Republican leaders have been increasingly vocal in their claims that the state Government Accountability Board is “partisan,” and Gov. Scott Walker recently succeeded in getting a bill passed that will undercut the GAB’s power. The irony is that it was Republicans who were most supportive of the board when it was created. So why have they changed their tune?
The GAB was created to replace the old state elections and ethics boards. These were paper tigers, toothless wonders that did little to prevent corruption in government. The classic example was the caucus scandal: Reporting by the Wisconsin State Journal showed the Democratic and Republican caucus staff members in the state legislature were political hacks who drew a salary to work on getting their bosses reelected – an obvious rip-off of the taxpayers.
The State Journal series merely proved – albeit with excellent reporting – what every Capitol insider already knew. Yet the state ethics board never did anything about the problem. The state elections board was no better: Its board was typically divided evenly between Democrats and Republicans, which resulted in a stand-off on most issues. Commentators like me loved to carp about how powerless the ethics and elections boards were.
But the caucus scandal so embarrassed legislators that they had to take action, and the result was the creation of the Government Accountability Board, which would take on the responsibilities of both the elections and ethics boards. Rather than stacking its board with party loyalists, the law called for a board made up of retired judges.
The judges were nominated by a committee of state appeals court judges who are chosen at random: State Supreme Court Chief Justice Shirley Abrahamson literally picked the nominating committee out of a hat. The nominating committee gave its list of nominees to then-Gov. Jim Doyle, and from that list he picked six judges, and his choices had to be confirmed by a two-thirds vote of the legislature.
If anything, Doyle’s choices seem to skew in the Republicans’ favor. Three of the judges (Gordon Myse, Michael Brennan and Thomas Cane) had no background in partisan politics. Three others did, and all had been Republicans: Thomas Barland and David Deininger were both former GOP members of the state Assembly, and Gerald Nichol was a former Republican Dane County district attorney.
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| GAB Executive Director Kevin Kennedy. |
Indeed, not one Republican legislator voted against Doyle’s choices. (Two Democrats voted no.) And until recently, Republicans have had no complaints. The GAB seemed to handle the recount of the Supreme Court election that David Prosser eventually won with dispassionate professionalism, and GAB executive director Kevin Kennedy was quite diplomatic in his comments on the boneheaded mistakes of Waukesha County Clerk Kathy Nickolaus, whose monumental error (leaving out the results in Brookfield) enraged many Democrats.
But suddenly some Republican legislators, led by their Senate Majority Leader Scott Fitzgerald, started making claims that the GAB was partisan. This was based on the fact that the board had approved Republican recall elections but not for the three Democrats. The objections to the Republican recalls, however, were based on technical stuff (were the right forms filled out?) that are much easier to review. The Democrats’ objections were more about substance: They claimed that those circulating recall petitions for the Republicans misled voters, for instance, by telling Native American voters they were signing a petition in favor of Indian rights.
Investigating this would have taken staff time and money, and the GAB requested this, but to date the legislature has not acted on the request. Instead you had the Republicans crying bias, aided only by conservative Marquette University law professor Rick Esenberg (who admits to a conflict as he is litigating a case involving the GAB, but is still quite free with his criticisms).
Those criticisms were enough to worry GAB board member Thomas Barland, who announced his concern about “appearances:” It isn’t enough for the GAB to be objective, it must look objective. And so the GAB backed off and decided to approve the Democratic recalls.
Meanwhile the Republican-led legislature approved a new law proposed by Walker, to allow the governor to rewrite administrative rules by state agencies, including those of the Government Accountability Board. The law strikes me as questionable (as Democrats pointed out, Republicans will regret the change when a Democrat gets elected governor) for any state agency, but all the more so for the GAB, which is supposed to be beyond partisan politics. Giving a governor from either party the ability to second guess its decisions could eventually turn the GAB into an echo of its powerless predecessors. That would be unfortunate at any time, but particularly now when partisanship has risen to a such vitriolic level, and the need for an objective referee is so paramount.
Another Foolish Tax Giveaway
Back in the 1970s, Democratic Gov. Patrick Lucey successfully pushed for an exemption in the machinery and equipment property taxes paid by Wisconsin manufacturers. It was a huge exemption, and as it was phased in, it left homeowners paying an ever larger part of all property taxes. Their share of all property taxes rose from 51 percent in 1970 to 71 percent by 2005, according to a study by the Legislative Fiscal Bureau.
This has been a key reason that business taxes have long been lower in Wisconsin. The most recent study by Ernst & Young found that Wisconsin’s state and local taxes as a share of the Gross State Product were lower than in 35 states and tied with five others. Just 15 states had lower taxes on business.
Of course, the business taxes are the lowest on manufacturing companies because of the M&E exemption passed in the 1970s. By the early 1990s, some legislators were questioning whether this bias makes sense in an age when every state is scrambling to build a new post-manufacturing economy.
Which brings us to last week’s plan announced by Republican lawmakers to gradually reduce — by 2016 — the state tax on the production earnings of manufacturers and agricultural businesses to zero. Yes, that’s a rather radical plan and problematic in several ways.
For starters, there is no evidence it’s needed, given the Ernst and Young study. Business taxes are already lower here. Not to mention that past studies have typically shown that relative tax levels are a marginal factor at best for businesses choosing where to locate.
Secondly, it puts lawmakers in the position of picking winners. Why a tax break for manufacturers and agricultural businesses and not for any other kind of business? At a time when the state is so concerned about attracting high-tech start-ups, why spend so highly on Wisconsin’s traditional economy? And why lower taxes on the sector of the economy – manufacturing – that already gets the best deal?
Thirdly, even if some reduction was needed (and there’s little evidence for this), this plan is needlessly complicated and simply adds to a “Swiss cheese” of a tax system, as Wisconsin Taxpayers Alliance president Todd Berry complained. Berry suggested that most corporate tax managers would prefer a simple reduction in the corporate tax rate.
Of course, the proposal was hailed by James Buchen, head of lobbying for the Wisconsin Manufacturers and Commerce. His comments tend to make the whole thing look like a crudely targeted payoff for a group that supported Walker for governor.
The Buzz
-Waukesha Mayor Jeff Scrima’s proposal to have a referendum to approve or reject the idea of buying water from Lake Michigan probably puts him on the side of average folks in the city and in opposition to nearly the entire leadership community of Waukesha. This is turning into a bizarre soap opera that could continue right through his four-year term.
-The Democratic Party will no longer cooperate with the Journal Sentinel’s PolitiFact, claiming it is politically biased. Pressroom Buzz reports.
-And the Sports Nut considers just how much the Brewers will miss Prince Fielder.
