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Some Cry Foul Over Rapidly Rising Propane Prices

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Monday, 27 January 2014
in Wisconsin

home_heatingThis week Senator Kathleen Vinehout writes about the propane shortage and rapid increase in price. After being contacted by people concerned about the crisis, she spoke with those in the industry and did research to help folks understand the reason behind the problems and what could be done to prevent this from happening in the future.

ALMA - “I’ve been in business for 36 years,” the propane man told me. “I believe this is simply price gouging.” The propane retailer’s wholesale price went from $3.19 to $5.29 a gallon in just a few days. I wanted to know why.

At first, I heard the usual “supply and demand” story: a late planting season meant high moisture grain drew down propane supplies. Indeed, propane use to dry grain was four and one-half times larger this past harvest than a year prior.

January-like weather during the first of December meant increased propane demand earlier in the season. As one industry representative said: “It’s simply a matter of economics 101 – supply and demand.”

But things were not as simple as they seem.

“The propane industry has some responsibility here,” one man told me. “We knew reserves were dangerously low going into the harvest season,” said another.

According to Bloomberg News Service, propane stockpiles are the lowest since the government began keeping records in 1993.

I spoke those in the propane industry, listened to constituents and congressional staffers and did some digging in industry and government publications. I learned several “man-made” actions contributed to a shortage of propane.

In mid-November, Kinder Morgan Inc. shut down its Cochin pipeline carrying propane from Canada to the Midwest. The company kept the pipeline down until late December to install pumps used to reverse the flow of gas from south to north.

The company plans to sell a lightweight petroleum product to Canada to mix with heavy crude oil. The complete reversal of the pipeline was scheduled to happen next summer. However, I heard from retailers, the company upped the start-up date to mid-February – permanently removing a critical route transporting propane to the Midwest.

Many in the industry told me rail lines – another route of transporting propane to the Midwest – choose large volume contracts like coal, grain or sand – over smaller lots like propane. I learned of one retailer who ordered nine rail cars of propane last fall and still had not taken delivery. Trucks also are in short supply.

“I can buy propane for $1.50 a gallon in Texas,” one Alma man told me. “But I can’t find a truck to go pick it up.” A Pepin retailer said, “There are 186 trucks lined up [in Mont Belvieu, Texas] to get propane and they can only fill three an hour.”

The Wisconsin Propane Gas Association recently sent a letter to lawmakers explaining the shortage and the rapid rise in prices. They closed the letter with the following: Be warned, the situation in 2013-14 is not the result of a “perfect storm,” but rather due to structural flaws in the industry.

The U.S has no strategic reserve for propane and no restrictions on the export of propane.

According to the U.S. Energy Information Administration, the exports of propane and propylene have increased five and a half times in the past two years. Just in the past year exports nearly tripled.

Industry officials knew about the Cochin pipeline shut down (and the plans to reverse the line no longer delivering propane to the Midwest). They knew about the high demand for fuel to dry down grain and help cope with the very early, very cold winter. Still exports remained at the nearly triple (over last year) high figures all throughout January.

Reuters recently reported: "This is definitely an issue that will come to the surface as the fallout (of the shortage) becomes more well known," said John Kilduff, partner at Again Capital LLC, a hedge fund. "The industry has been caught short, a lot of consumers are going to ask the question - why are we allowing this?"

Finding a solution involves action by the industry and government. We need an “At Home First” U.S. policy that creates a strategic reserve of propane, limits exports in times of domestic need and makes sure companies are not price gouging.

Iowa Senator Chuck Grassley recently requested the Federal Trade Commission “remain vigilant in overseeing the propane market to prevent anti-competitive behavior or illegal manipulation, and ensure that any supply shortages are not created artificially.” Senator Grassley has the right idea.

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Hey Governor Walker, Let’s First Pay the Bills

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Monday, 20 January 2014
in Wisconsin

scott-walkerThis week  Senator Kathleen Vinehout writes about the new revenue estimates for the state.  The Legislative Fiscal Bureau estimates that state will end this budget with nearly a billion dollars over the $70 billion budget.  Kathleen writes that the Legislature should look first to paying the state’s bills and putting money into the state’s Rainy Day Fund.

MADISON - Imagine you came into a bit of money. Not a lot - less than $500 on your annual salary of $35,000 - but enough to make you happy.

This is the pleasant situation state government faces: new revenue estimates predict the state will close its books on the current budget with a little less than a billion more on its $70 billion biennial budget.

Lawmakers are falling over themselves to come up with the best tax give-away. But maybe they should check the pile of past due bills first.

So returning to my story; imagine you faced hard times. You delayed paying some of your mortgage, you got behind on your son’s college tuition, you skimped on supplies for your school-age daughter, you didn’t pay all your property tax and you missed a few car payments.

Instead of catching up on the bills you missed – with new money that comes nowhere near getting you caught up – you propose to your spouse to give the money away to your friends.

If I were your spouse I’d send you outside for a while and hope the weather cooled off your foolishness.

Such is the foolishness of lawmakers who want to cut income taxes – giving most benefit to high income earners – rather than pay the bills postponed over the past years.

The almost $900 million in estimated new revenue comes with a caution to Legislators. When reporting the new revenue estimate, the Legislative Fiscal Bureau (LFB) reminded lawmakers that about half of the surplus should be put away in the state’s rainy day fund – as is required by state law. This fund is woefully inadequate and was underfunded by Governors of both political stripes despite years of bipartisan calls to fund it from Legislators and citizens.

The LFB cautions that federal highway funds may be reduced – leaving Wisconsin with more of the responsibility to pay for already promised road and bridge construction. The LFB does not give a figure on the estimated drop in federal funds but this fact underscores the importance of putting money away in a rainy day fund.

In addition, LFB staff point out the structural deficit going into the next budget year in the Transportation Fund alone is $224 million. Promised spending in this last budget, including the service on new debt, raises the mismatch between estimated money coming in and money going out at almost another $120 million in the next budget.

Finally, LFB staff also points out the current transportation budget is spending much less on already committed projects than will be required in the coming budget. One example is the Zoo interchange where the state is spending less than one tenth of what experts estimate will be needed in the next budget.

The new LFB memo does not begin to touch the problems in the state’s General Fund.

Every part of the five major spending items –schools, health care, local government, corrections and universities – needs attention. The current budget required give-backs from universities that some say will put the UW system in a double digit structural deficit for the next budget. Underfunding of public schools and delayed payments to schools and local government started years ago and continued by this governor add to budget problems for the next Legislature. A growing prison population and a deficit in the state’s Medicaid program – caused by lower federal reimbursement – adds more cost to the next budget.

Then there is the matter of the state’s rising debt. Governors including Governor Walker made decisions that resulted in unpaid debt bills being rolled into a larger and larger debt payment.

Finally there is the matter of paying taxpayers on time for the tax breaks already given: it’s been almost 5 years since the state changed the withholding tables. So even though state income taxes have gone down – by a very modest amount – taxpayers don’t see any difference in their take home pay. To fix the problem completely would take more than the entire estimated increase in new revenue.

So - to the Governor and my fellow lawmakers – let’s first pay the bills.

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Senator Vinehout Not Running for Governor This Year

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Friday, 17 January 2014
in Wisconsin

ALMA - After careful consideration I have decided not to run for Governor this year.

The severity of the injury received in the car accident last month -- a splintering of the bone in my upper right arm – and the time required to recover and rehabilitate make it impossible for me to run the intense, grass roots campaign that I want to run and would be necessary to win.

I have many thanks to give to all the individuals across the state who have encouraged me to run and offered their support in countless ways. I will continue to work supporting the grassroots efforts of so many. The vision we share for our state and our communities will not fade.

I wish success to Mary Burke and others who may offer their time and talents in leading our state.

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Let the People Speak on Nonpartisan Redistricting

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Monday, 13 January 2014
in Wisconsin

voteSenator Kathleen Vinehout has heard from many people who are clamoring for the state to change the current partisan redistricting process to one that is nonpartisan. She is the lead Senate author on a bill that calls for an advisory referendum on this issue. Republicans have not yet scheduled a hearing for the bill.

MADISON - “Look at this map,” the man directed. “There are lots of squiggly lines in Wisconsin and Illinois but Iowa has real neat boxes.” The maps he showed me were the lines of Congressional Districts in the three states.

For many years Iowa has used a nonpartisan process to draw the district lines for state and US elected officials. Wisconsin, controlled by Republicans, and Illinois, controlled by Democrats, still uses the old partisan system of drawing lines.

What seems to be an archaic state activity comes up more and more in my discussions with voters. The word “gerrymandered” has found its way into the Wisconsin lexicon in a big way.

Some say the word has its origin in an 1812 election when a Massachusetts newspaper accused then Governor Elbridge Gerry of creating district lines to help his party dominate the state Senate. One district in the map resembled a salamander. Combining Gerry and (sala)mander became a popular expression to describe the drawing of legislative districts to gain a political advantage.

Two hundred years later the process dominates Wisconsin political discussions.

During 2011 a law firm was hired by Republican leaders to maximize Republican advantage. Some lawmakers signed secrecy agreements under threat to see their new districts before the proposal was made public. Subsequent elections demonstrated the effectiveness of the maps in maintaining a Republican majority.

Statewide editorial boards criticized the process and called for public hearings on a bill I cosponsored to implement a nonpartisan process – like that used to create the neat boxes on the Iowa map. Republicans are loath to hold public hearings to change the process. They feel they won the right to draw districts and correctly counter that Democrats did not change the process when they had control.

A group of freshmen representatives, led by Eau Claire Representative Dana Wachs and Wausau Representative Mandy Wright are traveling the state holding public hearings to bring attention to a proposal that would put the nonpartisan redistricting question on the November 2014 general election ballot.

Announcing their efforts, Representative Wachs stated, “Attempts to fix our flawed, partisan system of redistricting have been ignored in the Legislature, so we feel that now is the time to give Wisconsin voters the chance to speak up.” I support this approach and signed on as lead author of this bill in the Senate.

Government reform groups suggested partisan redistricting is one cause of the current hyper-partisan environment. Jay Heck of Common Cause recently told the Chippewa Herald, “The current process has produced too many uncompetitive general elections in which the winners are really determined in partisan primary elections. This has often allowed the most extreme partisans from their respective parties to be elected. Bipartisan compromise becomes virtually nonexistent. Instead, we have bitter partisanship, paralysis and polarization.”

Representative Wright recently told Wisconsin Radio Network, “I actually have an unusual district, where’s it’s basically 50-50, and I have to be very conscious of listening to both sides of the aisle, and really actively seeking out ways that we can work together, and I appreciate that, and I think it’s a good thing but it’s never going to be resolved if I don’t have more of my colleagues that feel that same sort of pressure.”

Judging by the letters I’ve received, citizens’ support for a nonpartisan process runs deep. Some of those letters are sharply worded and deeply critical of the current process. For example, an Eau Claire man recently wrote me saying, “How can one defend a process that was done in the dark, in secret (even to having legislators sign secrecy contracts) at a cost of millions to taxpayers of Wisconsin, divided the citizens of Wisconsin and more - all for one and only one purpose - to allow representatives to choose their voters rather than the other way around for obvious political gain!”

Wisconsin does not allow direct legislation by ballot initiative – meaning a vote by the public would be advisory to the Legislature. But a lopsided public vote in favor of nonpartisan redistricting would send a strong message to elected officials they’d do well to heed.

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Independent Charter Schools: Siphoning off Public Money to Private Interests

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Tuesday, 07 January 2014
in Wisconsin

studentsIn this week’s column, Senator Kathleen Vinehout writes about new legislation that will allow statewide expansion of private charter schools at the expense of public schools.

ALMA - “Will the Legislature allow statewide expansion of charter schools and how will that affect my local public school?”

This question is one I hear so often particularly in communities where people are worried about the future of their small local schools.

Last fall, the Senate Education Committee debated Senate Bill 76, which takes away local control by requiring locally elected school boards to replicate charter schools when the charter performs 10% better then local district for 2 years in a row. It also allows certain charter schools to opt out of the state’s teacher evaluation system.

Private charter school companies lobbied hard for complete independence from state oversight but SB 76 did not go that far. School officials and citizens expressed serious concern about how expanding charter schools would impact public schools.

Money to run independent charter schools comes from school aid set aside for all public schools. The more money going to independent charter schools means less money for all public schools. For small cash-strapped districts, the expansion of independent charter could be devastating.

Sixty percent of Wisconsin’s public school districts are rural. As the amount of state school aid shrinks, small schools are particularly hard hit. Many rural districts are forced to pass referendum just to survive. Local property tax payers pick up more and more of the cost of their local schools.

Siphoning off even more state dollars for private independent charter schools will mean less educational opportunities for our children attending our local schools.

The public outcry against statewide expansion of charter schools made a difference.

Last month when the Senate Education committee took final action on SB 76 it was a scaled back version of the original bill. The amendment passed by the committee made the bill provisions apply only to the Milwaukee area.

But the committee did nothing to address the funding problem so public schools will still take a financial hit as independent charter schools expand.

Just as local schools celebrated this small victory, another charter school expansion bill reared its head in the State Assembly.

The bill was introduced in December by a group of suburban Milwaukee Assembly Republicans who are focused on passing a statewide charter school expansion bill before the Legislative Session ends. The bill contains many provisions of the Next Generation Charter Schools Act created and promoted by the American Legislative Exchange Council (ALEC). The bill is already scheduled for a quick public hearing.

Assembly Bill 549 expands who can authorize an independent charter school and stops local school districts from operating a charter school. Instead school boards must convert any charter school to a magnet school. This bill brings the law closer to the lobbying goals of the private charter management companies: eliminate any local control over charter schools.

Couple this with a requirement that any student from any district could go to any independent charter school and you end up with a world much closer to the goals of the private charter management companies: a privately operated school system that can siphon both money and students from any local public school.

When local schools are not well-funded and the best students are siphoned off, their future is in peril.

The next step in this privatization scheme is closing public schools. This happens because private charter schools drain not only taxpayer dollars but also the best students from local schools – leaving high cost disabled, impoverished and non-English speaking students in poorly funded public schools. With fewer resources and students, many public schools in other states have been forced to close.

Expanding independent privately run charter schools is unnecessary and unwise. Not considering how to pay for the statewide expansion of privately run charter schools is like talking about the color of a new car but not how to pay the car payments. In the end children in our communities are robbed of their greatest educational opportunities.

In the words of Garrison Keillor, “When you wage war on the public schools, you’re attacking the mortar that holds the community together. You’re not a conservative, you’re a vandal.”

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