Governor Walker has given state agencies guidance on how to develop their proposals for Wisconsin’s next budget, giving some glimpses into what the state’s 2015-17 budget might bring.
Wisconsin has a two-year budget. The budget process starts in the summer of even numbered years – like now — when the Governor instructs agencies in how to develop budget requests. Agencies submit their requests to the executive branch by September 15, and the Governor takes the requests into consideration when developing his own budget proposal to submit to the Legislature. The Governor is expected to release his budget proposal in the early part of 2015. For more about the Wisconsin state budget cycle, check the Wisconsin Budget Project’s Budget Toolkit.
For the upcoming budget, Governor Walker recently instructed agencies to assume there will be zero growth in General Purpose Revenue (GPR) appropriations in each fiscal year. In other words, he wants agencies to submit budget requests that are not any higher their budgets were two years ago, even though inflation and other factors have pushed costs up. Read more
Paul Ryan has a released a new poverty plan that advocates consolidating federal safety net programs and turning the money over to the states. It’s always worth taking a look at changes that could make anti-poverty program more effective, but Ryan’s approach would decrease opportunity for individuals living in poverty, not increase it.
Ryan frames his new proposal as aimed at giving low-income people the tools they need to make ends meet and lift themselves out of poverty. According to his proposal, Expanding Opportunity in America:
“A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. If you work hard and play by the rules, you should get ahead. But the fact is, far too many people are stuck on the lower rungs…There are many factors beyond public policy that affect upward mobility. But public policy is still a factor, and government has a role to play in providing a safety net and expanding opportunity for all.”
Ryan believes that a fundamental redesign of how federal anti-poverty programs deliver services can help expand opportunity across the board. Read more
Immigrants are playing a very important role in boosting cities in Wisconsin and across the Midwest, according to a report issued last month. The recent report, written by the Chicago Council on Global Affairs, analyzed 2000 and 2010 decennial census data and found that the arrival of immigrants over the last decade helped reverse a trend of declining populations in cities throughout the Midwest.
Here are some of the highlights of the report, “Growing the Heartland: How Immigrants Offset Population Decline and an Aging Workforce in Midwest Metropolitan Areas,” pertaining to Midwest metropolitan areas:
- Over the last decade alone, the region’s foreign born population rose 27.4% (from 3.5 million to 4.5 million).
- Immigrant population growth accounts for 38% of metropolitan area growth in the Midwest.
- Only 67% of native-born Midwesterners live in metro-areas, compared to 88% of immigrants.
- Although this region’s native-born population in the 35-to-44 age group saw a 20.6% decrease between 2000 and 2010, the immigrant population in that age range experienced a 44.2% increase.
There has been a great deal of interest this year in the subject of income inequality – as evidenced by the fact that economist Thomas Piketty’s book, “Capital in the Twenty-First Century,” reached No. 1 on the non-fiction, best-seller list a few months ago. However, it isn’t an easy summer read, which is why I’m bringing you a very condensed version of a short synopsis that appeared a few days ago in a New York Times column by Nicholas Kristof.
Apparently, buying Picketty’s book is one thing, and getting very far into the 685-page tome is something else. An analysis of Kindle data by UW Madison mathematics professor Jordan Ellenberg suggests that Piketty’s best seller may also be this year’s most unread book. With that in mind, Kristof wrote his recent column, which he calls “An Idiot’s Guide to Inequality.”
I don’t want to discourage you from buying and reading Piketty’s book, but if it isn’t something you envision taking with you to the beach this summer, I encourage you to read Kristof’s “idiot’s guide,” which elaborates on these five points (that I have excerpted from his column):
- Economic inequality has worsened significantly in the United States and some other countries.
The minimum wage has lost about 11% of its purchasing power due to inflation since 2009, making it harder for low-paid workers to make ends meet. (In comparison, CEO compensation rose 46% between 2009 and 2013.)
Some states have increased their own minimum wages, rather than waiting for Congress to do it. Nineteen states have set their own minimum wage higher than the federal minimum wage, including our neighboring states of Illinois ($8.35) and Michigan ($7.40), where a Republican-controlled legislature recently approved a wage increase to $9.25 by 2018. In Minnesota, the minimum wage is scheduled to rise to $9.50 by 2016. In contrast, state lawmakers in Wisconsin have taken no action to increase the minimum wage.
It’s too bad that Wisconsin lawmakers have refused to raise the minimum wage, because such a move would have broad-based benefits for workers. Read more
Today’s Circuit Court Ruling Reinforces the Inconsistencies in State Lawmakers’ Reasoning
Should state lawmakers turn down federal funds whenever there’s a risk that the funding in question could be cut in future years? If so, why is Wisconsin proceeding with major highway and bridge construction plans at a time when Congress is using short-term gimmicks to keep the Highway Trust Fund from becoming insolvent? And why did Wisconsin cut BadgerCare eligibility in half for parents, based on reliance on federal funding to subsidize the federal health insurance Marketplace?
That last question has gotten little attention over the past year, but it will be raised more often following a ruling today by a subset of the DC Circuit Court of Appeals. Two of the three judges participating in that ruling concluded that federal subsidies for the health insurance Marketplace can only go to people in states that set up their own Marketplaces. Read more
Wisconsin isn’t the only state that has made deep tax cuts on the premise of boosting the economy, only to find out that the promised job growth has not materialized. Kansas and North Carolina also passed large tax cuts and have experienced disappointing job growth. As a result of the tax cuts, these states have fewer resources to support investments in public schools, higher education, and a healthy workforce – investments that have a proven track record for creating jobs.
In Wisconsin, lawmakers have passed a series of tax cuts that total nearly $2 billion over four years. Governor Walker and some legislators have said that these tax cuts will make Wisconsin a more attractive place to do business, but job growth in Wisconsin since the tax cuts took effect has been slower than the national average. Unlike the U.S., Wisconsin has not yet gained enough jobs to replace the ones wiped out by the recession. Read more
The term “border wars” has taken on a new meaning for many states and cities across the United States that have been engaged in the practice of job piracy. However, a number of areas in the country are shifting away from this practice of luring jobs over state borders after recognizing that it is inefficient and does little to fuel job growth. Wisconsin policymakers should learn from the experiences in those states and localities and from the remedial actions they are taking.
On July 9th Good Jobs First released a new report exploring the issue of job piracy, also called job poaching, which wastefully exhausts economic development subsidies without incentivizing new job creation. The report, “Ending Job Piracy, Building Regional Prosperity,” provides examples of failing models of job piracy, including the border war that has been raging between Missouri and Kansas.
Missouri legislators have gradually come to the realization that job piracy is a zero sum game that is wastefully exhausting the economic development resources of both states. Read more
At least 13 Wisconsin counties may include an advisory referendum on the November ballot asking voters whether Wisconsin should expand BadgerCare and take the federal funding that would cover the full cost of newly eligible childless adults. The proposed ballot measure, which has already been approved in 4 counties and enjoys broad support, has generated debate about whether the Medicaid expansion topic is an appropriate matter for an advisory referendum.
There are many strong arguments in favor of taking the federal funding (see WCCF’s “Top Ten” list); however, some people who argue against including the BadgerCare question on the November ballot contend that it’s not a concern of county government. But even if we assume for the moment that an interest in county residents’ access to affordable health care isn’t reason enough for counties to allow voters to weigh in on the issue, counties also have their own reasons to be very interested in whether the state expands BadgerCare and accepts the federal funds:
- One very important consideration for counties is they bear the financial responsibility (rather than the state) for some community-based Medicaid services.
A bill under consideration in the U.S. House of Representatives could limit Wisconsin’s flexibility in applying sales tax and make it more difficult to invest in schools and communities, a new report from the Center on Budget and Policy Priorities shows.
A committee in the House recently approved a bill that would prohibit all state and local taxation of Internet access. Currently, there is a moratorium on new taxes on Internet access fees, but seven states with pre-existing internet access taxes – including Wisconsin – were grandfathered in. This new proposal would eliminate the exception for Wisconsin and other states, and permanently ban all taxes on Internet access.
For Wisconsin, this restriction would reduce the resources the state uses to invest in public education, a healthy workforce, and a solid transportation network. Wisconsin would lose $127 million in tax revenue in 2015 if prohibited from taxing Internet access – resources that could be used to make Wisconsin a more attractive place to live and do business. Read more