State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
I have sent the following letter to Jessica Stice, Executive Director of the USO of Wisconsin-Southeastern Region, with copies to Milwaukee County Executive Scott Walker and members of the Milwaukee County Board of Supervisors about the possible closing of the Milwaukee USO office:
As required by state statute, the highly acclaimed Wisconsin Legislative Audit Bureau (LAB) has completed a review of the Wisconsin Lottery, based on an examination of trends in lottery sales, operating revenues and operating expenses, the development and management of instant games, and the Lottery’s oversight of its contracts with private firms.
There has been a dramatic decline in the sale of pull-tab tickets. Pull-tab ticket sales totaled about $25.3 million during fiscal year 1988-89. However, by fiscal year 2007-08, sales had dropped to $3.2 million. The Wisconsin Lottery says the decline is due, in part, to private pull-tab vendors operating illegally or under a loophole in state law allowing any business to offer a game of chance with its products as part of a promotion. Pull-tab ticket sales are not expected to increase until or unless private illegal games are stopped or if the exemption for private vendors is modified. Wisconsin Department of revenue Secretary Roger Ervin, in a letter to auditors, says Lottery staff has conducted a market analysis showing the Lottery could generate an additional $23 million per year in revenue if statutes were changed to allow Lottery-only games.
Another noteworthy item in the audit involves the contract for product information services, a term that simply means advertising. Milwaukee public relations firm Hoffman York is contracted by the Wisconsin Lottery to publicize lottery games. Almost all funds appropriated in the state budget for product information go to Hoffman York. The 2007-09 state budget increased the annual product information budget from $4.6 million to $7.5 million. Hoffman York received $7.2 million during fiscal year 2007-08 and used it to buy radio and TV time to publicize games.
The Wisconsin Lottery is required by its contract to formally review and evaluate Hoffman York’s performance each year. The LAB discovered the Lottery “has not done so. Instead, agency officials provide ongoing verbal feedback and conduct quarterly surveys of Wisconsin residents to gauge their awareness and opinions of the Wisconsin Lottery.”
While the audit was being conducted, the Lottery started to make an evaluation form for its product information contractor. The audit reports says:
“To measure the effectiveness of Hoffman York’s product information services, the Wisconsin Lottery compared initial 12-week ticket sales for 16 publicized scratch-off games with average 12-week sales data for comparable unpublicized scratch-off games that were introduced during the same period.”
Following a 2005 LAB recommendation, the Lottery began using an evaluation tool to determine each instant game’s first 12-week ticket sales and overall sales. During fiscal year 2007-08, 113 instant scratch-off games were available for purchase at some time. The LAB audit is recommending the Lottery include product information costs in its evaluation tool for instant games and require Hoffman York to consistently report amounts spent to advertise individual games.
In his response to the audit, Wisconsin Department of Revue Secretary Roger Ervin wrote that despite the challenge of precisely determining the effect of lottery advertising, it works. Ervin says the Lottery stopped advertising during 1993 and it lost about $19.5 million in instant ticket sales, a loss of at least $25 for every $1 of advertising not spent.
Other notes from the audit:
During fiscal year 2007-08, Wisconsin Lottery ticket sales totaled $494.7 million.
The Wisconsin Lottery provided taxpayers with $146.5 million in property tax relief during fiscal year 2007-08.
During fiscal year 2003-04 through fiscal year 2007-08, ticket sales increased 2.4 percent.
Once again, I commend the LAB for their consistently outstanding work. Here’s the audit report.
Wisconsin has a moving problem. Too many are voting with their feet.
Our state’s high level of taxation is forcing too many residents to pack up and leave. During November 2005, the Wisconsin Taxpayer Alliance issued a very troubling report entitled, "Moving In, Moving on: Migration in Wisconsin." During the five years prior to the 2000 census, almost 669,000 people either moved to or out of Wisconsin. However, the net in-migration into Wisconsin was a meager 7,282.
Individuals with college or advanced degrees were more likely to leave, while those with less education tended to come. Individuals with household incomes above $75,000 left Wisconsin. Those with incomes of $200,000 or more had the highest rates of leaving.
The huge exodus of wealthy Wisconsinites leaving the state caused a loss of an estimated $4.72 billion in net worth and a loss of $455 million in income over the five years of this study. That means far fewer in-state bank deposits, less stock in Wisconsin firms, less investment capital for in-state ventures, and less money given to local charities.
Arthur Laffer, president of Laffer Associates and Stephen Moore, senior economics writer for The Wall Street Journal editorial board confirmed that high taxing and spending have had a negative impact on Wisconsin’s ability to compete and cause many people to relocate elsewhere.
Laffer and Moore write in the Wall Street Journal, “Five of the states near the bottom of our competitiveness ratings -- Illinois, Maryland, Michigan, New Jersey and Wisconsin -- have enacted major tax increases.” Laffer and Moore say the record movement of citizens across America has little to do with the weather. They say the states with the most dynamic and desirable economies are generally the states with the lowest tax, spending and regulatory burdens. These states win the battle for the prized commodity of human capital. The big losers are high taxing and spending states in the Midwest and Northeast.
New evidence suggests the disturbing pattern continues.
The Woodrow Wilson School of Public and International Affairs at Princeton University released a study during September 2008 examining migration trends in New Jersey. The authors compared New Jersey to states that tend to attract low‐income individuals, while seeing a relative outflow (or much smaller inflow) of wealthy individuals. The study said Wisconsin is a good example, being one of the five states in the country with the most negative correlation between income and net migration. The list includes Wisconsin, Arizona, Delaware, North Dakota and Arkansas.
The study says the following about Wisconsin:
“At low income levels, there is strong net in-migration into Wisconsin; however, at higher income levels, in‐migration is small or negative. Hence, one can say that Wisconsin is more attractive to low‐income individuals than high‐income earners.”
Authors concluded that in New Jersey, “poor people leave, but rich people do not.” In Wisconsin, “on average, poor people move in, but rich people do not.”
Why is Wisconsin so enticing to so many poor? University of Wisconsin-Madison economics professor provided an answer in his presentation to a Federal Reserve Bank of Minneapolis conference on the Midwest economy during June 2008. Kennan displayed graphs showing Wisconsin dishes out the highest welfare benefits in the Midwest. You thought we ended welfare as we know it? Time limits have been placed on benefits and there are more stringent work provisions. But the size of benefits remains generous.
Factor in other benefits like child care, BadgerCare, the earned income tax credit, and low income housing, and the incentives for low-income residents to flock to Wisconsin are quite evident. The term, “welfare magnet” may have disappeared for some time in Wisconsin, but this new data seems to suggest there could be an entirely new welfare migration taking place.
This migration is clearly putting a strain on our finances. Just how much it is costing in taxes is unclear but my guess is that it is substantial and needs further study.
Meanwhile, our wealthiest leave Wisconsin, taking with them their tax revenues, spending, savings, investments, and charitable contributions. To stop people from voting with their feet in Wisconsin, we must stop the hemorrhaging of taxing and spending.
Amidst the various newspaper sale ads, television offerings, and never-ending assortment of trimmings on the table, please remember the true, and yes, religious significance of Thanksgiving. As we reflect on our own blessings after a year about war, terrorism, natural disasters, and negative campaigning, those blessings certainly seem very clear. Pause and appreciate what we have: family, friends, individual liberties and freedom, and for those truly fortunate, rewarding employment and fine health. The most joyous season we are about to enter should be a reminder to all not to take any of what we enjoy each and every day for granted.
While we take into account what we truly are thankful for, we should take time to also hope that those not as blessed may find whatever it takes to make their lives better and happier. Far too many in our country and abroad have suffered great hardships this past year. They should not be forgotten. They need to be remembered in our thoughts and prayers.
Watch TV. Enjoy all the sports. Eat and eat some more. But carve out some time to gather as a family, ponder your many blessings, and give thanks, for that is the true meaning of this wonderful holiday.