Progressive Thinking

If you put aside all the political ads and smears and judge them on their resumes, sitting before you in the final job interview are two candidates, Scott Walker the politician and Mary Burke the businesswoman. Past performance is the best indicator of the job they will do in the future.

GREEN BAY - The long Wisconsin Governor’s race will finally end tomorrow, Tuesday, November 4th 2014. We are selecting a chief executive officer to run the largest single business entity in our state, a company with a multi-billion dollar budget and over 65,000 employees, and you are a member of the evaluation panel that is being asked to pick just one for the job.

As the Wisconsin State Journal, typically a conservative newspaper, said in it’s endorsement of Mary Burke today “State politics is far too divisive under Gov. Scott Walker. Wisconsin lags on jobs and faces its third largest budget shortfall in two decades.” The State Journal goes on to say “Mary Burke, a former Trek Bicycle executive and state Commerce secretary, offers our state decades of business experience on a global scale.”

If you put aside all the political ads and smears and judge them on their resumes, sitting before you in the final job interview are two candidates, Scott Walker the politician and Mary Burke the business woman.

You look at their resumes and see Scott Walker is a college drop out. Burke earned a finance degree from Georgetown, ranking number one in her class, and a master's degree in business administration from Harvard.

After graduating from Harvard, Burke quickly becomes an entrepreneur, launching Manhattan Intelligence, a service for consumers in New York City. Later on, Burke joins Trek Bicycle, her family's growing Wisconsin company in Waterloo. She serves as director of European operations for three years, living in three different countries and opening offices in five. Trek reports that its European sales soared during her tenure. She later serves as director of forecasting and strategic planning for nearly a decade.

Meanwhile Walker has never held a significant job in his life outside of elective political office. He works at getting himself elected, first to the State Assembly and then as Milwaukee County Executive. At Milwaukee County, he directly supervises a staff of 19 in the Executive’s office, at least 4 of which later end up being convicted of misconduct. He says he doesn’t know what they were doing. He encourages labor strife among county employees by breaking their contracts and hiring outside temporary employees to do their jobs. He throws out the employment contracts of nearly 300 top level managers and forces many to resign or retire. He can offer no evidence that his administration did anything exceptional to improve the business climate in Milwaukee County as a whole during his six years in office.

Walker then goes on to four years as Wisconsin’s Governor, pledging to foster private-sector job growth and balance the state budget. Walker fails on both. He again encourages labor strife by trying to break the unions with ACT 10. He cuts $800 million  out of revenue sharing to our local schools and governments, passing the discord on to them. The record of Walker’s signature jobs agency, the Wisconsin Economic Development Corp. (WEDC), has been sloppy and disappointing. State exports slipped last year, and job growth has been slow, less than half what the governor promised and trailing the rest of the states in the Midwest during the national recovery. The budget faces a 1.8 billion dollar deficit.

The Wisconsin State Journal says “Our editorial board met with both candidates for governor, and we've closely followed their public lives and careers. Our endorsement of Burke isn't a prediction of who will win. It’s who we believe is best to lead Wisconsin forward.”

The State Journal concludes “Mary Burke is that candidate”.

You have to decide who gets the job offer and who gets that nasty rejection letter, and you have to live with your selection for the next four years. In Human Resource Management, “past performance is the best indicator of the job they will do in the future”.

For Wisconsin Governor, do you want more of the same or a change? All the polls still say the race is a toss up. Tomorrow is your last chance to vote, to make your selection heard.

Senator Kathleen Vinehout writes about a question she is often asked on the state’s budget – is it in the red or in the black. She explains the process by which the estimate is generated and has been for decades.

ALMA - Are we in the red or in the black? What’s the truth? What’s the reality?” The rural Trempealeau County woman was clearly frustrated.

“What do the figures really mean?” she asked me. “Is there a big hole? Or not? Is it all smoke and mirrors?”

Fresh off the rhetoric of the campaign trail, people are rightly confused about where the state is headed and what numbers are real. It’s hard to find someone who is not just outright frustrated at what they see as intentional distortions.

But when spring comes, lawmakers will be working hard trying to balance what is sure to be a $70 billion-plus spending plan. Somehow, they will have to balance the books.

How can we tell what’s real?

Let us begin with hard cash: money coming into state coffers. In a two-year budget, what’s real – money actually coming in – can be found in the tax returns of the first year. The state’s budget year runs July 1 through June 30. It takes a while to tally things and pay year-end bills. So numbers change a bit while accounts are tallied and then audited.

Preliminary tax returns show that individual income tax collection is down by about 2½% and corporate income tax is down by over 9%. Individual income tax makes up over half of the general fund. This puts the actual total down about 2% over the budget estimate.

A sharp drop in corporate income tax collection is important. There are different theories why. Perhaps companies are not making money; or too many dollars were given away in corporate tax breaks.

Just one tax break – the manufacturing and ag tax credit – cost taxpayers almost half the amount by which corporate income tax collection dropped. (Tax breaks passed in the last four years total over 50 separate items and will cost taxpayers an estimated $1.1 billion next fiscal year.)

So we know things did not go well in the last fiscal year. Will they get better?

This depends on with whom you talk – but let’s take the least politically minded entity in the state budget process – the nonpartisan Legislative Fiscal Bureau (LFB).

When allowed to do the math without any partisan driven assumptions – and this is important – the LFB estimates Wisconsin will begin the next budget process in the red by about $1.766 billion. You may have heard this number rounded up to $1.8 billion.

This is how much money is needed to fund the commitments in the coming budget.

The number is an estimate – as all budget numbers are estimates. But it is based on the best nonpartisan assumptions going forward and follows the conventions used in estimating past budget ‘starting points.’

In the final weeks of the campaign there were several other numbers tossed around. One used by the Governor was that Wisconsin was $535 million in the black.

The Governor used a memo prepared by LFB to buttress his claim. In this memo the nonpartisan LFB was directed by Finance Co-Chair John Nygren to make several assumptions. Namely, “let us assume Wisconsin brings in more money and spends less.” Not surprisingly, the numbers were better.

Politifact in the Milwaukee Journal Sentinel analyzed the ‘$535 million in the black’ and rated it False.

Other factors loom large in balancing the next state budget. Not included in this analysis is the mismatch between money coming in for roads and bridges and money going out.

The Governor and lawmakers voting for the last budget put nearly a billion in new spending on the state’s credit card. The transportation fund cannot support this level of borrowing.

Balancing the next budget will be a challenge. Needs are great. Tax money given away in the form of tax breaks cannot be spent on vital services.

To begin an honest budget discussion, let’s start with the best information and agree on the facts. To paraphrase Ambassador and former US Senator Daniel Patrick Moynihan: You can have your own opinion but not your own set of facts.

Local Press and TV media claims of a huge Walker lead in the area and Statewide based only on Marquette's "likely voters" are suspect. A conclusion based on same results could easily be "still tied with Burke closing".

GREEN BAY - Last Thursday, the local Green Bay press and TV media had a field day reporting that the Final Marquette Poll showed Governor candidate Scott Walker with a 17 point lead in the area and a 7 point lead statewide among "likely voters" over challenger Mary Burke. Last 2 minutes of the 4th quarter, Packer fans, and game over, right?

Well, not so fast. There are serious problems with that interpretation of the Marquette Poll results and there are other polls.

If you look closely at the Marquette poll, you may have noticed that among all "registered voters", Walker received 46 percent to Burke's 45. That shows a 2 point improvement for Burke over the previous Marquette Law School Poll, conducted Oct. 9-12, which had Walker with a 48-45 lead over Burke among these same voters. Based on these results, the conclusion could be still tied with Burke closing.

So the real shift in the Marquette poll was only among those they declared to be "likely voters". The Poll's director, Charles Franklin, even said as much, and that's where the results become suspect. Marquette defined "likely voters" as those who said they were extremely likely to vote when polled. Most polls we are familiar with traditionally use an actual record of voting in similar elections to define "likely voters". While this method can have problems of it's own, such as including new voters, it is generally more trustworthy than the method Marquette used.

Said simply, the Marquette poll "likely voters" might just have lied about, or at least exaggerated, their intention to vote.

The conclusion that the race is still tied is also supported by other final polls. With just three days until Election Day, the two final public polls in the Wisconsin governor's race both show the race between embattled Gov. Scott Walker and Mary Burke is a dead heat.

The final poll from Public Policy Polling (PPP), released yesterday, shows a statistical dead heat, with  Walker holding a 48 - 47 lead over Burke. The poll was taken over three days and surveyed 1814 likely voters. PPP has been one of the consistently most reliable polls both in Wisconsin and nationwide.

Also released yesterday was the final poll from YouGov, which surveyed 1494 voters, showing another dead heat with Walker leading Burke 42-41.

When asked for comment, Democratic Party of Wisconsin Chair Mike Tate said Saturday "The final public polls released over the last few days confirm what we've known for months -- the race between Scott Walker and Mary Burke is all going to come down to turnout". He went on "Wisconsin voters need to know this race is incredibly close and their vote will make a difference between four more years of Scott Walker's failed policies or a new direction with Mary Burke."

Big Corporate For Profit Media Missed “Bait and Switch”, Outsourcing Safeguards Were Never Implemented as Walker Administration Announced But Did not Implement WEDC Outsourcing Prohibitions.

STATEWIDE - In July the outsourcing issue dominated the Governor’s race, generating wall-to-wall news coverage, and some excellent reporting on the use of public money to support outsourcing companies by Governor Walker’s jobs agency, the Wisconsin Economic Development Corporation (WEDC).

But when both candidates seemed to take strong positions against public job creation dollars going to companies engaged in outsourcing Wisconsin jobs, and WEDC seemed to enact safeguards, the issue vanished from the Governor’s race. This disappearance was so complete that it did not even come up in the two debates.

An analysis of the public record by Citizen Action of Wisconsin reveals that the strong protections announced in the media against providing state job creation grants, loans, and tax credits to firms engaged in outsourcing jobs were never implemented.

In addition, even the safeguards that were announced in the media and not implemented do not effectively prevent huge state tax breaks from going to outsourcing companies. Shockingly, Wisconsin tax policies enacted by Governor Walker and the Legislature actually could allow companies to claim large tax credits for some of the costs of outsourcing Wisconsin jobs.

“It is stunning as we witness an eleventh hour media frenzy over pseudo stories that have no impact public policy that the media is missing one of the biggest and most impactful stories of this election,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “It is scandalous that voters are in danger of going to the polls knowing all about various fake campaign stories and no knowledge that state policy still allows their tax money to go to corporations engaged in outsourcing their jobs, and even could allow corporations to write off some of the expense of outsourcing.”

Walker Administration Announced But Did not Implement WEDC Outsourcing Prohibitions

In July, as a result of an intense debate about which candidate would take effective action to deter companies receiving state job creation grants, loans, and tax credits from outsourcing jobs, the Walker Administration announced in the media a number of changes in state policy designed to prevent companies which receive state aid from outsourcing Wisconsin jobs. It was announced and reported in the media that a series of reforms, championed by Representative Peter Barca (D-Kenosha), were discussed at the July WEDC meeting and would be implemented at the next meeting.

A Citizen Action of Wisconsin analysis of WEDC Board Minutes and publicly available records finds no evidence that strong policies announced to the media were ever put in place. Instead, the policies implemented were so watered down that is still perfectly legal to provide state funding to corporations engaged in outsourcing.

There were only two changes Citizen Action could locate in the public records. First, there is now 30 days notice required for layoffs by companies receiving WEDC grants, loans, and tax credits.  Second, new WEDC contracts will require that state funds are not directly spent on outsourcing.  Given that WEDC funds large corporation such as Ashley Furniture have every ability to use non-state resources to outsource, it seems to be still perfectly legal for companies receiving state dollars to outsource jobs, and to cancel out the jobs public money is paying them to create.

Other much stronger measures reported in the media seem never to have been implemented.

One measure prominently reported as having been adopted by WEDC would have suspended funding for outsourcing companies until an equal number of jobs in Wisconsin are created.  As WKOW TV 27 reported: “companies who accept awards, then later reduce their net number of jobs in Wisconsin, cannot get any more actual money until they get their workforce back to where it was when the award was originally given out”. However,  This provision is not at all mentioned in WEDC board’s minutes or committee minutes, WEDC’s website, or in any subsequent board agendas. At the request of Citizen Action of Wisconsin, legislative staff made numerous requests to clarify the status of this policy with WEDC’s counsel, and to provide in writing the actual policies adopted by WEDC, but received no response.

The Milwaukee Journal Sentinel reported on July 29th that: “Gov. Scott Walker on Monday backed a proposal by Assembly Minority Leader Peter Barca to block state money and incentives from going to companies that shift jobs overseas.” The article goes onto state that the policy was discussed at the July WEDC board meeting and would be passed at the next meeting. Citizen Action’s review of public records, including WEDC minutes, finds no evidence this broad policy against giving state dollars to companies engaged in outsourcing was ever enacted. WEDC counsel has not responded to legislative requests for information on this policy.

Manufacturer's tax Credit an Even Bigger Outsourcing Loophole

Although the media has focused on WEDC’s connection to outsourcing, Governor Walker’s signature tax policy, the Manufacturer’s and Agricultural Tax Credit not only allows outsourcing companies to get massive tax credits, but even could allow them to write off some of the cost of outsourcing on their state taxes. The size of the tax credit is greater than WEDC funding for manufacturing. According to the Wisconsin Budget Project, it will add up to $874 million in tax credits over ten years.

The Manufacturer's tax credit represents a larger potential public support for outsourcing than WEDC grants, loans, and tax credits. The credit is available to those with manufacturing or agricultural property, but is not based on the size of the workforce. Because Wisconsin's corporate income tax is based on the sales a company has within the state, a company can still lay off or outsource large segments of its workforce and continue to be eligible for a sizable tax credit so long as it owns even one piece of property for manufacturing purposes. Recipients of this credit have no additional requirement to report outsourcing, and are not deemed ineligible for the tax credit if they outsource.

Although this massive tax credit is a major threat to Wisconsin workers, there has been no discussion during the Governor’s race about attaching job creation requirements to the credit or withdrawing it from corporations that outsource Wisconsin jobs.

“The Walker Administration's bait and switch on outsourcing is the biggest unreported story of this election,” said Robert Kraig, executive director of Citizen Action of Wisconsin. “Even the best informed voters are being left entirely unaware that it is still perfectly legal for a company like Ashley Furniture to outsource large segments of its Wisconsin workforce and claim  substantial job creation grants, loans, and tax credits while doing so. It could even be legal for them to write off some of the cost of outsourcing.”

A Green Bay Press Gazette story gave legs to a false report that Democratic Gubernatorial Candidate Mary Burke was fired by TREK, questioning her business credentials just before the election. Our sources say the reported firing was made up by Walker friend Gary Ellerman, Chairman of the Jefferson County Republican Party and fired by TREK himself.

GREEN BAY - Several days ago we predicted that the Republican “dirty tricks” people supporting Scott Walker would save one or two of the best smear shots at Mary Burke until the closing days of the campaign. That’s how it’s often done in the dirtier regions of Milwaukee County politics. You drop the dirt bomb just before the final weekend of the campaign so it has time to sink in with the electorate while still not giving your opponent enough time to counter it.

On Thursday morning, in a front page article entitled “Burke on report of being fired from Trek: `ridiculous'” by Adam Rodewald, the Green Bay Press Gazette gave legs to a false report that “Burke was fired by her family, who founded Trek Bicycle, following financial losses and low morale among staff.” Damage done, the seed of doubt about Burke's business credentials is planted, even if there is no truth to the story. Continued on page 10.

Of course when we get to page 10, the Press Gazette goes on to say the “report relies on statements by several anonymous sources and Gary Ellerman, who the Wisconsin Reporter identifies as a former Trek human resources director and current chairman of the Jefferson County Republican Party.”

We've dealt with the Wisconsin Reporter for years, and know it to be a Madison Republican front posing as a news source. And our sources say Gary Ellerman is the man behind the latest campaign to smear Mary Burke. Ellerman is the Chairman of the Jefferson County Republican Party and is known for posing as a Democrat during the recalls to force the real Democrat into a costly primary.

Ellerman is also known for enjoying a bad joke or two at the expense of Democrats. A visit his FaceBook page by a Democratic source turned up a October 19 share of a faked picture of Michelle Obama holding a sign saying such things as “My Family is a Fake”, “Husband is a Homo”, “Kids are adopted”, and “I am a man”.

Finally FaceBook also reveals that Gary Ellerman is a friend and committed supporter of Scott Walker. The July 2, 2012 picture above that Ellerman posted of himself posing “With the Governor and a few friends Sunday” provides the evidence.

Trek President John Burke released a statement Wednesday saying the report was inaccurate and noted that it was actually Gary Ellerman who had been fired from Trek in 2004, according to the Wisconsin Radio Network.

When asked for her comments, Burke said “I read the report. It’s ridiculous,” and then “Frankly, we’re in the last six days of the election, and I think it’s a desperate attempt to undermine my credibility based on absolutely no evidence at all.”

If anyone asks him, Scott Walker will probably say he didn't know what his friend was up to. Of course, he said he didn't know what the six convicted members of his staff at Milwaukee County were up to either.

That's how it goes. You throw something out, anything, and see if it sticks. It seems to be a way of life for politician Scott Walker and businesswoman Mary Burke is new to the game. Maybe we can do a little to clarify the story here.