Wisconsin’s Lagging Income Growth Boosts Federal Share of Medicaid Costs

Wednesday, October 4, 2017 at 5:37 PM by

A state’s lagging economic performance can have a silver lining – in the form of increased federal assistance. Thanks to a Medicaid formula that currently provides more generous cost-sharing to states that are below average in per capita income, Wisconsin’s rather anemic personal income growth will save the state millions of dollars during the 2017-19 budget period.

However, that feature of Medicaid funding allocations could be gone in a few years if Congress approves the recent Republican proposals that would block grant or cap each state’s allocation. Read more

New Census Data Show Continued Gains from the ACA

Tuesday, September 12, 2017 at 6:28 PM by

Insurance Coverage Also Improves in Wisconsin, but More Slowly than in Medicaid Expansion States

The number of Wisconsinites who do not have health insurance fell sharply during the first three years of implementation of the Affordable Care Act (ACA), according to new survey data released today by the U.S. Census Bureau. Approximately 218,000 fewer Wisconsin residents were uninsured last year than in 2013, a decline of 42 percent.

Wisconsin is still among the top ten states in the percentage of people with insurance, but our state’s rank has been slipping. We went from being tied for 7th best in 2015 to a tie for 10th best last year.  In 2016, Kentucky, West Virginia, Connecticut and Rhode Island all surpassed or tied Wisconsin’s rate of insurance coverage. Read more

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Unemployment is Low, but Wisconsin Workers Face a Host of Other Roadblocks

Friday, September 1, 2017 at 3:54 PM by

Even as the state’s unemployment rate declines, Wisconsin workers face significant barriers to economic stability, according to a new look at the state’s labor market. Long-term stagnation in wages, a black/white economic disparity that is among the largest of any state, increasing levels of income inequality, a shrinking middle class, and limits on the ability to unionize are among the obstacles faced by Wisconsin workers, according to The State of Working Wisconsin 2017 by COWS.

Key findings of the report include:

Wisconsin has fallen behind in job growth compared to other states. In 2016, Wisconsin had 128.4 jobs for every 100 jobs it had in 1990, compared to 132.6 jobs nationally. That gap is a relatively new occurrence, with the pace of job growth in Wisconsin exceeding the national average for the 1990s and the early part of the 2000s. During the recession, Wisconsin lost jobs at about the same rate as the national average. Read more

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Five Reasons the Foxconn Deal Would be Bad for Wisconsin

Monday, August 21, 2017 at 4:44 PM by

Governor Walker has proposed an unprecedented package of businesses incentives aimed at encouraging Foxconn to build a manufacturing facility in southeast Wisconsin. The deal could result in the state paying Foxconn nearly $3 billion in state money over the next 15 years, in exchange for Foxconn spending $10 billion to construct a facility in Wisconsin and creating up to 13,000 jobs.

Here are five reasons why the proposed deal is a poor use of public resources:

1. The state would likely pay Foxconn a lavish $200,000 to $600,000 for each new job, depending on how many jobs are ultimately created.

There’s a lot we don’t know about the Foxconn deal, including the number of jobs that would ultimately be created at the new facility. The agreement between Governor Walker’s administration and Foxconn indicates that the company will create “up to” 13,000 jobs — but that leaves open the possibility that the number could be considerably less than that. Read more

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The Significant Risk of Never Breaking Even on Foxconn Subsidies

Wednesday, August 16, 2017 at 5:35 PM by

When the Legislative Fiscal Bureau wrote last week that it would take until at least 2043 for Wisconsin to break even on the Foxconn subsidies, they were summarizing a Department of Administration analysis that used the “best case” assumptions. Using the same methodology and most of the same assumptions, a new Wisconsin Budget Project analysis calculates that other scenarios within the range described by Foxconn could mean that the cost of the state subsidies would not be recovered until 2050 or 2058.

Of course, the DOA analysis and our alternative scenarios all raise the question of whether we can ever expect to break even on the state’s investment and local costs. As many people have pointed out, tech companies aren’t the most stable employers, and Foxconn’s own record illustrates that point. With that in mind, our new analysis calculates how much Wisconsin would be in the hole if Foxconn pulled out of Wisconsin 25 years from now or, alternatively, if they pull out of Wisconsin in 2034 when the annual subsidy payments would end. Read more

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Under Deal, State Could Reward Foxconn for Creating Jobs that Pay Near-Poverty Wages

Thursday, August 10, 2017 at 2:09 PM by

(Update: The version of the bill that was approved by the Assembly on August 17, 2017 subsidizes jobs that pay at least $30,000.)

With the state offering enormous subsidies to lure Foxconn to Wisconsin, lawmakers should at the very minimum build in requirements that the new jobs pay family-supporting wages. But the $3 billion proposed deal could result in the state cutting checks to Foxconn to pay for the creation of new jobs that pay as little as little as $23,000 per year, an income level that would put a family of four below the poverty line.

The deal would give Foxconn up to $1.5 billion of state tax money over 15 years in tax credits to subsidize the creation of new jobs at the facility and up to $1.35 billion in subsidies for the facility itself. The state would pay 17% of the salary of jobs that meet certain standards. Read more

Foxconn Deal Keeps Looking Worse

Wednesday, August 9, 2017 at 4:56 PM by

The massive subsides for Foxconn proposed by the Governor keep looking worse as we learn more. The most recent sobering information came this week when the Legislative Fiscal Bureau (LFB) issued a new analysis of the proposed subsidies. The figures in that August 8th analysis reinforce why a number of commentators and editors for business publications, including the editors of Bloomberg, have been extremely critical of the proposal.

Here are some of the key points in the new LFB review of the Foxconn bill: Read more

Growing Gap between Rich and Everyone Else Thwarts Economic Opportunity

Tuesday, August 8, 2017 at 4:13 PM by

It turns out that a rising tide doesn’t lift all boats.

As the economy has expanded over the past decades, prosperity has not been broadly shared. Income gains have been directed into the pockets of those who already have very high incomes, while incomes of the rest have stagnated. The result is that workers in Wisconsin and across the country are missing out on reaping the rewards of their increased productivity, while the incomes of the top 1% soar.

The incomes of the very richest have increased dramatically, while the incomes of everyone else have stagnated. Since the late 1970s, the income of the top 1% in Wisconsin has increased by more than 130%, while the income of the remaining 99% has increased just 9%. The share of all income that is captured by the top 1% has more than doubled since the 1970s, to the point where $1 out of every $6 in Wisconsin now goes to the top 1% of earners. Read more

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Reviewing the Foxconn Costs and Risks (without the Rose-colored Glasses)

Wednesday, August 2, 2017 at 5:31 PM by

Different Assumptions about Foxconn Job Creation Yield Much Higher Estimates of the Cost of Jobs

The cost of the proposed new tax credits for the tentative deal with Foxconn could be far larger per job created than some people have suggested. Those costs will vary greatly depending on the ratio of spending for payroll versus the capital expenditures.

The more that Foxconn invests in its facilities and state-of-the-art automation, rather than payroll, the more the proposed deal will cost state taxpayers per job created. A new Wisconsin Budget Project report examines the potential tax credit costs based on four scenarios that make different assumptions about the number of new jobs, the duration of the project, and the amount of Foxconn spending for capital improvements. Read more

President Trump’s Budget Would Make it Harder for Wisconsin to Strengthen its Workforce

Monday, June 19, 2017 at 10:49 AM by

President Trump visited the Milwaukee area last week, tweeting that he was “heading to the Great State of Wisconsin to talk about “JOBS, JOBS, JOBS!” Expanding opportunities for workers and developing the state’s workforce should be a top priority for policymakers at both the state and federal levels, but President Trump’s rhetoric doesn’t match his actions on this issue. His proposed budget makes deep cuts to the federal resources that Wisconsin uses to develop the state’s skilled and work-ready labor force.

Trump jobs tweet

In his visit to Waukesha County Technical College, President Trump emphasized the importance of developing a skilled workforce, declaring that “America must not only teach, but celebrate skilled labor.” But the 2018 budget he proposed would deeply cut federal funding for programs and services that states deliver that are critical for the development of a healthy, well-educated workforce – programs like Medicaid, which helps people with low incomes see a doctor when they need one, and SNAP (previously known as food stamps), which helps people with low incomes put food on the table. Read more

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