Archive for 2010

Walker Team Reflects Geographic Mix

MacIver News Service | December 30, 2010

Drawing individuals from communities across Wisconsin from West Salem to Superior to Green Bay to Racine, Governor-Elect Walker broke the typical Madison-Milwaukee base in selecting his incoming cabinet.

“I am excited that these top notch individuals have agreed to serve the State of Wisconsin as members of my cabinet,” said Walker. “This diverse group will join me in public service to help reshape government so that our state can efficiently provide the basic level of core government services taxpayers expect and deserve.”

Mike Huebsch, former Assembly Speaker from West Salem, will serve as the Secretary of Administration.

“I’m looking forward to working with Governor?elect Walker and the fantastic cabinet he has chosen. The individuals he has appointed understand the challenge we have before us and are ready to get Wisconsin working again,” said Huebsch.

Paul Jadin, Green Bay Chamber of Commerce President and former Green Bay Mayor, will helm the soon to be revamped Department of Commerce.  Walker plans on replacing the department with the Wisconsin Economic Development Corporation (WEDC).  Under Walker’s plan WEDC would review the DOC’s current duties and responsibilities and either reassign them to other agencies or eliminate them.  If the legislature approves Walker’s plan, Jadin will become the WEDC’s “Chief Executive Officer.”

Dave Ross, Mayor of Superior, will join the cabinet as the Secretary of the Department of Regulation and Licensing.

Ben Brancel, from Marquette County, will be the Secretary of the Department of Agriculture, Trade and Consumer Protection.  He held this same office under Governor Tommy Thompson.  Brancel is a fifth-generation farmer and a former Assembly Speaker.

“I’m excited to have the opportunity to once again serve the Department of Agriculture, Trade and Consumer Protection community and work alongside Governor-elect Walker to grow Wisconsin’s economy,” said Brancel.

Cathy Stepp, from Racine County, will be the Secretary of the Department of Natural Resources.  Stepp has served on the Natural Resources Board, the State Senator for the 21st District, and as Co-Chair of the Environmental and Natural Resources Committee.

Walker also named two individuals from out of state.  Dennis Smith will be the new Secretary of the Department of Health Services.  He comes from Virginia and currently works at the Heritage Foundation.  He served as the head of the U.S. Centers for Medicare & Medicaid Services during the Bush Administration.

Wyman Wynston will be the new Executive Director of WHEDA.  He previously was a manager of the agency.  Wynston comes most recently from Atlanta, where he serves as a senior commercial TAD manager in the Atlanta Development Authority.

Of course, Milwaukee and Madison aren’t completely out of the picture in Walker’s incoming cabinet.

Mark Gottlieb, former Port Washington mayor, will be the Secretary of Transportation.  The Secretary of the Department of Financial Institutions will be Peter Bildsten, from Madison.  Gary Hamblin, former Dane County Sheriff, will be the Secretary of the Department of Corrections.  Eloise Anderson, incoming Secretary of the Department of Children and Families, has worked in California, Madison and Milwaukee.

Walker also named Rick Chandler as Secretary of the Department of Revenue, Stephanie Klett as Secretary of Tourism, and Manuel “Manny” Perez as Secretary of Workforce Development.

Readers’ Choice: Top News Stories of 2010

MacIver News Service

Earlier, we posted our top video exclusives for 2010. For our print retrospective, we let you make the selections.

What follows are our top ten MacIver News Service written reports of the year, including some exclusives, based on overall web traffic. As you can see, most of the stories are more recent, reflecting a growing readership for MNS, upon which we will build in 2011.

Click on each headline to access the full story.

10.  Twin Lakes Street Rehab Makes List of 100 Worst Stimulus Projects 


9. Lame Duck Session on Contract Approval Would Be Second Ever in State History, First in 36 Years 

 

8. Milwaukee’s Rank as 4th Poorest City in Nation Comes Amidst Concerns Over City’s Schools, Public Safety

 

7. Facts About ‘Green Job’ Creation Elusive as the Wind


6. Walker Asks Doyle to Stop New Hiring, Projects

 

5. Wisconsin Supreme Court Affirms Property Rights, Rebukes Governor Doyle


4. Walker Not Shying Away from Showdown with Government Unions

 

3. Wisconsin Borrows $1.4 Billion from Feds for Unemployment Funds

 

2. MacIver Institute Posts Legislators’ Financial Disclosures Online
     

 

1. MacIver Institute Obtains Government Union Contract Documents, Posts Them Online

Debating Doyle’s Legacy

Governor Jim Doyle leaves office next week never having lost an election, but perhaps his legacy will be best defined by a recent interview regarding his successor, Milwaukee County Executive Scott Walker. Doyle, commenting on the failure of the proposed high-speed rail line between Milwaukee and Madison, said, “With all due respect, there is a big difference between making a political statement and making a choice.”

Wisc. Governor Jim Doyle (D)

Doyle spent much of his time as governor not living up to the political statements he made. From big issues to small issues, he disappointed and frustrated friend and foe alike. The Doyle motto seemed to be what Rush Limbaugh once described as the strategy of the Clinton White House years, “How do we fool them today?”

Taxes

Perhaps no other issue defines the governor’s political statements’ relationship to his actual policies than taxes. In his 2003 State of the State address, Doyle said, “Going forward, my mind will be open to every solution except one. We should not, we must not, and I will not raise taxes.”

Shortly after that speech, Doyle proposed to raise the nursing home bed tax from $32 per month per licensed bed to $116 per month per licensed bed to generate $13.8 million for the state’s general fund. More importantly, he vetoed the legislature’s attempt to freeze local property taxes, despite estimates taxes would go up 5.9%.

Since that inauspicious start, Doyle has increased taxes just about everywhere and on everything. From taxes on iPod downloads to the taxes on garbage, it would be difficult to find a tax that Doyle did not want to increase.

In the last state budget, Doyle raised taxes $2 billion and allowed local property taxes to go up an additional $1.5 billion. The previous state budget raised taxes and fees $763 million, and the “fix”to that budget raised taxes again $1.2 billion.

To Doyle’s credit, he did sign the bill that ended the automatic increases in the state’s gas tax.  Two years later Doyle said repeatedly in interviews that he thought ending the automatic tax increase was a mistake.

Balancing the budget

When Governor Jim Doyle was elected in 2002, he campaigned on tackling a $3.2 billion structural budget deficit.  He continued that theme in his 2003 State of the State address, the same speech where he promised not to raise taxes.

“But here in Madison, we face a crisis — a budgetary deficit that imperils state government — one so severe it will, if we do not address it, imperil our people too.”

A structural deficit is when the amount of money needed to maintain current services exceeds the anticipated revenue. As Doyle leaves office, the structural deficit is $3.3 billion.

When Doyle campaigned in 2002, as part of the effort to bring the state’s structural deficit under control Doyle planned to eliminate 15,000 state employees. Wisconsin under Doyle has actually added 2,116 employees since Doyle took office.

In the same speech where Doyle promised not to raise taxes and stressed the dangers of the budget deficit, Doyle also said the problem, “…is not that we tax too little. It is that we spend too much.” In 2003, Wisconsin spent $18.3 billion. By 2010, it is estimated Wisconsin will spend $25.6 billion. Wisconsin’s last budget increased spending by $3.6 billion. Included in the 2009-2010 state budget is $2 billion of federal stimulus funds spent on existing state programs.

The next state legislature will also have to figure out a way to pay back $200 million to the Wisconsin Injured Patients and Families Compensation Fund, fund raids to fuel state spending that have been ruled illegal by the State Supreme Court.

The raids on the Compensation fund were part of a pattern of raids on segregated funds, including over $1.3 billion from the state’s transportation fund. The state then borrows to fill the gaps in those funds, something it cannot do for the state’s general fund. The 2009-2011 budget authorizes $1.3 billion in borrowing for the transportation fund. As a result of all this borrowing, only 88 cents of every dollar collected for transportation actually goes to spending on transportation needs.

In 2009 the Pew Center on the States listed Wisconsin as one of the ten worst states in fiscal peril. “Wisconsin’s history of budget shortfalls and pattern of borrowing frequently to cover operating expenses, among other measures, made it poorly positioned to weather the most recent severe economic downturn.”

Education

Under Doyle, Wisconsin ceased to be known as an innovator in education. Governor Jim Doyle often touted his success at keeping school funding high in Wisconsin, as he did again recently on Up Front with Mike Gousha.  However, the governor does not have an education record to brag about.

In his 2003 State of the State address, Doyle said, “We owe all of Wisconsin’s children — no matter where they come from — a great education.”

Like his other public statements, his actions spoke louder than his words.

In the 2003-2004 legislative session, Doyle used his veto power twice to keep enrollment caps in place on the Milwaukee Parental Choice Program (MPCP). Doyle relented only when school choice supporters in Milwaukee raised the pressure by organizing in the African American community in 2006 just as the state was creating a rationing plan. Even then, Doyle imposed new restrictions on choice schools and only raised the enrollment cap to 22,500 students.

Doyle again acted in the interests of the teachers unions and against education reform when he threatened to veto a bi-partisan compromise that would have allowed the state’s public charter online schools continue to operate after a lawsuit by the state’s largest union threatened to shut them down. At the last minute, Doyle demanded an enrollment cap be put in place while the online schools were studied.

The enrollment cap on online school enrollment continues, and last year 1,756 students were placed on a waiting list administered by the Department of Public Instruction.

Doyle’s insistence on maintaining the enrollment caps on online charter schools was contrary to his public commitment to seek federal “Race to the Top” education funding. Perhaps that is why Doyle falsely stated on Wisconsin’s application that there were no limits on enrollment in the state’s charter schools.

“Race to the Top” was meant to reward those states that demonstrated significant education reforms. At stake was a share of $4 billion in new federal education money.  States were invited to competitively apply for the funding, and funding would be awarded to those states that demonstrated the biggest commitment education reform. President Barack Obama, with Doyle at his side, announced the program in Madison in 2009.

Despite the public commitment by Doyle, Wisconsin failed twice in its application because it failed to make the serious reforms necessary to be competitive with other states.

The most significant reform proposal pushed by Doyle was to place control of the Milwaukee Public School system in the hands of Milwaukee Mayor Tom Barrett.

However, neither of them could articulate a vision of how that would improve the school system and failed to convince the majority Democrats in the legislature to go along with the proposal.

Meanwhile, the state’s application was faulted for failing to create mechanisms that would have held teachers accountable for the education of students in the classroom. The few reforms that did pass the legislature had the support of the teachers unions, demonstrating that they were not serious reforms.

At the local level, Doyle removed the Qualified Economic Offer that set an amount teachers could expect as an annual increase. As long as a school district offered that amount, the district and the teachers unions would avoid going to arbitration. Without the QEO in place, local property taxpayers run the risk of the districts losing in binding in arbitration and escalating property taxes. Meanwhile, escalating teacher salaries could place in jeopardy school districts’ ability to provide for other costs related to their students’educations.

Other Issues

Legislators on both sides of the aisle learned that Doyle’s rhetoric did not match his governing record on other issues, too.

As attorney general, Doyle criticized changing the appointment process of the Department of Natural Resources Secretary. Doyle supported keeping the appointment being made by the members of the DNR board. However, when he became governor, Doyle changed his position to keeping the appointment power for the governor.

Before Doyle let his new position become fully known by the general public, the executive director of the Wisconsin Wildlife Federation George Meyer told the Milwaukee Journal Sentinel, “I really don’t believe he would go back on his word.”

 Doyle vetoed the legislation when it finally came to his desk last year.

As attorney general, Doyle supported legislative oversight of agreements between the states and Native American tribes operating off-reservation casinos. As governor, Doyle vetoed legislation that would have provided for such oversight.

Doyle opposed legislation that would allow citizens to directly petition for referendums to reduce the size of county boards. When the bill made it Doyle’s desk, Doyle signed it.

When Doyle was a candidate for governor in 2002, he criticized his opponent Dane County Executive Kathleen Falk for releasing early some “non-violent” prisoners. When faced with a budget crunch as governor, Doyle included in his last budget the early release of some “non-violent”prisoners.

This kind of cynicism in governing is harmful to the body politic in that it leads the public, special interests and legislators to believe that everything is open for a deal. Unfortunately with Doyle, they may have been right.

So when the major newspapers that endorsed Scott Walker for governor called on him to reverse his position on high-speed rail, who could blame them? Look at whom they have been dealing with for the last eight years.

By James Wigderson
Special Guest Perspective for the MacIver Institute

Top Ten MacIver News Video Exclusives for 2010

2010 was a busy year for the MacIver News Service as a whole and their investigative reporter in particular. While we covered a wide variety of topics, including the development and eventual derailment of the Madison to Milwaukee train project, the recent controversy surrounding the state labor contracts and the ongoing fiscal problems with the state budget–this year-end retrospective covers the work we did on video and focuses on stories that were MNS exclusives. 

Joe Biden Plugs Free Markets…and Sweeping, New Government Intervention

Vice President Joe Biden and Treasury Secretary Timothy Geithner came to UWM in April to make a case for financial sector reform. The MacIver News Service was very interested in attending this event, but the organizers weren’t so interested in returning our phone calls. So we showed up anyway. Biden’

s press people welcomed us into the event, giving us credentials on the spot. During the event, our cameras caught an interesting pitch from the vice president as he argued for a free market economy, while Geithner and Congresswoman Gwen Moore argued for taking over failing banks.

 

 

Wisconsin Pushing Forward with ObamaCare Implementation

The Doyle Administration was so excited about ObamaCare, it started planning for a state insurance exchange right away, even though the law didn’t require them until 2014. The University of Wisconsin held a symposium at the Capitol to talk about some of the issues that would come up in setting up the exchanges. The MacIver News Service stumped a national expert when we asked why Wisconsin should set up the exchanges now, when the federal government has not yet given any guidance on what it expects from the exchanges.

 

 

Milwaukee Teachers Now Aware of Budget Mess at MPS

For weeks the MPS Board of Directors had been talking about laying off 700 educators, including 500 teachers. However, only a handful of educators ever showed up to the meetings to defend their jobs. Then when the layoff notices went out, less than 200 people participated in a protest in front of the administration building, and only a fraction of them were the ones actually getting laid off. The MacIver News Service asks some of those who did come out for the protest why they never attended any of the budget meetings and why so few of their fellow teachers were at the rally with them.

 

 

WEAC Pockets Stimulus Cash

While combing through records of stimulus spending in Wisconsin, the MacIver News Service noticed the New Holstein School District used its stimulus funds to pay $416,219.32 to WEA Trust for health insurance and another $237, 861.68 to utility companies. Guidance from the Federal Government stated stimulus money could not be used for these types of expenses. It turns out there was a loophole, but our investigation got WEAC pretty upset. They sent out notices to their members about us, claiming we weren’t really reporters. Here’s out news story about it.

 

 

DNR Publishes, Distributes Global Warming Textbook

Sometimes the best stories are hidden in plain view. That was the case with the DNR’s Global Warming Textbook, which anyone can download right off the DNR’s website. The book is distributed to schools around the state, and Representative Jim Ott says it appears to be an indoctrination tool for the global warming lobby.

 

Did Wisconsin Lie on Race to the Top Application?

It stinks when you lose, but it’s even worse when you cheat and still lose. That’s what happened to Wisconsin in its quest for a Race to the Top education grant. The state claimed there are no enrollment caps for charter schools, but the state’s statutes claim something different.

About those Green Jobs…

Wisconsin’s global warming bill wanted 25 percent of the state’s electricity to come from renewable sources by 2025. Right now, utilities are required to bump up its renewable energy percentage to 10 percent by 2015, and even that is proving difficult. The fact is Wisconsin doesn’t have much potential for wind energy, so the companies are outsourcing electricity production to states that do. Howard County, Iowa is benefiting from that Wisconsin policy in jobs, rent money, and property taxes.

MPS Has 17 Painters on Staff at $98k/year

There are days when MPS seems like an onion, and every layer you peel away reveals new and startling facts. During the budget debate this spring, we learned the district employs dozens of full time tradesmen. The board was talking about laying off 17 of its painters. When we learned what those painters made, a lot of people in the community could understand why they were on the chopping block.

Lawmaker Removed from Committee Prior to Controversial Vote

The MacIver News Service followed the state’s controversial global warming bill very closely, which meant we attended a lot of committee meetings that otherwise would have been ignored. It led to some interesting discoveries. Right before an assembly committee was about to vote on the bill, it was revealed that a key democrat was removed from the committee. We were there to chronicle that discovery and quickly learned about the closed-door politics that led to the decision.

Average MPS Compensation Tops $100k

Other than the headline itself, this story tops our list for another extraordinary reason. We were in a room packed with Milwaukee reporters when this announcement was made, and somehow we got the exclusive on it. Why? Your guess is as good as ours.

 

 

Gov.-Elect Walker Proposes Regulatory Reforms

MacIver News Service

[Madison, Wisc...] Governor-elect Scott Walker wants to curb state agencies from promulgating rules that exceed the intent of the enabling legislation passed by members of the legislature.

Walker says the rules and regulations created and enforced by state agencies often go far beyond specific language outlined in state statutes, and serve to complicate Wisconsin’s regulatory climate.  The incoming Governor says he is troubled by the notion that unelected government officials, on occasion, try to assume the same power held by elected officials in the legislature.

“For too long the over regulation of business has stifled job growth within our state and repelled job creators from others,” Walker said Tuesday when outlining some of his proposed changes to Wisconsin’s rulemaking process. ” The common sense reforms contained in our proposal will take the power of regulating away from unelected bureaucrats and put it back where it belongs—in the hands of the people.  I believe the Legislature should exclusively have the power to create laws.”

Walker is proposing legislation would prevent agencies from creating rules more restrictive than those passed by the legislature, although rules to be challenged in circuit courts where the plaintiff resides, and require the governor to approve proposed agency rules.

“This is about empowering people through their elected officials.  If anything it is taking power away from the unelected bureaucracy,” Walker said.

The former Republican lawmaker from Wauwatosa summarized  a three-prong approach to regulatory reform. Under Walker’s plan:

  • An agency may not create rules more restrictive than the regulatory standards or thresholds provided by the Legislature
  • Individuals who challenge rules will have their plea heard in the county circuit court where the plaintiff resides, as opposed to Dane County as current law directs
  • In addition to the tradtional Legislative oversight, the Governor will also have to approve proposed rules promulgated by state agencies

The Governor-elect announced that additional regulatory reforms will be included in the final version of the special session legislation

Democrats accuse Walker of making a power grab.

“This scheme politicizes the implementation of laws by inserting the governor directly into the rules process and creates another layer of bureaucracy,” said Senator Mark Miller (D-Monona).

Miller continued by questioning whether certain agencies can legally be held accountable by other branches of the state government.

“There are also serious constitutional concerns about whether another independently elected constitutional officer like the Superintendent of Public Instruction can be required to seek the approval of the Governor before carrying out their duties,” Miller said.

Walker argues his ability to veto proposed rules should be no different than his ability to veto legislation as part of checks and balances.

Walker will be sworn in as governor on January 3rd.  He has announced plans to immediately declare a state of economic emergency and call a Special Session of the legislature to address Wisconsin’s economic climate and job creation.  His proposal for regulatory reform will be one of the items included in the Special Session call.

Students’ Reviews, Testing Are the Key to Grading Teachers

When it comes to grading teachers, the best metrics may have been right under our noses all along.

A recent study from the Gates Foundation shows that the best indicators of teacher performance in the classroom come from the students; both from their performance on value-added testing as well as from the feedback of students themselves.

Students know when they’re being taught effectively, the Gates Foundation concluded in their preliminary findings. Student perceptions in the classroom often reflected the abilities of their teachers and created a solid backbone for teacher analysis in America’s schools.

More importantly, the influence of student achievement from year to year and the performance of these students in value-added examinations stood out as an important pillar of teacher grading. Additionally, teachers with histories of student achievement tended to extend that success into their own evaluations.

These results were bolstered by student performances in the classroom –the teachers that graded out better often did so on the strength of how their pupils achieved on statewide testing. In fact, the performance of past classes also had a strong relationship with how effective a teacher would be with their current group of students.

The discovery regarding student test results is particularly relevant for this state’s classrooms. For years Wisconsin students have been subjected to a subpar state testing mechanism that fails to accurately measure achievement and growth in schools. The Wisconsin Knowledge and Concepts Examination (WKCE) is woefully ineffective when it comes to measuring student performance beyond the broadest levels. Its inferior status has been the subject of criticism for years, and State Superintendent Tony Evers has dedicated resources to replacing the faulty test by 2012.

The preliminary findings from the Gates Foundation study emphasize how important this new testing mechanism will be. The new test will have to comprehensively measure student achievement in a manner that not only is comparable from district to district, but across the country as well. This would give Wisconsinites a strong base for comparing both student and teacher performance in a measurable way from Madison to Hudson and across the country as well.

Most teacher evaluation in Wisconsin comes from principal observation in the classroom and grading based on a small window of first-hand experience. This is a process that requires large time commitments, is often done only on a yearly basis or worse, cannot be translated between districts, and isn’t entirely effective even when it works.

Educators and school boards across the state balked when the idea of tying teacher evaluation to statewide testing was brought up to adhere to Race to the Top standards. Local districts eventually relented under the condition that no administrative actions could be taken based on evaluations derived from tying student performance to teachers. As a result, any connections between student and teacher would be purely observational and unable to be tied to teacher performance in any way.

While this was a moderate concern with the WKCE, it would be a major missed opportunity if the new and improved state rubric – in line with Common Core of Data standards –played no role in teacher evaluations. What the Gates study finds is that these value-added assessments provide an efficient and accurate way to gauge teacher performance. Combined with elements such as student feedback and historical achievements and results, Wisconsin can create a program that effectively measures just how good its teachers really are.

The state is still several steps away – the WKCE must be completely rebuilt and teachers have to band together and accept a valid method for tying student performance to their own effectiveness –but the blueprint has been laid out. As a new comprehensive testing program comes into place to more accurately measure student performance, its scope should expand beyond producing results for just students.

The Gates Foundation has shown the foundation for managing realistic teacher evaluations begins with the students. The onus is now on Wisconsin to build on that foundation. The re-imagining of the WKCE is a step in the right direction. However, if the reformed test can’t be tied to teacher performance, then the state will have missed an enormous opportunity to better understand what is happening in its own classrooms.

By Christian D’Andrea
MacIver Institute Education Policy Analyst

PSC Hits Consumers with Grinchian Rate Hikes

‘Twas the week before Christmas and all through the state, it’s time for a visit from the PSC, to jack up your water rate.

The jolly bureaucrats at the Public Service Commission may be adverse to coal, but they are leaving something worse in your stocking this December,  a nice new, larger, water bill—especially if you get your water from Milwaukee.

The PSC approved a 20.8 percent overall increase in annual revenues for the Milwaukee Water Works. This is a 23.1 percent rate increase for retail customers and a 7.9 percent increase for wholesale customers.

To be contemporary, Parker Brothers is going to have to raise the price of the Water Works utility in their Monopoly game, that’s for sure.

Milwaukeeans in single-family homes will see their average water bill jump from $145 to $182 annually. Commercial consumers can expect a 23 percent increase and industrial customers can expect a 26.5 percent increase.

Most of Milwaukee’s suburban water customers were adversely affected by the rate increases as well. Mequon will see a 32.6 percent increase in their rates and New Berlin will see a 25 percent increase.

On the other hand, Butler won the lottery and will actually see a 21.3 percent decrease in their rates.

Milwaukee Water Works officials pointed to a slightly negative rate of return last year by the utility, -.69 percent, the result of increased costs of the chemicals used for water treatment and less demand for water.

The city of Milwaukee also took $3 million of “surplus earnings” last year from the Water Utility and put it in the city’s general fund for 2010. This was part of a plan to increase rates overall to generate revenue for the city of Milwaukee that was not property based.

The city of Milwaukee’s Budget Summary for 2010 said, “In 2009, the Water Works received Common Council approval to pursue a two part plan to increase Water Works revenue. This plan will stabilize the utility finances, preserve enough positive cash flow to transfer $3 million of surplus earnings to the city General Fund, while keeping water rates highly competitive.”

However, after the $3 million was taken for the 2010 budget and the intended rate increases were announced, Milwaukee’s suburban customers balked. The issue even became an issue in the 2010 race for governor when Milwaukee County Executive Scott Walker questioned whether the sudden proposed jump in rates would be detrimental to employers such as Cintas that were heavily affected by water rate increases.

Milwaukee originally requested in September 2009 a 28.5 percent in water revenue. An audit by the staff of the PSC reduced the request to 25.3 percent. PSC commissioners expressed concern about such a dramatic increase in the rates in a poor economy and settled on the 20.8 percent overall increase in annual revenues. The Milwaukee Water Works will collect $19 million more in revenue.

Milwaukee is not planning on any revenue from the water utility for the city’s general fund in 2011. However, if the city of Milwaukee’s budget takes another hit, such as a need to increase funding for the city’s pension liability, will the city be tempted to go to the well again for more “surplus earnings?”

The other question is whether this is just the beginning of spiraling rate increases. Milwaukee has drained the cash reserves of the Water Works. The Water Works has double the capacity it needs, and therefore has more to maintain. Will the new revenue stream be enough, and could the higher rates actually mean a decrease in water sales?

The PSC’s decision came in the same week that the Joint Finance Committee approved the PSC’s plan to dramatically increase the assessment on energy utilities to pay for more energy conservation projects. The assessment will jump from $94 million to $256 million in just four years.

The legislature rejected a plan earlier in the year to create a renewable energy mandate because the mandate would have increased energy rates for consumers. Dubbed the “Clean Energy Jobs Act,” the PSC endorsed-plan would have raised energy rates between 6.4 percent and 12.5 percent.

Unable to force an increase in the cost of energy through the legislature, the PSC pushed a new energy assessment through the backdoor as a regulatory measure.

These large increases in the cost of energy and water are coming at a bad time for the economy. A new poverty report indicates 18 percent of Milwaukee County residents are living in poverty. November employment figures show 4800 fewer private sector jobs in Wisconsin.

Unfortunately, because of the staggered six-year terms commissioners serve, legislators will have to contend with a liberal majority on the PSC for some time yet. The legislature will need to find out who’s naughty and nice as they watch the PSC puruse policies that run counter to Governor-elect Scott Walker’s pro-growth agenda.

Because, left unchecked, the naughty little elves at the PSC intend on soaking Wisconsinites.

Bah. Humbug.

By James Wigderson
Special Guest Perspective for the MacIver Institute

State Forecast $700 million Off Previous Estimates

MacIver News Service | December 20, 2010  

[Madison, Wisc...] In their final quarterly projections before leaving office, the Doyle Administration now predicts the state will begin the new year with nearly $700 million less than they forecast just three months ago.

Further, the Doyle Administration’s new forecast warns that at some point during the month of January, the state’s General Fund may be more than $427 million in the red.

The Department of Administration released the forecast, and information regarding the fund balance transfers in  memos to the Joint Committee on Finance Co-Chairs Senator Mark Miller Representative Mark Pocan.

The new quarterly forecast just released by DOA shows the General Fund with a beginning balance in January of -$376,5 million, a difference of $695.3 million appearing only three months after their last forecast. In September, the state’s quarterly forecast indicated Wisconsin’s General Fund would begin the year with a positive balance of $318.8 million. 

In the September memo to the Department to the Finance co-Chairs, DOA Secretary Dan Schooff projected the state’s General Fund would face a deficit as vast as $386.3 million during the month of December, which was up from the previously forecast deficit of $261.6 million in December, which was issued in August .

However, all previous correspondence between DOA and members of the Joint Committee on Finance had predicted that when overall cashflow was considered, the state would begin 2011 with a positive balance in the General Fund.

MacIver News will update this story, and provide reaction, as it develops.

MPS Audit Reveals Careless Financial Management

By Christian D’Andrea-MacIver Institute Education Policy Analyst

Not only are Milwaukee’s Public Schools running their operating budgets into steep deficits, but they’re also fraught with high-risk accounting problems, according to recent MPS audits.

The district recently commissioned a series of examinations of the daily transactions in some of Milwaukee’s schools. These reports found disturbing trends within the halls of some of the city’s largest institutions. All but three of the 26 schools observed in 2010 audits had at least seven high-risk non-compliance problems in their schools, suggesting that safeguard measures had been routinely ignored and in some instances, school resources had been mismanaged.

Sixteen of these non-compliant institutions had operating debts in 2009-2010 that ranged from $5,175 up to $751,422. As a whole, their over-budgeting cost taxpayers over $2.68 million in additional costs, tempered only by 10 schools who were able to post surpluses over the same period. However, not all the news was bad in Milwaukee. Schools like Longfellow and South Division created a combined surplus of nearly $200,000 thanks to careful spending in their institutions. The entire breakdown can be found in Figure 1 below.

These issues ranged from the documentation of employee payroll and overtime pay to the care and responsibility for valuable assets in the classroom to teacher funds for student activities and events. Schools often were irresponsible with their spending as well as the management of everyday items needed in their classrooms. Expensive items such as computers, televisions, and security equipment were often poorly documented across schools, leading to problems when it came to their regulation and management. 

Without the proper documentation, these assets were not properly tracked and controlled. As a result, classroom tools like laptops and other costly items were at a greater risk of turning up missing or being the target of thefts. When these items disappeared from their schools, it was often the district that ended up paying for their replacement.

Overtime was another problem for schools. Overtime errors were found in schools such as Keefe Avenue, Dover Street, and Hamilton during the 2010 audit sessions. Infractions ranged from principals failing to sign off on approved payroll overages and allowing teachers to call their own overtime schedules without clearance to nearly 100 hours of working time paid for by the district but not documented by school staff.

In many schools, principals across Milwaukee were not familiar with MPS’s overtime pay procedures or they simply chose to ignore these procedures. For example, the procedure for approving overtime at Dover Street school had become so effortless and unscrutinized that the school’s principal merely rubber-stamped his approval of payroll documentation rather than undertake the careful review that MPS standards require (his stamp has since been removed).

This was better than instances in other schools where administrators weren’t even that dedicated. Custer High School was cited for failing to review their overtime staffing reports at all. Bradley Tech High School was cited for incomplete documentation of their staff overtime scheduling and payroll as well. Both lapses allowed for teachers to rack up big overtime costs in situations where overtime staffing may not have been needed or even worked.

Custer and Bradley Tech combined for 27 high-risk non-compliances against the backdrop of MPS regulations in 2009-2010. In this same period, these two schools were responsible for nearly $1 million in budgeting deficits, burning through funding at an alarming rate. These schools have proven to be inefficiently run financially, and the problems don’t stop there. 

Unfortunately, they aren’t the only examples of mismanagement in MPS. Double-digit violations of high-risk procedures are the norm in Milwaukee schools. Running at a school-wide deficit has become almost equally regular. While advocates will lobby for greater funding in these schools, it may be a lost cause if the money going in can’t be properly managed.

Milwaukee’s public schools are facing examinations to measure their efficiency when it comes to spending – and they are failing. This inability of schools to operate within their budgets is unacceptable – and some of these problems may stem from how financial procedures are currently handled. Correcting the issues brought to light by these audits is just one small step in figuring out the district’s budgeting quagmire. Until this web of irresponsibility can be untangled, the schools, districts, and the students will suffer for it.

Fig 1: Audited Milwaukee schools, their total high risk non-compliances, and their operating costs.

 

 

Firings Rare in State Service MacIver Analysis Finds

MacIver News Service | December 15, 2010

[Madison, Wisc…] Just how much job security comes with a state job in Wisconsin? Plenty, according to an analysis of discharge and layoff termination data from the state’s central payroll system, conducted by the MacIver News Service.

This year, only 90 permanent state employees out of a pool of approximately 36,000 lost their jobs. Cumulatively in the last five years, only 419 permanent employees were discharged from the 29 different state agencies which utilize the Department of Administration’s central payroll, which includes more than half of the state’s 69,000+ public employees.

“For me one of the last options I want to consider is having any more people in the state not employed,” said Walker. ” So it’s a much better option to be able to consider wage and benefit reforms or other things that would help balance the budget without having people laid off.”

Layoffs are rare in state service.  A review of DOA payroll data shows that this year, as Wisconsin’s private sector employees struggled in the continuing recession, only 31 state employees were laid off.

DOA’s central payroll does not include the University of Wisconsin System, Courts or the State Legislature which use separate payroll system.

The findings underscore the importance of reaching labor agreements with state employee unions, since state employee numbers are rarely trimmed, Walker argued Tuesday in an impromptu press conference outside his temporary offices across the street from the State Capitol in Madison.

“Clearly, for the taxpayers it’s important that we have all options available to us,” Walker said in one last effort to convince lawmakers not to approve the agreements Tuesday night. “This is not about whether we think people are doing a good job.”

Walker addressed reporters as lawmakers in both houses waited on definitive final action on collective bargaining agreements with 16 of the 19 government employee unions.

Raw Video of Walker Press Conference


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