- I'm Frederica Freyberg.
Tonight on "Here and Now," a first look
at the U.S. Senate tax plan.
In our look ahead, we'll talk about an anti-violence project
taking shape in Milwaukee with Mayor Tom Barrett.
WPR's Shawn Johnson is here with capitol insight on a legal power
play between the governor and the superintendent of public
instruction.
We'll go to Ashland to learn about prospects for a new life
for an old Wisconsin resort, Telemark.
It's "Here and Now" for December 1st.
- Funding for "Here and Now" is provided, in part,
by Friends of Wisconsin Public Television.
- A first look tonight at the Republican U.S. Senate
tax plan and where it goes from here.
Wisconsin Senator Ron Johnson is now onboard after getting an
additional break for business.
But the latest analysis of the plan by Congress's Joint
Committee on Taxation shows the Senate GOP plan would add $1
trillion to the deficit over ten years.
Still, the bill is hurdling toward passage
with Johnson's imprimatur.
We're joined tonight by a tax expert and professor
in the UW-Madison La Follette School of Public Affairs.
Rourke O'Brien also served as senior policy adviser
at the U.S. Treasury Department.
So thanks very much for being here to talk about this.
- Thanks for having me.
- So the tax plan is somewhat overshadowed today by other
major breaking news out of Washington,
but what do you think of that new scoring of which we just
spoke with its trillion dollar deficit?
What does that do to this bill for the politics of it?
- Sure, when we started this whole process,
Paul Ryan and Mitch McConnell were both promising to go after
a tax reform package that was deficit neutral.
And then the goalposts changed and they said they're willing to
accept up one and a half trillion dollars of on budget
deficit increases with the promise that the economic growth
that would follow from the tax reform package would actually
offset all of those costs.
That it would be actually revenue neutral
at the end of the day.
But this is the first score we've seen
that's allowed for this kind of dynamic scoring.
This idea that we'll kind of count the potential feedback
mechanism through which the tax cuts might lead to more growth
which might offset some of the costs of the bill,
but it looks like that's only going to reduce the price tag
by a little bit.
So we're still going to have, even under the best case
scenario, a trillion dollars added to the deficit.
- Now, the last time we spoke you envisioned that
the House tax plan would require a lot of rewriting
once the Senate was involved.
What are the important changes that were made in your mind
that are now teed up for this Senate vote?
- I think the big difference between the House bill and the
Senate bill is the inclusion of the repeal of the individual
mandate under the ACA.
This was a provision that was added to the bill that will save
the government some money because more people will no
longer be insured and covered under the ACA.
That means fewer subsidies through the marketplaces.
That means lower cost to the government,
which created more room for tax cuts in the Senate bill.
Of course on the other side of that,
we're going to have potentially up to 13 million more Americans
uninsured and premiums are expected to go up
an additional 10% a year under this provision.
So here we have--the House plan was just mainly looking at just
taxes.
Here we have a tax and health care bill all in one.
- A lot of people have been talking about the process.
What do you think of it?
Does it seem to have been hurried?
- It does.
I mean these are really complicated bills.
There are a lot of really smart experts all around the country
who have models where they're trying to understand the
different implications of these various provisions.
Here we have a vote that's happening where we're just now
getting the latest numbers from JCT.
And it still seems that that might not even be the final
score as the bill seems to be changing out from underneath us.
- President Trump remarked this week, I heard him say it,
that the tax plan would hurt him and other wealthy people.
Could that possibly be true?
- It's hard to imagine how Trump personally won't benefit
from this bill.
The estate tax reform alone is-- it stands to benefit wealthy
families, such as the Trumps.
In addition, this provision to reduce taxes on pass-through
corporations, of which many Trump organization companies
are pass-through entities, that stands to benefit the president
and other wealthy business owners.
- Now, our own Senator Ron Johnson, as you know,
sought and received deeper business tax cuts to include
so-called pass-through companies.
He and others described these as kind of main street businesses.
Is that fully accurate?
- Many small business are incorporated
as pass-through entities.
So many mom and pop shops are.
It's the idea that the company is so small,
they only have a few owners and they rely on that business
income as their personal income.
So it's a way to simplify the tax code so they don't have to
get taxed twice, once through corporate tax process,
then through the individual income tax process.
But the rules on how you can organize as a pass-through
company are pretty loose.
So you can have hedge fund managers and law firms
and other kind of much wealthier entities
incorporating as pass-through companies.
By some estimates, 70% of all pass-through revenue
goes to the top 1%.
So this is ultimately going to be a big tax cut again
for the wealthy.
- Going back to our previous interview,
you said that whether corporate tax savings will be passed on
to the average worker in higher wages or whether it will just be
captured by shareholders through dividends is an important part
of the story that remains to be told.
When will that be able to be told?
- Yeah. It's still an open question.
How much can we expect these corporate tax cuts to be passed
on to the worker?
Even by the most generous estimate, we'd only expect,
in some economic modeling, about 25% of those tax cuts to be
passed on to the worker in the form of higher wages.
But it's important to remember that right now in most
industries, corporate profits are at all-time highs
and wages have stagnated.
It's hard to see how we can expect
this one-to-one transfer that
we've been promised that these corporate tax cuts will be
passed on to the worker.
- What is your reaction as a tax expert to the part of the
plan that sunsets the individual tax cuts but keeps
corporate tax cuts permanent?
- It creates quite a fiscal cliff for families.
So in the next ten years, while some families in years one and
two might receive a modest tax cut under this bill,
those tax cuts sunset.
By 2027, the majority of middle class families are going to
actually see a tax increase.
So the idea is that part of the bill will be so popular that
five or ten years from now, there will be another bill that
will vote to extend those provisions.
But then that will only make the deficit picture worse.
At some point, we have to figure out a tax bill that is
permanent.
A tax reform that works for everyone and that ultimately
will be paid for somehow.
- Speaking of being paid for, as part of the PAYGO sequester
rules, would there have to be automatic cuts to programs like
Medicare because of this tax bill?
- It does look likely that the tax bill as written would run
afoul of PAYGO rules which would automatically trigger cuts
to a number of programs including Medicare.
In the past, the Congress has gone ahead and put in waivers
and said that this specific piece of legislation won't count
against those rules.
It looks like that's what they're going to do here but
that's going to be an important thing to watch.
- All right, Rourke O'Brien, thanks very much for your expertise.
- Thanks for having me.
- In tonight's look ahead, the city of Milwaukee has released
its ambitious nearly 100-page "Blueprint for Peace, "
an awaited document to stem violence in the city.
A city that saw a 76% increase in gun homicides
between 2010 and 2016.
The blueprint sets out six goals beginning with
stop the shooting.
The others: promote healing and restorative justice,
support children and families, promote economic opportunity,
foster safe and strong neighborhoods and
strengthen the coordination of violence prevention efforts.
The plan is being described as a public health approach.
Milwaukee Mayor Tom Barrett joins us with details.
Mayor, thanks very much for being here.
- It's great to be with you.
- Why a public health approach?
- Well, I think most people would be surprised to learn that
in the city of Milwaukee, the budget for our police
department, which this year is about $302 million,
is actually larger than the entire tax levy
for the city of Milwaukee.
I'll repeat that 'cause it's shocking probably
to most people around the state.
The budget for the Milwaukee Police Department is larger than
our entire property tax levy.
So there's no question that we're putting the resources into
law enforcement and doing what we can to apprehend criminals
and to stop things from happening.
But we're also now convinced that we could add a gazillion
police officers and we still wouldn't get to some of the core
issues that are leading to the violence in the city.
Nationally and locally here as well,
we're seeing more and more people saying, look,
let's look at some other factors.
Obviously, we're going to have a lot of police but let's treat
this as a public health epidemic because there are factors that
are leading, not just Milwaukee but a lot of urban areas
throughout the nation, to have much higher counts of violence.
So that's something that we want to deal with here.
So what we did is in 2015, the year when we saw a significant
increase in homicides, we essentially retooled our Office
of Violence Prevention, tripled it in size,
and asked them to put together a community document.
So this is not the mayor's "Blueprint for Peace."
This is the city of Milwaukee community's "Blueprint for Peace,"
because I need the entire community to buy into
this approach to see if we can reduce the violence we have
in the city of Milwaukee.
- Now, this blueprint is all-encompassing.
How can the city fix everything all at once?
- Well, we can't fix everything all at once,
but I think if we can bring the churches,
if we can bring law enforcement, if we can bring community
groups, if we can bring citizens,
neighborhoods together and have a unified approach,
where we're dealing with a wide range of issues,
I think we're more likely to have a significant impact
on the level of violence.
Now, I say that, and I want you and your viewers to know our
homicide rate for this year is down about 16% from last year.
And it's down about 22% from 2015.
So I don't want people to be afraid to come to Milwaukee.
There's an incredible renaissance going on
in the heart of the city right now, unlike anything people
have seen in their lifetimes.
At the same time, we know that there are neighborhoods that are
plagued by too much violence.
That there are poverty issues, homeless issues,
transient issues, education issues.
So we want to deal with all these issues while we move the
city forward.
Because the city is moving forward.
- Now, one of the goals is coordination of efforts.
We've learned that there are so many people and groups trying to
help, but they compete for funding.
How do you specifically bring them together?
- So our goal is to have our Office of Violence Prevention
essentially be the center of the wheel.
And all the spokes feed into that center so that we can
better coordinate what's happening in different
neighborhoods.
We want to literally map the neighborhoods and see what
resources are in various neighborhoods serving youth,
serving people coming out of prisons,
serving people who need food.
If we have a more coordinated approach to this,
I think we're going to be able to better utilize the assets we
have and see where we need to put more resources.
It's an incredibly comprehensive approach.
You're right when you say that.
The document itself is very comprehensive.
But it's focused on bringing everyone together.
Not just law enforcement, not just the churches,
but as many individuals and institutions as we can to
supplement and complement the work that's being done
by law enforcement.
- Now, I noted interestingly that towards sustainable funding
to help implement the goal, you're thinking of a potential
city fee or a tax?
Describe that idea.
- Well, we're still in the formative stages for that.
Yesterday we made a presentation to the United Way.
And we think that there might be community support from
corporations and foundations.
Because we've done it in a way that we focus
on ten different neighborhoods.
Ten different neighborhoods.
It's a citywide approach, but we know that the violence
is most prevalent in ten different neighborhoods.
And so we're able to work with the foundation,
work with the corporation to say, look, you want to help us?
Here's old Milwaukee.
Here's old Milwaukee neighborhood.
Here's Harambee.
We could work with you to focus your dollars or your assets or
your people in this specific area.
So even though it's a large document and a comprehensive
document, it really can be broken up,
depending upon the funding source and the different needs
of those neighborhoods.
- Very briefly, with about a half a minute left,
what is next?
- Well, what we're doing right now is we're having neighborhood
sessions.
Again, because a big part of this is to have the
neighborhoods buy into this.
It can't just be the mayor's plan.
It can't be just the city's plan.
It certainly can't be just the police department's plan.
It has to be all of our plan.
If I didn't think we couldn't move the needle,
we wouldn't be doing this.
But I'm convinced we can deal with these issues because of the
incredible progress we've seen in economic development in
Milwaukee.
It's a different Milwaukee for people who haven't been here.
We're really moving in the right direction.
But we have to, again, bring everybody along with that.
- Mayor Tom Barrett, thanks very much.
- Thank you.
- A different look at crime and punishment now from the state
capitol.
Milwaukee State Representative Evan Goyke,
a former public defender, introduced a slate of bills this
week to put more inmates in treatment programs and reduce
the rate of reincarceration.
- The goal here today was to really talk about what is
happening behind the fence, in prisons,
and the prison population.
This is about avoiding a problem.
We stand on the precipice of having to build a new prison or
send guys out of state.
These three bills are just the beginning.
This is not my dream of how the criminal justice system should
be reformed.
This is just to avoid the crisis we find ourselves in today.
- In other state news, the race for governor in Wisconsin is
already seeing a skirmish between the incumbent and a
Democrat in the running.
In tonight's capitol insight, we look at how Governor Scott
Walker won't let Democratic Superintendent of Public
Instruction Tony Evers have his own lawyer to represent him in a
lawsuit over how he runs his agency.
The governor wants the State Attorney General's office to
represent Evers, even though the justice lawyer
would argue against Evers. Hmm.
We are joined by WPR Capitol Bureau Chief Shawn Johnson to
sort this out. That is kind of a hmm.
- It is.
There's a lot of those in this case.
- But it is usual practice, as I understand it,
for the State Department of Justice lawyers to represent
agencies in lawsuits.
So what's different this time?
- What's different this time is that while the Department of
Justice is willing and is currently slated to represent
Tony Evers in this case, they think that the people suing him
essentially are right.
That is, they disagree with Tony Evers in this case.
And so they would be giving him representation,
but not the kind of representation he wants.
- Let me back up a little bit and say that Evers was sued by a
right-wing law group over not getting the Walker
Administration's signoff on implementation of rules within
the Department of Public Instruction.
That's a new requirement under state law.
But does it make a difference in this case in terms of this legal
representation and this signoff of these administrative rules
that Tony Evers is a Constitutional officer?
- Tony Evers would argue that it does.
That his powers are spelled out explicitly
in the state Constitution.
And it's not just him making that argument either.
The State Supreme Court issued a decision in 2016 in a very
similar case involving a new law that gave the governor more
power to veto rules from the Department of Public
Instruction.
And in that 4-3 decision, they said that, yes,
the Superintendent of Public Instruction has these powers and
that the governor can't restrict them.
- This is basically just a quagmire,
but what is really happening here is that the justice lawyers
would not argue Evers' side of this case.
- Right.
That's what it boils down to at this point.
And that's why you heard Tony Evers say this past week-- he
held a press conference where he had a message to his political
opponents, Governor Walker and I think Tony Evers called them his
hand-picked attorneys.
He said you're fired.
And here's what Tony Evers said about why.
- The governor doesn't get to choose his opponents on the
ballot and his opponents' lawyers in court.
I can't believe there's many, if any,
citizens in the state of Wisconsin that would feel
comfortable going to court knowing that the attorney that's
representing them actually represents the other side.
- So who does Tony Evers want as his lawyer?
- He wants his own lawyer, his lawyer within the Department of
Public Instruction, to represent him.
That's actually what happened when this case-- not this case,
but the similar case went through,
the one decided in 2016.
Tony Evers had an attorney from the Department of Public
Instruction represent him.
He wants to do that again.
The Department of Public Instruction was starting to
initiate that process this time, when Governor Walker's office
stepped in and said, no, the Department of Justice,
Brad Schimel's office, will represent you, Tony Evers.
- What else does the governor say on why he's doing this?
- The governor, when he was asked about the Tony Evers
situation, he basically came back to this message of Tony
Evers needs to follow the law.
That was the message that you heard over and over again from
Governor Walker.
So he was asked specifically, shouldn't Tony Evers have a
lawyer representing him who represents his cause,
who believes in his cause?
Here's what the governor had to say about that.
- You're entitled to a lawyer that represents everyone then.
The fact of the matter is that the Justice Department
represents all state agencies.
They're not conflicted out.
And so they're ultimately going to represent the state
in this case just like they would
for any other state agency or any other office.
- Politically speaking, are both sides now, Tony Evers,
who we've mentioned is a candidate,
a Democratic candidate running for governor,
of course incumbent Scott Walker who has announced that he's
running for reelection, are they both politicking on this now?
- It would seem like it.
We are less than a year from the next governor's race.
I think we should view everything that Tony Evers,
a candidate for governor, and Scott Walker,
a governor running for third term,
we should view everything they do through a political light.
So I think we're on safe ground there.
When this thing started out, you could argue that Wisconsin
Institute for Law and Liberty, the group bringing this lawsuit,
while it is consistent for them to want to restrict
administrative rule-making power from agencies,
they presented this as Tony Evers breaking the law, right?
Knowing that he's a candidate for governor.
Tony Evers is hitting back now saying I'm standing up
to Scott Walker.
He's fund-raising off of this pretty regularly
saying that he's in this fight with Scott Walker.
So he's using it to his advantage, too.
- Just super quickly, there's a thing that just happened on this
as well, another filing.
- Yeah, essentially the lawyers who represented teachers who
brought this case initially back in 2012 are asking that court to
revisit it again and stop Scott Walker from enforcing this.
So instead of dealing with it at the State Supreme Court,
they want to take it back into the Circuit Court system.
- We'll keep watching it.
Shawn, thanks very much.
- You're welcome.
- Southeast Wisconsin is getting Foxconn.
Now an announcement about how northern Wisconsin could see a
major redevelopment project.
Granted, it's on a much smaller scale,
but it's regionally important.
The iconic Telemark Lodge Resort in Cable has seen more than its
share of ups and downs over its 70-year history.
From its start as a ski hill in 1947 to its heyday in the 1970s
when big-name acts played its grand venues as the ski lodge
expanded into a major resort and conference center.
It sits adjacent to the starting gate for the international
Birkebeiner cross-country ski race.
But by the mid '80s the resort's original owner filed bankruptcy.
And since then, the resort has been bought and sold several
times, each time reopened only to be closed again,
a rollercoaster of dashed promised for renovation and
revitalization.
So the question now is can the latest $47 million reno and
expansion announced by new buyers stick this time?
The developers are looking for taxpayer assistance,
which needs action from the legislature and the governor.
Cable area officials were in Madison this week trying to set
that in motion, including Town of Cable Chairman Art Hancock.
He joins us from Ashland and thanks very much for doing so.
- I'm glad to do so.
- Well, so what are you and others seeking from the state?
- What we're seeking from the state is the permission to
establish a tax increment district.
We're a small town and TIF legislation and TIF districts
are usually only granted to villages and larger cities.
Because we don't meet the criteria with the existing
legislation, we were down in Madison to try to get them to
give us special legislation so that we can establish a district
in our town.
- What's been the response in Madison?
- I thought it went really quite positively yesterday.
We met before the Ways and Means Committee for the Assembly and
for the most part they were very positive.
They did have some concerns that as a town they don't want us to
get in over our heads with financing it too much.
But I think we allayed their fears and I feel like
we're on a positive track.
- Is there any kind of dollar figure as to how much the new
buyers or the developers would like to see?
- The Town of Cable has not entered into any negotiations
with the developer at this time.
There have been some numbers that have been thrown out,
but they're just kind of preliminary numbers.
The resort is in such a dilapidated state right now that
the amount of money that needs to go and that can go into
TIF-allowed projects, it's really kind of preliminary right
now to determine that.
- Now, I spoke to one local in Cable who said that she is
excited by the prospect of bringing Telemark back,
but also scared to death.
Does that pretty much measure how people there feel?
- I thing that's probably a pretty good estimate of what
most folks in Cable feel.
The sense I get is that most of us are cautiously optimistic.
Telemark has been our flagship for years and years,
and it's been-- we have folks in Cable who-- couples that
have met on the slopes of Telemark.
And it was such an economic powerhouse for so many years.
So the prospects of it opening again are huge,
though we have over the last few years had a number of potential
developers that have fallen through.
I think people in Cable are a bit suspect but everybody that
I've talked to anyway is very optimistic.
- So what do you envision as the best-case scenario for that
property?
- Well, the best case is we have a current developer that is
interested in purchasing the property,
has actually entered into a purchase agreement with the
current owner of the property.
They hope to close on the property at the end of January.
That's the first-- would be the first big milestone.
And then within the last next year or year and a half,
for them to develop the property just along the same lines
that they are hoping to-- that they've projected that they are.
- What could it mean for the economy and jobs in the region?
- We had a-- the Town of Cable and Bayfield County
funded a market feasibility study.
And we-- and part of that study,
they looked at some of those numbers of what it might mean to
the community.
And they're projecting that it might result in about a
$25 million increase in direct visitor spending to Bayfield County.
So a lot of that would come right into our town,
and we would be very happy with those results.
- Why do you think, if you do, that this time might be the
charm for Telemark?
- Well, the current developer is--
they've been around the block.
They've done these projects before.
The developers that have come through that tried to just kind
of renovate the existing building that was built in the
'70s, that hasn't worked out.
But this developer wants to do a complete redevelopment of the
property.
And it's a different thing.
And I think their marketing plan is quite different as well.
And I think that that will prove to be successful.
- All right. Well, we hope so.
Art Hancock out of Ashland, thanks very much for joining us.
- Thank you.
- Next week on "Here and Now," we'll hear from our colleagues
at WisContext.org about the connection between Hurricane
Maria recovery and a slow-down of some medical supplies in
Wisconsin.
That's on next week's program.
That's all for tonight.
I'm Frederica Freyberg.
Have a great weekend.
- Funding for "Here and Now" is provided, in part,
by Friends of Wisconsin Public Television.