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Wisconsin Welfare

  [Sorry about the problem last week.  The problem was not with the 
  listserve, but with two sites that received the message.]
  Last week, Ralph Nader sent the following letter to Wisconsin's Governor 
  Thompson, recommending that the Governor cut corporate welfare rather 
  than put needy families and children at risk. 
  Governor Tommy Thompson
  P.O. Box 7863
  Madison, WI  53707
  July 9, 1996
  Dear Governor Thompson:
       You appear to have unerring eye for asserted welfare abuses
  involving the poor down to the last school lunch.  But, your vision
  seems to dim at the mere mention of waste and abuse inside welfare
  for corporations.  
       This selective view of welfare problems allows you to continue
  to recommend expanded state handouts and tax escapes for profitable
  corporations, even as you boast of plans to cut the poverty welfare
  rolls in Wisconsin. 
       In your May 22nd USA Today op-ed, you declared, "We must end
  welfare, not only in Wisconsin but also in America," and further
  claimed, "The end of welfare is not negotiable."  You declared,
  "The welfare check is history," in a May 19th New York Times
  article.  Yet, at a May 29th press conference in Washington, DC,
  where our Corporate Welfare Project coordinator asked you when you
  planned to start attacking Wisconsin's other AFDC program, Aid For
  Dependent Corporations, you failed to answer her question.
       You brag about your so-called landmark Wisconsin Works (W-2) program,
  which cuts back Aid for Families with Dependent Children in Wisconsin and
  places needy children and families who have no jobs at risk.  Wisconsin
  spends a little over $300 million per year for poverty welfare cash
  assistance.  In contrast, you and state staffers promote corporate
  welfare, which provides well over a billion dollars a year in state tax
  breaks, subsidized loans and grants to businesses.  A recent ad placed by
  the Wisconsin Public Service Corporation in Site Selection magazine touted
  the state's "exceptional corporate tax advantages."  Corporate welfare
  privileges given to powerful economic interests overflow in Wisconsin, 
  forcing innocent small businesses and residential taxpayers to compensate
  for big corporations' bonanzas, by either paying more taxes than
  they should, or receiving reduced public services, or enduring
  larger government debt.   
       The Wisconsin corporate welfare trough is a cornucopia of
  corporate freebies.  It is filled with tax escapes, subsidized
  loans and grants.  Business people don't even have to pay for the
  phone call to get the details; they need only dial 1-800-HELP-
       Since the 1960s, the Wisconsin Legislature has enacted a
  number of welfare offerings in an effort to induce profit-seeking
  corporations to locate or expand their operations within the state. 
  According to the Wisconsin Department of Development (DOD), these
  privileges include tax exemptions, tax credits, special corporate
  tax treatment and other special tax incentives.  State and local
  tax escapes for businesses in Wisconsin now total $1.1 billion each
       The DOD also offers a broad range of state financial
  assistance to businesses.  These include grants, loans and DOD
  services designed to help businesses get started, expand and meet
  corporate welfare challenges in other states.  During 1995,
  Wisconsin Development Fund awards totalled almost $9.5 million in
  state funds.  Sample recipients and their 1995 profits are listed
  in Table 1.  Why do these profitable companies need to tap state
                                    Table 1
          Sample Recipients of 1995 Wisconsin Development Fund Awards
  Company                                Award     1995 Company Profits
  General Electric Medical Systems       $500,000   $6,573,000,000
  (General Electric)  
  Hutchinson Technology Inc.           $1,000,000    $21,078,000
  Kohl's Department Stores, Inc        $1,480,000  $80,973,000
  Mercury Marine (Brunswick Corp.)       $750,000  $127,200,000
  Reynolds Wheels International          $510,232  $389,000,000
  (Reynolds Metals)               
  Supervalu, Inc.                       $502,000   $43,334,000
   Source: Wisconsin Development Fund Semi-Annual Reports, Department of 
       Even sports teams have their hands in the state till.  Last
  summer, when the Brewers claimed that they hadn't been able to
  raise private funds for a ballpark, you immediately held closed-
  door meetings with the mayor of Milwaukee and the Brewers' owners. 
  The result was a proposal for more corporate welfare in the form of
  a tax hike in Milwaukee and surrounding counties to raise $160
  million toward stadium construction costs.  The total deal, as of
  February 1996, included $882 million in state, city and county
  investment, even though more than 70 percent of state voters had
  turned down efforts to fund the stadium through a state lottery. 
  The voters further expressed their opposition when they voted, for
  the first time in history, to recall a state legislator   Senator
  George Petak.  Succumbing to pressure from you, Senator Petak had
  cast the deciding vote for a sales tax increase to help pay off
  $250 million in bonds to build the new stadium, even though he had
  promised constituents that he would oppose the tax.
       Your support of business welfare is at odds with expert and
  public opinion.  According to Site Selection magazine, quality
  labor, overall costs, business climate and infrastructure   not
  incentives   are today's top site selection factors.  A recent
  report reviewed results of hundreds of studies that had examined
  the effectiveness of state and local tax subsidies.  Though the
  studies used a variety of methods of data collection and analysis,
  the results were fairly consistent.  Two important findings were:
         There is no evidence that state and local tax cuts,
       when paid for by reducing public services, stimulate
       economic activity or create jobs.
         There is little evidence that the level of state and
       local taxation figures prominently in business-location
       Rio Rancho, New Mexico is an unfortunate case in point.  The
  city provided a smorgasbord of subsidies and tax escapes to attract
  employers, but after handing out big tax breaks to corporations,
  could not afford adequate funding for its schools.  According to a
  Wall Street Journal exposi of corporate welfare, Rio Rancho's high
  school students were bused to an overcrowded Albuquerque school and
  local middle and elementary schools were packed to twice their
  capacity.  Rio Rancho's "bidding for business" strategy may come
  back to haunt the city.  According to Site Selection magazine, the most important
  factor driving business location decisions is the availability and
  quality of labor.  
       At the May Economic War Among the States conference in
  Washington, many of the more than 70 state and municipal
  legislators and officials, business executives and legal, labor and
  economic experts in attendance called for a truce in the
  proliferation of lucrative tax breaks, loans and grants that states
  and cities are using to attract companies and professional sports
  teams.  Nearly all attendees agreed that the governors and mayors
  are in the dark about the long-term effect of tax breaks for
  businesses, that may create jobs at a substantial cost but also
  make it harder to finance other public services.
       While Wisconsin's corporate welfare programs grow, the social
  spending caseload has been slashed by 39 percent.  Among the cuts
  are included income support for the neediest children.  AFDC
  payments to disabled parents receiving Supplemental Security Income
  will be eliminated and replaced with a lower separate monthly
  supplement per child, resulting in a cut in benefits of 60 percent,
  or $10 million annually, for example.  Must a child incorporate
  itself to elicit your concern?     
       Your rhetoric attacking "welfare as we know it" is hollow as
  long as you ignore tax escapes, subsidies and subsidized loans to
  corporations.  These welfare payments and tax breaks for allegedly
  "free market" wealthy corporations must be examined and curtailed
  before genuinely needed payments to needy families and especially
  children are slashed.  Failure to end these huge amounts of
  corporate welfare and erosions of the tax base for the privileged
  and wealthy makes a mockery of your professed conservative belief
  in `sink or swim' free enterprise markets.  You are, instead, a
  leading corporate socialist.
  Ralph Nader
  Janice Shields
  Center for Study of Responsive Law
  P.O. Box 19367, Washington, DC  20036
  202-387-8030			|   Internet:	jshields@essential.org