Econoic Development | MacIver Institute

Waukesha Water Wars
Regional Cooperation a 2-way Street

It’s the $116,000,000 question. Where will the city of Waukesha get water from, and what does it mean for regional cooperation?

Waukesha was once known for the healing properties of its spring water, earning the city the nickname, “Spring City.” Now the city is under a compliance order from the Environmental Protection Agency to reduce the amount of radium in the drinking water. Apparently the healthy glow of Waukesha residents owes more to Madame Curie than to the extra minerals.

The radium is the result of using well water from a deep aquifer that is rapidly becoming depleted. A layer of shale prevents surface water from replenishing the aquifer. As the aquifer diminishes, the radium count increases.

Waukesha has two choices, and neither one of them are fun.

The first choice is to acquire land to the west and dig more shallow wells. This is costly, $145-$176 million, and will again directly affect water surface features in the surrounding area. Communities to the west will surely protest the loss of water pressure in residential wells and the damage to lakes and rivers. Already environmentalists and residents of the Town of Waukesha are unhappy over plans to annex land near the Vernon Marsh area for development and shallow wells.

The other choice is to get water from Lake Michigan. Under the Great Lakes Compact, communities in counties that straddle the Great Lakes Basin can petition to be granted permission to tap Lake Michigan water. This is not an easy process.

Under the Great Lakes Compact, each state in the Great Lakes region has the power to veto any applications for water. The community getting the water has to arrange for the water’s complete return, with allowance for use. Finally, the community has to find a seller.

In Waukesha’s case, they are considering water from three communities: Milwaukee, Oak Creek, and Racine. Milwaukee is the “cheapest” option so far. To build as pipeline to get the water from Milwaukee and to accomplish the return flow is estimated at $116 million, much less expensive than developing wells to the west.

Nothing in life is ever that easy. During Milwaukee’s debate over whether to sell water to western New Berlin, Milwaukee aldermen demanded more than the price of water. They wanted New Berlin’s cooperation with light rail and other regional transportation projects. They wanted New Berlin to agree to allow more affordable housing. In the end those demands were dropped, and New Berlin agreed to pay $650,000 a year and a one-time fee of $1.5 million.

Now it’s Waukesha’s turn, and the issue has already injected itself into the race for mayor. Waukesha’s current mayor Larry Nelson likes regional cooperation of the Milwaukee kind. He supports regional cooperation on transportation and is open to joining a Regional Transit Authority.

His opponents are of varying degrees of opposition. Former Milwaukee Journal Sentinel reporter Darryl Enriquez supports the idea of getting water from Lake Michigan, but only if there are no policy strings attached. He wants to be open to negotiating with Oak Creek and Racine to keep Milwaukee from dictating terms. Former police officer Bill Beglinger and real estate developer Jeff Scrima go even further, suggesting Waukesha should store water in quarries and develop wells to the west rather than take the risk of Milwaukee dictating the city’s housing and transportation policies, even though such water plans were dismissed as unworkable and too expensive.

On the other side, there’s pressure in Milwaukee to not sell any water to Waukesha. Local environmental writer Jim Rowen is typical of the opposition to selling Waukesha water. Rowen’s objection is to any expansion of Waukesha, believing growth in Southeastern Wisconsin is a zero-sum game. If Waukesha grows, it must be to the detriment of Milwaukee. Regional cooperation gives way to regional competition, and Rowen wants to play cut-throat with Waukesha’s water needs.

However, the growth to which Rowen objects is the natural, modest growth Waukesha has already been seeing projected over the time of the negotiations to get Waukesha approval for water, build the pipeline and arrange for the return flow of the water to Lake Michigan.

Growth of part of the region should be to the benefit of all. If Waukesha grows, that’s more people working in Milwaukee and buying goods and services there. Milwaukee would benefit and, if they adopt the right policies, grow, too.

But if Milwaukee listens to anti-Waukesha voices like Rowen, Milwaukee will miss an opportunity to generate revenue from the water sale and demonstrate to its neighbors it really believes in regional cooperation.

By James Wigderson
A Special Perspective for the MacIver Institute

Tags: Econoic Development, Environment, Wigderson
Posted in mi perspectives | February 9, 2010 | | 7 Comments

“Gal Gate” Fallout on the Economy

Controversy Likely to Put the Screws to Business Community

As the Assembly Speaker deals with the fall out from revelations he has ‘dated’ a registered lobbyist for the payday lending industry (or as he said ’a gal’) look for Wisconsin businesses and our economy to bear the burden of any of his alleged personal indiscretions.

That some of the more liberal members of the Assembly caucus have been concerned with Sheridan’s tepid support for many of the anti-business planks of their agenda is well known in and around the Capitol. In fact, the much-reported lengthy caucus which took place last week centered on more than just Sheridan’s perceived reluctance to advance new regulations on the payday loan industry and included the airing of grievances on multiple issues.

The tawdriness of a possible affair between the Speaker and a registered lobbyist who may have influenced his position on efforts to regulate her industry is not the point of this column. Rather, there now exists a real potential for the Assembly to take a sudden, and sweeping, shift from the left to the far left in the waning days of the spring floor period.

There are two scenarios as to how the next few days/weeks will play out, and neither one is good for Wisconsin’s business community.

Scenario one has Mike Sheridan maintaining his position as Assembly Speaker. Maintaining his hold on power, however, would require him to appease the more liberal members of his caucus.

Scenario two has Sheridan being ousted by those same liberal members, who would be empowered to show that such a change delivered more results than the shuffling of offices in the Capitol.

Either way, look for the State Assembly to appease their labor union base during this turmoil and take up and pass three key pieces of legislation whose fates had otherwise been uncertain prior to “Gal Gate.”

Wage Lien - Establish the priority of a wage lien over the pre-existing lien of commercial lenders. This would remove the current $3,000 cap in the state’s wage claim lien law (already the most generous in the nation). This would make it impossible for a lender to calculate how much of a business’ collateral can be pledged against a line of credit or other loan. This severely hampers businesses’ access to credit at a time when we need businesses to expand and provide more jobs.
Minimum Wage - Increase the state minimum wage from $6.50 per hour to $7.60 per hour and indexes the rate as of June 1, 2009. In addition, the bill repeals the state preemption of local living wage ordinances in Wisconsin. Making it more expensive to create entry level jobs will prolong Wisconsin’s participation in the current economic crisis.
Mental Health Parity - Require all group health plans to provide mental health and substance abuse disorder benefits at the same level as benefits for physical conditions. This would make it more expensive to employ any and every person, if the employer provides medical health benefits. Employers will either stop providing the benefits, or employ fewer people as they absorb this new cost.

All three of these bills have passed the State Senate and are awaiting action by the State Assembly. Out of necessity, if not out of conviction, look for the Assembly Democratic leadership to now move on these in the near future.

This week, Bill Lueders, editor of Madison’s liberal weekly Isthmus bemoaned the lack of action, specifically on the minimum wage bill.

“But here in Wisconsin, the Dems have only themselves to blame. One full year of Democratic rule has produced almost nothing in the way of substantive change. That’s because the claim that Democrats have fundamentally different allegiances than Republicans is bogus.

“Take the minimum wage bill. Wisconsin’s rate rose last July from $6.50 to $7.25 to match the federal minimum, so SB-1 and AB-41, if passed, would deliver a mere 35-cent-per-hour bump, along with the automatic adjustments. But even this is apparently too much for the Dems.

“I asked to discuss this issue with Assembly Speaker Sheridan, who we now know is dating a lobbyist for the payday loan industry even as he works to weaken legislation to regulate it. He didn’t call back. I tried talking to the Assembly bill’s lead sponsor, Rep. Cory Mason, over a period of seven weeks. He blew me off too.”

Lueders and the left are seizing on Sheridan’s vulnerability in an attempt to force action in the waning days of the session.

“What Mike Sheridan and other Assembly Dems need to do is bring AB-41 to a vote. Let everyone see which Democrats take a stand against a 35-cent-per-hour hike in the minimum wage. Otherwise, the public is right to consider the entire party complicit in this betrayal and throw them all out.”

So the gauntlet has been thrown, and not just by Lueders.

As the labor union advocate and writer Roger Bybee notes, the left, particularly the labor movement, had great expectations for Sheridan:

“In 2009, popular hopes had been raised as a progressive new group of Democratic legislators moved into power at the Capitol. Elected as assembly speaker was Mike Sheridan, former president of the big UAW Local 95 at Janesville, a placid town of 62,000. Sheridan has been regarded as bright, articulate and strongly committed to labor and working people.”

But Bybee uses “Gal Gate” to express his displeasure in the Speaker’s reluctance to advocate for his union brethren

“While Mike Sheridan is highly regarded by progressives in the United Auto Workers, his recent statements suggested that the Democrats are practicing business as usual under the State Capitol dome. “Shanna [Wycoff] is a friend of mine and I have a lot of friends that are in the lobby corps,” he said, adding, “I mean, I think that part of my job is relationship building.

“It would be utterly unfair and premature to cast stones at Sheridan, who after all, does support imposing a cap on payday loans. He certainly does not fall in the Max Baucus category of Democrats who have thoroughly sold out and serve only to taint the Democratic label. However, having a relationship with a lobbyist from an industry that feeds directly on the desperate straits facing working families and the poor is hardly a way to build trust.”

Ouch. Bybee concludes by notifying Democrats that they need to kiss up to their labor union base, and quick.

“Unless the Democrats—from the White House on down—recognize that the Great Recession is still plaguing tens of millions of working families, they will not be viewed fondly in November in places like Janesville.”

Sense a theme? There is blood in the water, folks.

Regardless of what did or did not happen in Mike Sheridan’s personal life and without regard to the political fortunes of the beleaguered Speaker of the Wisconsin State Assembly, look for Wisconsin’s business community, and by extension the state’s economy, to suffer additional blows before the Legislature adjourns this spring.

Be they by Sheridan or would-be Speakers like Donna Seidel or whomever, I believe these three bills will soon be ushered through the Assembly.

That one politician’s ‘dating’ habits could have such a sweeping impact on Wisconsin’s economy should serve as exhibit one for why government should not wield so much power over the private marketplace.

By Brian Fraley
A MacIver Institute Perspective