There has been so much that has happened within the last year that you deserve to know what is going on with your local government.  Walker's $1.8 billion fiasco needs to be dragged out into the light of day and I don't have any faith that the Journal-Sentinel will do their job unless the 2000 people I'm e-mailing this to already know about it.  Feel free to forward it on to others and if you want more background on these issues, click on the links in this email.

 

Jim McGuigan

NOTE:  This page was last updated in 2004

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In this issue:

• Why Walker's new borrow and "invest" plan went down in flames
• A self-glorifying Walker lies to GE Medical and GE Medical snubs the exec
• Lack of a fiscal note in "Truth in Sentencing" cost of $1.8 million but where was the Milwaukee Journal Sentinel when it was happening?  Click on this link to read my 1998 forecast of this mornings headline.
• Balancing budgets without tax increases require cuts -- what happened in this last budget
• Sales tax scheme costs to come due in 2008 -- after the gubernatorial election
• What has been done to solve the pension problem
• Save 49% on your energy bill with new windows

 

Why Walker's new borrow and "invest" plan went down in flames

When the stock market crash that started the Great Depression happened back in the 20's many peoples lives were ruined.  Many people had borrowed money to invest and when the banks "went bust" and the loans were called, the money wasn't there.  Similarly, what Walker wants to do is borrow money through a complex scheme to invest and hope the return is greater than the costs of the loan.  Costs of the loan include fees for the financial company (click on this link for more) and the interest rate the county would have to pay.  Sources tell me the county would have to make between 4% and 6% just to break even.   If the investment wouldn't make at least the minimum break even point the county would have to backfill the loss with your tax dollars.   The majority of Supervisors did the wise thing by rejecting the scheme.  Only Rice, Cesarz, DeBruin and Schmitt lacked the courage to stand up to the County exec.  The first two have been on the board for less than a full term.  Schmitt was worried about voting against Walker since he almost faced a recall for his vote on the pension plan.  But most troubling was DeBruin's vote.  Of all the Supervisors, DeBruin was the only one to be on Finance, Personnel and the pension study committee at the time of the pension vote so her unwillingness to stand up to Walker on this issue is based on self-preservation. 

 

A self-glorifying Walker lies to GE Medical and GE Medical snubs the exec

Last spring GE Medical announced its plans to expand its business on the county grounds.   GE, the State of Wisconsin and the City of Wauwatosa had worked hard to pull together the deal and they wanted to make a big splash by announcing the deal at a special press conference on the county grounds. 

 

They had kept the announcement hush-hush to assure maximum press exposure.

 The day before GE's press conference, Wauwatosa Mayor Teri Estness, a large number of Wauwatosa Alderman and County Executive Scott Walker were all invited to the announcement with their sworn promise to keep the announcement secret.  Only Walker contacted the media to tell them the reason for the press conference and Walker used the opportunity to take credit for GE choosing to expand there.   Livid at being lied to, GE executives invited Estness to speak and when it was Walker's turn to take the podium, GE Vice-President Joe Hogan simply closed the program. 

 

Lack of a fiscal note in "Truth in Sentencing" legislation cost taxpayers $1.8 billion but where was the Milwaukee Journal Sentinel when it was happening?

In 1998, a young Republican Assembly Rep from Wauwatosa managed to get "Truth in Sentencing" legislation rammed through the State Assembly despite democrats complaints that it didn't have a fiscal note and no one knew the final costs.  That representative was Scott Walker who chaired the Assembly corrections committee.  Click on the link above to read my 1998 article forewarning of the problem that the Journal-Sentinel first today thought was important enough to publish.  I'm amazed it took the JS six years to write this story.  Now let's see if they cover the political genesis of the plan.  If they do cover it they will surely go after Governor Doyle who was the Attorney General at the time.  Doyle advocated for "truth in sentencing" but as the top cop for the State at the time it's no shock that his primary focus was law enforcement.  It was Walker who, as a legislator, actually had a vote and should have proposed a plan on how to pay for this costly policy.  Instead, he just got the legislation pushed through without a fiscal note (a legislative estimate of costs associated with the policy). 

 

There's no small irony that $1.8 billion later, Walker still calls himself a fiscal conservative.

 

Balancing budgets without tax increases requires cuts and what happened in this last budget

The way that the media covers county government has always been to cover what the County Exec does and only then do they  cover the county board.  When the board stands up to the exec they do seem to get decent coverage.  Walker knows this and he knew that if he didn't make the cuts in order to achieve his no-tax campaign pledge that he would have to increase revenues.  He didn't make the cuts. The problem was that the revenues he included was funny money in his "borrow and invest" plan.  The board has a 4 year term ahead of them but is aware of Walker's fantasy of being elected Governor in 2006 so he won't have to clean up the mess should Walker's investment scheme not work out -- they will.  After Walker's intended exit to higher office, they'll be the ones that will have to raise taxes to pay for the loss on the investment.  Half of the board is old Supervisors who voted for the pension plan and they knew how relentless and brutal talk radio squawkers like Charlie "the adulterer" Sykes were on them during the pension debacle.  There was no way they were going to vote for a budget that they knew was highly likely to blow up prior to their next election.

 

Sales tax scheme costs to come due in 2008 -- two years after the gubernatorial election

Last year County Exec Walker rammed through a budget scheme that allowed him to shift the 1/2% County sales tax from paying for the debt on capital infrastructure to the operating budget.  The problem is that the debt from the Countys capital infrastructure continues to grow since it's not being paid down.  At this rate, if nothing is done to fix the problem, the county will be facing a massive fiscal crisis by 2008.  Why isn't the Milwaukee Journal-Sentinel writing anything about this?  Will it take them 6 years to cover this story also? 

 

What has been done to solve the pension problem?

Nothing.  It's a great political issue for talk radio and Walker, but last year Walker actually UNDERFUNDED the pension plan by another $5 million.   If the stock market really takes off the pension fund will do well and the pension problem will evaporate, but that's a fairly risky strategy as pension obligations increase as employees retire.  With more and more county employees being laid off, many are just opting for retirement.  As time goes on, our life expectancy continues to increase and employees draw off of the pension plan for a longer period of time because of it.  You do the math.