 Welcome to the Donahue Group. We're delighted you could join us for a, I think, fun-filled half hour of interesting conversation about the issues affecting the times. We have a slightly different cast of characters this evening, but I'm going to go around and order former State Senator Cal Potter. We pulled him off the back 40 where he was plowing, you know, He's planting corn to make ethanol, he's planting corn to make ethanol. Dirk Seilman, also a county person. Tom Paneski has the nerve to be on vacation this week, and so we thought we would go ahead anyway and invite Dirk. We taped a wonderful episode on the non-motorized transportation committee that Dirk is chairing. He's also the recently elected chair of the town of Mosul, the only town in the county that's losing population. That may not be true, and, you know, if we go down over 150 years, there's only, I think there's only one way to go. We'll go up from here on. I'm optimistic. Yeah, must be optimistic. I think until recently, Mosul was the last place in the county that had unpaved roads. There was a county road that was unpaved in Mosul for a number of years and even. This is Ken Risto, who continues unexplainably to work for the Schwoingen area school district. Benefits, it's just the benefits. No, I thought from the other perspective that they haven't fired you yet. Ten years is a beautiful thing. It is a beautiful thing. Ken is a social studies curriculum and something or other, and something specialist, and I'm Mary Lynn Donahue. I'm a simple city lawyer, so we're here talking about some interesting state issues. Lots of stuff is going on. It's budget time. Cal, as a long-term public... Former sausage maker. There you go. It's interesting now that the Democrats are back in at least a little bit of power. The process has predictably ground to a halt, and what are your predictions about, will we get a budget this summer? Will it be a good one? Well, Republicans who control the assembly who are obviously not happy with what the finance committee did because they defended the governor most of the time because of it's an evenly split committee, and when there's no majority, the governor's position stands, and so the bill that's advanced to the Senate, and as we take this next week, the Senate will take up the budget as the first house of consideration, and they will do their darnedest to defend what the governor has put in it, as well as add a few pet programs. Judy Robson, the majority leader in the state Senate, has indicated she would like to see health care plan, some type of health care plan that her caucus has got apparently the votes for, put in the budget, and then that package will go over to the assembly. Well, even before that happens, we've seen the speaker in the state assembly hips saying they don't want to even take it up because there are too many tax increases in the budget. Well, I think what will eventually happen is that the state needs a budget, of course, and it will take a while, but it's going to be rendered as a conference committee product, and the governor will render his extensive veto writing powers on that compromise package that hopefully will get there before October, but wouldn't surprise me if it did take a few more weeks than it should, really. You know, I, Hiepschen and the Republicans are just saying, well, we don't want any tax increases. We don't want to, won't take this document up, but they are in the majority. They are a house that needs to come up with a budget, and if they were totally responsible, I think they would start working on their own budget during this time rather than saying, we're not going to take anything up until the other house listens to us or the other house changes it. They are the ones that need to come up with alternatives, and as this process has gone through the finance committee, they've sniped at the oil tax which was going to help them the transportation area and other areas. Well, what you need to do is, if you're a responsible statesperson, what programs do you want to cut to balance the budget? Well, what revenues do you want to raise or tax increases? Do you want to pass or what are you friendly towards to putting your budget package? Just don't say, I'm not going to take it up. That's not a very good leadership style, nor is it a very responsible course of action for someone in state legislature. Maybe he should just give his salary back for those number of months. Good idea. Then we could save a little bit on that end. What's the political advantage to that? Because it really doesn't make any sense. Ultimately, I think you're right. It's going to be a conference committee product when you've got the assembly in the hands of the Republicans and the Senate in the hands of the Democrats. What's the tactical advantage of holding your breath till you're blue in the face? I think they want to do air as much as they can to tax increase issue. And labeled Democrats as they traditionally Republicans do is tax and spend Democrats. And I think they want to, you know, the governor isn't under term limits. So, you know, they're looking ahead to the next race. And whether it's green or whoever runs for against Doyle, I'm presuming Doyle's going to run again. He's raising money at least right now already for I presume for the next run. So they're going to do what they can in the next three years to paint him as a bad governor. And one of the things to do is to take the things in the budget that they feel the public will react negatively to and air those as long as they can and as loudly as they can. Now, from their own personal political benefit, coming back in October and saying now we're going to sit down and pass a budget would be no different than if they did it in August. You're right. I mean, to me, it's actually worse because you're going to have all the service school district payments, shared revenue payments, all the things that where checks have to be written and amounts have to be shared with local units of government will not be known if you screw around until the very end. I mean, how is the county and other units of government going to set their levy if they don't know what their local aid payments are going to be. So as far as a disservice to the taxpayer, screwing around until fall is not a good thing, but from a political standpoint where they're going to air all the wrongs of the budget, that's probably the advantage that they see in this whole process. Well, you take us a little farther. I think they're looking at another election in the gubernatorial. I think they're looking at November of 2008. They, you know, the Republicans, I think, were absolutely startled that they did so poorly this last time around. They did not think that they would lose control of the state senate and they... Fairly dramatically. Fairly dramatically, yeah. And so they, I think, are looking at trying to regain control of the senate, which I think would be very tough for them to do, just if you look at the elections that are coming up in November of 2008. But another option that I've heard just spoken is that they simply do not pass a budget, and then you simply go by continuing resolution under the current one, and I don't know what kind of mess that would be. Well, it's not good governing, and we elected these people to be legislators, and that's what they need to be doing. And, I mean, just call me Pollyanna, that's because my hair is curly, so I can, you know, be a little orphan Annie here and just suggest that they be about the business of protecting the state and doing what we elected them to do. Both of you have been on the board. What does the board do when, because Cal made, alluded to this, what does the board of education who relies heavily on state aides do in the absence of a budget? We dink around until it finally gets set. And so you can literally go up almost to the point where they're printing the tax bills. Right. And it's been, we've had a couple of real of October's. Sure. And you borrow money. Yeah. In the case that you, when we talked about a continuing budget into the future, you can simply budget for the same level of aid. The problem is, of course, in January or February when the new aid payments come in and they're higher, then you've got yourself to send out a new tax bill. Yeah. And you've levied the people more than you probably should, because the economy is healthy enough that there is some increase in school aides and in shared revenues. And they're predicting that some increase in tax revenues, just even if you keep things, keep things as they are. Well, the Wisconsin economy is doing quite well right now. So just in and of its own with no changes, they'll probably get close to double digit revenue increases. Right. And so that's good news. Is that, if I can interrupt, is that just simply in the sales tax collection side? No, just sales tax, corporate tax. Okay. Just generally, when the economy is growing as it is, with a lot of people employed, you get more revenue. Rising wages and income tax collection. I've been following with interest the oil tax because I think it's an interesting, it's an interesting political move. But again, it seems to be, you know, some redistribution of income. Interestingly enough, I read a poll that indicates that a huge majority of Wisconsin residents think that if this oil tax does pass that ultimately the consumers will pay it anyway. Mark me in that group. And I would tend to be in that group as well. There is a way. Three giant oil companies. This is from the journal Sentinel. Exxon, Mobile, Chevron and BP did pay some $7.3 million in corporate income taxes over a three-year period of time in the same period in which they reported worldwide profits of $165 billion. Two other companies, Shell and Murphy Oil, which has a Wisconsin refinery, pay no corporate income tax at all from 2003 through 2005. Shell had profits in those years of $55.9 billion. We've talked about, I mean, to say that these are windfall profits for oil companies is certainly, I mean, it's a tired statement that we've been true for so long and we're just kind of living with it. Apparently, if the state adopted a combined reporting tax structure in which they would pay income as sort of branches of the mother companies that were, we could raise some substantial income there and it seems to me that that would be politically palatable at least to working-class people and to maybe non-manufacturers. What do you think? Is that an untapped source of revenue where rather than continuing how the individual income tax burden in Wisconsin has gone up, as the corporate burden has gone down, the individual income tax burden has gone up, is this a way of dealing with it? We need more money. Well, I tend to think of it as kind of the old ethnocentric approach where everything is in the United States. These are international corporations. You know, it hasn't happened to this point but if you tax Wisconsin, if Wisconsin taxes an extra 10 or 12 cents per gallon, at some point, if there's a shortage, what to prevent them from shipping to Minnesota rather than Wisconsin? I mean, it gets kind of tricky. You know, I think you just look at it and you say there's a shortage. These are huge companies and they're making big money. Unfortunately, they pay federal taxes and probably not a lot of those. The answer in my mind is you take away some of these crazy loopholes that are in there that were put in when oil was down to 10 bucks a barrel. Take away the loopholes but trying to do all these little tricky things to get extra tax out of them, I don't think that's going to work. The problem with the governor phase is, of course, is that the Republican-controlled legislature of the past did away with indexing on the gas tax and so they've got all these nice programs of new highways they want to build, all the maintenance costs going up, payments to towns and villages and counties need to be made for highway repairs and the money is not coming in because they've killed a goose that was laying a golden egg. And now the governor says, how do I come up with additional revenue? Doing what you described as a corporate tax change I think is just something that he felt he couldn't get through. I mean, if you said... And I think that's true. You're going to have all the corporate people screaming. Why not pick... He's saying pick on the oil company who loves the oil company. I think most business people don't even like the oil company. Right. But isn't that dangerous? This person is unpopular. This company is unpopular. So now we can pick on them. I think just from a policy standpoint that's incredibly dangerous. But tax... But you don't have the votes to pass an increase in the gas tax and you've got extremely high expenses in the transportation area, including new projects like Highway 23 in Sheboygan County, which all the local legislators stumbled all over each other saying we've got to build this not in 13. We have to build it now. Well, if you want to build it now, you've got to fund it. And one of the reasons that we did in the 1980s put indexing is because we knew you had to fund these projects and you knew you had to fund your aid. That's the problem with some of the legislators today is they don't have any guts to say either you cut the program or you've raised the money. They say we wanted both ways. Well, you can't have it both ways. Right. And Cal Potter is steamed up. You've got to have it. Well, that's what we have. All these politicians, both on the federal and state level, they want all these programs. Right. And the federal level, we go into debt and on the state level, we've got to apologize. Well, I'm not going to take up the budget because we've got to raise taxes. Well, what are you in office for? Well, but here's my response, because I want to Cal to settle down a little bit. I don't. I don't. No, actually it's... Well, in any event, taxation is all about social policy. There's not a way that you tax that is not a social policy. In Wisconsin, our social policy has been to greatly reduce, reduce, reduce, reduce the level of taxes that corporations pay and greatly increase, increase, increase the amount of money that individuals pay. And that is a social policy and you do it through taxation. You cannot do a tax that's not social policy. It doesn't matter what it is, so... Well, I'm not saying generally. I'm saying you pick somebody off. Somebody says, I don't like Mary Lynn Donahue, so I'm going to come up with some tax that all of a sudden the taxes on her house are triple anybody else's. But that happens with sales tax. Well, you shouldn't, in my mind. I mean, all the exemptions that there are for sales tax. And I think... Lawyers... I mean, you don't have to pay... I think some of those are wrong. I think some of those exemptions came because people had powerful political influence. But if you... What you should be trying to do is build an equitable tax system. And I think that... I agree that corporate taxes as a percentage of the total tax revenue pie have gone down. And I think that they should not have gone down as far as they have. I think we should be looking at that. But I think we have to make sure that we look at it rationally rather than saying, well, there's nobody that's going to defend the oil companies. So let's see if we can nail them. Because if that becomes a policy, then who's to say that next time it's, well, nobody likes Dirk, so let's nail him. Or nobody likes Mary Lynn. Everybody likes Kim. I don't think it's... Well, there goes the hypothetical. I mean, that may be the political machinations to pick out the oil company. But I think the economic defense is is that you've got a product that is... We use the word windfall. You've got a product that through a variety of circumstances, none of which have got to do with the oil company, they're making larger and larger, larger profits. I mean, the reality is part of the reason why oil prices are gasoline prices at the pump are so high as we've got a refinery crisis in this country. There's just as much oil coming into this country now as there was a year ago or six months ago. Granted, China's got... They want their crack at oil too. So it makes some economic sense to recognize this is a peculiar instant business who is profiting not through being more efficient or because consumers want a tremendous amount more. It's just a set of circumstances unique to their industry and that's why we're pointing the finger at them and saying maybe you need to pay some taxes when you've never paid taxes. I think you're right though, I think between the litigation and the fact that there will be some creative accountants will figure out a way around this tax is probably a debate about nothing. I don't think we're going to get as much money as we suspect we're going to get. I was just going to say that picking on them I think is a poor word, but I think if you look at the lax energy... The last energy bill that Congress took up and you look at the lobbyists who were winners in that energy bill, there were people in the coal industry and in the oil industry and the Cheney Bush group literally sat down with those folks and wrote that energy bill and who got fleeced the American taxpayer and now you take something like Governor Doyle who's saying looking at the figures that Mary Lynn gave us as far as profits, you look at the tax burden that they used to have compared to what they have today and they are bandits. They're criminally fleecing the people of this country and it's a dirty, dirty shame and somebody ought to do something about it and Cheney and Bush, of course, aren't going to do about it because they're... The answer is ride bikes. There you go. And you know you are sitting in Tom Pineski's chair so if you would like to make a spirit... You want to say something good about Bush or Cheney or go right there. No, you're not going to go there. Yeah, I'm afraid we're... Kind of slightly... The bull is a little... Just a tiny bit but Dirk is standing up for the... Well, never mind. Dirk's more moderate than I am. Mr. Moderation. But Cal, I mean, and again, maybe it is polyish but Cal is absolutely right. Politics is about making choices and sometimes those choices are hard but that's what you ran. That's why you wanted the job and ultimately our generation maybe needs to really confront the reality that if you want government services you've got to pay for them. You can't keep kicking the can down the road whether it be in the national level and passing it on to our children, our grandchildren, or in the state level where you keep on doing creative accounting till the music stops and some poor governor ends up like, you know, well... McAllum. Like McAllum did, exactly. Yeah, yeah. I mean... Tommy Bielder in an opportune time. He really did. He really did. I remember Marty Schreiber. Yep. Beat him up mercifully because the Academy went downhill. They had a deficit. He blamed it on the governor who was seated and that was the end of him. Yeah. Well, it's completely true and I mean, think of Bush and Clinton. I mean, you know, those kinds of things happen. Well, this is so far a spirited discussion. What do you think about ending the sick leave perk for... And there are a variety of bills out there. One just for lawmakers, one for lawmakers and judges, one for lawmakers, judges, and all state employees. This is the program that allows state employees to accumulate sick leave, put a dollar value on it, and use that to pay health insurance premiums upon retirement. And I went back to a December 2006 article in the Journal Sentinel. Very few judges take any sick time and their accumulated benefits are pretty high. If you legislate your letters, take any sick time. Right. Of course, I mean, supposedly, they have a part-time job. I'd really like to see a really part-time legislature and there would be less mischief is my theory. What do you think? Should that perk end? Well, if it's being abused, it should be looked at, but I'm not... I have never been one who said that any particular employee ought to be treated differently than anyone else. For example, I was the legislator, I was the teacher who has the same retirement system all through those years. We received, of course, health care. We could buy into a life insurance plan, plus we had the sick leave benefit. I think what you need, and when we got pay increases, we got the same pay increase that the non-union state employees got. It was something you could defend. We got the same health care benefits. I think there should be parity. But state employees other than legislators have to report to a boss and say, this is when I'm sick, this is what my vacation is, this is what my sick leave is. Legislators ought to be responsible to this speaker's office or the chief clerk's office about when they're not there, when they're sick, and keep an accounting of when they're absent, why they're absent, that type of thing, if that benefit is going to continue. But to have the benefit or take it away, when everybody else has it, because somebody's abusing it, maybe we ought to look at the abusers and the abuse and change the system. Because legislators, they're paid at two-thirds of what middle management gets. A legislator who works hard, they make maybe 45,000 today. A good legislator, particularly in leadership, earns their 45,000. The only reason to be in it is maybe because you do get some benefits. You get a health care plan, the sick leave, that type of thing. To emasculate the compensation and make it so that only the wealthy can participate in being in the legislature, and that's what it was. Before I got in, I think, let's say we're making like $7,500 or $11,000 a year. We moved to $15,000. I was making $12,000 as a teacher. I could move and it was financially able to do so. Before that, it was a lot of retired people, business people who had others to run the shop or they're gone. I think you need to have a decent compensation package. If you're not going to do it up front in salary, you should do it at least to have parity of benefits with other employees. I'm for being the same, but I'm not for defending the abuses. I think there is a way to do this. When I was not there, I would report these things to the clerk. Why not? Why not have a system where this is very visible, the press has access to the records, and anybody who abuses it is exposed for their negligence. Maybe this is being pollyannish, but I agree with Cal that legislators are underpaid, but we do too much of this. We can't pay them, so let's see if we can sneak in some of these benefits. Virtually every legislator abused this system, virtually everyone. They don't feel good, they stay at home, but it has no impact. This, as Cal said, was really a way to accumulate health care benefits for when you retire. That does not happen in the private sector. That does not happen with teachers. Teachers get X number of days, and they have to keep very, they keep incredibly cool. I'm impressed. They spend maybe almost too much time keeping track of who has used, and it's one hour here and a half day there, and that's a system that doesn't work with the legislator because their job is so amorphous. You're here, you're there, you're talking to a constituent, you're not feeling well, but you receive a phone call from a constituent. Is that work or isn't that work? It's really tough. I would just say let's be straightforward, let's pay them more, but let's not do these kind of under-the-table benefits that I think undermine the confidence of the people in the legislature. Well, it'd be interesting, and it would be nice if the decision is made, as you folks have talked about, on policy decisions and not pandering. Let me just switch the topic. We're running out of time. It's funny how quickly time goes when you're yelling about politicians. The first poll in the state of Wisconsin regarding presidential hopefuls is out. Now raise your hand if you're tired of the 2008 presidential election already. No way. I'm just kidding. You've got four political junkies. It's like people watch baseball in Arizona in March. Good grief. Look at C-span on a regular basis. Well, let's just guess. Who's on top with the Republicans? In Wisconsin? Uh-huh. Giuliani. Giuliani? Giuliani. Is it Wisconsin residents or is it? Wisconsin. Wisconsin residents, I would say Giuliani. You are right. Giuliani and those who lean Republicans, 68% have a favorable view of Giuliani. Tommy Thompson trails, but not by much. 65% McKean. Is it brother or Tommy? Brother, Tommy. I mean, yes, I'm sorry. Not his brother, okay. Yes. Who's brother? Fred isn't in the poll. Fred is not in the poll. You know, Tommy might get some coattails on that. You know, just check that Thompson box. Everybody knows law and order. And Mitt Romney, poor Mitt is not doing too well at 20%. Yeah, whoever came up with that line in the carry campaign, that was pretty brilliant. Among Democrats, your guess? Hillary. I'm sure it's Hillary. Al Gore. I saw the poll. Is that where it Gork snuck in? Because I heard he was out polling someplace, but I didn't hear where. But the poll I saw that he was. Okay. You're right. 74%. I'm glad that Cal admitted he cheated. Why didn't you? I just read the newspaper. Clinton at 69. Obama's 62 and Edwards at 59. So it's a pretty tight field. Yeah. And I think that's interesting. My concern is, you know, we've talked about voter fatigue. And these guys are running hard. And publicly, I mean, this isn't behind the scenes. Let's, you know, visit the caucuses and, you know, gripping grins in New Hampshire and so forth. I mean, this is, you know, public polling, the forums, the debates. This whole state primary system has shifted forward. It's 18 months ahead. Probably the biggest development of the day is Blumenthal, the mayor of New York, dropped his Republican party affiliation. Bloomberg, yeah. And is going to potentially run as an independent. Yeah. And as somebody said, you know, Mitt Romney has quite a bit of money. He could probably buy a state or two. Bloomberg has enough money. He can buy the whole United States. Yeah. He's got enough money to fund his own effort, just like Ross peroded. Yeah. Yeah. So, and it's interesting because I was just listening to the radio this morning about Bloomberg and who generally gets fairly high marks in terms of running the city of New York. And so I think that will be, I think that will be interesting. I think Fred Thompson's potential entry into this is, does that shake the field up? I think he'll do fairly well in the Republican primaries, but I still think 2008 is a Democratic year. People need- Especially if Bush stays the course. Oh, and he is relentlessly staying the course. But we can't, the ship is really listing to the left now. So what is the nautical term to the left? Port? Port. Yes, we are- The left and port are four letter words. Thank you. No wonder you're beloved at the school district. But in any event, it'll be interesting to see how things run. And it's been a wonderful, very quick half hour. We hope you've enjoyed the conversation.