Wisconsin faces a revenue crisis after irresponsible tax cuts produced a huge budget deficit. State leaders are attempting to deal with the crisis though drastic cuts to vital infrastructure, such as public education. These proposed cuts follow years of reductions to these same crucial services.
For years, Wall Street and other big corporations have engaged in a systematic effort to suppress taxes, making it difficult for cities and states to advance progressive revenue solutions to properly fund public services. Banks have taken advantage of this crisis that they helped create by targeting state and local governments with predatory municipal finance deals, just like they targeted cash-strapped homeowners with predatory mortgages during the housing boom. Predatory financing deals prey upon the weaknesses of borrowers, are characterized by high costs and high risks, are typically overly complex, and are often designed to fail.
Predatory bank deals have cost Wisconsin and Milwaukee Public Schools hundreds of millions of dollars, and banks continue to siphon tens of millions more each year. But the state and our schools have numerous options available to get out of or renegotiate these toxic deals, and even to recoup losses.
In Wisconsin’s Dirty Deals: How Wall Street Drains Public Budgets and What We Can Do About It, Carrie Sloan and Saqib Bhatti argue that Wisconsin leaders have a clear choice: disinvest in education and other vital services, which hurts ordinary working people and their communities; or hold Wall Street accountable for its destructive effect on our economy and take action to get taxpayer money back from banks. It is time we start making our money work for us.