Double Whammy helps the phone companies
Bills combine to hurt local government, consumers

Two bills before the Wisconsin Legislature, combined, would create state policy that would hobble local government efforts to provide broadband service in Wisconsin,   reserve the potentially lucrative market for unregulated phone companies and cable providers and actually encourage price gouging by unregulated monopolies..

By themselves, Senate Bill 272 and Assembly Bill 672 are bad enough.

But you have to look at them together to find out what direction the state would be heading were both to become law. It's a direction that reserves broadband services for just some communities, ignores rural areas of the state and invites giant cable companies and telecommunications providers to prey on consumers.

"The overall policy is 'reserve broadband for the telephone and cable companies,'" says Sandy Fain of iTown Communications.

That's absolutely counter to the state's stated policy of encouraging the rapid deployment of broadband.

"This legislation is designed to stymie us and prevent other municipalities from getting into the business. . . . This legislation is terrible. It's going to create a digital divide among rural and urban Wisconsin," Reedsburg Mayor Carl Stolte told the Milwaukee Journal Sentinel. "You can't start excluding geographic areas of Wisconsin because the numbers don't work for cable companies and Internet providers."

"Mayor Stolte's got it right," Fain says. "There are at least two somewhat subtle provisions in (AB 672) that would stifle local government from engaging in self-help regarding broadband infrastructure. The first is a provision that puts a floor on the prices a municipal provider could charge (ostensibly to keep it from subsidizing the service) but the practical effect is that cable companies can price below that floor,  and if AB672 passes, telephone companies will be able to as well."

As a result, Wall Street will shy away from underwriting revenue bonds (as opposed to general obligation bonds)  to finance a municipal telecommunications project, Fain said in an e-mail to the Alliance of Cities. iTown Communications wants to work with smaller and medium sized cities to build and operate broadband networks for their businesses and citizens.

"The second provision requires the local government first seek to obtain the service from a private provider. If the private provider doesn't have the service available but offers to provide it at any price within the time frame specified in the bill, then my reading of the bill is the local government cannot proceed on its own," Fain wrote. "It's a trap. The telephone company can ask a gazillion dollars and the local government will have to take it or leave it, but cannot pursue its own infrastructure."

Fain recommends a more balanced approach to broadband. His proposal asks the state to:

1. Distinguish between regular broadband and super high-speed broadband.
2. Deregulate broadband as cable and telecommunications monopolies break up.
3. Have the PSC review the industry every three years or so, and intervene if monopolistic practices are occurring.

See his testimony on AB 672 here. See Waupaca Mayor Henry Veleker and businessman Charlie Lieby's take on SB 272 here.

New Group Will Monitor 'TABOR'

Local government has to keep an eagle eye on legislative efforts to amend the constitution to include a complex set of rules patterned after the so-called Taxpayers Bill of Rights in Colorado, so we've created a new group to perform the task. Partners in Local Government, the loose-knit confederation of associations and individual local governments, has added educational and union leaders to the Partners roster and created WI TABOR (pronounce the entire acronym, please).

Inexplicably, supporters of the proposal have picked the name without the space in it for their web site. They must not be fazed by the homonym.

As if by magic, four days after creation of WI TABOR, a guest column appeared in the Wisconsin State Journal  by Wade Buchanan, president of the Bell Policy Center in Colorado, warning voters here about the unanticipated consequences of TABOR there. With luck, other publications will see the guest column and reproduce it.  The column also will appear in the March issue of Wisconsin Counties magazine. At the time, several of our associations were being deluged with information from Colorado about the unanticipated consequences of TABOR there, so our motto was born.

Buchanan's column as it appeared in the State Journal is located here. If you want to send it to your local paper, feel free to cut and paste it into an e-mail message.

Also, please contact your legislators (list here), or Rep. Jean Hundertmark (who is reportedly heading up the effort to rewrite AJR 55)  or Rep. Frank Lasee  to ask them if the effects of TABOR here have been studied, and if so, to please provide you with as copy of the study. 

When the differences between the tax systems and the state and local relationships in the two states are analyzed, it is likely that local government would take a bigger brunt of the effects of TABOR in Wisconsin.

"If you are dependent on (money) coming from the state to local government, you have a more pronounced financing problem," Hedges said on Wisconsin Public Radio.   We aren't aware that the differences between Wisconsin's and Colorado's tax systems have been studied, and we think they spell more trouble for local governments in Wisconsin than their counterparts in Colorado have encountered. See this sidebar.

Oregon voters on Feb. 3 buried Measure 30, choosing to balance the budget by spending less, not by paying more, the Portland Oregonian reported. The Legislature's $800 million tax increase was losing by about a 3-to-2 ratio in partial returns when the Oregonian's story went to press. Story here. The average elected official in Marathon County is eligible to join AARP.  In Rothschild the average age is 60. In Wausau and Weston, it's 54. And the average age of a Marathon County Board member is 58, reports Elizabeth Putnam in the Wausau Daily Herald. And the old fogies have challengers so scared that uncontested races are common, she reports. Story here. The Minnesota Taxpayers League has named as its "No. 1 priority" the adoption of a state constitutional amendment that would limit state and local spending growth to no more than the amount needed to serve population increases and inflation, the Minneapolis Star Tribune reports. Will they succeed in getting an amendment that works, or will they create a "ratchet down" effect like Colorado's that will produce an amazing shrinking government?  The story doesn't say, but it's here. You may have to subscribe to the online Star Trib, for free. Rep. Frank Lasee told Manitowoc County Republicans AJR 55  is drawing increasing Legislative support and may be passed out of the Assembly later this session. See the Manitowoc Herald Times Reporter story here. Any effort to solve Colorado's fiscal mess via constitutional amendment should not include just changing the Taxpayers Bill of Rights —  it should include modified school funding requirements, insists Gov. Bill Owens. He made his comments to nearly 200 delegates at a Colorado Municipal League meeting, only a day after the Bell Policy Center received two ballot titles for initiatives to change TABOR. Owens predicts voters will side with him if a TABOR fix were the only issue on the November ballot. Story here. Colorado Republican State Rep. Al White  thinks a constitutional convention may be the best solution to Colorado's fiscal woes. But he views a constitutional convention as a last resort for sorting out the contradictory amendments in the existing constitution, the Denver Post reports.  Story here. In Wisconsin, Republican Don Pridemore touted AJR 55 as he announced  a bid to challenge Rep. Michael Lehman (R-Hartford). He mustn't read the Alliance newsletter. Story here. The folks at the Bell Policy Center have spent two years studying tax laws in Colorado. They say the Taxpayer's Bill of Rights needs to be revised, and they're proposing a series of ballot measures to change it. Story here. Carol Hedges of the institute told a Wisconsin Public Radio audience Feb. 5 that Wisconsin citizens may wake up to quite a hangover if they enact AJR 55. Story here. Still unconstitutional: U.S. District Judge Barbara Crabb has again ordered La Crosse to remove a monument inscribed with the Ten Commandments from a city park.  The AP story is here. Getting Worse? Everyone hates traffic congestion, and it keeps getting worse, in spite of attempted remedies. What can we do? The answer to the first question is that people need mobility, and they want to move around during rush hours. That's why they call them rush hours. The answer to the second question is grin and bear it. Brookings concluded in a study, "Traffic: Why It's Getting Worse, What Government Can Do" that we simply can't build enough new highways or transit systems to eliminate congestion.  And we can't readily afford either, said the study. Adding more concrete (the solution the Southeastern Wisconsin Regional Planning Commission wants to impose on Milwaukee) "is totally impractical and prohibitively expensive. Governments would have to widen all major commuting roads by demolishing millions of buildings, cutting down trees, and turning most of every metropolitan region into a giant concrete slab... no large region can afford to build enough to completely eliminate peak-hour congestion." The study is located here.