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Thursday, October 02, 2014

Roads Point To Janesville Politics In Tax Hike Referendum


The Gazette put out a story attempting to explain why Janesville's tax hike referendum doesn't mention a purpose for the tax revenue it expects to raise - as exposed a week ago by yours truly. In their article, a claim is made that the city resolution initially approving the referendum binds the referendum's revenue to street repairs. I don't buy that premise at all. Plus, who would challenge the city?

The resolution was required by the state to get the referendum on the ballot. Beyond that, the city is bound only by the language in the question. The resolution is a commitment by the Common Council proving they merely support the question to raise the revenue. The rest of the resolution serves as little more than an internal city memo that can be amended or defeated by another resolution at the will of the council at any time. As you can see, the referendum question is written strictly to raise capital with no order to use it for a specific operation or program.

CITY OF JANESVILLE REFERENDUM - QUESTION 1

"Under state law, the increase in the levy of the City of Janesville for the tax to be imposed for the next fiscal year (2015) is limited to .908%, which results in a levy of $29,712,286. Shall the City of Janesville be allowed to exceed this limit and increase the levy for the next fiscal year (2015), by a total of 4.039%, which results in a levy of $30,912,286? If this referendum is approved, the amount of approved increase in the levy will be available to the City only through the year 2019." Yes _____ N_____

It is amazing to see how much time, effort and chatter (not to mention bad advice) administration officials and council members put into the referendum only for the city attorney to say a stock state template he used to compose the referendum resulted in deleting its purpose out of the question. Keep in mind that the final resolution on the referendum's question absent "for street repairs" language was voted on and approved by the city council, regardless of the source the city attorney now claims its template came from.

I contend this was by design.

As a citizen journalist looking for answers on how and why this happened, I prefer to go back to the genesis of the referendum question. For this, I return to a special meeting on the street program held June 10th when Jay Winzenz, the assistant city manager at the time, had this to say ...

June 10th Special Meeting On Street Program
"One thing that that question doesn't include is; what the purpose is. And that's what I think is an important piece of information and as I recall we added that purpose in, when we were considering the question before when the council was considering two different questions, one for public safety and one for street maintenance. From a voters standpoint, I would want that in there so the $2 million or so wouldn't go for some other purpose I did not intend."
-- Assistant Manager Jay Winzenz

Can I say ...bingo?

So if "street repair" language was in the question before, who deleted it in advance of the June 10th special meeting and months in advance of the referendum? On whose orders?

In retrospect, Winzenz was being the straightest arrow in the house. As a voter himself, he apparently empathized with voters and placed their concerns at the top by insisting to legally bind the street program to the extra money. Question is, why couldn't the others?

At that same meeting, Council Member Doug Marklein said it needs to be made clear that the "sole purpose of the referendum was due to state law and levy limits." That means it must be framed as a narrow tax levy question - not a question about street repair or hint that another option exists. Heads nodded approval. No one objected.

As reported in an earlier Gazette article, Marklein also said, "If we go to referendum, we need to keep the wheel tax out of the discussion.”

Why is all that cloak and dagger necessary?

As explained in an earlier posting, if communities want to raise their tax levy beyond the growth of new construction, they must put the question in a referendum for voters. Walker and company took tax levy control away from local elected officials and made that a new law.

However, Janesville officials want residents to think they have absolutely no choice but to raise the street repair money via property tax levy OR if the referendum fails, borrow the money and pay even more over a longer term. This narrative plays off of voters sentiments and helps keep the third option at their disposal - the wheel tax - out of the public discussion.

So, I believe city officials early on planned to keep the subjects of the "wheel tax," a "road tax" or "street repair" out of the referendum (public) question for several reasons.

Most important among them is the city itself is complicit in promoting the legislative agenda of Forward Janesville. That means Janesville "non-partisan" officials supported the politics behind shifting state aid away from local roads to pay for major highway construction and expansions. It's one thing to support expanding the interstate, it's another thing that it comes at the expense of cutting local road aid, resulting in local wheel taxes or tax hiking referendums.

But they succeeded, and afterwards a few council members suggested that if residents have a problem with the shortfalls, they should point blame at state politicians for approving the legislative agenda the council themselves supported. They are being either very disingenuous or just plain ignorant. No disrespect intended, but those are the facts.

For the loss of control regarding tax levies, local officials can point blame at state republicans for tying their hands because it is true. But for the loss of local road aid and its tax hiking remediation, Janesville officials must blame themselves. The problem for area voters is that it's easy to conflict the two for self-interest and political purposes. That's how divide and conquer works.

The second reason to keep streets, wheels and roads out of the discussion is because they want to keep the third option - the wheel tax - out of the discussion. That not only helps keep Forward Janesville's role out of the discussion, but also no one on the council appears willing to raise the current annual wheel tax from $10 to $30, $40 or $50 and have that on their political resume. So I suspect several council member's opposition to the wheel tax is driven by the personal politics of not giving a future opponent for higher office a negative talking point. That's a real sad possibility.

Lastly, the council seems fixated on using scare propaganda to warn taxpayers of dire borrowing consequences IF the referendum doesn't pass. For now, this is where I leave the tax hike referendum. There will be more analysis to follow as we watch the city make some adjustments and ramp up their messaging with the Janesville Gazette, no doubt in tow.

June 10th Special Session Video
Winzenz' presentation about the referendum question begins at 00:16:50.

Marklein can be heard speaking about the sole purpose of the referendum at 00:46:00

Friday, September 26, 2014

Developer "Wins" $2.4M From Taxpayers, City Council Grovels Into The Camera



You know, some things will never get better regarding Janesville's policies on economic development, and when the quality of the presentation and the expectations from those agreements degrades to the level of Monday's city council meeting, expect the slide to continue on.

The city council as expected, unanimously approved (Farrell was absent) a TIF agreement giving away $2.4 million in land and cash value to a well-connected and deep-pocketed developer, Jeffrey Helgesen. But what was not listed on the agenda was the misdirection communicating the agreement along with what I saw as an embarrassing moment for the taxpayers of Janesville. Literally, several members of the council groveled at the feet of the wealthy recipient through the camera lenses, who could not find it within himself, or a spokesperson, to attend the meeting. It was truly pathetic all around.

Beyond the bad optics, the actual presentation left many important questions never asked and unanswered, deliberately I should add, in what seems like a coordinated effort between the city and the developer to leave major components of the agreement omitted and open-ended.

For instance, during the presentation and also in the resolution, there is no mention of the lifespan term of the TIF District. The TIF District itself was created several years ago, but it is important to know how many years property taxes paid within the boundaries of the TIF will remain segregated from the general fund.

Also, stating that the two developments will generate $12.4 million in "annual tax value" implies to the average observer that that is how much tax revenue will flow into the city's tax treasury each year. Of course that would be a completely wrong conclusion to assume. The $12.4 million figure is the projected ASSESSED value of the development and is nowhere near that amount in annual tax revenue. Remember, property taxes on developed property inside a TIF remains excluded from the general fund for the life of the TIF. Taxpayers will not see a dime more than the baseline tax being paid on vacant land for the next 10 or possibly 15 years.

There is also no mention of jobs and this is where the city leaves itself open for more ransom demands at the hands of the developer and his tenants. Outside of enterprise zone tax credits available to a future employer, we can assume Helgesen will likely use the renter's jobs potential as leverage against the city to pay their lease or turn over more cash or tax awards. By giving the developer 3 years to meet the provisions of the agreement, they basically gave him another hostage to line up for final demands on the city BEFORE he begins construction. You can almost bet on this.

Then, and this gets better or worse depending on your perspective, council members and the city's economic development coordinator create the impression that competition was in play for the agreement.

In fact one council member, Brian Fitzgerald, said "we won this time," just before they voted to pass the TIF agreement resolution. I think when city officials make statements to indicate a competitive bidding process was in play for a $2.4M incentive package, they should also identify which cities or villages Janesville was in competition with for Helgesen's attention - and what "packages" they offered. If Janesville won, who lost?

On the other hand, if Janesville dangled the property and cash hand-out to attract developers, they should list the names of the competing developers and what their job creation offers were. My point of course is that in the vast majority of these deals, competition is not involved at all. These are simply people winning taxpayer funded largesse because of their connections. So why did they mention competition when none exist?

Other questions that should have been asked was whether or not the developer approached private commercial banks for his project or whether he considered buying one of Rock County Alliance's shovel-ready distribution / manufacturing sites that are for sale - but he wasn't in attendance to be asked.

In Rock County, I must be the only one that offers an independent perspective on the area's economic development strategies outside of the local trickle-down borg.

I admit it's a boring subject and many folks shut it out of their conversations, but I would also submit that these agreements play a major role in expanding a rigged system that redistributes wealth to the top, destabilizes free markets, shifts the tax burden and drives the wedge deeper into the wealth disparity gap.

In fact I would say that after public officials ability to sell out our voices exponentially grew via the Citizens United ruling, these local economic development "incentive" agreements are running a close second to being America's next worst problem.

Janesville residents, you are getting som - moked from every angle and as recent Janesville Gazette editorals would say - get informed!

Council Video On TIF agreement The TIF presentation begins at 1:30:00 The council discussion begins at 1:36:20.

Wednesday, September 24, 2014

Calendar: LWV Event In Janesville With Mike McCabe



The Janesville League of Women's Voters invites the public to come hear Mike McCabe, discuss his new book, “Blue Jeans in High Places.” This is listed as a social event.

McCabe is the director of the Wisconsin Democracy Campaign, a nonpartisan watchdog group that tracks money and exposes corruption in state politics. The nonpartisan, all-volunteer local League works to register voters, host candidate forums, study the issues and bring informative programs to the voters.

“This program is not only for political people but for those who vote holding their nose and for those who don’t vote at all. These last two elections have shown us there are plenty that don’t even go the the polls.” says Amy Golackson, president of Janesville’s League of Women Voters.

When:
Thursday - September 25, 2014
6:00 PM

Where:
Pontiac Convention Center
2809 N Pontiac Dr
Janesville, WI 53546

Web: Janesville League of Women Voters

For a primer on McCabe and his important book, read Bill Lueders' Mike McCabe delivers a blistering manifesto in Blue Jeans in High Places (Isthmus)

Tuesday, September 23, 2014

Newspaper Misinforms On Referendum While Telling Readers To Get Informed


CITY OF JANESVILLE REFERENDUM - QUESTION 1

"Under state law, the increase in the levy of the City of Janesville for the tax to be imposed for the next fiscal year (2015) is limited to .908%, which results in a levy of $29,712,286. Shall the City of Janesville be allowed to exceed this limit and increase the levy for the next fiscal year (2015), by a total of 4.039%, which results in a levy of $30,912,286? If this referendum is approved, the amount of approved increase in the levy will be available to the City only through the year 2019." Yes _____ N_____

If you want to get informed with correct information about Janesville's tax hike referendum or the local citizens two referenda that were left helplessly dangling by the Janesville city council, you've come to the right place.

It's very unfortunate that the city council approved "reframing" the language in their own so-called "street repair" referendum (NOT the citizens referenda) that basically insults local taxpayers. Yet once again, it's the Janesville Gazette newspaper that not only repeatedly goes along with the city's ill-advised narrative, but doubles down on both the insult and the errors.

JG Editorial Excerpt:
(Titled: City's critics should get informed, do better)

Many people also don't understand that the state limits how much the city can increase its tax levy each year. The amount is based on the percentage increase in value from new construction. That has led to tax increases in the 1 percent to 2 percent range for recent budgets in Janesville. That's hardly frivolous and barely keeps up with inflation.

The problem with the above statement is that the "state" the Gazette editorial is referring to, and the limits they seem to be complaining about were newly imposed on local governments by their endorsed governor, Scott Walker, and state republicans Act 10 law. Before Walker, local elected officials were able to control their own costs and levies without central state power intervention. If the newspaper has a problem with that, they should take it up with their endorsed governor or join the effort to replace him.

OR embrace the suck.

JG editorial excerpt: One way around that limit is to borrow for major projects. The state allows cities to exceed levy limits to pay off debt.

That's only half true. Walker and company did not take away local officials power to borrow, so the city can borrow for major projects. Essentially, the state says local officials can exceed levy limits without asking voters, but only using borrowed money - WITH DEBT.

For instance, the Janesville city council could borrow a billion dollars tomorrow if they so choose, providing they found a lender and were able to pay it back without raising taxes. NO STATE PERMISSION OR REFERENDUM IS REQUIRED.

However, (returning to Act 10 restrictions) the only way Walker and company will now allow local communities to raise the tax levy (revenue) beyond the increase in value from new construction is through referendum.

JG editorial excerpt: That's why the city council last month approved a plan to ask residents in November if they support borrowing $1.2 million a year for five years to catch up on street maintenance.

Whoa! Whoa! Whoa! That's a completely false statement on two counts.

One, the city council is NOT asking residents to borrow. Period. The word "borrow" or any terms related to borrowing activity does not appear anywhere in the referendum question. The city council is asking residents to approve raising the property tax levy by 4.039%. Those are the facts. Remember, the city is not required to go to referendum to borrow - only to tax.

Two. The referendum is NOT about "street maintenance." Again, the referendum question contains NO language about streets or maintenance, nor does it imply the additional money will be used exclusively for streets. Because it is a binding referendum, the city is bound only by the language set forth in the referendum. That means the city is asking voters to approve taxing property owners above state imposed levy limits on the city's budget by $1.2 million a year for the next five years. That's it. Period.

The city could spend the extra money on administration raises or new vehicles - or on anything including road repair.

Despite multiple stories and editorials from the Gazette about Janesville's referendum being a question to approve street repair, spending or borrowing - the referendum is about none of that.

Now, perhaps that is the message city officials want to send to taxpayers and voters, but it is wrong and misleading AND in truth, was incumbent upon the Janesville Gazette to set the record straight. Instead, the newspaper helps the city misinform voters and ridicules those who question the misleaders.

Monday, September 22, 2014

WEDC Administrative Budget Up 35% Under Walker's Mismanagement



According to a recent Legislative Audit Bureau report, administrative spending in Gov. Scott Walker's flagship agency, the Wisconsin Economic Development Corporation (WEDC), ballooned 35% after its first year.

Keep in mind this substantial increase is for operational staffing (mostly patronage hires) and utility costs, not for the so-called tax incentive venture capital slush fund the scandal-plagued governor keeps topped off for his political donors. In fact, you won't want to go to that side of the WEDC budget equation if government secrecy or misuse of taxpayer's dollars are among your pet peeves.

Walker's highly contradictory brown-bagging facade as governor however becomes again evident in his visible role as the WEDC board director, as it tells the same story of wasteful spending, reckless accounting and failed jobs creation ...

Wisconsin Gazette Excerpt:
The Legislative Audit Bureau’s report examined the Wisconsin Economic Development Corporation’s finances over fiscal years 2011-12 and 2012-13. Auditors found the agency’s spending on administrative expenses such as salary, marketing and travel grew from $11.2 million in the first year to $15.1 million in the second.

Read more here.

Friday, September 19, 2014

Walker Booster Critiques Tax Cut Driven Deficit. Next Day Walker, "More Tax Cuts!"


The Janesville Gazette, a big booster and apologist of Gov. Scott Walker's (endorsed him both times), published an amusing editorial the other day criticizing republican legislators in a "I told you so" fashion that their election year tax cuts went too far now that a revised projection shows the state budget heading into a $1.8 billion deficit.

At first glance, it's easy for the reader to think they're including Walker in their criticism, but the editorial mentions Walker merely by association. The editorial's title, "Republican tax cuts don't look so wise given fiscal estimates" pretty much sums it up that in the Gazette's view, it's "republican," tax cuts, not Walker's that are to blame.

The truth is, they can conveniently use republican lawmakers as their whipping boys for all the state's troubles because they know their gerrymandered districts protect them. They can't lose. The editorial creates a final separation and elevation for Walker when they conclude, "Walker demonstrated his fiscal chops soon after taking office." Really.

But here's the best part. The very next day after their editorial, Walker unveiled his re-election platform and among his priorities are ...you guessed it ...more tax cuts in the face of spiraling budget deficits. Gotta' wonder what the Gazette's WMC-owned editorial staff are thinking now, but you can bet they will be endorsing Scott Walker for governor - no matter what.

After hearing this audio of Sen. Fitzgerald posted at the Democurmudgeon, it's really beginning to look like Walker and state republicans are suddenly satisfied with large budget deficits driven by tax cuts. That's not necessarily a surprising concept from supply-side "conservatives" since their policies are largely responsible for driving the nation's debt. It was only in their electioneering rhetoric, where they pretended tax cuts will drive greater economic activity enough to cause an actual increase in tax revenue. They don't even pretend that anymore.

Deficits NEVER did matter with conservatives. It's all about winning re-election.

Thursday, September 18, 2014

Scott Walker's Budget Sink Hole Is Deeper Than It Looks



Press Release

Wisconsin State Sen. Jennifer Shilling Excerpt:
Walker budget deficit grows to $3 billion

MADISON – After state agencies submitted their 2015-17 budget requests this week, Gov. Walker’s budget deficit is now projected at nearly $3 billion.* The overall budget deficit could exceed $4 billion once state transportation, school funding and other agency budget figures are released.

BUDGET CRISIS BY THE NUMBERS
Current Fiscal Year (FY15) Budget Deficit:
$396 million (LFB memo 9.8.14)
 
Projected 2015-17 State Budget Deficit numbers:
$1.8 billion structural deficit (LFB memo 9.8.14)
$1.1 billion in new spending requests (DOA agency budget requests 9.15.14)
Estimated $680 million Transportation Fund deficit (Associated Press 9.15.14)
Estimated $568 million in K-12 Fair Funding costs (WI DPI 2013-15 budget request)

Tuesday, September 16, 2014

City Council Operates Outside Of The Law, Power Slams Citizen Initiative. What's next?


I hope the Wisconsin attorney general's office is paying attention to what's going on in little ol' Janesville. Afterall, isn't it the AG's job to enforce state laws?

In brief, a Janesville resident didn't like the way things were going with the city's planning and spending for a new central fire station, so he took the initiative and started a petition drive to place two questions on referendum to local voters. He met the guidelines as written in state law. The petitions were deemed valid by the county clerk's office and went to the city council as per Wisconsin Statute 9.20.

That is when things got very messy.

Instead of following state statutes regarding the handling of his petitions, the city council, following some bad advice from the city attorney and the local newspaper, the Janesville Gazette, proceeded to turn the tables on the resident and his supporters. They basically said we're going to ignore you and your petitions and you'll have to sue us to make us follow the law. Apparently, the city council is banking on the notion that if they shirk the law or operate outside its parameters, they can end the process established by law. Got it? That's it in a nutshell.

Regarding petitions of direct legislation, there are state statutes that local governing bodies are expected to follow ...assuming they follow the law in the first place.

But what makes this moment in time somewhat special is it comes after a 30 day period the common council was given to deliberate over the petitions. The law is fairly specific. It outlines...

Wisconsin State Statutes Excerpt:
9.20 (4)
The common council or village board shall, without alteration, either pass the ordinance or resolution within 30 days following the date of the clerk's final certificate, or submit it to the electors at the next spring or general election…
(my emphasis)

That’s the law.

But the Janesville city council followed a law the city attorney pulled out from Oz called the "take no action" law. Taking no action is not an option listed under 9.20, but that is exactly what the Janesville city council did with these petitions. They did NOT adopt the resolutions OR submit them to the county clerk, nor did they give the petitions an up or down vote within the specified 30 day time frame.

That is against the intent of the law according to the state's handbook on Direct Legislation...

Initiative and Referendum in Wisconsin Excerpt:

Limitations On Use Of Municipal Initiatives: A series of decisions by the Wisconsin Supreme Court have dealt with “Direct Legislation,” Wisconsin’s statutory term for the indirect initiative. In particular, Landt v. Wisconsin Dells, 30 Wis. 2d 470 (1966); Heider v Wauwatosa, 37 Wis. 2d 466 (1967); ans State ex rel. Althouse v Madison, 79 Wis. 2d 97 (1977) have set limits on the use of this procedure. The court ruled that:

5) If it does not enact a direct legislation proposal, the municipal board must put the question to a vote, even if it declares the measure to be invalid or likely declared unconstitutional.

That's worth repeating. The municipal board "must" put the question to a vote ...even if they declare the measure invalid or likely declared unconstitutional.

But they did not put the question to a vote and now the time is up.

The 30 day period is over and there is one week left to get the petitions on the ballot for the November General Election. This is where it all stands and time is of the essence.

Fact is, the Janesville city council put the cart before the horse AND is playing dirty pool against the electorate. And, so is the Janesville Gazette.

The question at hand isn’t about the question on the petition. The question is about the question going to the ballot box for voters to decide on. It’s also about a citizen and citizenry operating in good faith according to the law. It’s not about whether everyone agrees with a single citizen, who did his due diligence and played by the rules, or the 3500 signers who agreed with him. He met all the requirements of Wisconsin State Statute 9.20. It was up to the council to vote on the petition’s resolutions, adopt them or submit them to Janesville voters.

As a spectator, I think this episode is a very big deal for the city of Janesville. Not just because I think the council has done irreparable harm to the office and themselves, but with the message they send to others that shirking the law is a viable strategy to settle your differences.

That, much like Gov. Scott Walker, if you can find ways to circumvent laws, you can operate outside its limits and redirect the burden and pursuit back onto those who want justice. It's just bad public policy all around.

The council is also telling Janesville residents that their civic engagement and participation is meaningless and their petitions are useless as long as the council operates outside of the law.

No doubt, the city council's decision to shut down citizen initiative has its supporters, but I predict it will have a chilling effect on future civic engagement and cooperation that will likely last until there is a complete turn over of the council's membership. That's a truly sad predicament.

Stay tuned in on this one, because regardless of where these petitions are headed, it still won't be over.