- Associated Press - Monday, February 8, 2016

Wisconsin State Journal, Feb. 7

Timing of bill shows Scott Fitzgerald’s real motive is political power

Senate Majority Leader Scott Fitzgerald is right that public officials shouldn’t hold two big jobs at the same time. It dilutes their effectiveness and prevents more people from serving in higher office.

Specifically, the Juneau Republican wants to stop county executives from simultaneously serving in the Legislature. That makes some sense, given that both jobs are considered full-time positions, paying full-time wages and benefits at taxpayer expense.

But Fitzgerald’s motive for raising the issue now is nakedly political. That’s because the only person Fitzgerald’s prohibition is likely to impact anytime soon is a Democrat with a strong shot at reducing Fitzgerald’s power.

Enter Mark Harris, the Winnebago County executive who ran for Congress in 2014. Harris is a moderate Democrat with a strong understanding of tax laws and budgeting. He’s running for the open 18th Senate District seat, which includes Oshkosh and Fond du Lac.

The seat was decided by just 600 votes four years ago, and incumbent Sen. Mark Gudex, a Republican, isn’t seeking re-election. So the 18th is expected to be a competitive and crucial race for state Senate this fall.

Fitzgerald says he wants to prevent “double-dipping,” in which a county executive could collect a $100,000 salary for running a county while at the same time earning more than $50,000 for serving in the Legislature.

But no one is doing that now. So there’s no problem to fix. And Harris hasn’t said if he intends to keep doing both jobs, should he win a Senate seat this November.

Fitzgerald and the Legislature didn’t stop Bob Ziegelbauer from serving as Manitowoc County executive and as a state assemblyman from 2006 to 2013. We liked the independent Ziegelbauer in the Assembly. But we criticized his double service as too much responsibility for one person. And he seemed to get the point, resigning from the Legislature three years ago to concentrate on his county job.

Other state lawmakers who were elected county executives have similarly left the Legislature, including Jim Kreuser in Kenosha County and Paul Farrow in Waukesha County. Yet these men served in both positions for several months before resigning their state posts.

Harris is going the other direction - running for the Legislature as a sitting county executive. His third county term ends next year.

Fitzgerald’s bill would force Harris to choose one job or the other if he won a legislative seat in November.

Fitzgerald says serving as a top county official and as a state lawmaker would risk conflicts of interest. That’s a stretch. After all, Harris’ county is the biggest in what would be his Senate district. So his interests would be pretty much the same.

Fitzgerald’s real motive is preserving his political power. He wants to continue to run the state Senate with a comfortable GOP majority. And the Democrats’ best shot at gaining a seat is the 18th District, though the Democrats would need to pick up a total of three seats to claim majority control.

Fitzgerald’s argument that there ought to be a law is weak for a conservative who, in theory, should favor limited government intervention. Fitzgerald should wait until a problem actually exists before worrying about a top-down solution.

Voters can pressure Harris to disclose his intentions. Voters are the best judges of whether a politician is spreading himself too thin.

Let the voters, not a highly partisan Senate majority leader, decide.

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Leader-Telegram, Feb. 5

Keep current rules on selling water utilities

The Legislature would be wise to put the brakes on a proposal reportedly moving quickly that would make it easier for private companies to buy and operate municipal water systems in Wisconsin.

According to the Milwaukee Journal Sentinel, Pennsylvania-based Aqua America is behind this effort. The firm owns and operates more than 1,400 public water systems and 187 wastewater treatment systems in eight states, the newspaper reported.

The proposal cleared the Assembly last month and now heads to the state Senate.

Having a for-profit company take over a city water system is far different than hiring out garbage pickup, for example. With the latter, the private company owns the trucks and the trash containers. It makes sense that several private operators competing with each other will try hard to provide the best service at the lowest cost to keep and hopefully grow their market share.

But we can’t have multiple companies running our water system. So presumably the only incentive to sell would be to save money because a private company might pay its workers less than the municipality and find other efficiencies to keep water bills low.

As for replacing aging pipes, the current system of municipal ownership requires a competitive bidding process that prevents the public from getting gouged. Presumably a private firm would operate under similar rules.

“Government has a level of accountability to citizens that private companies simply don’t have,” Tom Stolp, deputy director of the Wisconsin League of Conservation Voters, said recently at a news conference and reported in the Journal Sentinel.

Stolp is right. If something goes afoul with a city’s water supply, accountability rests with local public officials, not business executives beholden to stockholders.

Another concern to skeptics in the crowd is whether some public officials might be tempted to favor selling the city water operations and then miraculously end up working for the new private company. In other words, officials working out of public view for their own benefit rather than what’s best for their communities.

The Journal Sentinel reports that under current law, the local elected governmental body must vote to approve the sale of its water utility. The proposal then goes to the state Public Service Commission for approval, and finally voters must also give approval in a referendum. So, yes, under current law municipalities can sell their water operations.

This bill would make referendums optional. Citizens would have 60 days to get the signatures of 10 percent of the voters in the municipality to force a referendum.

Bill supporters say the measure would simply enable communities to sell their water operations if they think a private company could do a better job.

A reasonable argument can be made that garbage pickup and perhaps some other services traditionally done by government workers can be done at least as well and maybe better and cheaper by private business. But turning the safety of our water supply over to a company whose headquarters is far away should at the very least require a referendum by those who will have to live with the decision and drink the water.

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The Journal Times of Racine, Feb. 7

On inversion, blame Congress and corporate tax rate

If you’re mad at the news the Glendale-based Johnson Controls is, through its merger with Tyco International moving its corporate headquarters to Ireland to avoid paying the higher American corporate tax rate, we’d advise you to send your anger in the right direction: Toward Congress.

The merger will save Johnson Controls an estimated $150 million on U.S. taxes, the Milwaukee Journal Sentinel reported Jan. 30. It’s an action known as a tax inversion. The United States has the highest corporate tax rates in the world - a statutory rate of 39.1 percent and a marginal effective rate of 35.3 percent - making inversion all too popular with American companies. In 2014, for example, Chicago-area companies AbbVie, Horizon Pharma, Medtronic, Chiquita Brands and Mylan moved their corporate headquarters across the Atlantic to take advantage of lower corporate tax rates.

“The failure to modernize the federal tax code has pushed American businesses to move overseas,” wrote Brett Healy of the free-market Wisconsin-based think tank MacIver Institute. “Our politicians have failed us, not Johnson Controls.”

We’re inclined to agree.

There’s blame to go around for the corporate tax rate staying as high as it is. During the October 2013 budget standoff between President Barack Obama and congressional Republicans, with the threat of a government shutdown looming in the air, Wisconsin 1st District Congressman Paul Ryan’s effort at making tax reform part of the budget deal was thrown overboard as tea party Republicans, led by U.S Sen. Ted Cruz, R-Texas, demanded the defunding of the Affordable Care Act, aka Obamacare, as part of any budget deal. The president called Cruz’s bluff, and a budget deal was reached without any defunding of Obamacare … but also without any serious effort to take up Ryan’s tax reform proposals.

In the spring and summer of 2014, with American companies fleeing, congressional Democrats introduced legislation to prevent companies from engaging in inversion, and to punish those that did. That legislation went nowhere, but more importantly that’s treating the symptom instead of the disease.

Then, after the Republican victories in the November 2014 midterm elections, Ryan ascended to chairman of the House Ways and Means Committee. In an interview with The Journal Times that month, Ryan said he expected tax reform to be a big issue in 2015.

We don’t recall a lot of action on tax reform taking place last year. Perhaps prospects will improve now that Ryan is speaker of the House.

We understand that Republicans are almost always in favor of lower taxes, and the Democrats don’t want to see the loss in tax revenue that would come from reducing the corporate tax rate. But there’s no tax revenue to be collected at all when a company relocates its corporate offices in another country.

Businesses look for means to avoidance, ways to pay less in taxes. At the moment, corporate inversion is the path that has been drawn up. Members of both political parties, whether in Congress or the White House, should have an interest in creating an American business climate in which companies want to be here and not someplace else.

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