Progressive Thinking

GREEN BAY - I was watching Governor Scott Walker last Sunday morning on Up Front with Mike Gousha and was struck by a repeated question. Can’t this guy just give a straight answer?

When Gousha tried to tie him down on his repeated 250,000 job creation campaign promise, he said we were doing better than Illinois. When Gousha pointed out that Illinois was the only one of 10 Midwestern states that we surpassed, Walker changed the subject to the last three months.

I was struck most by his answer on the John Doe investigations into illegal activities by himself and his staff at Milwaukee County. “Those who know can’t talk” Walker said, and “those who don’t shouldn’t talk”. I really don’t know what that was supposed to mean.

Back in February, I went on record in this blog, under my own name, saying Scott Walker knew as far back as 2002 about the “secret network” in the Milwaukee County Executive’s office. I knew because I helped his staff, namely Tim Russell, set it up.

What was most interesting was the reaction from the Governor’s staff. Scott Walker wouldn’t talk about it, and they said the charge came from a known Democrat. They didn’t deny it, they just implied it was only politics and that seemed to satisfy folks.

Only, I wasn’t a Democrat in 2002. Back then, I was running around with a group of Milwaukee County inner ring suburban Republicans called the Franklin Citizens for Responsible Leadership. Scott Walker and Tim Russell most likely thought I was one of their own.

But by 2014 the story changed and it was all politics.

We should not accept these evasions. That there is no real truth in politics, that it is all just spin from one side or the other. To do so demeans ourselves was well as the standards we set for our political leaders.

Mike Gousha tried to get a straight answer from Scott Walker, and you could tell he was getting frustrated. But for a guy like Walker, the answers he gave to Mike and me will be good enough unless we show him we are not buying it any more.

The Fraud and Mismanagement Hotline, operated by the Legislative Audit Bureau, was created so that people could “easily and confidentially report suspected fraud, waste and mismanagement, and other improper activities within state government.”

MADISON - “Workers and inmates were required to remove asbestos with no protection,” the woman told me. Her colleague agreed. “Since we lost union protections, bad things are happening at the Department of Corrections.”

The workers said no cameras or cell phones are allowed in the prison, making the bad things hard to prove. State workers didn’t know what to do.

I suggested they call the Fraud, Waste, and Mismanagement Hotline at 1-877-373-8317. The Legislative Audit Bureau (LAB) oversees the hotline. The LAB is part of the legislative branch of state government, which puts it in the perfect position to oversee the functions of the executive branch of state government.

The hotline was established by 2007 Wisconsin Act 126 and has been active since April 2008.

According to the 2012 LAB report on the hotline, it was created “so that the public, state employees and contractors could easily and confidentially report suspected fraud, waste and mismanagement, and other improper activities within state government.”

It provides one of those critical checks and balances in government and is managed by a Certified Fraud Examiner.

Complaints to the hotline come primarily through the toll-free number (1-877-FRAUD-17). A secure voice mail is always available at this number. People can also use the U.S. mail or a secure web-based form found at http://legis.wisconsin.gov/LAB/Hotline/.

Those contacting the hotline are not required to leave their name or other contact information. But auditors tell me people are encouraged to leave some contact information as LAB staff must often make follow-up inquiries to get to the bottom of a problem.

Those who contact the hotline are protected by some of the strongest whistle blower protections in state statute. State law requires the Audit Bureau to keep the identity of a person contacting the hotline private even when other information about the fraud or mismanagement investigation is made public.

Sometimes the information conveyed through the hotline ends up in a full-scale Audit Bureau investigation. Some of the most public and wide-reaching state investigations began with a call to the hotline. For example, an audit of Food Share benefits spent outside the state of Wisconsin was the result of a hotline call. Another investigation uncovered problems with the monitoring of administrative contracts, unauthorized spending and failure to competitively bid contracts for administering the state’s large Medicaid program.

Other audits having their genesis in hotline contacts include an investigation of the asphalt warranty program that looked at the construction and life of state roads, and yet another looked into the misuse of Workforce Advancement Training funds.

Many people called the hotline with problems related to Family Care, the program assisting the developmentally disabled, frail elderly and physically handicapped. Using the information shared by callers, auditors where able to craft a much more thorough evaluation of the Family Care program.

Most recently, full scale audits were authorized by the Joint Committee on Audit on two problems in state government brought to legislators’ attention through calls. The first is an investigation into problems experienced by people filing claims for unemployment insurance. The second is alleged fraud and mismanagement by the company contracted with the state to provide nonemergency medical transportation for Medicaid patients who need help getting to a doctor or therapy appointment.

In both cases complaint calls came in to legislators’ offices - including mine - and the LAB hotline.

Complaints matter. The hotline provides a convenient and confidential way for people to provide information about fraud, waste and mismanagement directly to someone who can investigate the problem.

I know when it comes to state government, shining a light on something makes it improve. Auditors tell me this is known as the Sentinel Effect: the tendency for human behavior to improve when people know their performance is being evaluated.

Government is about us. When you know things are not working, take the time to call the hotline. Your information could become the critical piece of the puzzle needed to solve a problem of waste, fraud, or agency mismanagement.

Remember, call 1-877-FRAUD-17.

Senator Kathleen Vinehout writes about Wisconsin wineries along the Mississippi River and western Wisconsin. She shares her discussion with a winemaker about the unique grapes from which many of the wines are produced. She also mentions the Great River Road Wine Trail which includes many Wisconsin winery members.

LA CROSSE - “Wisconsin has wineries?” the Chicago woman asked guests at a local bed and breakfast who shared their plans for touring.

Yes, Wisconsin has wineries – over 70 – and growing.

Many of the state’s wineries are located in the Upper Mississippi River American Viniculture Area. This federal designation covers the region from Galena, Illinois to the Twin Cities and extends 40 miles on either side of the Mississippi River. Grapes grown in this area have a unique flavor because of the microclimate and soils along the river.

I recently spoke with Dave Danzinger, owner/operator of Danzinger Vineyards perched atop the beautiful Alma Bluffs. “We are farmers,” Dave told me. “So we started with the grapes.”

About 15 years ago the University of Minnesota started releasing varieties of winter hardy grapes. Breeders at the university crossed German and French grape varieties with wild grapes growing in the north woods. Dave explained that French grapes are only hardy to 15 degrees Fahrenheit and German grapes are hardy to zero. But the new varieties are hardy to -40F!

The Minnesota researchers named some of the new varieties for the Mississippi River region: Frontenac, St. Pepin, La Crosse, La Crescent, and St. Croix. Because of the wild grape parent, these grapes are a little tarter. “They make a good sweet wine, more toward the Concord grape,” Dave said. “Before these grapes, the only variety that could take the cold was the Concord.” With development of the hardier grapes, new opportunities opened up for Wisconsin winemakers.

Just along the Wisconsin side of the Mississippi River there are 14 wineries from La Crosse to Prescott.

Danzinger Vineyards has 18 acres of grapes under cultivation - making it one of Wisconsin’s largest at one site. So many grapes are produced that they sell grapes to other winemakers. In February Danzinger’s was named Wisconsin Winery of the Year. The recognition was in part because the vineyard won so many medals at the Wisconsin State Fair. Dave and his crew were also recognized for hosting educational meetings and helping other vineyards get started.

There are three types of wineries. Some winemakers grow no grapes. Other winemakers buy 80% of their fruit. Still others, like Danzinger’s, grow their own grapes and use only Wisconsin fruit. Because of this difference, states like Iowa have a labeling program that identifies Iowa wine grown and produced in that state. Minnesota has a Farmstead Winery law that requires 70% of fruit from that state. No such laws exist in Wisconsin.

The Wisconsin Winery Association advocates for laws to help wineries. This year state winemakers sought a law change to allow wineries to serve alcohol until midnight – making it easier to host events like wedding receptions. The bill passed unanimously out of the Senate Agriculture, Small Business and Tourism Committee, upon which I serve. But it failed to pass the full Senate and Assembly. The group seeks to reintroduce the bill next year.

Following the Great River Road Wine Trail is a wonderful way to visit the outstanding wineries on Wisconsin’s beautiful West Coast. Over half of the members are Wisconsin wineries: Valley Vineyard is a new winery nestled in the St. Croix River Valley near Prescott. Maiden Rock Winery and Cidery specializes in artisanal ciders from authentic cider apples grown in Wisconsin. Villa Bellezza in Pepin has a collection of charming buildings and a central square that leaves you feeling like you’ve slipped into a small Italian village. Just down river is Danzinger’s winery 500 feet above the Mississippi near Alma. Head to Fountain City and Seven Hawks Vineyard with a tasting room and wine bar located in a renovated 1870s river town building. Elmaro Vineyards, located near historic Trempealeau, offers a beautiful rural setting in which to enjoy a glass of Wisconsin wine.

The 31st Senate District is home to 5 other outstanding wineries that offer unique and exceptional Wisconsin wines and spirits in fantastic settings: Brambleberry Winery in Taylor, Tenba Ridge Winery in Blair, Sandstone Ridge Winery near Osseo, and Infinity Beverage Artisan Winery and Distillery and Cap & Corks Winery in Eau Claire.

Take time to enjoy the fruits of the labor of our fantastic Wisconsin winemakers. To learn more, visit www.wiswine.com

Senator Vinehout writes about the funding crisis facing rural schools across the state. Members of the Speaker’s Task Force on Rural Schools released two reports on the funding crisis in rural schools. Going to referendum to raise property taxes for a school district’s survival is unsustainable. Proposals to fix the state’s school funding formula target aid for the unique needs of rural schools and now we need a bi-partisan commitment to get the work done for the sake of our communities.

MADISON - “It is well recognized by many, including our legislators, that our equalized aid formula which uses property values as the ‘equalizing factor’…is broken,” testified Alma Superintendent Steve Sedlmayr during a Pepin public hearing.

Following hearings in Pepin and around the state, members of the Speaker’s Task Force on Rural Schools recently issued two reports: the first by majority members of the task force and the second released by Representative Fred Clark and minority members.

While many recommendations were similar, the two reports represent the split among legislators who, along with the Governor, will determine the future of funding public education in rural Wisconsin.

Representative Clark recently summarized the crisis facing rural schools: At our six public hearings around the state, testimony from rural school leaders was consistent and compelling. Inadequate funding adds to factors such as high transportation costs, high costs for technology, and the expenses of having sparse student populations. The bottom line is that many of our rural schools lack the resources to provide students with educational opportunities anywhere near those of our wealthier, suburban districts. One sign of the un-level playing field for rural schools is that of the 956 operating referendums (asking taxpayers for extra funding just to pay teachers and keep the lights on) that public school districts have placed on ballots since 1998, 73% have been for rural schools.

An increase in referendums is the direct result of choices made by legislators to not address the unfairness of state school funding. Instead addressing this unfairness, many lawmakers encourage school boards to go to voters and ask for an increase in property taxes.

For example, at a recent round table discussion sponsored by the Chippewa Falls School District, Representative Tom Larson said, “Referendums are tough for school boards, but a good way to let voters decide. It’s up to them to increase taxes.”

This thinking has justified deep cuts in state funding for education and an increase in referendums to raise property taxes just to keep rural schools alive. Before school boards mostly went to referendum for new construction; now they turn to referendums for their schools’ survival. This results in very unequal property tax bills.

Take the example of the Gilmanton school district which provides an outstanding education. High school juniors taking the ACT ranked in the top ten of all school districts in the state. Local people love their school. For the sake of their school’s survival, the community voted to increase property taxes by 45% according to a report by the Wisconsin Taxpayers Alliance.

But increasing property taxes to keep a school alive is not sustainable.

A Gilmanton resident told me, “We will never be able to do this again.” Local superintendents agree. “People simply can’t afford an increase in property taxes,” said one.

School boards have cut expenses to the bone and spent down “reserves” or savings accounts. With no place left to cut expenses, a community that won’t support a referendum and experiences dramatic declines in state support, are beginning to talk of the dreaded ‘C’ word: Closing.

Facing such a ‘do or die’ referendum, rural Oakfield Superintendent Sue Green recently told the Milwaukee Journal Sentinel, “We don’t want to be the first school district to be forced to close because of a failed referendum.”

The solution is to change the way the state pays for schools. Numerous proposals, including State Superintendent Tony Evers’ 2013-15 proposed budget, describe the details. But Governor Walker eliminated Evers’ proposal before sending his budget on to lawmakers. Republican leaders fought every effort to bring the proposal to a vote despite having funds available as the result of a recovering economy.

Paying for local schools shouldn’t be a partisan issue. Every rural legislator must agree the state needs to pay for high cost transportation and rural broadband.

Recommendations offered by both the majority and minority members of the Speaker’s Task Force on Rural Schools are a good first step. Lawmakers must stop the talk and walk the walk. Let’s see a bipartisan pledge to support Tony Evers’ proposal in the next budget.

The work is done, the crisis is clear. Now we need the votes.

Scott Walker's brand of government has always featured tax cuts offset by putting needed purchases on the credit card. This week Senator Vinehout writes about the unsustainable increase in state debt that results.

MADISON - “I was wondering how Wisconsin's state debt has been trending over the last several years,” Dave from Durand wrote me. “I'm also curious to know why there has been no talk of paying off the state's debt.”

The state’s debt is important. Before any other bill gets paid, or any other service delivered, the state must make payments on debt. When money goes to pay off bonds – the way the state incurs debt – that money is not available for roads, schools, health care or public safety.

Too much debt can lead to less money available for everyday operations – as more general revenue is used to pay off debt. Think of the credit card or mortgage payment taking up more of your take home pay.

Over the past twenty years the state’s debt has tripled.

In a paper I recently received from the Legislative Fiscal Bureau (LFB), the state’s total indebtedness went from $4.4 billion in 1996 to a projected $14.6 billion in 2015.

For comparison, in the fiscal year 2014-15, the state is projected to take in a total of $14.7 in tax revenue.

From 2007 through 2010, during recession years, total indebtedness increased by 23%. In 2011 through 2015, projections show an increase of a little less than ten percent.

Part of the reason debt grew at a slower rate in the past four years is that two funds- one to clean up petroleum spills and another to finance clean water projects- are winding down. These bonds will eventually be paid off, lowering the total indebtedness of the state.

But other types of debt are increasing – potentially at an unsustainable rate.

The two main types of bonds, General Obligation and Transportation Revenue, grew by 15% during the recession and 18% since 2011. One reason debt grew at such a high rate in the past 8 years? Both Governors Doyle and Walker restructured debt to avoid making a payment – using the cash saved to cover state operations. This led to extraordinarily high debt payments.

Perhaps the most serious financial problem going forward is that the state cannot support the current level of borrowing for transportation. Borrowing for roads and bridges was nearly $1 billion in the last state budget. Debt payments on this loan is projected to be 20% of all the money coming into the Transportation Fund by the first year of the next state budget according to another paper I recently received from LFB.

Some state officials imply the current problems with money for roads are because of borrowing from this fund for state operations ten years ago. This is utter nonsense.

For the last two state budgets, money was moved from the General Fund (85% of which goes to pay for schools and universities, health care, local government and public safety) to the Transportation Fund. Much of this money was “one time” meaning the gap between spending and revenue only got higher in the next budget.

Instead of cutting spending, the governor and legislative majority increased borrowing for transportation.

This is why interest on the transportation debt has jumped from 11% of the fund in 2009-10 to a projected 20% in 2015-16.

Too much debt can affect the state’s credit rating leading to increased interest costs on future bonds. States are rated based on risk by several bond-rating agencies.

When bond-rating agencies look at the credit worthiness of a state, they look at the state’s overall financial performance compared to other states. With the exception of Illinois, Wisconsin already has the lowest Moody’s bond rating of seven states in the Midwest.

In January, Moody’s mentioned Wisconsin’s “below average balance sheet position” and “sizable negative GAAP balances” in assigning a credit rating. Looking towards the future, Moody’s said, “The state's ability to make progress toward structural budget balance and improve its liquidity and fund balances will be important to future credit analysis.”

There is no free lunch in state budgeting. Spending too much and collecting too little in taxes leads to a budget imbalance and more borrowing.

Dave, you’re asking the right questions. We need to talk about the state debt.