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Wednesday, June 29, 2011

Walker's Budget Rewards His Top Campaign Donors

Road builders, voucher advocates and the wealthy get big perks

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It's inevitable that a state budget includes perks for campaign allies.

Inevitable, but not ideal.

But this year's biennial budget, a Republican creation signed by Gov. Scott Walker with about 50 vetoes on Sunday afternoon, includes a shocking number of perks for donors at the same time the governor has declared that the state is broke and cannot afford to fully fund education, BadgerCare and other programs that benefit the average Wisconsinite.

“If the state were swimming in cash, you'd think, 'Well, this is just what politicians do,'” said Wisconsin Democracy Campaign Executive Director Mike McCabe. “But we're repeatedly being told that the state is broke and has historic budget problems.”

The power of corporations is easily seen in the state budget, which includes $2.3 billion in corporate tax breaks over the next 10 years, McCabe said.

“They got everything they wanted,” McCabe said.

Generally, only 1% of the electorate donates to political campaigns. McCabe said in Wisconsin that elite 1% is typically white, wealthy and from the toniest suburbs ringing Milwaukee and Madison. Their interests are represented throughout the budget document.

Although much has been made of the political influence of labor unions on Democrats, McCabe said that contributions from businesses dwarf them. For every dollar a union donates to a candidate, McCabe said, corporations spend $12 on their preferred candidates. And while big business interests heavily favor Republicans, they also provide $4 to Democrats for every $1 from unions.

Rewarding Contributors

So how did Republicans reward the individuals and organizations that donated more than $11 million to Walker's gubernatorial campaign?

  • Corporations in general got a big boost in the new budget. Walker and his Republican allies have offered them tax breaks for adding jobs, moving to Wisconsin and, quite frankly, simply for existing. Walker and Republican legislators have even gone so far as to relax child labor laws.
  • At $1.3 million, Walker's top campaign contributors are employed in the manufacturing and distributing sector. Not surprisingly, the state budget includes a number of tax breaks for manufacturers—on top of the plentiful tax breaks they've enjoyed for years. Most shocking was a new tax break for manufacturers that was introduced in the Joint Finance Committee at 11 p.m. on Friday, June 3, with no public debate. When completely phased in, manufacturers will benefit from a new $129 million tax break per year, even if they aren't adding any new jobs. Wisconsin Manufacturers & Commerce Vice President Jim Buchen called this late-night giveaway the “icing on the cake.”
  • While it's difficult to get details on just who, exactly, qualifies as donors in the catch-all “retired/homemakers/non-income earners” category, it's fairly safe to say that these “non-income earners” have lots of unearned income. These retired and unemployed individuals contributed $1,240,888 to Walker's campaign, and comprised his second-strongest supporters.

The Republican budget handsomely rewards Wisconsin's wealthy, providing them, for example, with lower capital gains tax rates on Wisconsin investments. In 2011-2012, the state estimates this perk will reduce tax revenues by $16.1 million. By 2016, when it's fully phased in, the state will lose more than $100 million annually, according to an estimate by the nonpartisan Legislative Fiscal Bureau. Yet Republicans have offered no compelling evidence that allowing wealthy investors to pay less tax on their profits will create any additional jobs in the state.

Walker's budget also passes up an opportunity to ask the wealthy to pay their fair share during this time of economic stress. Instead of raising the income tax rate on the top wage earners or increasing the corporate tax rate to bring it up to the national average, as advocated in the alternative Wisconsin Values Budget, Walker and the Republicans are balancing the budget on the backs of the state's low-wage earners. They're raising $41 million by changing the Earned Income Tax Credit, slashing $500 million from Medicaid programs, and cutting $1.6 billion from public education.

  • Road builders—who contributed $166,007 to Walker's campaign, but whose influence on Republicans can be far greater than this relatively small sum through independent expenditures—were big winners. Not only did Walker increase funding for state roads, bump up the planned timeline for huge freeway projects in southeastern Wisconsin and decrease funding for mass transit, but Walker also proposed a historic shift in how roads and mass transit would be funded. Not surprisingly, that change would have ensured full funding for his road-building friends in the future while making local bus systems very vulnerable.

Thankfully, the JFC deleted Walker's historic pandering to his allies. But, for good measure, state Rep. Robin Vos (R-Burlington), co-chair of the JFC, added an amendment to kill off regional transit authorities around the state, thus ensuring that Wisconsinites will be dependent on cars and roads—and deep-pocketed road builders—for the next generation.

  • Tucked into the details of the budget was a plan to make it easier for nonprofit, member-owned credit unions to convert into for-profit, shareholder-owned banks. Credit unions, of course, viewed this provision as a way for a handful of profit-minded bankers to kill off their competition. Banking and finance sector employees contributed $958,414 to Walker's campaign, his fourth-highest contributor.
  • No pay-for-play budget would be complete without an appearance by the voucher school backers, who have gifted their allies at the state and local level with millions of direct and indirect campaign contributions over the years. According to an analysis by the Wisconsin Democracy Campaign, voucher supporters—including the Betsy DeVos- and Scott Jensen-led American Federation for Children and Metropolitan Milwaukee Association of Commerce (MMAC)—spent more than $3 million in 2009 and 2010 to help elect Walker and Republican legislators. That number far dwarfs the $1 million that voucher opponents—primarily the teachers' union—spent trying to get their allies elected. The payoff? Walker cut K-12 public education by $1.6 billion while expanding vouchers beyond the city of Milwaukee, paving the way for vouchers to spread across the state, eliminating the enrollment cap on Milwaukee voucher schools and all virtual schools, and increasing the income limit for participating families.
  • MillerCoors executives donated $25,000 to Walker's campaign and $65,000 overall, and were rewarded with a budget amendment that would boost their viability while harming small, craft brewers—the kind of small, craft brewers that make Wisconsin great but aren't politically connected.



Targeting the Enemy

But Walker's budget doesn't merely reward Republican donors. McCabe was shocked by “the length to which they are going to punish their political enemies.” Traditional Democratic allies such as public employee unions and Planned Parenthood are taking big hits—historic hits—in the Republican-backed budget and collective bargaining bill. The punishment goes beyond defunding these entities to almost destroying their ability to operate and, in turn, be active in politics.

To no one's surprise, the unions busted in Walker's controversial collective bargaining bill just happened to be the same unions that traditionally support Democrats. Walker managed to preserve the rights of unions that back Republicans—police and firefighters—even though these employees represent the biggest portion of local governments' salary expenses.

While Walker didn't single out Planned Parenthood for special treatment, the Joint Finance Committee certainly did. Co-chaired by a former Planned Parenthood board member, state Sen. Alberta Darling (R-River Hills), the Darling-led JFC voted to strip Planned Parenthood of state funding, even though the organization does not use public money for abortion services. The JFC also made additional cuts to family planning programs.

Why was Planned Parenthood targeted? Possibly because it spent $62,021 on independent expenditures in support of Walker's gubernatorial rival, Democrat Tom Barrett, and $25,394 in negative ads about Walker. In addition, the group spent an additional $35,587 to support Democratic legislators and $13,052 criticizing Republican legislators in the 2010 election.

And thanks to her high-profile support of Walker's agenda, Alberta Darling is facing a recall election on Aug. 9.

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