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Category “Wisconsin’s Budget Mess”

7th Circuit Court of Appeals Uphold Act 10

So unions, you want to go all the way to the U.S. Supreme Court?

Dealing unions their latest loss in court, a federal appeals court Friday upheld Gov. Scott Walker’s tight limits on collective bargaining for most public employees.

The ruling by the three-judge panel upheld a September decision by U.S. District Judge William Conley in Madison that the law known as Act 10 does not infringe on the rights of government workers.

“Act 10 does not violate the First or Fourteenth Amendments to the United States Constitution. We therefore affirm the district court’s judgment in favor of the state,” the ruling reads.

The law stipulates that government employee unions can negotiate over wages but nothing else, and that any pay increases can be no higher than the rate of inflation, except where voters approve them by referendum. The law also dictates that unions cannot be recognized by the state or local governments unless 51% of all potential members — not just those voting — support the union in annual elections.

Two unions representing local employees throughout Dane County sued in July 2011 in federal court in Madison contending the law violates their rights to freedom of association and equal protection under the law.

“This difference is likely of no comfort to plaintiffs, but the First Amendment does not require an affirmative response from governmental entities; it simply requires the absence of a negative restriction,” Conley wrote in his own decision last year. “Under Act 10, general employees remain free to associate and represent employees and their unions remain free to speak; municipal employers are simply not allowed to listen.”

Act 10 is still before the Wisconsin State Supreme Court, with a ruling expected in the next couple of months.

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UW Slush Fund Grew to $1.7 Billion

The Regents are do do things, right?

New figures from the University of Wisconsin System show the system’s reserves stood at $1.7 billion at the end of March.

The system released data Thursday that shows campuses had a combined $1.61 billion in uncommitted reserves. About $121 million was committed.

The figures also project the system will have $1.1 billion in uncommitted reserves and $205 million in committed reserves on June 30, the end of the state’s fiscal year.

System officials have taken intense criticism over the last year for building massive reserves while raising tuition year after year.

The most recent budget called for a tuition freeze on students attending the UW System.

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Image of the Day

(Via Facebook)

This is from 2012 data in an analysis from the Mercatus Center, a think tank house at George Mason University.

Map-Table-6

Congratulations Wisconsin, we have one of the most solvent state budgets in the nation.

Act 10, doing great things for the Badger State three-years running.

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Meanwhile…in Illinois

Just passing this along.

Legislators passed an overhaul of the state public-employee retirement system Tuesday, cutting benefits for workers and retirees in a move that sets up a likely court battle with organized labor.

Supporters say the Illinois pension legislation is expected to save $160 billion and will fully fund the retirement system over 30 years.

“We’re here today because the cost of our present state systems are simply too rich for the resources available,” said House Speaker Michael Madigan, a Democrat.

Gov. Pat Quinn, a Democrat, is expected to sign the bill into law.

Illinois has seen its credit rating fall in recent years to the lowest among U.S. states as it has struggled to address a gap in its pension funds that is nearing $100 billion.

The measure also gives Chicago officials a template to follow as they move to address the city’s own pension crisis; Chicago’s credit rating is among the lowest for major U.S. cities.

“The pension crisis is not truly solved until relief is brought to Chicago,” said Chicago Mayor Rahm Emanuel. “Without providing the same relief to local governments, we know that taxpayers, employees, and the future of our state and local economies will remain at risk.”

The Illinois overhaul package relies on benefit cuts, including reducing the annual cost-of-living increase for retirees and raising the retirement age for younger workers.

Ironically, the plan is being attacked on two fronts.  Organized labor (as expected) is screaming bloody murder about the changes and plans on going to go to court to challenge the law as soon as the ink on Quinn’s signature is dry.

On the other side is the few conservative think tanks which operate in and around Springfield, which don’t think the legislation goes far enough to keep the state from eventually having to file for bankruptcy.  They’ve called the bill a bandage on a open wound which will not be enough.

I tend to agree with the think tanks here, but the reality that Illinois is even doing this given all the “hey” Quinn tried to make about Act 10 in 2011, is kind of nice to enjoy.

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The Debate Over Meeme Resurfaces Once Again

I won’t make many friends with certain family and former classmates, but since it is in the news, it is time to say it: The Kiel Area School District needs to finally bite the bullet, and close down Meeme Elementary School.

With elementary enrollment declining, the Kiel Area School District is taking a look at its two elementary schools to determine whether it should continue to operate both of them.

Enrollment at Meeme LEADS Elementary School declined by 15 students over the last four years, from 101 students in 2009-10 to 86 this school year, according to information from the district. Meanwhile, enrollment at Zielanis Elementary School declined by 38 students, from 496 to 458, during that time period.

An enrollment projection analysis by the University of Wisconsin-Madison’s Applied Population Laboratory projects a continued decline in elementary enrollment.

The district looks at its staffing situation every March, Superintendent Louise Blankenheim said. This year, for the second consecutive year, the district transferred a teacher from Meeme to Zielanis. Next year’s fourth-grade class at Meeme would have had only 11 students, so the fourth grade and one teacher were moved to Zielanis for 2013-14.

That led to the question of whether Kiel should look at having one or two elementary schools, according to Blankenheim. Knowing “where the budgets have been, where the state budget’s going, knowing that every year we’re looking at enrollment and … teacher-student ratio, … (the board) felt that it was … time to do a comprehensive study.”

This isn’t the first time the issue of closing Meeme has arisen. In November 1981, a Citizen’s Advisory Board was formed to review the district’s enrollment. After its analysis, the advisory board voted in 1982 to keep Meeme open, and the school board accepted the recommendation.

Meeme, which opened in 1964-65, became a charter school in 2005. Enrollment at the school had been declining and the principal at that time thought becoming a charter school would provide an opportunity for the school to offer more individualized programming, Blankenheim said.

For those who don’t know the geography of the Kiel Area School Distirct, Meeme is located about four miles west of Cleveland on Manitowoc CTH XX, just off of Wisconsin State Highway 42.  Zielanis is located inside the City of Kiel, about 10 to 11 miles west of Meeme.

Traditionally, the border which separated rural KASD households into those who sent their children to Meeme and Zielanis was Manitowoc CTH A, which more or less runs through the middle of the district. My boyhood home was just west of CTH A.

In the early 90s, just as I was set to start 5th grade and going to Kiel Middle School, the school board at the time suggested moving the border west to Lax Chapel Road, some three miles away.  The plan at the time was to bulk up Meeme’s enrollment numbers which even back then were in decline.  The idea was eventually scuttled after people like my parents — who still had my two younger brothers in elementary school — and others in my neighborhood rose up to protest the move because they didn’t wish to change elementary schools midway through for their kids.

So the debate as to what will happen to Meeme has been on-going and constant for the people of Kiel, School Hill, Meeme, Spring Valley, Osman, and other rural areas in the district.  Those closer to Kiel feel the school has outlived its purpose.  While those closer to the school feel a loyalty to it, and feel that Kiel is too far away compared to nearby places (and schools) like Howards Grove, Manitowoc, Valders, and Sheboygan.

(A little dirty secret / rumor about the origins of Meeme is that it was set up by the Kiel Area School District not as a way to serve the rural areas, but as a way to cheat in establishing its school district borders.  With Meeme that far away from Kiel proper, but still a Kiel school, the district was able to expand its borders to cover the surrounding areas.  This had significant effect on the ability for Howards Grove to go north, Valders to expand south, and all but forced Cleveland into the Sheboygan Area School District.  For instance, did you know that Meeme Elementary School is actually closer [7 miles] to Howards Grove than it is to Kiel [10 miles]?)

What is happening with Meeme is a reality of what is happening across the country.  With people having less and less kids, it is forcing many school districts across not only Wisconsin to reconsider the need of some of their buildings, but also whether the need to hire new teachers is warranted.  (This is beginning to wreck havoc with WEAC and other “More Money for Schools Now!” supporters, and will utterly collapse much of their argument in the coming decades.)

Without as many kids in schools — just because there aren’t as many kids — it is going to cause per pupil numbers (i.e. in classroom size, teacher to pupil ratios, and per capita spending) to fluctuate like never before.  Want to see what a state where the average per student spending is $25,000 a kid?  Wait a few years with the demographic growth we’re under and that will be Wisconsin just because there are less and less kids to spread the money around to.

People who are crunching the numbers know all this.  Why do you think the UW-Madison does at its “Applied Population Laboratory” anyway?

The real question going forward is what do the policymakers and lawmakers do with this knowledge and what will those committed to the status quo do with it as well.  For years, groups like WEAC have been screaming about things like SAGE based on the belief that there would be more and more kids, and thus the need for more and more teachers.  We’re on a path, where the opposite is more likely to happen.

So the question now is, why are groups like WEAC still being listened to when to comes to “the right amount of school financing” when clearly the numbers are beginning to show us all something completely different?

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Illinois: Worst Credit Rating in the Nation

Believe the real news about this announcement is two things.

1) Illinois is about to issue $500 million in new bonds as part of the budget plans of Democratic Governor Pat Quinn — the lamest duck governor in the country.  This news will only effect the sale of them.

2) The Land of Lincoln barely dodged the bullet from dropping from an “A-level rated bond” to a “B-level rated bond.”

Illinois may have Chicago acting as a jobs magnet to puff up its numbers, but its relationship with its public employee unions is the dark mirror of what Wisconsin has done since the enactment of Act 10.  Its budget is in chaos and a live-action train wreck for all the world to see.

Illinois fell to the bottom of all 50 states in the rankings of a major credit ratings agency Friday following the failure of Gov. Pat Quinn and lawmakers to fix the state’s hemorrhaging pension system during this month’s lame-duck session.

Standard & Poor’s Ratings Service downgraded Illinois in what is the latest fallout over the $96.8 billion debt to five state pension systems. The New York rating firm’s ranking signaled taxpayers may pay tens of millions of dollars more in interest when the state borrows money for roads and other projects.

“It’s absolutely bad news for taxpayers,” said Dan Rutherford, the Republican state treasurer.
Illinois received its bottom-of-the-pack ranking when it fell from an “A” rating to “A-minus.”

That’s the same rating as California, but California has a positive outlook. Illinois’ fragile overall financial status netted it a negative outlook, putting it behind California overall. The ratings came out now because Illinois plans to issue $500 million in bonds within days.

Exactly how much Illinois’ credit-rating slide ultimately will cost taxpayers is unknown until the demand for the state’s bonds is measured in the markets. But Rutherford estimated the state will pay $95 million more in interest than if Illinois had a AAA rating, which is much higher.

Even before the downgrade was revealed, Quinn said in Chicago the “pressure is higher than ever” to solve the pension problem because “credit rating agencies are screaming at the top of their voice” for final action.

[…]

One other ominous point in the Standard & Poor’s report is that inaction could lead to downgrading Illinois to “BBB,” an “unusual” low rating for any state. The agency noted a “lack of action on pension reform and upcoming budget challenges could result in further credit deterioration.”

“Most states will build reserves when the economy is performing well, and that typically provides a cushion when the revenues deteriorate,” said Robin Prunty, the S&P analyst who heads the agency’s state ratings group. “But Illinois has never really carried or accumulated any kind of budgetary reserves.”

Not surprisingly, they has been called to deal with pensions a multitude of times by both Democrats and Republicans in Illinois.  Also not surprisingly, the  state’s public employee unions have claimed any attempts to change the current pension system is unconstitutional and would be fought tooth and nail.

Illinois has created this hell, it is now time for them to burn in it.

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Teen Smoking Hits All-Time Low in Wisconsin

Good news, but is it a pyrrhic victory for future state budgets?

Wisconsin health officials say smoking by middle and high school students has dropped to an all-time low.

The 2012 Wisconsin Youth Tobacco Survey, released Monday, found that 13% of high schoolers say they smoke and 2.5% of middle schoolers admit to smoking. The last study in 2010 showed nearly 18% of high schooner and nearly 4% of middle schooler smoked.

The survey is done by the Wisconsin Department of Health Services and the Wisconsin Department of Public Instruction.

The 2012 figures contrast sharply with 2000, when 33% of high school students and 12% of middle school students said they smoked.

Admittedly, it’s a survey, so you could have some lying going on.

The reason I bring up future state budgets, keep in mind, the former Doyle budgets — especially the 2009-2011 state budget — were built on massive tax increases on tobacco sales.

If those are going to be limited in the near-future, I got to admit, whatever white paper the Legislative Fiscal Bureau is going to issue in the coming months on that revenue source will be an interesting one to read.

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30 Pieces of Silver Paid in Full, Wirch Gets Spot on JFC

The biggest shock here isn’t that Wirch is on Joint Finance.

It’s that incoming minority leader Chris Larson (D-Milwaukee) bounced off Lena Taylor (D-Milwaukee) to put Wirch on and decided to keep La Crosse’s Jen Shilling — who was a mainstay during her Assembly days — on instead.

A Democratic senator said to have changed his vote for his party’s leader snagged a coveted appointment Wednesday on the Legislature’s powerful budget committee.

Sen. Bob Wirch (D-Somers) and Sen. Jennifer Shilling (D-La Crosse) were chosen to serve on the Joint Finance Committee by incoming Senate Minority Leader Chris Larson (D-Milwaukee). Earlier this month, Larson beat his Democratic colleague Jon Erpenbach of Middleton in a race for minority leader.

After the vote, Erpenbach’s backers concluded Sen. Bob Wirch (D-Pleasant Prairie) had voted for Larson after saying he would vote for Erpenbach. One of them had noticed Wirch had folded his ballot multiple times and was able to tell which ballot was cast by Wirch after the fact.

Justin Sargent, Larson’s chief of staff, said that the Milwaukee Democrat hadn’t considered the recent leadership vote in deciding on the committee appointments. Shilling, who had run for assistant minority leader and lost to Sen. Dave Hansen (D-Green Bay), was seen as being aligned with Erpenbach.

Under the soon-to-be replaced legislature, Taylor is the current co-chair of Joint Finance with soon-to-be Speaker Robin Vos (R-Burlington).  What exactly did she do to Larson to not only lose her seniority from the committee, but to be bounced completely.

There’s got to be a story behind that right there.  Is it because the two don’t get along — a theory I don’t buy — or because the two faced off against each other in the primaries of Milwaukee Assembly Districts where Larson (and WEAC) was seeking to replace many African American incumbents who Taylor was close with?

It’s probably the latter, but the truth is, we’ll never know.  He’s only has two spots to fill, and probably has a litany of reasons not to give each and every member of his caucus a spot on Joint Finance.

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State Deposits $108.7M into Rainy Day Fund

Admittedly, it’s not a lot of money, but it’s more money that has been going in there for years — if not the past decade.

It is indeed working Wisconsin.  We’d be foolish to go back to the old ways of union monopolization of work rules which cost this millions of dollars on unnecessary and sometimes ridiculous conditions.

Gov. Scott Walker is touting the deposit of nearly $109 million into the state’s rainy day fund, money that can be tapped in an emergency.

The deposit announced Monday comes after the state ended the last fiscal year in June with a surplus of about $342 million. Even though it is less than 1 percent of what is spent out of the state’s main account every year, it is the largest deposit ever into the rainy day fund. It marks the second year in a row that a deposit has been made.

Walker says “we remain committed to making the tough decisions necessary to avoid tax increases while maintaining services.”

He says his priorities for the next two-year budget include creating jobs, developing the workforce, reforming government and transforming education.

Walker will unveil his new budget in late 2012 or early 2013.  Currently, state agencies are sending the governor’s their 2013-15 spending requests.

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Who Paid for the “Wisconsin 14’s” Trip to Illinois?

The MacIver gang is not letting it go, and with the silence coming from all fourteen Democrats, the truth could have the potential of being the biggest campaign finance scandal in Wisconsin history.

I recall talking to a friend in Madison as this all broke out and remarked there was no way someone like Chris Larson (I used Larson as an example since he’s young (29), recently married, and without much savings) could afford to stay in Illinois long without tapping into some form of campaign fund.

This friend replied with a more sullen answer: None of them can.

 

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