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Economic Focus
LFB: $143 Million Deficit
On Thursday, the Legislative Fiscal Bureau released a downward revision of its revenue estimates, showing an expected shortfall of $143 million at the end of the two-year budget period.
Due to the lingering effects of the poor economy, revenue estimates are expected to come in $273 million less than previously thought.
The $143 million is about $71 million below the “trigger” for a budget adjustment, which is 0.5% of the general fund. The Department of Administration and state agencies are expected to be able to fill the shortfall through debt refinancing and other moves.
Unfortunately, tight budgets are nothing new for Wisconsin. In the past, Madison has dealt with its budget as a rolling disaster: always doing just barely enough to hold it together and let the next guy worry about it. We stopped that this year. Instead of band-aids, bailouts, gimmicks and tax hikes, we fixed a $3 billion deficit and focused on the private sector, just like we promised we would.
Sen. Darling noted that 29 states have an estimated $31.9 billion in combined budget gaps for fiscal 2013, according to the NCSL.
Wisconsin is not immune to the bad economy, we’re simply responding to it better. Instead of tax hikes that shift the burden away from the government and onto the taxpayers, and instead of playing political games that make the business climate worse, Republicans in Madison will continue to keep the focus on growing jobs, not the government.
This week, Democrats have been happy to over-exaggerate the importance of one newspaper’s over-exaggeration of our state’s redistricting process.
The Milwaukee Journal Sentinel decided to sensationalize the use of legal nondisclosure agreements early in the legislative process on redistricting, with several high-profile stories over the course of the week.
As you know, in Wisconsin, redistricting is required every ten years based on population changes. Our state’s process is to pass a bill through the legislature. As such, the redistricting maps were subject to the same requirements of transparency and openness as any other bill. All of those requirements were fully met.
However, Democrats and other groups had already decided before the census data was even received to file a lawsuit over the constitutionality of the maps themselves. With that lawsuit in mind, and knowing that the maps would eventually be the subject of additional lawsuits, members were asked to limit their public comments on the maps to save themselves the unnecessary hassle of turning up in depositions and finding themselves in the middle of those lawsuits.
In legislative rules define partisan caucuses as any meeting convened “by 2 or more members of a political party to discuss business related to the organization or agenda of that party … or to discuss any matter pending in or proposed for introduction in the legislature.” Therefore, discussions about redistricting between members are considered a legislative caucus, which are specifically exempted from the open meetings law.
In the past, attorney-client privilege would be extended to discussions on redistricting, but in this year’s case, a judge pierced that privilege by court order, leading to last week’s news articles.
The maps passed through the process exactly as required, and that redistricting is required by our state constitution every ten years. The maps have the presumption of validity, despite the politically-motivated over-reactions based on sensationalistic exaggerations from the press.
Bank Settlement brings $140 Million to Wisconsin
On Thursday, the Department of Justice and Gov. Walker announced a historic, multi-state settlement to a lawsuit over bad housing practices by six major banks. In short, the banks agreed to a nationwide settlement of $25 billion, divided up among a number of programs for affected homeowners and direct payment to states. Wisconsin’s portion of the settlement – contingent upon final approval – will take the following forms:
Ø $60 million in new bank-funded programs aimed at improving affected communities, including high-foreclosure and blighted areas;
Ø $31.3 million for refinancing programs for affected homeowners;
Ø $17.2 million in direct reimbursements of homeowners covered by the lawsuit; and
Ø $31.6 million to the attorney general for discretionary purposes
Around the Country
USA Today: Wash. is likely the next state to allow gay marriage In South Carolina, Governor Nikki Haley says she wants to eliminate the corporate income tax and flatten the state's six income tax brackets down to three.
Interesting Read of the Week
For nearly a decade it turns out, the most accurate forecasts have come from the fringe. So it’s upsetting to learn that many of those same Cassandras now believe, for different reasons though, we are on the brink of another catastrophe that may be far worse:
Ø Steve Hanke, an economist at Johns Hopkins, says there’s a 50% chance of a recession this year
Ø Lakshman Achuthan, of the eerily accurate Economic Cycle Research Institute, predicts a return of double-digit unemployment
Ø Hanke and Achuthan are downright rosy compared to George Soros, who has warned of violent riots throughout the world and a possible total global financial collapse.
Let’s hope all these guys are wrong.
Forestry Update
February 15 - The Wisconsin Council on Forestry will meet at 9 a.m. in Room 415 NW of the State Capitol, Madison, to discuss council priorities for 2012, the biomass harvest guideline review process, and other items.
Natural Resources Update
Report looks at impacts of silica sand mining in Wisconsin
The rapid expansion of sand mining in Wisconsin has generated much interest from members of the public, reporters, local government officials, state legislators and others.
In response, the Department of Natural Resources has prepared a detailed report that summarizes the best current information on silica sand mining; its possible environmental impacts; and local, state and federal regulations that address sand mining and processing.
A key reason for the expansion of sand mining in Wisconsin is the quality of our sand for hydraulic fracturing gas and oil wells elsewhere. It is the best for “hydrofracking.”
There are no oil or gas wells located in Wisconsin, nor are there any plans for such wells, so the DNR report does not address issues surrounding hydrofracking.
The report will be updated periodically as any significant new information becomes available. The report is available on the Nonmetallic Mining in Wisconsin page of the DNR website.