I was on Wisconsin Public Radio Friday with FightingBob.com’s own Ed Garvey, who dramatically began the show with an announcement about the threat of “financial martial law” coming to Wisconsin.
(For those who don’t know: My father was a banker. So Garvey’s three words immediately make me think of an army of three-piece-suited wingtip-wearing bankers armed with attaché cases.)
A report on the Forbes.com blog of left-winger Rick Ungar followed up:
Reports are surfacing that Scott Walker is now preparing his next assault on the democratic political process in the State of Wisconsin.Following the lead of Michigan GOP Governor Rick Snyder, Walker is said to be preparing a plan that would allow him to force local governments to submit to a financial stress test with an eye towards permitting the governor to take over municipalities that fail to meet with Walker’s approval.According to the reports, should a locality’s financial position come up short, the Walker legislation would empower the governor to insert a financial manager of his choosing into local government with the ability to cancel union contracts, push aside duly elected local government officials and school board members and take control of Wisconsin cities and towns whenever he sees fit to do so.Such a law would additionally give Walker unchallenged power to end municipal services of which he disapproves, including safety net assistance to those in need.According to my sources, the plan is being written by the legal offices of Foley & Lardner, the largest law firm in the state, and is scheduled to be introduced to the legislature in May of this year.The story first came to public attention yesterday during an interview with Madison, Wisconsin attorney and activist, Ed Garvey, on Wisconsin Public Radio.
I of course was handicapped by having no idea what Garvey was talking about, which is why I was reduced to pointing out that our state is in much worse financial shape than most people think. While state government is required by law to be balanced on a cash basis, if state finances were measured on the more-accurate-for-a-$30-billion-annual-spending-enterprise Generally Accepted Accounting Principles, then the state, measured at the end of the 2009–10 fiscal year, was $2.94 billion deep into the red ink. As I also pointed out last week, the state’s Unrestricted Net Assets (gross assets minus money owed on those assets) is another red number, $9.46 billion, better than only seven states in dollar amounts and, at 3.7 percent of GDP, better than only five states. And our $15.21 billion in state and local government debt gives us the sterling bond ratings of Aa2 rating from Moody’s (which ranks Wisconsin 34th), AA+ from S&P (26th), and AA+ from Fitch (31st).
Ungar and/or his amen chorus see this as an evil conspiracy to undermine democracy (defined as election results you don’t like) and privatize government. (Because evil business, which has to earn its customers, would perform government services so much worse than those pure-of-heart selfless public employees, who you’ve seen acting like sixth-graders at the State Capitol for weeks and are threatening a general strike.
Gov. Scott Walker denied Monday that his administration was working on a financial martial law (or I thought I heard “Marshall plan” mentioned Friday). Read the comments, of course, and you’ll see the types of thoughts about Walker that, had the governor been a Democrat, would be called “hate speech.”
The Wisconsin State Journal‘s story was funnier to read:
“The secret plan is being prepared by the state’s largest law firm, Foley & Lardner, for the Greater Milwaukee Committee, the Bradley Foundation, the governor, and key legislators,” Garvey writes. “There is speculation that Alberta Darling is the Walker point person on this nutty scheme, but no need to speculate: call Senator Darling’s office and ask!”So we did.“I have no idea where they are getting this,” said Andy Potts, Darling’s spokesman. “It’s not true.”Later in the blog, Garvey, who did not return calls Monday, writes of a “fancy brochure” that will essentially sell the governor’s plan to the state. Problem is, that brochure already exists. It was put out Feb. 14 by the Greater Milwaukee Committee, and it has nothing to do with the state, or the governor, or Michigan.Instead, it focuses on Milwaukee County and offers suggestions for changes that could lead to greater transparency in government.“Contrary to the rumors that circulated this weekend, the initiative does not support providing the state with the ability to take over cities and other entities,” said Julia Taylor, president of the Greater Milwaukee Committee.
I pass on three reactions to Ungar. The first comes from someone who works in local government: “More tinfoil conspiracies from the same people who are discovering that when we have to balance the budget, it might actually mean they lose a little money.”
The second comes from a poster named justgoogleit, who refers to the takeover of city government in Benton Harbor, Mich., because of Benton Harbor’s financial disaster area:
You clearly didn’t raise any concern about the fact that Benton Harbor was effectively taken over by DEMOCRATS. Frankly, my opinion is that the city of Benton Harbor SHOULD have been taken over…and I don’t care what political party did it.If you agree that governmental bodies can be taken over financially (i.e., the old law is OK with you), what sense does it mean to leave those in power? For instance, until this new law was passed in Benton Harbor, the elected officials could have started passing all sorts of goofy laws just to spite the state-appointed financial manager. For instance, they could have passed laws for a 100x pay increase for themselves, or that the populus would be paid $100 per day. Without the power of controlling the legislation (city laws), it becomes a tug-of-war. The state-appointed financial manager has the purse-strings and the people who were part of the problem (the city council, mayor, etc.) get to drive the city further into the ground!Why is there not this uproar about such things in other cases? The East St. Louis school district was taken over by the Illinois state government recently. Camden, New Jersey was taken over by the state a decade ago (I think part of it is still under state control). There are dozens of examples of this.You may argue that the law goes one step further. And, I suppose it does. However, it effectively ensures that the city councils/mayors who haven’t shown their way out of a financial mess, thus requiring outside control, aren’t allowed to continue to create a mess!You (or your editor) chose to use words like “martial law”. Ummm, while an interesting set of words to grab headlines (and associate it with the GOP, of course), it is far from the truth. There is no military that is involved in any of the cases that I am, or you are, talking about. Why not use the words “voter murder” to further illustrate your point about the killing of a voter’s opinion? That would get you some more clicks, wouldn’t it?
Another poster, xcori8r, makes another inconvenient point:
Gee, it does not seem as if there is much of a concern about this in cities and states that are run successfully. The only concern is in failed states and communities where kleptocratic and/or utopian overreaching socialist fiscal management have brought communities to or over the brink of insolvency.
What a crazy thought. Financial solvency? Not spending more tax dollars than you collect?
The other fact, like it or not, is that such financial takeover measures must have passed constitutional muster at least somewhere, otherwise they wouldn’t be happening in Michigan and other states. (Including to our south, in East St. Louis.) The Michigan law referred to has been in place for several years, and the Benton Harbor takeover began under the previous Democratic governor.
Apparently passing on not even half-baked conspiracy theories is easier than financial discipline, which Wisconsin has been lacking for decades. (Note the number of Madison protesters who apparently are color-blind — they are unable to see red ink.) Single-fiscal-year deficits of $2.94 billion and debts exceeding your assets by $7.45 billion do not happen overnight.
Steve Prestegard.com: The Presteblog 
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