes the lifestyle in a community, only to desert it years later?
First, the traffic to-and-from these megaplexes disrupts as much as it invigorates:
They come to town, change the traffic flow and the character of the place, they push many of the costs of their employees onto the locality and the state, they avoid their fair share of taxes, they pocket a financial windfall, and then they leave town.
When it comes to economic development, place-making and community, bigger isn't always better.
For Further Reading:
Walmart: It Came, It Conquered, Now It's Packing Up & Leaving
The Perils Of Walmart Dependence
Big, Empty Boxes
Impact of Big-Box Stores on Taxes and Public Costs
But, it turns out, much of this was just merely oligopoly power solidifying itself. Big companies became too big to fail, and the wages of most workers stagnated.
In our haste to believe that all we'd learned from the Great Depression was wrong, we marched ahead cutting taxes, cutting regulation, getting government out of the way of all-knowing business. Zoning laws changed and development intensified.
The small mom-and-pops, which were the hubs of smaller communities throughout the nation, were inefficient and antiquated. Travel patterns were changed. The off-ramp economy was the path to prosperity. A new automobile-dominated society was deemed superior. Big boxes and one-stop shopping were supposed to transform daily life, for all, for the better.
But what happens when the oligopoly changes the lifestyle in a community, only to desert it years later?
First, the traffic to-and-from these megaplexes disrupts as much as it invigorates:
Traffic and noise depress property values in nearby neighborhoods. More traffic in- creases the cost of local government services, such as road maintenance and police. [source]Many of these big boxes also use their size and strength to avoid taxation:
As one example, take Walmart, the largest among them, which looks for tax loopholes wherever it can find them. “For every kind of tax that a retail company would normally pay or remit to support public services, Walmart has engineered an aggressive scheme to pay less and keep more,” found a 2011 report by the non-profit research organization Good Jobs First. These include using its fleet of lawyers to systematically challenge its property tax assessments, and gimmicks such as deducting rent payments made to itself through captive real estate investment trusts. Good Jobs First calculated that these tactics cost state and local governments more than $400 million a year in lost revenue, and concluded, “Walmart may be more of a fiscal burden than a benefit to many of the communities in which it operates.”Much of the cost for the employees at these big boxes is placed upon the locality and the state:
Large numbers of big-box employees rely on Medicaid, food stamps, and other public assistance programs to get by. Several states have reported that their Medicaid rolls are now swollen with su- perstore workers. In 2005, for example, Massachusetts disclosed that some 9,500 Wal-Mart, Home Depot, and Target em- ployees and dependents were receiving publicly-funded health care at an annual cost to taxpayers of over $12 million.It's also been found that these big boxes hurt the local job market:
Perhaps most disturbing, researchers at Penn State University, after controlling for other factors that influence poverty, found that counties that gained Wal-Mart stores during the 1990s fared worse in terms of family poverty rates than those that did not. [source]
As these businesses are forced to down- size or close, the resulting job losses typi- cally equal or exceed the number of new jobs created by the big-box store.This was recently shown in a large-scale study con- ducted by Univ. of California economist David Nuemark and his colleagues at the Public Policy Institute of California. The study examined 3,094 counties across the U.S., tracking the arrival of Wal-Mart stores between 1977 and 2002.And when they leave, they typically leave blight behind. As the Institute for Local Self-Reliance discovered:
The study found that the opening of a Wal- Mart led to a net loss of 150 retail jobs on average, suggesting that each Wal-Mart em- ployee replaces approximately 1.4 workers at other stores.
These stores tend to remain vacant because retailers often continue paying rent or take other steps to block competitors from occupy- ing the site. Clauses in many big-box lease agreements forbid property owners from leas- ing the building to another company without the original tenant's approval.
When it comes to economic development, place-making and community, bigger isn't always better.
For Further Reading:
The Perils Of Walmart Dependence
Big, Empty Boxes
Impact of Big-Box Stores on Taxes and Public Costs
Where Are The Conservative Calls For Accountability For Corporate Welfare Recipients?
The rejiggered corporate structure will allow the new company to reel in $150 million in tax savings.
However, saving taxes was not the primary motivator for the deal, the company said. Though the merger includes the tax shift, "it's not about the foreign domicile," said company spokesman Fraser Engerman. "This is all about strategy."Hillary Clinton Slams Johnson Controls-Tyco Deal
"Here is as direct an example of what's wrong with the thinking and acting of an American corporation that we could get," Clinton said.
She told supporters at a bowling alley here that "I will do everything I can to prevent this from happening, because I don't want to see companies that thrive, use the tax code, the gimmicks, the shenanigans...to evade their responsibility to support our country."
Clinton said that during the economic and financial crisis of 2008, Johnson Controls was among the companies "that begged the administration and the Congress to help bail out the auto industry."
Said Clinton: "Johnson Controls goes to Washington, says, 'Please American taxpayers, save us!'
"And the auto industry, the suppliers, the jobs, were saved. OK. But just in the last few days Johnson Controls announces it's going to pretend to sell itself to a company in Europe to escape paying taxes to the United States government. It's called an IN-version. I think it should be called a PER-version."
Clinton told the audience that the company was happy to accept their help during the crisis.
"Now they want to move overseas for the sole purpose of escaping their fair share of taxes to support what made them be a company that was successful in the first place — the rule of law, the contract system, our judicial system, the support we give to training people, all that you and I have contributed in previous generations. They are willing to walk away in order to pay a lower tax instead of doing what they should to support our country to grow and be prosperous and strong in the future and it is wrong."
Clinton added: "We've got to take all of these abuses on...We have to go after everybody who is trying to undercut American prosperity and America's future."Johnson Controls Subsidy History
| Subsidy Summary | Subsidy Value | Number of Subsidies |
|---|---|---|
| State/Local | $219,964,345 | 103 |
| Federal (grants and allocated tax credits) | $309,118,823 | 13 |
| TOTAL | $529,083,168 | 116 |
Sunday Reading
Confusion About The Financial Crisis Won't Die
Will Bill Privatize Water Utilities?
Is Ted Cruz Right About The Federal Reserve & The Great Recession?
Bill Would Limit City Control Of Development
Zoning Laws Transfer Wealth In The Wrong Direction
The Case Against Bernie Sanders Is Dumb
Can New Approach End Gerrymandering?
Will Bill Privatize Water Utilities?
Is Ted Cruz Right About The Federal Reserve & The Great Recession?
Bill Would Limit City Control Of Development
Zoning Laws Transfer Wealth In The Wrong Direction
The Case Against Bernie Sanders Is Dumb
Can New Approach End Gerrymandering?
Union Decline Leads To Wage Decline For All
5 States Where the Middle Class Is Being Destroyed
CEO Pay, Unionization & The Middle Class
Unions, Public Sector & Wages
Wisconsin: -5.7%
The clear winner (or loser) in the race to the bottom has been Wisconsin, losing 5.7% of its middle class households since 2000. Average median income has dropped by roughly $9,000 annually, and costs of living have gone up as well. There have also been many political battles that have not worked in the middle class’s favor. Governor Scott Walker gutted many of the state’s unions — which has a big effect on the middle class — and all signs seem to indicate that he will aim to implement similar policies. Like Ohio, Wisconsin’s makeup was particularly vulnerable to a recession, and the proof is in the numbers.Union Membership In Wisconsin Plummets In Wake Of GOP Measures
In 2015, 8.3% of Wisconsin workers, or 223,000 in all, were members of unions. That was down sharply from the 306,000 people, or 11.7% of the state’s workforce, who belonged to unions in 2014.
For Further Reading:
Unions, Public Sector & Wages
Saturday, December 19, 2015
Wisconsin Reading
Minnesota, Wisconsin Diverge As Twin Cities Outpace Northern Peers
Scott Walker Dramatically Rewrites Election Rules In Wisconsin
Wisconsin Ranks 32nd In Five-Year Job Growth Report
Medicaid Expansion Would Save State $1 Billion
Walker's Assault On Open Records
Walker Signs Bills Dismantling GAB, Overhauling Campaign Finance Law
Scott Walker Dramatically Rewrites Election Rules In Wisconsin
Wisconsin Ranks 32nd In Five-Year Job Growth Report
Medicaid Expansion Would Save State $1 Billion
Walker's Assault On Open Records
Walker Signs Bills Dismantling GAB, Overhauling Campaign Finance Law
Walker's Grasp On Reality Even More Tenuous Than Previously Thought
In an article for the Journal Sentinel, The Wisconsin Comeback, Scott Walker repeated familiar talking points and platitudes. According to Walker, Wisconsin is flourishing.
The Journal Sentinel has their own editorial, Another Lousy Wisconsin Jobs Report and Little Action on Job Creation.
A new government report shows that our state ranked 32nd in private-sector job growth among the 50 states in the five-year period that ended in June. That's the entire recovery period since the last recession.
Private-sector hiring in Wisconsin grew just 7.6% during those five years, far behind the national growth of 11.2% and behind nearby Midwestern states. Michigan, Indiana, Minnesota, Ohio, Iowa and Illinois all did better.Joel Rogers (the Sewell-Bascom Professor of Law, Political Science, Public Affairs and Sociology at the University of Wisconsin-Madison, and director of the Center On Wisconsin Strategy) added:
According to a recent report from the Pew Research Center, Wisconsin now leads the nation in destroying its middle class. Defining "middle-class households" as those with income 67% to 200% of their state's median, Pew showed Wisconsin leading all other states in the 2000-2013 period in its rate of loss...
Median worker wages here, for example, are now $17.38 an hour. In inflation-corrected terms, that's up only 71 cents from 35 years ago — equivalent to an increase of only 2 cents a year — despite a near doubling of worker productivity over the period. Job growth has been pathetic, among the worst in the nation. If Wisconsin had merely kept pace with the rest of the country's recovery from the Great Recession, we'd have 90,000 more jobs today than we do.
And job quality is through the floor. More than a quarter (27%) of Wisconsin workers now make $11.55 or less an hour. A full-time year-round job at that wage is not enough to keep a four-person family out of poverty, even on America's distinctively stingy definition of the poverty line.In the sense that 'comeback' usually has a positive connotation, I don't think 'comeback' means what Scott Walker thinks it means. Hopefully Wisconsin can comeback from the Walker 'comeback'.
Saturday, December 5, 2015
Wisconsin Reading
Scott Walker's Food Stamp Cuts Are Coming To A State Near You
In Wisconsin, Little Conserved By Radical Conservatives
Fewer Teachers, Less Experienced Teachers Mean Challenges for Wisconsin's Public Schools
Wisconsin's Public Sector is Leanest in Two Decades
Wisconsin Has Far Fewer State Employees Than Most States
Scott Walker Signs Bill Limiting Doe Probes As Records Are Released
The Use and Disclosure of Personal Email in the Walker Administration
"Wisconsin is Moving in the Right Direction"
Wisconsin Government Revenue is Not Out of Line
Slay The Wisconsin Gerrymander
Wisconsin Not High in Taxes, Spending
WEDC May Have Illegally Awarded $21 Million in Tax Credits
Wisconsin's Position Again Inflated in a Tax Ranking
Discovery of Census Flub Tempers State's Tax Hell Status
In Wisconsin, Little Conserved By Radical Conservatives
Fewer Teachers, Less Experienced Teachers Mean Challenges for Wisconsin's Public Schools
Wisconsin's Public Sector is Leanest in Two Decades
Wisconsin Has Far Fewer State Employees Than Most States
Scott Walker Signs Bill Limiting Doe Probes As Records Are Released
The Use and Disclosure of Personal Email in the Walker Administration
"Wisconsin is Moving in the Right Direction"
Wisconsin Government Revenue is Not Out of Line
Slay The Wisconsin Gerrymander
Wisconsin Not High in Taxes, Spending
WEDC May Have Illegally Awarded $21 Million in Tax Credits
Wisconsin's Position Again Inflated in a Tax Ranking
Discovery of Census Flub Tempers State's Tax Hell Status
Saturday, October 31, 2015
GOP Zombies Lumber On
There is a zombie party, but it's not the GOP
Even Schneider, in the article, writes that Ryan becoming speaker was unthinkable weeks ago. But the Republicans did what they do best when between a rock and a hard place, a well-staged photo opportunity. Hence, even Schneider doesn't have much more to say about Ryan other than "young, attractive." Ryan's previous attempts at serious policy analysis have been shown to be nothing more than flim flam.
For the past few weeks (more so than usual), dysfunction was the entire scene for the Republicans. 20 or so presidential candidates, a Tea Party caucus holding the rest of the party hostage, and seemingly no one wanting to become the new speaker.
Paul Ryan was the only Republican left that the party felt the public may actually pay some attention to at this point. Because Ryan and Rubio are younger, the Republican party is alive and well, according to Schneider.
Schneider details how the Republican party still has a hold on America and the demise of the party is premature:
I know this is the Republican playbook - claim the opposite of reality and always act as if everything is just what the Republicans planned and wanted (and Schneider's sole purpose is to regurgitate some version of this fantasy in every article he writes). But, aren't even the conservatives getting tired of the willful distortion of reality?
"Dysfunction" was hardly the scene in the House last week as Wisconsin Rep. Paul Ryan took hold of the speaker's gavel — an act unthinkable even to Ryan just a few weeks prior. The young, attractive Ryan always has been seen as the future of the Republican Party, able to bridge the gap between the GOP's more ardent wing and those more interested in governing. (In the end, only seven of the Tea Party's "Freedom Caucus" members voted against Ryan, proving the group's opposition to Ryan was overblown.)WOW. Talk about trying to polish a turd. Nobody revises history quite like the Republicans.
Even Schneider, in the article, writes that Ryan becoming speaker was unthinkable weeks ago. But the Republicans did what they do best when between a rock and a hard place, a well-staged photo opportunity. Hence, even Schneider doesn't have much more to say about Ryan other than "young, attractive." Ryan's previous attempts at serious policy analysis have been shown to be nothing more than flim flam.
For the past few weeks (more so than usual), dysfunction was the entire scene for the Republicans. 20 or so presidential candidates, a Tea Party caucus holding the rest of the party hostage, and seemingly no one wanting to become the new speaker.
Paul Ryan was the only Republican left that the party felt the public may actually pay some attention to at this point. Because Ryan and Rubio are younger, the Republican party is alive and well, according to Schneider.
Schneider details how the Republican party still has a hold on America and the demise of the party is premature:
In fact, Republicans — y'know, the party that has ceased to function — currently hold majorities in the U.S. House, Senate and claim 31 governorships.He forgets to mention much of this is due to gerrymandering and voter suppression tactics. For Schneider, just like his new hero Paul Ryan, details aren't that important.
I know this is the Republican playbook - claim the opposite of reality and always act as if everything is just what the Republicans planned and wanted (and Schneider's sole purpose is to regurgitate some version of this fantasy in every article he writes). But, aren't even the conservatives getting tired of the willful distortion of reality?
Weekend Reading
The Real Reason Germs Spread in the Winter
The Links Between Gut Microbes and the Brain
The Myth of Big, Bad Gluten
The Religious Right's Big Lie About the Founding of America
You're Not Irrational, You're Quantum Probabilistic
American Failure: The 401(K)
The 401(K) Crisis is Getting Worse
Inequality in Our Retirement Accounts
The Rage of the Bankers
Why Does Wall Street Want Higher Rates?
The Stock Market is Not the Economy
The Case Against Raising Interest Rates Before Wage Growth Picks Up
The Failed Reaganomics Experiment In Kansas Keeps Getting Worse
Red States Spent $2 Billion in 2015 to Screw the Poor
The Links Between Gut Microbes and the Brain
The Myth of Big, Bad Gluten
The Religious Right's Big Lie About the Founding of America
You're Not Irrational, You're Quantum Probabilistic
American Failure: The 401(K)
The 401(K) Crisis is Getting Worse
Inequality in Our Retirement Accounts
The Rage of the Bankers
Why Does Wall Street Want Higher Rates?
The Stock Market is Not the Economy
The Case Against Raising Interest Rates Before Wage Growth Picks Up
The Failed Reaganomics Experiment In Kansas Keeps Getting Worse
Red States Spent $2 Billion in 2015 to Screw the Poor
Friday, October 23, 2015
Another Wisconsin Corporate Welfare Failure
Harley-Davidson plans job cuts amid decline in quarterly earnings
Here's a link to Harley-Davidson's subsidy bonanza over the years.
Wisconsin gave Harley a $25 million subsidy (corporate income tax credit, rebate or reduction) in 2010.
Sadly (for journalism), the article mentions nothing about the millions in subsidies given to Harley-Davidson.
Saturday, October 3, 2015
Wisconsin's Corporate Welfare
In keeping with the theme of corporate giveaways (see the previous post), there has been a lot in the Wisconsin media lately regarding company lay offs, closings and downsizings.
Jobs Lacking After State Subsidy Of Kohl's
Joy Global To Temporarily Close Milwaukee Department, Lay Off 113 Workers
Caterpillar Plans To Cut Thousands Of Jobs As Key Markets Slow
Perplexingly, Wisconsin has also been lavishing welfare on some of these same companies as they lay off employees or fail to create the promised jobs.
Caterpillar (and former Bucyrus) has received $40 million in state and local awards (subsidies) in Wisconsin.
Kohl's has received at least $87.5 million in subsidies from Wisconsin.
Mercury Marine received $123 million. Northwestern Mutual Life $50 million. Quad Graphics $46 million. Oshkosh Corporation $36 million. Uline $18.6 million.
According to a New York Times analysis, Wisconsin spends $1.53 billion per year on subsidies.
As Badger Democracy wrote:
For More Information:
Discover Where Corporations are Getting Taxpayer Assistance Across the United States
Jobs Lacking After State Subsidy Of Kohl's
Joy Global To Temporarily Close Milwaukee Department, Lay Off 113 Workers
Caterpillar Plans To Cut Thousands Of Jobs As Key Markets Slow
Perplexingly, Wisconsin has also been lavishing welfare on some of these same companies as they lay off employees or fail to create the promised jobs.
Caterpillar (and former Bucyrus) has received $40 million in state and local awards (subsidies) in Wisconsin.
Kohl's has received at least $87.5 million in subsidies from Wisconsin.
Mercury Marine received $123 million. Northwestern Mutual Life $50 million. Quad Graphics $46 million. Oshkosh Corporation $36 million. Uline $18.6 million.
According to a New York Times analysis, Wisconsin spends $1.53 billion per year on subsidies.
As Badger Democracy wrote:
In total corporate incentives, Wisconsin ranks 14th overall in the nation...Of the 903 reported corporate grants listed in the Times report, 300 (nearly one-third) have come in 2011-2012 alone, during the Walker administration, primarily through the WEDC “Enterprise Zone Jobs Tax Credit.” In fact, seven of the top ten grant awards totaling over $270 million are 2011 or 2012 grants.But we're broke, remember?
For More Information:
Discover Where Corporations are Getting Taxpayer Assistance Across the United States
About Meijer Grocery Coming To Wisconsin...
Think you'll be saving money by shopping at Meijer? Think again.
Here we have yet another large corporation using their boardroom of lawyers to lower their property taxes...which means you'll be paying more.
In a long-building tax avoidance scheme, big businesses and their lawyers, with the help of malleable appraisers and tax representatives, are turning the appraisal profession on its head.
Some basic economic principles are imbued in property appraisal. Substitution is the idea that a comparable must not only be similar physically, but also economically (similar rents, expenses, etc.).
Typically the details and length of the lease are common factors a buyer would consider when contemplating the purchase of an income-producing property. The appraisal profession typically considers the rents a property can charge an outcome of the location - the land. Now, according to the lawyers, the value is due to goodwill and other intangibles...and, conveniently, most of these aren't taxable.
Take Walgreens, a court recently ruled that sales of Walgreens weren't good comparables or good indicators of value for ... Walgreens. Typical retail, a closed Blockbuster store, and mom-and-pop stores were deemed more comparable.
The City of Milwaukee recently settled a property tax dispute, dating back to 2010, with Walgreens, on 18 of their stores. The settlement was for $3.7 million dollars.
Opinions in the Milwaukee Journal Sentinel on the topic (incorrect grammar and all) were things like: "Is it any wonder why citizens and businesses want to get out of the City?" or "This should be good news for mayor Berrett now he has another excuse for not fixing the pot holes on almost every street in the city. Waite for him to try increasing the wheel tax again. Which reminds me is he spending any of the wheel tax money on streets."
So, giving a business a refund of $3.7 million is a reason for a business to go away? Not to mention, the $3.7 million Walgreens is not paying, now has to be paid by other citizens. When corporations avoid paying their fair share, everyone else has to pick up the slack.
Much of what this case hinges on is that fact that Walgreens claim the leases they have are not market rate and actual sales of other Walgreens are also not comparable market transactions.
On the transfer returns (which names the buyer and seller; and separates real estate, equipment and business value) for the Walgreens sales, the Property owners claimed the total sale prices were for the real estate. Plus, in their actual leases on these properties, they specifically state these are real leases and not financing instruments. [Transfer returns and court transcripts, which contain this, are public information.]
Yet, in court they have claimed just the opposite. And the judge agreed in a City of Madison v. Walgreens court case. Although, if we're going to accept these revelations as true, this means that Walgreens has submitted falsified transfer returns and entered into bogus contractual leases.
Much of how a property's value is declared is based on accounting - wherever they can shift the supposed value to lower their taxes the most (based on things like depreciation, etc.), that's where they'll enter it in the ledger. A Walgreens is built to be a Walgreens, nothing else. Just as other special purpose properties (like gas stations, car washes, etc.) are built for a specific use. The builder/owner does this because they expect a certain return on their investment at that specific site.
Walgreens feels more appropriate comparable properties, to establish the value of their properties, are vacant buildings and and other neighborhood establishments.
This is like saying to find out what my Chevy Camaro is worth I should look at what Ford Taurus' are selling for. They're both cars, right?
The court completely ignores the concept of substitution. A property is only comparable if a buyer would actually consider it as an alternative investment. A vacant store does not have the same marketability and value as a store with a 25-year lease.
If a current owner of a Walgreens store were to sell, he/she would base the sales price on what the income stream is worth - how much he/she gets from the leases. Which is why most Walgreens sell at twice what Walgreens are claiming they are worth in court.
This whole fiasco ignores the general market that is the triple-net lease, investment grade properties. These are properties under long-term leases (usually 25 years) where the tenants pay the expenses. Thus vacancy (a typical deduction from the cash flow) is non-existent for the property owner. And, expenses are minimal to non-existent since they are the responsibility of the tenant. For these reasons, the standard Walgreens drug store sells for $467 per square foot at a 5.6% capitalization rate. The minimum typical footprint of a Walgreens is 12,000 square feet; this equates to a $5,604,000 value (or a rental rate of roughly $26 per square foot).
Even though the market evidence indicates this is what typical investors buy and sell these properties for, Walgreens astonishingly claims the stores are only worth half that.
All of these factors corroborated the City's assessments on the Walgreens' properties. Yet, for some inexplicable reason, the judge bought Walgreens' self-interested and contradictory argument and decided rather than comparing apples to apples, one should compare apples and rotten apples. And, because of this, my fellow taxpayers, you will pay more since Walgreens is paying less.
And taxpayers should be upset over this (and start complaining to their city attorney office to fight back against this shakedown) because theambulance-chasing lawyers tax representatives are trying to use these same arguments all over the country on restaurants, big box stores and a whole host of other properties. Which means, in the next few years, residential home owners will be paying a lot more, while commercial property owners will laughing all the way to the bank.
And, for big boxes (like Meijer, Target, Walmart, Lowes), some courts have decided the best comparable indicators of value are vacant, or "dark", stores. Somehow, a building that is closed and out of business is a viable alternative investment to an successfully operating one.
Olivia LaVecchia has more of the gruesome details:
For Further Reading:
For Cities, Big Box Stores Are Becoming Even More Of A Terrible Deal
Multibillion dollar Meijer, Inc. finds another way to screw Michigan cities and kids
Unfair Comparisons? Meijer, other big-box retailers use ‘dark store’ loophole to cut their Michigan property tax bills
Big box stores ringing up property tax discounts
Are big-box retailers getting a tax break at schools’ expense?
Here we have yet another large corporation using their boardroom of lawyers to lower their property taxes...which means you'll be paying more.
In a long-building tax avoidance scheme, big businesses and their lawyers, with the help of malleable appraisers and tax representatives, are turning the appraisal profession on its head.
Some basic economic principles are imbued in property appraisal. Substitution is the idea that a comparable must not only be similar physically, but also economically (similar rents, expenses, etc.).
Typically the details and length of the lease are common factors a buyer would consider when contemplating the purchase of an income-producing property. The appraisal profession typically considers the rents a property can charge an outcome of the location - the land. Now, according to the lawyers, the value is due to goodwill and other intangibles...and, conveniently, most of these aren't taxable.
Take Walgreens, a court recently ruled that sales of Walgreens weren't good comparables or good indicators of value for ... Walgreens. Typical retail, a closed Blockbuster store, and mom-and-pop stores were deemed more comparable.
The City of Milwaukee recently settled a property tax dispute, dating back to 2010, with Walgreens, on 18 of their stores. The settlement was for $3.7 million dollars.
Opinions in the Milwaukee Journal Sentinel on the topic (incorrect grammar and all) were things like: "Is it any wonder why citizens and businesses want to get out of the City?" or "This should be good news for mayor Berrett now he has another excuse for not fixing the pot holes on almost every street in the city. Waite for him to try increasing the wheel tax again. Which reminds me is he spending any of the wheel tax money on streets."
So, giving a business a refund of $3.7 million is a reason for a business to go away? Not to mention, the $3.7 million Walgreens is not paying, now has to be paid by other citizens. When corporations avoid paying their fair share, everyone else has to pick up the slack.
Much of what this case hinges on is that fact that Walgreens claim the leases they have are not market rate and actual sales of other Walgreens are also not comparable market transactions.
On the transfer returns (which names the buyer and seller; and separates real estate, equipment and business value) for the Walgreens sales, the Property owners claimed the total sale prices were for the real estate. Plus, in their actual leases on these properties, they specifically state these are real leases and not financing instruments. [Transfer returns and court transcripts, which contain this, are public information.]
Yet, in court they have claimed just the opposite. And the judge agreed in a City of Madison v. Walgreens court case. Although, if we're going to accept these revelations as true, this means that Walgreens has submitted falsified transfer returns and entered into bogus contractual leases.
Much of how a property's value is declared is based on accounting - wherever they can shift the supposed value to lower their taxes the most (based on things like depreciation, etc.), that's where they'll enter it in the ledger. A Walgreens is built to be a Walgreens, nothing else. Just as other special purpose properties (like gas stations, car washes, etc.) are built for a specific use. The builder/owner does this because they expect a certain return on their investment at that specific site.
Walgreens feels more appropriate comparable properties, to establish the value of their properties, are vacant buildings and and other neighborhood establishments.
This is like saying to find out what my Chevy Camaro is worth I should look at what Ford Taurus' are selling for. They're both cars, right?
The court completely ignores the concept of substitution. A property is only comparable if a buyer would actually consider it as an alternative investment. A vacant store does not have the same marketability and value as a store with a 25-year lease.
If a current owner of a Walgreens store were to sell, he/she would base the sales price on what the income stream is worth - how much he/she gets from the leases. Which is why most Walgreens sell at twice what Walgreens are claiming they are worth in court.
This whole fiasco ignores the general market that is the triple-net lease, investment grade properties. These are properties under long-term leases (usually 25 years) where the tenants pay the expenses. Thus vacancy (a typical deduction from the cash flow) is non-existent for the property owner. And, expenses are minimal to non-existent since they are the responsibility of the tenant. For these reasons, the standard Walgreens drug store sells for $467 per square foot at a 5.6% capitalization rate. The minimum typical footprint of a Walgreens is 12,000 square feet; this equates to a $5,604,000 value (or a rental rate of roughly $26 per square foot).
Even though the market evidence indicates this is what typical investors buy and sell these properties for, Walgreens astonishingly claims the stores are only worth half that.
All of these factors corroborated the City's assessments on the Walgreens' properties. Yet, for some inexplicable reason, the judge bought Walgreens' self-interested and contradictory argument and decided rather than comparing apples to apples, one should compare apples and rotten apples. And, because of this, my fellow taxpayers, you will pay more since Walgreens is paying less.
And taxpayers should be upset over this (and start complaining to their city attorney office to fight back against this shakedown) because the
And, for big boxes (like Meijer, Target, Walmart, Lowes), some courts have decided the best comparable indicators of value are vacant, or "dark", stores. Somehow, a building that is closed and out of business is a viable alternative investment to an successfully operating one.
Olivia LaVecchia has more of the gruesome details:
Figuring out the value of a property can be a complicated business. In Michigan, town and county assessors typically use a property’s construction costs, minus depreciation, as a primary metric to determine its fair market value; taxable value is half that amount. Property owners sometimes prefer, instead, to use the sale prices of comparable properties. This was the approach that Lowe’s took—with a catch. Lowe’s looked at the definition of the word “comparable,” and decided to stretch it. It said that, because big-box stores are designed to be functionally obsolescent, comparable stores are those that have been closed and are sitting empty—the “dark stores” behind this method’s name...
It’s an established part of the big-box retail model that the boxes themselves be custom-built, cheaply constructed, and disposable. If retailers decide that they need a bigger space, it’s cheaper for them to leave the old one behind and build a new one. When Walmart, for instance, opened its wave of new, twice-the-size Supercenters across the country in 2007, it left hundreds of vacant stores behind it. This means that new, successful stores like the Marquette Lowe’s are rarely the locations that are up for sale, and that when big-box stores do come on the market, it’s because they’ve already failed or been abandoned by the retailer that built them. In other words, Lowe’s was saying, it had built a property that, despite generating roughly $30 million in annual sales for the company, had very little value, and because of that, it should get a break in its property taxes...
Despite all of this, cities and towns continue to buy into the myth, sold to them by the mega-retailers themselves, that big-box stores spark economic development. In service of this myth, local and state governments across the country have granted at least $2.6 billion in subsidies to just six large retailers, including $160 million to Walmart and $138 million to Lowe’s, according to another study from Good Jobs First.When these businesses use their clout to avoid taxation, all other taxpayers pay more.
For Further Reading:
For Cities, Big Box Stores Are Becoming Even More Of A Terrible Deal
Multibillion dollar Meijer, Inc. finds another way to screw Michigan cities and kids
Unfair Comparisons? Meijer, other big-box retailers use ‘dark store’ loophole to cut their Michigan property tax bills
Big box stores ringing up property tax discounts
Are big-box retailers getting a tax break at schools’ expense?
Weekend Walker Reading
How Do You Like Unions Now, Gov Walker?
Scott Walker Back GOP Plan To Overhaul Civil Service System
Board Delays Decision On Land Sale To Walker Donor
Scott Walker Can't Be President, So He's Back Ruining Wisconsin
Irrelevant Scott Walker Hits New Low
GOP Presidential Candidate Scott Walker To Propose Vast Union Restrictions
Scott Walker Proposes National Right-To-Work Law and No Bargaining For Federal Workers
Scott Walker's Exaggerated Claims Of Employment Trends In Wisconsin
Wisconsin: Where Has The Labor Force Gone?
Wisconsin Still Has High Poverty
Scott Walker Back GOP Plan To Overhaul Civil Service System
Board Delays Decision On Land Sale To Walker Donor
Scott Walker Can't Be President, So He's Back Ruining Wisconsin
Irrelevant Scott Walker Hits New Low
GOP Presidential Candidate Scott Walker To Propose Vast Union Restrictions
Scott Walker Proposes National Right-To-Work Law and No Bargaining For Federal Workers
Scott Walker's Exaggerated Claims Of Employment Trends In Wisconsin
Wisconsin: Where Has The Labor Force Gone?
Wisconsin Still Has High Poverty
Thursday, September 24, 2015
Tuesday, September 22, 2015
Poor Scotty
"Scott Walker is still a disgrace, just no longer national," AFL-CIO President Richard Trumka said in a one-line statement as news outlets began reporting Walker's exit from the campaign.
Saturday, September 19, 2015
Saturday, September 5, 2015
Weekend Reading
Low-Income Workers See Biggest Drop In Paychecks
What Does The Average Rent Get You In These U.S. Cities?
Donald Trump Is Rich Because His Dad Was Rich
New Study Argues Hedge Funds Are Even Worse Scam Than We Thought
A More Accurate Measure Of Economic Output
The Stock Market Is Not The Economy
Wage Growth Continues To Be The Key To Social Security Solvency
Tax Cuts Do Little To Spur Job Growth
Waukesha Doesn't Need Lake Michigan Water
Waukesha Plans For Lake Michigan Water Raises Worries
Waukesha Request For Great Lakes Water Should Be Nixed
The Antidote To Economic Anxiety Is Better Government
What Does The Average Rent Get You In These U.S. Cities?
Donald Trump Is Rich Because His Dad Was Rich
New Study Argues Hedge Funds Are Even Worse Scam Than We Thought
A More Accurate Measure Of Economic Output
The Stock Market Is Not The Economy
Wage Growth Continues To Be The Key To Social Security Solvency
Tax Cuts Do Little To Spur Job Growth
Waukesha Doesn't Need Lake Michigan Water
Waukesha Plans For Lake Michigan Water Raises Worries
Waukesha Request For Great Lakes Water Should Be Nixed
The Antidote To Economic Anxiety Is Better Government
The Latest Walker Wrongdoings
22-Year Political Veteran Scott Walker Says He Is Not A Career Politician
Walker Scandal: Who Got Convicted and Why
Principals Decry Loss of Funding, Local Control Under Scott Walker
Ex-WEDC Employees Say Politics, Haste Tripped Up Job-Creation Agency
Here's Why Scott Walker's Harley Davidson Love Is Pretty Awkward
The Most Gerrymandered State
Why Scott Walker Is An American Dictator In Waiting
Who Is Scott Walker?
Walker Scandal: Who Got Convicted and Why
Principals Decry Loss of Funding, Local Control Under Scott Walker
Ex-WEDC Employees Say Politics, Haste Tripped Up Job-Creation Agency
Here's Why Scott Walker's Harley Davidson Love Is Pretty Awkward
The Most Gerrymandered State
Why Scott Walker Is An American Dictator In Waiting
Who Is Scott Walker?
Sunday, August 16, 2015
More On Scott Walker's Stadium Corporate Welfare
Scott Walker Takes $250 Million From U. Wisconsin, Gives $250M To Billionaire Sports Team Owners
On Wednesday, Walker signed a bill that would spend $250 million of taxpayers’ money to build the new arena. Last year, the team TISI +% was purchased by two billionaire hedge fund managers, Marc Lasry and Wesley Edens. In what’s become a standard ploy, the new owners threatened to move the team if they didn’t get a new arena.Scott Walker's Misguided Stadium Deal
As the Washington Post reported on Thursday, one of the team’s other owners is Jon Hammes, one of Walker’s top campaign fundraisers. Hammes’ son recently donated $150,000 to a pro-Walker super PAC. For the Hammes, this must feel like a pretty good return on investment: $150K plus some fundraising work in return for $250 million. (Obviously, Walker will deny that there’s been any quid pro quo. But Walker has been working on this deal for months: according to the Milwaukee Journal-Sentinal, he included $220 million in state money for the arena in his budget back in February, but state lawmakers took it out.)
Wisconsin Governor Scott Walker on Wednesday signed a bill approving $250 million in public funding for a new arena serving the Milwaukee Bucks, which seems to fly in the face of both Walker's presidential campaigning as a fiscal conservative and his insistence that there isn't enough money for things like public education or living wages. In July, when Walker signed the state's new budget, he cut funding to the University of Wisconsin by $250 million.
The usual pitfalls involved in stadium financing are apparent here: unrealistic calculations of return on investment, an underestimated true cost to taxpayers, misplaced priorities, fishy-looking political relationships. Walker can talk all he wants about lowering taxes and cutting waste, but when all is said and done and you include $174 million in bond interest over 20 years, he's sinking upwards of $400 million into a stadium for a team owned by billionaire hedge-fund managers in a state with a projected $2.2 billion deficit. Owners Wesley Edens and Marc Lasry will kick in $150 million, while former owner and senator Herb Kohl is contributing $100 million, but $93 million in bonds by the Wisconsin Center District will be paid for by an extension of taxes on hotel rooms, car rentals, and food and beverage sales.Scott Walker is America’s biggest hypocrite: The “fiscal conservative” is giving $450 million to wealthy sports owners
Tomorrow, Scott Walker will stand on a stage at State Fair Park in Milwaukee, Wisconsin, and betray virtually every conservative economic principle there is by handing out up to $450 million in taxpayer money to wealthy sports owners to pay for private infrastructure at a time when public infrastructure is crumbling.
The massive sum will go toward the building of a new sports arena for the Milwaukee Bucks basketball franchise, pleasing the team’s billionaire hedge-fund-manager owners, who threatened to move the team if they weren’t given taxpayer tribute. Conservatives in recent years have feigned concern about corporate welfare, and this deal is really the ultimate expression of it: hundreds of millions of dollars from teachers, waitresses, factory workers and shop owners funneled to pay for an aristocrat’s show palace rather than needed public service.
Of all the things desperately wrong with this, perhaps the most salient is the fact that the “old” arena, the BMO Harris Bradley Center, is only 27 years old, inaugurated in 1988. Incredibly, this makes it the 3rd-oldest arena housing a professional basketball franchise, behind only Madison Square Garden in New York and the Oracle Arena in Oakland, both of which have been substantially renovated over the years.
We don’t upgrade anything in this country after 27 years. There are pipes carrying water to homes that date back to the 19th century. In Milwaukee, in fact, hundreds of those pipes burst at a record pace in 2014 due to the cold weather. Seventy-one percent of Wisconsin roads are in mediocre or poor condition, and fourteen percent of its bridges are structurally unsound. If you wanted to prioritize infrastructure projects needing attention in the Badger State, “replacing the arena we built in the late 1980s” would fall down the list, somewhere below “make sure the thing Wisconsinites are riding on in cars doesn’t crash to the ground.”Scott Walker Push For Milwaukee Bucks Arena Subsidy Could Benefit His Fundraising Chief
Real estate mogul Jon Hammes, who has donated hundreds of thousands of dollars to Republican candidates and causes, is a prominent member of the investor group that owns Milwaukee’s NBA team. Last week CNN reported that he also will serve as the Walker campaign’s national finance co-chairman. Days after that appointment, Walker’s Republican allies in the Wisconsin state Senate backed the governor’s proposal to spend public funds on a new arena for the Bucks.
In his speech announcing his presidential candidacy, Walker presented himself as a free-market conservative and derided what he called a “top-down, government-knows-best approach” to economic policymaking. Hammes serves on the board of a conservative think tank called the Wisconsin Policy Research Institute that says “competitive free markets, limited government, private initiative and personal responsibility are essential to our democratic way of life.”
But under Walker’s proposal, the government would redistribute taxpayer money to a project benefiting Hammes and other Bucks investors.Did Bucks Investors Pay Off Walker?
“However, before Walker proposed the arena deal, Hammes had donated more than $15,000 to his gubernatorial campaigns, according to state campaign finance data,” the publication reported. “Federal records also show that over the last decade, Hammes has donated almost $280,000 to Republican candidates and third-party groups — including more than $14,000 to the Wisconsin Republican Party. Hammes Company in 2010 donated $25,000 to the Republican Governors Association, which that year spent heavily in support of Walker’s first run for governor. Jon Hammes also contributed $500 to Walker while he was a Milwaukee county executive… Hammes became one of the part owners of the Bucks in 2014. A little more than three months later, Walker unveiled his proposal to spend a quarter of a billion dollars on a new arena for the team.”
Saturday, August 8, 2015
The Ol' Switcheroo
Jason Stein did a nice job a highlighting Scott Walker's brazen hypocrisy. Further confirmation of what many Wisconsinites already know - Scott Waker is a self-serving, opportunist, liar.
Scott Walker Touts Local Power, But Doesn't Always Defer To Local Governments.
Republicans talk of personal freedom, lower taxes and other platitudes from their playbook, but their end game is keeping power in their hands. The folksy, "you know better than the government" line they repeat ad nauseam is simply the candy-coating of the bitter pill they'd like us all to swallow.
Scott Walker Touts Local Power, But Doesn't Always Defer To Local Governments.
On the campaign trail, presidential candidate Scott Walker speaks about shifting power from the federal government to state and local officials.
But as governor, Walker hasn't always favored more power for local officials. While often giving local governments more options, Walker hasn't been afraid to take a wide range of powers away from liberal local officials in Wisconsin who adopt policies unpopular with conservatives...
Walker and GOP lawmakers have passed a number of limits on local elected officials, drawing frequent criticism from Sen. Bob Wirch (D-Pleasant Prairie).
"He cut the power of city councils, village boards, county boards. It's shameful. These are big-government Republicans," Wirch, a former county board member, said of the governor and legislators. "They drive up to the Capitol with small-government bumper stickers and make big-government Republican decisions..."
Walker and legislators from his party have:
■ Set limits on tax and spending increases for schools and municipalities.Republicans blather on and on about local control and putting the power back in the hands of the people. But empowerment isn't their true aim. Rather, Republicans merely want whichever policy best allows them free rein to use federal, state and local government coffers as their personal piggy banks.
■ Pre-empted Milwaukee's residency rule, which dates back to 1938 and requires city employees to live within city limits. That law was reinstated last month by a state Appeals Court in a decision that is likely to be appealed.
■ Voided the paid sick leave law passed by Milwaukee voters in a referendum.
■ Restricted the duties and staff of the liberal Milwaukee County Board with a May 2013 law. That law also put to voters a proposal to cut the pay of elected board members by 50% and eliminate their future health and pension benefits, which county voters approved a year later.
■ Prohibited election clerks in urban areas from allowing early voting on the weekends. Walker did use his partial veto power to nix language restricting early voting hours in Milwaukee and other cities to 45 hours a week.
■ Limited local control over the siting of cellphone towers.
■ Given responsibility for liberal Dane County's water quality plan to the Walker administration while leaving the other 71 counties in Wisconsin alone.
Republicans talk of personal freedom, lower taxes and other platitudes from their playbook, but their end game is keeping power in their hands. The folksy, "you know better than the government" line they repeat ad nauseam is simply the candy-coating of the bitter pill they'd like us all to swallow.
Keep Republicans Away From Social Security
Here's yet another prime example of why Scott Walker and the Republican party are wrong for America.
Scott Walker Suggests Raising Age To Qualify For Social Security.
There is so much misinformation out there regarding Social Security. Much of it pushed by conservatives who would like to end the program.
For starters, hopefully everyone is aware that the current full Social Security retirement age (for those born after 1960) is 67.
As Ezra Klein stated:
But “cutting” Social Security is unpopular and people don’t like to talk about it. So folks who want to cut the program have instead settled on an elliptical argument about life expectancy. Social Security, they say, was designed at a time when Americans didn’t live quite so long. And so raising the retirement age isn’t a “cut.” It’s a restoration of the program’s original purpose. It doesn’t hurt anything or anyone.
The first point worth making here is that the country’s economy has grown 15-fold since Social Security was passed into law. One of the things the richest society the world has ever known can buy is a decent retirement for people who don’t have jobs they love and who don’t want to work forever.
The second point worth making is that Social Security was overhauled in the ’80s. So the promises the program is carrying out today were made then. And, since the ’80s, the idea that we’ve all gained so many years of life simply isn’t true….
[S]ince 1977, the life expectancy of male workers retiring at age 65 has risen six years in the top half of the income distribution. But if you’re in the bottom half of the income distribution? Then you’ve only gained 1.3 years.Christian Weller adds:
Workers who have paid into Social Security have to wait until a specific age before they can receive full retirement benefits. In the past, the full retirement age was 65, but it has been gradually increasing and will eventually reach 67 for people born in 1960 and later. Retirees can still claim Social Security at age 62, but their benefits will be reduced significantly if they do. These permanent benefit reductions are greater the earlier somebody claims Social Security and the higher the full retirement benefit age is. Some conservatives, including Cruz and Paul as well as former Florida Gov. Jeb Bush, have now called for raising the full retirement benefit age even further –- for instance, to 69 years. This translates into across-the-board benefit cuts due to Social Security’s formula, which yields a larger amount for every month a worker delays claiming retirement benefits up to age 70. And it translates into especially deep cuts for workers who must retire early. These cuts are particularly harmful to lower-income workers and people of color.David Rosnick and Dean Baker have found that increasing the Social Security qualification age also increases inequality:
The full retirement age for Social Security benefits – originally 65 – is currently 66 years, and is scheduled to increase over the next 15 years to age 67 for workers born in 1960 and later. Every year of increase in this “normal” retirement age (NRA) is equivalent to a cut in benefits of 6-7 percent.1 Despite this increase, there has been discussion of raising the retirement age even further – to 69, 70, or even higher.Rosnick and Baker, in their research, also address the falsities regarding solvency and life expectancy:
The primary justification for such an increase is that the Social Security Trust Fund faces a looming shortfall. Yet the Congressional Budget Office projects that Social Security will be able to pay all promised benefits through 2038.2 Thereafter, even with no changes whatsoever, Social Security will be able to pay more than 80 percent of benefits until 2070. Under current law, a young worker planning to retire at age 70 will receive a monthly benefit 24 percent larger than if the same worker retired at age 67. However, those credits for delayed retirement would be eliminated if the retirement age were increased to 70, resulting in a 19 percent cut in benefits. In addition, workers who start collecting benefits at an earlier age would see a reduction in benefits of roughly 18 percent compared to current law.
Another justification for an increase in the retirement age is that life expectancy is increasing, and the retirement age has not kept up. But this makes little sense when discussing workers in physically demanding jobs who are often unable to continue working into their late 60s. Additionally, as we reported in earlier work, there has been considerable widening of the gap in life expectancy between high- and low-income workers. As a result, the already-scheduled increase in the retirement age has effectively wiped out the gains in expected years of retirement (if workers retire at NRA) for males in the bottom half of the income distribution.Paul Krugman elaborates:
Start with Mr. Christie, who thought he was being smart and brave by proposing that we raise the age of eligibility for both Social Security and Medicare to 69. Doesn’t this make sense now that Americans are living longer?
No, it doesn’t. This whole line of argument should have died in 2007, when the Social Security Administration issued a report showing that almost all the rise in life expectancy has taken place among the affluent. The bottom half of workers, who are precisely the Americans who rely on Social Security most, have seen their life expectancy at age 65 rise only a bit more than a year since the 1970s. Furthermore, while lawyers and politicians may consider working into their late 60s no hardship, things look somewhat different to ordinary workers, many of whom still have to perform manual labor.
And while raising the retirement age would impose a great deal of hardship, it would save remarkably little money. In fact, a 2013 report from the Congressional Budget Office found that raising the Medicare age would save almost no money at all.The bottom line is that we all need to be very leery of Republicans claiming to have the best interests of social programs at heart when they propose increasing eligibility ages, reducing payouts or any of their other trojan horses. Social Security is too important to be left to the whims and disproven ideas of Republican apparatchiks.
For Further Reading:
Sunday, July 19, 2015
More Scott Walker Shenanigans
Scott Walker Sues Feds Over Food Stamp Drug Testing
Doug LaFollette Sues Scott Walker Over State Budget Measures
Wisconsin Deserved Better Than This Budget
The Attack On Government Pensions
Walker And GOP Just Took Away The Weekend
Scott Walker Strips Wisconsin Workers Of Living Wage In New State Budget
Walker Supports Boy Scouts' Ban On Gay Adults Because It 'Protects' Children
Who Is Scott Walker?
Scott Walker's Revolt Back Home
Behind Scott Walker, A Longstanding Conservative Alliance Against Unions
Scott Walker And The Fate Of The Union
Doug LaFollette Sues Scott Walker Over State Budget Measures
Wisconsin Deserved Better Than This Budget
The Attack On Government Pensions
Walker And GOP Just Took Away The Weekend
Scott Walker Strips Wisconsin Workers Of Living Wage In New State Budget
Walker Supports Boy Scouts' Ban On Gay Adults Because It 'Protects' Children
Who Is Scott Walker?
Scott Walker's Revolt Back Home
Behind Scott Walker, A Longstanding Conservative Alliance Against Unions
Scott Walker And The Fate Of The Union
Walker's Minions Giving Wisconsin The Business
Just in time for Scott Walker's presidential campaign kick-off, his economic revisionists are spinning yarns about steady improvement and a bright future due to Walker's policies.
Tom Hefty (conservative shill, Wisconsin Policy Research Institute affiliate and Journal Sentinel contributor) started this wishing-and-hoping form of policy analysis back in March. As I described his actions then, "He just rattles off numerous surveys that say Wisconsin is headed in the right direction, Wisconsin is poised for job growth and Wisconsin has a bright job outlook. More or less, opinions masquerading as statistics."
Tom Hefty (conservative shill, Wisconsin Policy Research Institute affiliate and Journal Sentinel contributor) started this wishing-and-hoping form of policy analysis back in March. As I described his actions then, "He just rattles off numerous surveys that say Wisconsin is headed in the right direction, Wisconsin is poised for job growth and Wisconsin has a bright job outlook. More or less, opinions masquerading as statistics."
Kurt Bauer, chief executive officer of Wisconsin Manufacturers and Commerce, continued the wishing-and-hoping analysis.
First he claims it's really too early to tell if Walker's economic policies are working. Funny, when the data aren't on their side, conservatives are suddenly patient in their proclamations. Yet, the entire time Scott Walker has been governor has coincided with his cronies unrelenting boosterism, despite the fact that reality (the data) disproves their optimism.
Then, like Hefty, Bauer talks of many good business climate rankings and surveys showing good potential for Wisconsin. For conservatives, simply becoming a right-to-work state will somehow transform the economy. Too bad all the research looking at right-to-work has found no such definitive benefit. And, surveying conservatives about whether the policies they favor will be good for the economy is like asking a cocaine addict if he would like more cocaine. Despite the evidence of the damage being done, they still want more, more, more.
Then, like Hefty, Bauer talks of many good business climate rankings and surveys showing good potential for Wisconsin. For conservatives, simply becoming a right-to-work state will somehow transform the economy. Too bad all the research looking at right-to-work has found no such definitive benefit. And, surveying conservatives about whether the policies they favor will be good for the economy is like asking a cocaine addict if he would like more cocaine. Despite the evidence of the damage being done, they still want more, more, more.
Next, though, he details all of the actual economic metrics where Wisconsin trails Minnesota. You know, reality. Those unimportant things like per capita income, unemployment rate, and education levels. Take that, Minnesota!
This is followed by a host of historical excuses/reasons why/how this has hamstrung Wisconsin. Surprise! Cities and states have histories and experiences that have shaped their progression. Poor Milwaukee is caught between Chicago and Minneapolis. Yet, having these two economically vibrant centers nearby has been good for Milwaukee, not bad. And we would have an even more regional economy, drawing more from both of those cities and strengthening the region as a whole, if we had improved rail transit amongst the three cities. A terrible Walker policy (killing the train) that will have implications in the region for decades.
[source]
Bauer then abruptly switches gears claiming Wisconsin is more business-friendly and therefore Wisconsin has a brighter future. "A better Wisconsin business climate will lead to a better Wisconsin economy. The opposite is true for Minnesota."
Doesn't the fact that Minnesota's economy has been performing better than Wisconsin's for the past few decades tell us that they have a pretty good business climate and a productive set of economic policies in place? Wisconsin has improved in the business climate ranking - we're now 32nd. Minnesota's ranking is 9th.
Wisconsin is hardly even nipping at Minnesota's heels, even using the supposed indicators that the boosters claim show such promise for Wisconsin.
As was noted back in April, "Even the former mayor of Minneapolis, writing in the Minneapolis Star Tribune, felt the need to highlight the differences between Minnesota and Wisconsin policy-choices since Scott Walker took office:"
For Further Reading:
Scott Walker & Wisconsin's Slow Job Growth
38th, For Republicans, Is The Head Of The Class
Wisconsin ranks dead last for start-ups, despite Governor Walker’s goal of creating thousands of new companies [post]
Wisconsin is hardly even nipping at Minnesota's heels, even using the supposed indicators that the boosters claim show such promise for Wisconsin.
As was noted back in April, "Even the former mayor of Minneapolis, writing in the Minneapolis Star Tribune, felt the need to highlight the differences between Minnesota and Wisconsin policy-choices since Scott Walker took office:"
In Minnesota, Dayton turned a $5 billion budget deficit into a more than $1 billion budget surplus in just one term. By raising taxes on the wealthiest earners, Minnesota is now in a position to invest more resources into the state’s schools and infrastructure.
In Wisconsin, Walker was unable to take his state out of the red and is still facing a $2 billion budget deficit. Walker made the decision to cut taxes for millionaires and billionaires, while slashing programs and refusing investments at the expense of middle-class families and Wisconsin’s financial well-being.
In Minnesota, Dayton has moved forward Democratic policies like increasing the minimum wage, expanding Medicaid and investing in the middle class, and now we are seeing one of the most business-friendly states in the country. Just this year, Forbes ranked Minnesota as the ninth best state for business, seventh in economic climate and second in quality of life.
In Wisconsin, Walker opposed a minimum-wage increase and equal-pay legislation, rejected federal funds to expand Medicaid, and attacked Wisconsin workers with right-to-work and anti-collective-bargaining policies. As a result, the cost of doing business in Wisconsin is higher than the national average, and median household income is thousands less than in Minnesota.
The facts are clear: Walker and the Republican trickle-down economic policies have made it practically impossible for Wisconsin to recover from the recession, and the state consistently sits at the bottom of the region in private-sector job growth.Bruce Thompson's article, at Urban Milwaukee, asks, Why is Minnesota outperforming Wisconsin? He ultimately concludes Minnesota is doing many things correctly and, "Empirical evidence can lead to better solutions—but not if it is treated only as grist for a pre-determined position." Minnesota is following the evidence, Wisconsin republicans are merely digging in their heels continuing to push policies they know are unfair and inefficient.
For Further Reading:
Scott Walker & Wisconsin's Slow Job Growth
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