Bang for the Buck – in Protecting and Generating State Revenue

Wednesday, May 27, 2015 at 3:10 PM by

Rejecting the Governor’s Recommendations for DOR Positions Would Open up a Huge Budget Hole

One of the positive aspects of the Governor’s budget proposals is an investment in Department of Revenue positions to increase tax compliance and improve collection of state and local debts.  But despite the fact that those additional positions will yield a tremendous return on the investment, some conservative legislators have balked at providing more staff for DOR. The issue may be debated in the Joint Finance Committee (JFC) this Thursday or Friday, May 29 or 30. 

Last week the committee voted to amend the budget bill by adding a $5 million appropriation for a new initiative to prevent Medicaid fraud.  (The new spending includes $500,000 in 2015-16 from state revenue, and $4.5 million from federal funds.)  It’s a one-time expenditure to purchase and begin implementing new software intended to identify and prevent fraud.  The Medicaid fraud prevention initiative may be a good investment in future years, but — in sharp contrast to the proposed DOR positions — no savings are projected during the current biennium. Read more

Rein in Tax Breaks that Aren’t Tied to Job Creation

Tuesday, May 26, 2015 at 7:29 PM by

There’s been a lot of talk in Wisconsin over the last couple of weeks about the need to ensure that tax breaks and loans awarded by Wisconsin’s economic development agency are limited to businesses that are creating jobs and fulfill their job growth commitments.  Yet almost no attention has been paid to the fact that the state’s largest tax credit for corporations is ballooning in cost and is distributed to businesses operating in Wisconsin regardless of whether they are expanding or slashing their workforce in our state. 

In the wake of the audit of the Wisconsin Economic Development Corporation (WEDC), that privatized agency has gotten well-deserved criticism for failing to demand that jobs be created with each of its contracts, and for failing to ensure that grant and loan recipients hit wage and job targets or at least submit information showing whether jobs were being created or retained. Read more

Giving Resources to Schools with One Hand, and Taking Away with the Other

Thursday, May 21, 2015 at 2:30 PM by

The budget package passed this week by the budget committee of the Wisconsin legislature includes new money for education in Wisconsin, but a closer look shows that most of that money will wind up in other places than public schools.

In recent weeks, lawmakers have emphasized that they were committed to avoiding the worst of the education budget cuts proposed by Governor Walker’s budget cuts. Lawmakers did restore some school funding that Governor Walker recommended cutting, but they also followed the Governor’s lead on diverting some of the money set aside for public schools and sending it instead to property owners or private schools.

Lawmakers allotted $208 million in new public education funding over the next two years, compared to the previous budget. But only about $50 million of that amount – less than a quarter of the total new funding – will actually get delivered to public schools in a way that allows districts to put that money to work educating public school students. Read more

In Some Parts of Budget, JFC Shows Affinity for Federal Funding

Wednesday, May 20, 2015 at 5:47 PM by

By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds 

The Joint Finance Committee votes Thursday, May 21, on a wide range of Medicaid issues, including whether to expand BadgerCare and save upwards of $345 million that could help prevent deep cuts in higher education and other parts of the budget. The most frequent argument made by conservatives against capturing that federal assistance is that we shouldn’t accept federal funding that might not be secure. However, if you were carefully watching the Finance Committee’s budget votes last Thursday you would have gotten a very different perspective on the willingness of the majority party to accept federal funding.  

There were at least two times last Thursday when the JFC voted to amend the Governor’s budget in ways intended to capture or utilize more federal funding. In one case (motion #345) the committee unanimously approved new standards that will make it easier for the Department of Children and Families to close child support cases. Read more

JFC Approves Significant Changes in Budget Management and Process

Tuesday, May 19, 2015 at 8:20 PM by

Legislators Change Guidelines for Agency Requests and Using Unanticipated Revenue 

This afternoon the Joint Finance Committee (JFC) made several significant changes relating to how agencies’ biennial budget requests are submitted, as well as the size of the minimum budget balance and how the state handles “excess” revenue when General Fund revenue exceeds the projected amount.  I think the changes approved today could be a case of taking two steps forward and one step back, but we may need to see the actual budget language before we can really assess the changes.  Read more

New LFB Paper Makes Stronger Case for Taking Federal Medicaid Funds

Monday, May 18, 2015 at 7:23 PM by

Increase in Childless Adult Enrollment Boosts Costs and Potential Savings  

The number of childless adults participating in BadgerCare is now expected to be about 6,800 per year higher than the budget bill assumed, which means the cost of not accepting enhanced federal assistance for covering that population is also considerably higher. 

A paper issued by the Legislative Fiscal Bureau this afternoon contains the new enrollment assumptions for childless adults and other Medicaid groups.  By using those figures to do some quick calculations, I estimate that the state would save at least $23 million more than the Fiscal Bureau calculated back in February, when it said that by expanding BadgerCare and accepting the increased federal funding Wisconsin would enjoy a net savings of $345 million during the 2015-17 biennium.  (My calculation is based just on the increased childless adult caseload and assumes that other factors, such as the cost per individual, haven’t changed since February.) 

[May 21 update:  LFB figures released this afternoon show that the net increase in savings was a little smaller than I calculated, which suggests that other variables also came into play.  Read more

JFC Will Vote Tuesday on Whether to Delay Increasing State Reserve Funds

Friday, May 15, 2015 at 4:40 PM by

If Legislators Are Truly Serious about Responsible Budgeting They Won’t Postpone a Long-Overdue Increase in State Reserves

For as long as I can remember, state politicians have been saying that Wisconsin needs to adopt more fiscally responsible budgets by doing things like increasing the state’s meager reserves and bringing revenue and spending into better alignment. Nevertheless, Wisconsin lawmakers continue to postpone building up budget reserves.  Instead, when there is a projection of “surplus” revenue it is often used in unsustainable ways that add to the state’s future fiscal challenges. 

This Tuesday, May 19, the committee that reviews and revises the state budget bill will have a chance to increase reserves and reduce the “GAAP deficit” (i.e., the gap between state revenue and spending obligations calculated according to Generally Accepted Accounting Practices). That will be decided when the Joint Finance Committee votes on whether to once again delay a statute that now requires increasing the state’s general fund balance to at least 2% of general fund spending in fiscal year 2017-18. Read more

Budget Committee Takes a Positive Step in Improving Public Involvement

Thursday, May 14, 2015 at 7:04 PM by

Involving Stakeholders in Family Care Changes Could Serve as a Model for Other Budget Improvements  

Republican leaders on the Joint Finance Committee announced a significant improvement in the state budget today – or at least in the process for developing and approving one part of the budget, the changes relating to community-based long-term care for seniors and people with disabilities.  Let’s hope that similar improvements are made in other parts of the budget that have comparable problems.   

One of the very troubling things about the Governor’s budget bill is that it contains sweeping changes that circumvent the usual processes for involving stakeholders and advisory committees in the development of public policy proposals.  Among the numerous examples of that, perhaps the most troublesome was the dramatic set of changes to community based long-term care provided through the Family Care and IRIS programs.  The development of those changes totally excluded the usual advisory role of stakeholders, and was even a surprise to the agency that has been administering those programs.   Read more

Welfare Reform Block Grant Funds Once Again at Risk in Wisconsin

Tuesday, May 12, 2015 at 5:18 PM by

The Joint Finance Committee will vote Thursday on whether to divert more funds from the federal welfare reform block grant to help finance unrelated parts of the state budget.  The amount of those funds transferred to the Department of Revenue (DOR) has already been increased dramatically in each of the last two budgets.  $62.5 million per year from the Temporary Assistance to Needy Families (TANF) block grant is being used to replace state funding for the Earned Income Tax Credit (EITC), and that maneuver reduces the funding available for important programs to assist vulnerable low-income families.   

According to a Legislative Fiscal Bureau paper (#215) , federal law would allow the state to transfer up to $12.3 million more to DOR in the next biennium, in order to back out state General Fund dollars for the EITC.

Optimally, legislators should decrease the use of TANF funding for the EITC, which is what the Department of Children and Families (DCF) proposed last fall in the budget request they submitted to the Department of Administration.  Read more

New Figures Highlight Need to Adjust Homestead Credit

Monday, May 11, 2015 at 5:27 PM by

Wisconsin’s property tax credit for low-income homeowners and renters is declining because – in contrast to most of the rest of the tax code – it isn’t adjusted for inflation.  New figures released last week by the Legislative Fiscal Bureau (LFB) show the credit is falling even faster than the Governor’s budget assumed, and the following chart illustrates the decline.   

Property-tax-cut-for-wisconsin-residents-with-low-incomes-continues-to-shrink Read more