Wisconsin’s Public Sector Comes with a Low Cost, Compared to Other States

Monday, August 8, 2016 at 8:12 AM by

Wisconsin is leaner in most types of public sector jobs than all but a few other states, according to a review of employment figures by Governing.

Only three states have fewer public workers working in areas other than education than Wisconsin, according to the analysis. For every 10,000 state residents, Wisconsin has 199 public non-education employees. That’s less than half the number of public employees per population in Wyoming, which had the most public employees for its population size, and 50% less than the number of public employees per population in New York, Mississippi, and Alaska. Only three states had a smaller number of public employees than Wisconsin for their population size.

Wisconsin also ranked relatively low in payroll costs. For every $100,000 in personal income, Wisconsin governments spent $202 in March 2014 for non-education public employees. Only 11 states have lower payroll costs as a share of personal income. Read more

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Governor’s Statements Give Hints of What’s to Come in Next Budget

Tuesday, August 2, 2016 at 12:18 PM by

Governor Walker’s public statements and his instructions to state agencies on how to develop their proposals for Wisconsin’s next state budget give some glimpses into what the state’s 2017-19 budget might bring.

Wisconsin has a two-year budget. The process of deciding what to include in the budget starts in the summer of even numbered years — in other words, now — when the Governor instructs state agencies how to develop budget requests. Agencies submit their requests to the Governor in September, and the Governor takes the requests into consideration when developing his own budget proposal to submit to the Legislature. The Governor is expected to release his budget proposal in the early part of 2017. (For more about the Wisconsin state budget cycle, check the Wisconsin Budget Project’s Budget Toolkit.)

For the upcoming budget, Governor Walker has instructed state agencies to assume there will be zero growth in General Purpose Revenue (GPR) appropriations. Read more

Categories: 2017-19 biennial budget, Blog, Medicaid, STATE BUDGET | Comments Off on Governor’s Statements Give Hints of What’s to Come in Next Budget

Lower-than-Expected Medicaid Spending Offers Relief and Opportunity

Tuesday, July 5, 2016 at 7:44 PM by

Reduced Participation Provides Opportunity and Reason to Streamline Enrollment Procedures

Members of the legislature’s Joint Finance Committee got some very good news last Friday in the form of a quarterly report on the state Medicaid budget from the Wisconsin Department of Health Services (DHS).  The letter from the interim Secretary of DHS indicates that the agency now estimates that Medicaid spending during the 2015-17 biennium will be $418.6 million below the amount lawmakers anticipated when they passed the budget bill a year ago.

The portion of Medicaid spending specifically from state General Purpose Revenue (GPR) is projected to be almost $176 million (3.1%) less than the budget bill set aside. That’s an improvement of $90.6 million GPR since the last projection was made three months ago.

These numbers from DHS are very good news at a time when state revenue projections haven’t been very good. The reduced growth in Medicaid spending improves the prospects for keeping the total state budget in the black – without resorting to additional remedial measures (beyond the delay in debt payments that the Governor already implemented). Read more

Categories: 2015-17 biennial budget, BadgerCare Plus, Blog, Medicaid, spending | Comments Off on Lower-than-Expected Medicaid Spending Offers Relief and Opportunity

Despite Jobs Growth, State Revenue Falls in May

Monday, June 20, 2016 at 7:08 PM by

Wisconsin got a very positive jobs report last week, but the apparent good news from the preliminary May data did not carry over to last month’s tax collections. As a result, the state may finish the current fiscal year well below the revenue target included in the budget bill – creating a more precarious situation in the second half of the 2015-17 biennial budget.

The Department of Revenue released the May tax collections figures at about 4:00 on Friday, June 17. As is often the case when those numbers are released late on a Friday, the news wasn’t good.  The new DOR figures show the following:

  • Tax collections fell by $17.5 million (1.5%) in May, relative to the amount in May 2015.
  • Although sales tax collections increased by $25 million compared to the same month of 2015, individual income tax revenue dropped by 6.3% ($31.5 million) last month, and corporate income tax revenue was off by $8.5 million (almost 35%).
Read more
Categories: 2015-17 biennial budget, Blog, corporate tax, income taxes, taxes | Comments Off on Despite Jobs Growth, State Revenue Falls in May

The Growing Strain on Public Health Department Budgets

Thursday, June 9, 2016 at 2:18 PM by

Wisconsin Is Third Lowest Nationally in Total Spending for Public Health

Concerns about the threats posed by the Zika virus have generated debate in Congress about funding for public health and have drawn attention to the importance of public health systems. That makes this a very appropriate time to also look at the funding for our state and local public health departments.

In Wisconsin, as in other states, we expect a lot from the public health system. However, we generally take that system for granted, and Wisconsin has one of the most poorly funded public health systems in the nation.

A recent report by the Trust for America’s Health (Investing in America’s health: a state-by-state look at public health funding and key health facts) compares the total spending level for public health in each state in 2015, and it also ranks states by the public health funding from a variety of sources. Read more

Categories: Blog, HEALTH & HUMAN SERVICES, local government, STATE BUDGET | Comments Off on The Growing Strain on Public Health Department Budgets

Wisconsin Made Second Largest Cut this Year in Support for Higher Education

Friday, May 27, 2016 at 12:35 PM by

Tech. College Funding Shift Masks 25 Percent Cut in Higher Ed Support Since 2008

Wisconsin cut state support for higher education by 8.3 percent this year, or $603 per student. As the following graph illustrates, only Arizona cut state funding for higher education by a larger percentage. 

In contrast to Wisconsin, most states have been taking advantage of the national economic recovery to increase support for higher education and restore some of the funding cut during the recession. The bar graph from a new report by the Center on Budget and Policy Priorities (CBPP) shows that Wisconsin was one of just 11 states that cut its support for higher education in the current fiscal year, relative to fiscal year 2015, and almost all of the other cuts were far smaller. Read more

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Skipped Debt Payment – and Higher Costs – Point to Need for Better Budget Planning

Thursday, May 12, 2016 at 9:45 AM by

Governor Walker has delayed a payment on the state’s debt, pushing costs off into the future and increasing the amount of interest the state will have to pay.  Postponing debt payments can be a helpful tool to manage budget shortfalls, but Governor Walker hasn’t released information indicating why the delay was necessary.

Instead of making a $101 debt payment that was due in May, the state skipped the payment and restructured the debt to be repaid over the next eight years. (State law allows the governor to restructure certain types of debt without getting the approval of legislators.) This move reduces spending in this fiscal year, but raises future costs in two ways:

  • By increasing the amount of principal that must be repaid in future years. Spreading out the $101 million cost over the next eight years will raise payments on the debt principal by $12.6 million for each year between 2017 and 2024.
Read more

Wisconsin No Longer Making Headway in Boosting State’s Rainy Day Fund

Monday, May 2, 2016 at 6:07 AM by

Regularly putting money into the state’s Rainy Day Fund during periods of sustained economic growth helps build up a budget cushion on which the state can rely to cushion the impact of recessions and avoid harmful budget cuts. But before 2011, Wisconsin’s Rainy Day Fund sat mostly empty.

In 2011, 2012, and 2013, the state deposited money into the Rainy Day Fund when tax revenues came in higher than anticipated, building the balance to $280 million. But lawmakers made no deposits to the fund in 2014, 2015, or in 2016 so far. They pushed aside a requirement that part of higher-than-anticipated tax revenues be deposited in the Rainy Day Fund, and instead passed new tax cuts and allowed existing tax cuts to grow. Some of those tax breaks benefitted large corporations and taxpayers with high incomes.

Progress on Strengthening Wisconsin's Rain Day Fund has Stalled

There’s no hard-and-fast rule about how big a state’s Rainy Day Fund should be, but the Government Finance Officers Association recommends that states have at a minimum of 5% to 15% of annual general revenues set aside. Read more

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Good News on the State’s Medicaid Budget

Wednesday, April 13, 2016 at 7:59 PM by

The latest quarterly report from the Department of Health Services (DHS) projects that state spending for Medicaid and related services during the current biennium will be $85.2 million less than the state budgeted. That amounts to $12.6 million less state spending than the state estimated in its last update, three months ago. (I’m focusing just on the state share of spending; the total reduction from all sources is almost $203 million, relative to the amount budgeted for 2015-17.)

Granted, Medicaid spending trends can change rapidly, but the DHS report is welcome news – particularly since other budget indicators aren’t so good. Recently reduced estimates of national economic growth in 2016 suggest the possibility of less state revenue growth than anticipated, and as we noted in a recent blog post, state tax collections dropped by $91 million in February. Against that backdrop, the latest DHS report provides a bit of positive news relating to the prospects for keeping the state budget in the black. Read more

Categories: 2015-17 biennial budget, Blog, HEALTH & HUMAN SERVICES, Medicaid, spending | Comments Off on Good News on the State’s Medicaid Budget

Is Sharp Drop in Revenue Bad News for Wisconsin’s Budget?

Monday, April 4, 2016 at 4:48 PM by

$91 Million Decline in Tax Collections Underscores Need for Increased Transparency

The Wisconsin Department of Revenue (DOR) recently released the tax collection figures for the month of February, and the new numbers show a drop of $91 million for the month, compared to February 2015. That was a drop of 14% in General Fund tax revenue, even though February was one day longer this year.

For first 8 months of the current fiscal year, revenue is up 3.8% compared to the 2014-15 fiscal year. That’s a bit worrisome because the last revenue estimates from the Legislative Fiscal Bureau (LFB) projected tax growth of about 4.4% for the fiscal year that ends on June 30 (and that estimate had been revised down from the 4.6% increase anticipated when the budget bill was passed).

Unfortunately, the Wisconsin DOR – in contrast to its counterpart in Minnesota – almost never releases month-by-month tax collection projections in conjunction with the actual tax collection figures. Read more