Minnesota releases updated revenue and spending projections in early December of each year, and the new figures released today are very positive – a net gain in the Minnesota budget balance of about $1 billion. Let’s hope that Wisconsin can come close to matching that when our new tax and spending estimates are released in late January or February.
As we noted in a blog post about two weeks ago, many people across the country are watching Minnesota and Wisconsin carefully because of the very different directions that the two states have gone in fiscal and health care policy over the last couple of years. Because of the many demographic similarities between the two states, the divergent choices by policymakers set up an interesting experiment. In that context, today’s budget news from our neighbor to the west could be an early point in their favor, but we won’t have any basis of comparison in Wisconsin for another month or two. Read more
Thousands of out-of-work Wisconsinites who have been searching for a job for a long time will lose their unemployment benefits at the end of the year, unless Congress acts to renew federal unemployment benefits. According to a new analysis from the Wisconsin Budget Project, 65,500 jobless workers in Wisconsin will lose access to federal benefits over the next six months, as shown in the chart below.
Most states pay unemployment insurance benefits to jobless workers for a maximum of 26 weeks. In times of higher unemployment, Congress authorizes federally-funded benefits that provide assistance to people who reach the limit on their state-financed unemployment insurance. If the program that provides federal unemployment benefits is allowed to end, the maximum duration of unemployment benefits for jobless workers in Wisconsin will drop by more than half, from 54 weeks to 26 weeks.
November was Native American Heritage Month, but for most of the month all we have heard about was the mascot issue and casinos. The national stories about the “code-talkers” during World War II were a welcome exception to the dearth of positive stories about American Indians during the first half of the month, though those stories drew attention to just a very brief glimpse of Indian history and contributions.
In addition to wishing that the media would shed more light on Native Americans’ contributions to American history and culture, I would like to hear more about the economic challenges facing American Indians, particularly those living in “Indian country.” The following graphic, prepared by my colleague Tamarine Cornelius, shows that the unemployment rate for Native Americans in Wisconsin is almost twice the rate for non-Hispanic whites, and the poverty rate is more than two and a half times as high for Native Americans (25.3% vs. Read more
Yesterday’s competition between the Green Bay Packers and the Minnesota Vikings ended in a rare tie game. That game is finished, but there is another competition that is still going on between Wisconsin and Minnesota, one that involves job creation and economic growth, rather than touchdowns and field goals.
Wisconsin and Minnesota are similar states in many ways, but we are taking very different approaches to growing our state economies. Policymakers in Wisconsin have focused on cutting taxes, especially for corporations and the wealthiest, sharply reducing state spending on K-12 education and the university system, and limiting tax credits and other services that give a boost to struggling families. In contrast, policymakers in Minnesota have targeted the state’s highest earners for an increase in income taxes, kept education spending on an even keel during the recession, and expanded Medicaid.
The different approaches to economic development amount to a type of experiment, one that policymakers from other states will be watching with a close eye. Read more
2014 is the 50th anniversary of the “war on poverty,” and we can expect a lot of debate and posturing then about that ambitious undertaking. Expect some legislators to use the opportunity to urge that policymakers renew their commitment to fight poverty and reinvigorate some of the elements of that agenda, while others will take that opportunity to declare the war on poverty a failure and a mistake.
A Gallup poll conducted last week found strong public support for boosting the minimum wage (now $7.25/hr.) to $9.00 per hour. That change was supported by 76% of Americans, with only 22% opposed. Here are a few of the other highlights from the national survey of 1,040 adults:
- The support was solid across the political spectrum – with the backing of 58% of Republicans, 76% of Independents, and 91 % of Democrats.
- Support wasn’t quite as strong for indexing the minimum wage for inflation (after raising it to $9), yet that was endorsed by 68% of adults and opposed by 29%.
- Public support for an increase to $9.00 was up 5 percentage points since early March, when 71% were in favor and 27% against the proposal.
The national poll was conducted by Gallup last week at about the same time that 61% of New Jersey voters supported an amendment to that state’s constitution to raise the minimum wage $1 to $8.25 and index it for inflation (even as they reelected Governor Christie, who had opposed that measure). Read more
New LFB Paper Illustrates Why Tapping TANF Funding Appears Unlikely
The Assembly overwhelmingly approved a bill today that we strongly support, because it is aimed at expanding a program to provide on-the-job training to low-income people. The only catch is that it isn’t funded, and the prospects for funding it don’t look promising anytime soon.
The bill in question is SB 333, which is part of the package of workforce training bills proposed by the Governor in late September. It authorizes expansion of the Transitional Jobs program, which now only operates in Milwaukee. Transitional Jobs was first implemented several years ago as a pilot program, with funding from the federal Recovery Act. Although that came to an end, the 2013-15 biennial budget bill created a new version of it in Milwaukee, which is now called the Transform Milwaukee Jobs Program. It was allocated $9.9 million from the federal welfare reform block grant known as Temporary Assistance to Needy Families (TANF). Read more
Public-private jobs creation agencies, like the Wisconsin Economic Development Corporation, are inherently susceptible to problems with accountability, conflict of interest, and public disclosure. That’s the message of a new report by Good Jobs First, which shines a spotlight on WEDC as an example of a partly privatized jobs creation agency beset by accountability issues.
The report includes a five-page summary of the problems that have affected WEDC since it was created in 2011, which include:
- Spending federal money without legal authority to do so;
- Failure to track past-due loans awarded to businesses;
- Erroneous or unrecorded financial deals; and
- Inadequate verification of whether companies getting subsidies met performance requirements.
These types of problems aren’t unique to the WEDC. The report details similar issues that have arisen in several other states that have converted their economic development arms to public-private partnerships, including Arizona, Indiana, and Florida.
WEDC officials scoffed at the new report. Read more
Could Lack of New Funding Divert Resources from the Current Milwaukee Program?
We were very pleased to learn a couple of weeks ago that the package of workforce training bills being proposed by the Governor includes one to expand the Transitional Jobs program, which now only operates in Milwaukee. Our enthusiasm was tempered when we realized that the bill isn’t funded. Apparently, the idea is to use existing funding to expand the program, but a funding source hasn’t been identified.
Transitional Jobs programs provide on-the-job training to low-income people. Wisconsin’s Transitional Jobs program was first implemented several years ago as a pilot program, with funding from the federal Recovery Act. Although that came to an end, the 2013-15 biennial budget bill created a new version of it in Milwaukee, which is now called the Transform Milwaukee Jobs Program. It was allocated $9.9 million from the federal welfare reform block grant known as Temporary Assistance to Needy Families (TANF). Read more
Poverty Remains High, Median Income Remains Low, and Health Insurance Coverage Improves Modestly
Data released today by the U.S. Census Bureau reinforce the recent findings by economists that there is a very wide gap between the rich and the poor. The new Census figures for 2012 from the Current Population Survey (CPS) show that the painfully slow economic recovery has yet to help a large segment of Americans. Poverty remained high last year, at 15% nationally, and median income remained low — 8.3% below the 2007 level, before the Great Recession began.
In a New York Times blog post this afternoon, a graph prepared by Jared Bernstein uses the 2012 Census Bureau data to illustrate the diverging trend lines since 1967 in the household income of low, middle and upper income Americans. And as Bernstein notes, the divergence would be much wider if the Census Bureau didn’t exclude capital gains income from its data. Read more