And Walker (Still) Plans No-Bid Sales of Power Plants, the $7.5 million worth of damages to the Capitol building becomes $347,000 (maybe), and the expanding politicization of the civil service.
From Wisconsin State Journal:
Gov. Scott Walker’s plans to balance the state budget by cutting spending and public workers’ take-home pay will slow the state’s economic recovery, according to projections by a UW-Madison economist.
An estimated 21,843 jobs will be lost over the next year or two as public agencies and workers are able to spend less in their communities, said Steven Deller, a professor of applied economics who studied the ripple effects of Walker’s budget-repair bill and two-year budget proposal.
“That’s not just a bump in the road,” Deller said. “That’s a speed bump.”
Deller’s analysis didn’t calculate whether job losses would result if the $3.6 billion budget shortfall were fixed with tax increases or a combination of spending cuts and tax increases. Deller said he’s had many requests to analyze the job-loss effect of tax increases but has declined since there is no concrete proposal on the table.
His projections are based on the budget repair law, which requires the compensation cuts, and Walker’s proposed two-year budget, which cuts spending in areas such as medical care for the poor and elderly, local governments, schools and prisons. The budget repair bill was adopted but is on hold pending a court challenge.
In response to Deller’s job loss projections, Werwie said, “We are going to continue to pursue policies that will ensure our state has the business environment that allows the private sector to create 250,000 new jobs over the next four years.” [emphasis added — mdc]
I have elsewhere observed that the plan’s emphasis on providing tax cuts and then using spending cuts to balance the budget (including offsetting the deficit-increasing tax cuts) is a maximally contractionary approach to macroeconomic policy, viewed from a Keynesian perspective. Cutting spending on poor and elderly (while giving tax cuts to corporations and on average higher income individuals)  is going to reduce spending by those with the highest marginal propensity to consume, and increase spending by households by those with smaller marginal propensities to consume. To the extent that elements of the Governor’s plans involve reductions in transfers from the Federal government , well, the math is obvious (to those who can do math correctly ).
On the other hand, if capital is sufficiently mobile, and/or the sensitivity of investment to the user cost of capital is sufficiently high (or real wages/compensation can be driven downward sufficiently), it is conceivable that demand side contractionary effects can be offset by expansionary supply side effects. For more on this, see .
No-bid Contracts and Transparency
From Wisconsin State Journal:
Though it was removed from the budget repair bill, Gov. Scott Walker’s plan to privatize Wisconsin’s state-owned power plants remains alive.
“We’re still looking at a range of options regarding the power plants moving forward,” said Cullen Werwie, Walker’s press secretary.
It is a mystery to me why there is such an insistence on no-bid contracts. It’s almost like a point of principle.
State Rep. Brett Hulsey, D-Madison, said he hopes Walker decides to introduce the power plant proposal as legislation so that it can be discussed in committees. Democrats in the Assembly tried to remove the proposal from the budget repair bill and also proposed several amendments, including restoring the bid process, but all those efforts were voted down by Republicans.
Estimates of Damage to the Capitol building
Remember those alarming reports of damage caused by protesters to the Wisconsin Capitol building, on the order of millions of dollars? Rush Limbaugh weighed in, as did The American Spectator. Not much is heard about that multi-million figure anymore. From The Isthmus:
On March 3, the agency’s top lawyer claimed that protesters caused $7.5 million in damage to the Capitol, mostly to marble from the tape holding on signs and banners. Hastings notes that this claim was “flashed across the country” before being revised downward the next day to as little as $347,000.
On Monday, March 7, after the signs were all removed, DOA spokeswoman Carla Vigue said the agency was bringing in an “outside expert [to] determine the amount and nature of the work that will be needed to be done to bring the marble to its prior condition.” On March 9, she said “it may be several days” before this information is in hand.
Now, well more than several days later, no further information has been provided. “Still working on it,” said Vigue on Tuesday.
Jacob Arndt has a pretty good idea how much damage to the marble was actually caused: None at all.
Arndt owns Northwestern Masonry and Stone, a Lake Mills-based company that he says “does consultation work and has contracts with the state of Wisconsin.” He toured the Capitol early this month with a DOA staffer, inspecting the various types of stone: Kasota-Mankato, Wausau red granite, Dakota red granite, verde jade.
“I looked at each of these types of stones,” says Arndt. His conclusion: The painter’s tape used to affix signs left “little or no residue” anywhere. The worst problem he saw was some residue where media had taped cords to the floor, but even this was easily removed with simple cleaning agents.
“There’s no damage to the stone,” says Arndt, who has been back in the building several times since, verifying this finding. He says the DOA official who showed him around agrees even the lower cost estimate is “completely ridiculous and politically inspired.”
Other Aspects of the “Budget Repair Bill”
From the Wisconsin State Journal:
Gov. Scott Walker will be able to name political appointees to fill three dozen civil-service jobs that handle open records requests from the public under the budget-repair law he signed last week.
The changes affecting 15 state agencies and offices are among the provisions of the law that drew less attention over the past month because of the epic fight over its provisions stripping public employee unions of most of their bargaining power.
Walker’s separate 2011-’13 budget proposal would also make a political appointment out of another key civil service job – the top lawyer spot at the agency overseeing state labor law.
Jay Heck, executive director of the Wisconsin affiliate of the liberal group Common Cause, said the change to political appointments didn’t save the state any money and shouldn’t have been included in the budget-repair bill. The measure continued a process – begun under previous Republican and Democratic governors – to exert political influence over more public jobs, said Heck, whose group advocates for taxpayer funding of political campaigns and openness in government.
By the way, the “budget repair bill”, sans several tax items, has not yet been printed up (a requirement for the provisions to go into effect) due to a temporary restraining order, due the procedural issues (i.e., violation of the state’s open meetings laws). [Wisconsin State Journal]. Note that Judge Sumi, who issued the temporary restraining order, was appointed by then Republican governor Tommy Thompson.