Over the next few months, lawmakers will be making decisions about how to allocate Wisconsin’s public resources — decisions that have the potential to help or hurt school kids across Wisconsin, senior citizens, health care providers and patients, people with disabilities, and families struggling to get by.
Governor Walker is scheduled to release his budget proposal on February 3rd, after which the legislature will have a chance to make changes to the budget.
The Wisconsin Budget Project offers a number of easy ways to keep up with the state’s budget process. You can:
- Check out the page on our website that is exclusively devoted to the state’s 2015-17 budget. This page includes analyses and blog posts that describe what’s happened so far and the consequences of the decisions made during the budget process.
- Sign up to receive regular email updates from the Wisconsin Budget Project. We send emails out a few times a month.
The Very Bad Fiscal News for this Year Offsets Improved Revenue Estimates for the Next Biennium
New budget figures from the Legislative Fiscal Bureau (LFB) indicate that the state is on track to have a $283 million deficit at the end of the fiscal year. That hole is $153 million deeper than what the Department of Administration (DOA) had indicated in November.
Of course, the Fiscal Bureau isn’t predicting that the state will actually finish the fiscal year with a substantial deficit; they are sizing up the amount of red ink that the Walker administration and state legislators have to eliminate in order to meet the constitutional requirement to have a balanced budget.
On many occasions in 2014, we expressed concerns that state lawmakers were going to have to make painful budget cuts before the end of fiscal year 2014-15 because the tax cuts enacted early last year were based on overly optimistic revenue estimates and because the state was planning to draw down almost all of the anticipated balance. Read more
Governor Walker has made it clear that he wants to continue to cut property taxes. The best way to do this would be to strengthen a state tax credit that helps keep property taxes affordable for people with low incomes. Yet despite the Governor’s focus on property tax cuts, making improvements to the Homestead Credit does not seem to be part of his agenda.
Governor Walker recently said his goal is for property taxes to be lower in 2018 than when he took office in 2011. The legislature already cut property taxes by $466 million in fiscal year 2015, and given Governor Walker’s high priority on the issue, there are likely to be more property tax cuts coming.
The property tax cuts so far have been broadly distributed, meaning that even taxpayers in the top 1% received a tax cut. In fact, the top 1% – a group with an average income of $1.1 million – received an average property tax cut of more than $1,000 in 2014. Read more
The number of government workers in Wisconsin compared to the state’s population has dropped to its lowest level in at least 20 years, according to a new Wisconsin Budget Project analysis.
Public employees in Wisconsin fill many roles. They patrol country roads, drive city buses, put out fires, immunize babies, and repair roads. Most of all, they teach our children: Six out of 10 public employees in Wisconsin work in education, mostly in K-12 schools.
Public employees also work close to home. Nearly 3 out of 4 public employees in Wisconsin work at the local government level.
There are far fewer of these public employees than there used to be. The number of state and local government workers per Wisconsin resident has dropped 10% from its peak a decade ago. Now only eight states have a leaner public sector for the size of their population. For every 100 state and local government employees per capita in other states, Wisconsin has only 94 employees. Read more
The Department of Revenue (DOR) issued its report on December tax collections today, and at first blush the numbers look bad; however, I think they may actually suggest a modest upturn – relative to the November estimate for the current fiscal year (FY). Whether that assessment is accurate will become apparent later this week when officials release updated state revenue estimates for FY 2014-15 and for the next biennium, which begins on July 1.
What the short new report reveals on its face is that tax collections were down by 2.6% in December, compared to the same month in 2013, and tax collections for the first half of the current fiscal year were down by 2.7% compared to the last six months of 2013. Individual income tax collections for the last half of 2014 were down by 6.4% or $232 million, and corporate income tax revenue was down 8.0% or $38 million. Read more
Extreme Racial Disparities in Wisconsin’s Corrections System Have Worsened since King’s Death
As we contemplate the legacy of Martin Luther King Jr. and the unfinished business that needs to be tackled to achieve racial and ethnic equality, one of the issues that jump out at me is the huge growth in prison populations – particularly among African American males. That was a topic at many MLK observations across the nation today, but nowhere is it a bigger problem than in Wisconsin.
A report by the UWM Employment and Training Institute issued in 2013 pointed out the following data, most of which is derived from the 2010 Census:
- Wisconsin had a higher rate than any other state of working age African American men who were behind bars in state prisons and local jails; in fact, no other state was even close to the Wisconsin rate. (See the graph on page 8 of their report.)
- The WI incarceration rate of working age black males, 12.8%, is nearly double the national average of 6.7% of working age African American men, and 10 times the rate for white males in our state.
Will the Governor’s Next Budget Postpone the Statute Requiring an Increased Budget Balance?
A new set of comparative fiscal data published online last week by Pew Charitable Trusts reinforces the conclusion that Wisconsin needs to build up its budget reserves. The dataset in question shows that Wisconsin was expected to rank 35th at the end of fiscal year (FY) 2014 in the relative size of its budget reserves, and that ranking was based on figures collected last summer – when the state’s budget balance was far higher than it is expected to be at the end of the current fiscal year.
One key sign of whether state policymakers are interested in addressing the problem and establishing a more prudent budget reserve will come in February, when we see if the Governor once again postpones the effective date of a statute intended to increase the minimum balance that the state must aim to have at the end of each fiscal year. Read more
New figures released last week by the Census Bureau show that total state and local spending and revenue in Wisconsin is not much different in Wisconsin than the per capita figures for the nation as a whole. For example, our analysis of the new data – which is for state and local revenue and spending in 2012 – found the following:
- Wisconsin ranks 25th in total revenue (including federal aid) per capita, and was 1.5% below the national average on that measure.
- Looking at all state and local revenue per capita, but excluding federal financing, Wisconsin ranked 19th and was 1.1% above average.
- We ranked 24th in total spending per capita, 2.9% below average, and 21st (just 0.2% above average) in a slightly narrower spending measure – direct general spending – which I think is better for comparative purposes because it excludes things like state-owned enterprises.
Wisconsin’s figures are higher compared to the national averages when they are measured relative to income, because personal income in Wisconsin is well below the average nationally. Read more
While Hospitals Elsewhere Back Medicaid Expansion, Wisconsin Hospitals Offer a Fallback Plan
Hospitals in Wisconsin and many parts of the U.S. are asking state policymakers to take measures to reduce the amount of uncompensated care, although the recommended measures aren’t always quite the same. In our state, the Wisconsin Hospital Association (WHA) is asking state lawmakers to renew an expiring appropriation that provides state financial relief to hospitals that care for a disproportionate share of the uninsured or underinsured.
The $30 million state appropriation, which expires in June, captures $44 million in federal funds for “disproportionate share hospitals” (DSH). Wisconsin Health News reported last week that WHA plans to ask state policymakers to renew the appropriation. Extending that funding makes sense if state lawmakers continue to refuse to expand BadgerCare to cover more low-income adults, but the expansion option could save the state close to $300 million in the next budget and do far more to improve access to insurance and help hospitals. Read more
The Affordable Care Act (ACA), while authorizing the Children’s Health Insurance Program (CHIP) through federal fiscal year (FFY) 2019, created a funding cliff for states by only providing appropriations through FFY 2015. A letter made public last week, which was submitted to members of Congress by DHS Secretary Kitty Rhoades (on behalf of the Governor), explains why the extension of CHIP funding is extremely important for children in Wisconsin.
CHIP has garnered bipartisan support since its inception in 1997 and has been instrumental in lowering the uninsured rate of children in the U.S. Now, it’s up to members of Congress to continue working together to ensure that ongoing funding for the program is approved by September 2015.
At tail end of summer, the House Committee on Energy and Commerce (E and C) and the Senate Finance Committee sent a letter to the nation’s governors requesting state-specific input on CHIP. Wisconsin, along with 38 other states, provided responses that overwhelmingly stress the importance the program plays in providing low-income children with access to affordable, quality health care. Read more