Three proposals currently under consideration by state lawmakers have the potential to reduce the amount of money the state spends on corrections, keep people who commit minor crimes out from behind bars, and make it easier for people leaving prison or jail to get a job.
These developments to reduce the costs – financial and otherwise – of the state’s correction system are long overdue. For years, Wisconsin residents have been paying a high cost for the state’s over-reliance on prisons and jails. Part of the cost comes out of the pockets of taxpayers — nationally, only 11 states spend more per state resident than Wisconsin on corrections – and part of the cost is paid by communities, especially communities of color. Wisconsin locks up a larger share of African-American men than any other state, making it difficult for those individuals to get jobs after they are released, support their families, and make contributions to their communities. Read more
1. Compared to other states, Wisconsin has a lean public sector
Wisconsin had 4.4 percent fewer state and local government employees than the national average given our population size, according to a new analysis from the Wisconsin Budget Project. Wisconsin had a leaner public sector than all but 11 states.
2. The number of public employees in Wisconsin has declined over the last decade
Current levels of public employment in Wisconsin are significantly lower than they were a decade ago, relative to our population size. The number of public employees per Wisconsin resident has fallen about nine percent since 2001, as shown in the chart.
3. There are nearly three times as many local government employees in Wisconsin than there are state employees
There were 207,000 full-time equivalent employees working in local government in Wisconsin in 2014, compared to 72,000 in state government.
4. Most public employees in Wisconsin work in education
Six out of ten government employees work in education, mostly in K-12 schools. Read more
As you’ve probably heard or read by now, Wisconsin got some bad news today regarding state tax collections – which are now expected to be $158 million less than previously expected during the 2015-17 biennium. But the good news is that some other re-estimates partially offset the revenue loss, bringing the net change to the 2015-17 budget to -$94 million (compared to the previous estimate), and the state’s reserves can absorb that hit.
The bottom line is that the state is now expected to finish this biennium with a “net balance” in the general fund of $70.2 million, instead of the $164.5 million net balance that had been estimated a few months ago. The key lesson to be drawn from the numbers released today by the Legislative Fiscal Bureau (LFB) is that tax collections and other revenue can be volatile and are difficult to predict, so it’s important to build a sizeable “ending balance” or budget cushion into each budget. Read more
Transportation Tax Increase Shouldn’t Be Biased against Low-income Wisconsinites
Proposed legislation to fix local road repairs is a bad deal for poor Wisconsinites who don’t have cars. The proposal would authorize a sales tax increase that would fall more heavily on poorer Wisconsinites because the sales tax takes a higher percentage of their income. What makes that particularly inequitable is that the bill precludes using any of the new revenue for transit (e.g. bus and van service). Read more
Lawmakers Considering Proposals that would Hinder Wisconsin’s Ability to Make Investments in State’s Future
State lawmakers are considering a number of bills and constitutional changes that would make it difficult for Wisconsin to make necessary investments in local schools, communities, and health care systems. Several of the proposals are aimed at changing the budget process in ways that would make it more difficult for elected officials to boost the economy, lessen the economic effects of recessions, and protect vulnerable residents.
Wisconsin lawmakers are considering the following proposals:
More corporate tax cuts (Assembly Bill 623/Senate Bill 503) This bill contains a variety of innocuous-seeming changes to corporate tax law, but there is nothing innocuous about the cost of this proposal, which could be as much as a whopping $384 million a year! Keep in mind that this bill comes in the wake of a recent tax cut that gives manufacturers and agricultural producers a virtual pass on paying any corporate income tax at all.
At the hearing held by the state Senate on January 13, the bill author indicated he was open to changes that would pare back the cost. Read more
[January 4th UPDATE: The quarterly Medicaid report issued today by the Dept. of Health Services estimates that the changes I discuss below and a couple of smaller items are expected to yield net savings of $72.6 million GPR by the end of the biennium.]
A couple of factors should yield significant savings in state spending for Medicaid and BadgerCare during the current biennial budget. If state tax collections don’t fall short (which is a definite possibility), Medicaid savings could be used to build up the states meager budget reserves, and I hope state policymakers will also invest a little in initiatives to make the health care system more efficient, in order to hold down the future growth of Medicaid spending.
Early next week the Department of Health Services (DHS) should release a quarterly report about Medicaid spending from October through December. I expect that report to shed a little more light on the potential savings, but DHS might focus just on the estimated savings during that specific quarter, and not on the much larger savings over the next 18 months of the biennium. Read more
[Note: This post has been updated — primarily to add a reference to the WPR story about the increased GAAP deficit.]
When a state report is released late on a Friday with no fanfare, it’s a pretty good bet the report contains bad news. A case in point is Wisconsin’s Comprehensive Annual Financial Report (CAFR) for 2015, which was quietly posted online last Friday afternoon by the Dept. of Administration. In this instance the bad news is that the state’s General Fund deficit, as measured by Generally Accepted Accounting Principles (GAAP), increased in fiscal year 2015 by $414 million (from roughly $1.4 billion to $1.8 billion).
Release of the report had been expected about a week earlier. I don’t know what caused the delay until last Friday (Dec. 18), but I can’t help wondering if the quiet posting of the report on a Friday afternoon was intended to minimize media coverage. Read more
A recently introduced bill appears to be aimed at tilting the state budget process in favor of spending cuts or freezes. It does that in the guise of seeking more information from state agencies about budget options, but it fails to do so in a way that will facilitate a balanced and well-informed public debate of budget choices.
The proposed legislation – SB 407 and its Assembly twin, AB 534 – would require state agencies to submit two additional things with their biennial budget requests: a) a proposal that would maintain the existing level of funding, and b) a proposal to cut the agency’s budget by 5%.
If legislators want information from agencies that will help guide state lawmakers in where and how to make budget cuts, that’s their privilege. My concern about the bill isn’t about the information it would require from agencies, because I think shining more light on budget options is a good thing. Read more
Two state senators released a Legislative Fiscal Bureau (LFB) memo today that provides an updated estimate of the potential savings to Wisconsin from expanding BadgerCare to more adults. The Fiscal Bureau estimates that expanding BadgerCare for adults up to 133% of the federal poverty level would cover an additional 83,000 adults, but would yield a net savings for the state of more than $1 billion over a six-year period – by taking advantage of increased federal funding available for states that expand Medicaid.
If the expansion were to begin on January 1, 2016, the net savings for state taxpayers during the 2015-17 biennial budget period would be $323.5 million. Because that starting date is no longer a realistic option, the paper also lays out the projected fiscal effect of beginning expanded coverage a year later. Under either of those two options, Wisconsin would save an average of more than $15 million per month once the change took effect. Read more
Wisconsin lawmakers could learn a number of important lessons from Minnesota relating to budgeting. I’m not talking about the differences between the two states in budget choices relating to taxes and spending; that’s a topic for another day. I want to focus instead on state budget processes, transparency, and planning for economic downturns. Those are matters of bipartisan agreement in Minnesota, and they are areas where Wisconsin lawmakers should also be able to come together.
Minnesota’s budget practices have been on my mind because of a number of recent state and national reports that have cast the Gopher State in a positive light. Aside from the Vikings-Packers game in late November, Minnesota has been on a roll: Read more