Monday, December 17, 2007

WMC is giving the state nuggies

Paul Soglin calls WMC a "bully" because ... well, it's not clear why. He is unhappy because they talk about Wisconsin being a state with very high taxes. Can Paul prove this is not the case? No. We are a high tax state.

But WMC apparently should not say so because when you take all sources of revenue into account, we doesn't rank as high. The reason is said to be that we have lower user fees and get less federal money, but any way you crunch the numbers, Wisconsin's spending is above average.

I also suspect that WMC might hold Paul and administer and atomic wedgie while arguing that taxes are not the same as user fees in their economic impact.

The impetus for Mayor Soglin's most recent missive is the release of the Institute for Legal Reform's study on liability law in the 50 states. In 2006, Wisconsin was ranked 23rd. In 2007, it moved up to tenth. WMC apparently put out a press release last year, but not this year. That's shocking. An advocacy group acting like persons who advocate.

(Actually, WMC appears to have linked to the 2007 study on its website almost three months ago, but whatever.)

Paul doesn't like the study because it surveys, well, people like me. People who have represented national companies on liability matters. He writes "{i]t is not a cross section of the public, it is not even attorneys who represent ordinary people. All 1,599 attorneys are corporate attorneys representing the interests of a narrow element of our society." (This would be the one that creates jobs.)

It's certainly true that if we surveyed a group of plaintiff's lawyers, we'd get a different result. (Ordinary citizens would not, I think, have much of an opinion.) But the point of the survey - and WMC's use of it - is to focus on how the state is viewed by business and on how that might affect job growth and the overall economic climate. Surveying people who deal with this stuff on a daily basis does not seem like an unreasonable thing to do.

But doesn't the survey say that we improved? I guess, although I can't imagine why. Nothing really happened that would have warranted a dramatic change one way or the other. Maybe other states got worse. Maybe a different sample saw things differently.

We can argue about what this means but I am not sympathetic to Paul's implication that WMC is to be criticized for being critical of the business climate in the state as if too much candor will drive others away. If the business climate needs to be improved, it does. I can see no virtue in pretending otherwise.


Anonymous said...

WMC has consistently lobbied to allow big business to avoid paying their fair share of taxes here in this state, shifting the burden onto the everyday taxpayers. 20 years ago, businesses and homeowners split the tax burden in this state almost 50/50. Now, thanks to the efforts of groups like WMC, average Wisconsin homeowners are now responsible for more than 70% of the overall tax revenue.

Yet the drum beat of a state "bad for business" drones on and on from the corporate-fed spin-doctors at WMC.

Seth Zlotocha said...

but any way you crunch the numbers, Wisconsin's spending is above average.

Actually, the way the LFB crunched them this past January had WI 0.1 percent below the national average in state and local government spending per capita.

But, putting that aside, I think Soglin's point is that WMC's focus on taxes alone -- ignoring the need for public investment as a business strategy -- is a problem, not that it focuses on taxes at all. In other words, it's how WMC defines "business climate" that Soglin criticizes; at no point does Soglin pretend that the state's business climate doesn't need to be improved. (Although, admittedly, these points are made more clear in Soglin's subsequent post, as opposed to the one you cite.)

Just as an aside, one of the better blog posts I've seen on the issue of balancing taxes and public investment in terms of business development is this one, which was written by the folks at the Public Policy Forum in the context of the Miller-Coors merger.

Anonymous said...

Y'know, taxes are just terrible in New York City.

Get ready to buy lots of vacant land on Wall Street at a real bargain.

(I'm happy to chip in to get WMC hq to move there.)

Anonymous said...

Exactly what would it take for WMC to believe Wisconsin has a good business climate? Exactly what would it take for WEAC to believe that there is enough money in public education? These answers are the same. The goal is unattainable.

Wisconsin is a great state. We have a lot to offer. Much of that is funded by taxes. Yet with the all the cries of "too high taxes" there have been ZERO proposals to truly do anything about it. It's not about the taxes, it's about the spending, and nearly every body likes what we're spending the money on.

WMC should be promoting our good (yes, good) schools, beautiful parks, great roads, hard-working middle class life style.

I have several friends who recently moved back to Wisconsin from other states. I asked them why. They said for the schools. I said "but our property taxes are so high." And they said "yes, but in [the state I came from] the schools were so bad that everyone who could sent their kids to private schools." They're not complaining about our schools or our taxes. They know what it's like in other states.

I'm no great fan of Tommy Thompson, but he never bashed this state--not once. And he was the most popular governor in the state's history.

Rick Esenberg said...


I seem to recall that we went back and forth on those LFB numbers and whether they were distorted by this category of uility expenditures. Most people who move to Wisconsin (or from Wisconsin) notice a rather significant difference in their tax burden. You can try to manipulate numbers to convince people that their experience is wrong but they are unlikely to believe you.

Certainly the appropriate level of taxation is not zero. We should have roads and education and we do, but those things are not unique to our state. To argue that, at this point, we have a tax burden problem and to advocate that we restrain the growth of state and local government is hardly the equivalent of destroying our infrastructure.


Not as clever as you think, but if you have a plan to turn Milwaukee into Manhattan through higer taxes, I'm all ears.

Seth Zlotocha said...

My concern is that your post slights Soglin's position by suggesting that he's attacking WMC for addressing WI's business climate. That's just not the case. The point Soglin and others make is that WMC's "tax hell" rhetoric is counter-productive in that it doesn't leave any room for discussions of adequately balancing reasonable tax levels with needed public investment.

To give a more specific example, one that Soglin even notes in his post, WMC has been silent on the issue of developing UWM's research capacities in the Milwaukee area even though other prominent business groups and individuals -- even those with positions on the WMC board -- have spoken out in favor of that development as a necessary piece of the economic development pie in SE Wisconsin. Why the silence? I think -- and I imagine Soglin agrees -- it's b/c such advocacy would conflict with WMC's no-holds-barred attack on tax levels.

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