In Some Parts of Budget, JFC Shows Affinity for Federal Funding

Wednesday, May 20, 2015 at 5:47 PM by

By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds 

The Joint Finance Committee votes Thursday, May 21, on a wide range of Medicaid issues, including whether to expand BadgerCare and save upwards of $345 million that could help prevent deep cuts in higher education and other parts of the budget. The most frequent argument made by conservatives against capturing that federal assistance is that we shouldn’t accept federal funding that might not be secure. However, if you were carefully watching the Finance Committee’s budget votes last Thursday you would have gotten a very different perspective on the willingness of the majority party to accept federal funding.  

There were at least two times last Thursday when the JFC voted to amend the Governor’s budget in ways intended to capture or utilize more federal funding. In one case (motion #345) the committee unanimously approved new standards that will make it easier for the Department of Children and Families to close child support cases. Read more

JFC Approves Significant Changes in Budget Management and Process

Tuesday, May 19, 2015 at 8:20 PM by

Legislators Change Guidelines for Agency Requests and Using Unanticipated Revenue 

This afternoon the Joint Finance Committee (JFC) made several significant changes relating to how agencies’ biennial budget requests are submitted, as well as the size of the minimum budget balance and how the state handles “excess” revenue when General Fund revenue exceeds the projected amount.  I think the changes approved today could be a case of taking two steps forward and one step back, but we may need to see the actual budget language before we can really assess the changes.  Read more

New LFB Paper Makes Stronger Case for Taking Federal Medicaid Funds

Monday, May 18, 2015 at 7:23 PM by

Increase in Childless Adult Enrollment Boosts Costs and Potential Savings  

The number of childless adults participating in BadgerCare is now expected to be about 6,800 per year higher than the budget bill assumed, which means the cost of not accepting enhanced federal assistance for covering that population is also considerably higher. 

A paper issued by the Legislative Fiscal Bureau this afternoon contains the new enrollment assumptions for childless adults and other Medicaid groups.  By using those figures to do some quick calculations, I estimate that the state would save at least $23 million more than the Fiscal Bureau calculated back in February, when it said that by expanding BadgerCare and accepting the increased federal funding Wisconsin would enjoy a net savings of $345 million during the 2015-17 biennium.  (My calculation is based just on the increased childless adult caseload and assumes that other factors, such as the cost per individual, haven’t changed since February.) 

[May 21 update:  LFB figures released this afternoon show that the net increase in savings was a little smaller than I calculated, which suggests that other variables also came into play.  Read more

JFC Will Vote Tuesday on Whether to Delay Increasing State Reserve Funds

Friday, May 15, 2015 at 4:40 PM by

If Legislators Are Truly Serious about Responsible Budgeting They Won’t Postpone a Long-Overdue Increase in State Reserves

For as long as I can remember, state politicians have been saying that Wisconsin needs to adopt more fiscally responsible budgets by doing things like increasing the state’s meager reserves and bringing revenue and spending into better alignment. Nevertheless, Wisconsin lawmakers continue to postpone building up budget reserves.  Instead, when there is a projection of “surplus” revenue it is often used in unsustainable ways that add to the state’s future fiscal challenges. 

This Tuesday, May 19, the committee that reviews and revises the state budget bill will have a chance to increase reserves and reduce the “GAAP deficit” (i.e., the gap between state revenue and spending obligations calculated according to Generally Accepted Accounting Practices). That will be decided when the Joint Finance Committee votes on whether to once again delay a statute that now requires increasing the state’s general fund balance to at least 2% of general fund spending in fiscal year 2017-18. Read more

Budget Committee Takes a Positive Step in Improving Public Involvement

Thursday, May 14, 2015 at 7:04 PM by

Involving Stakeholders in Family Care Changes Could Serve as a Model for Other Budget Improvements  

Republican leaders on the Joint Finance Committee announced a significant improvement in the state budget today – or at least in the process for developing and approving one part of the budget, the changes relating to community-based long-term care for seniors and people with disabilities.  Let’s hope that similar improvements are made in other parts of the budget that have comparable problems.   

One of the very troubling things about the Governor’s budget bill is that it contains sweeping changes that circumvent the usual processes for involving stakeholders and advisory committees in the development of public policy proposals.  Among the numerous examples of that, perhaps the most troublesome was the dramatic set of changes to community based long-term care provided through the Family Care and IRIS programs.  The development of those changes totally excluded the usual advisory role of stakeholders, and was even a surprise to the agency that has been administering those programs.   Read more

Welfare Reform Block Grant Funds Once Again at Risk in Wisconsin

Tuesday, May 12, 2015 at 5:18 PM by

The Joint Finance Committee will vote Thursday on whether to divert more funds from the federal welfare reform block grant to help finance unrelated parts of the state budget.  The amount of those funds transferred to the Department of Revenue (DOR) has already been increased dramatically in each of the last two budgets.  $62.5 million per year from the Temporary Assistance to Needy Families (TANF) block grant is being used to replace state funding for the Earned Income Tax Credit (EITC), and that maneuver reduces the funding available for important programs to assist vulnerable low-income families.   

According to a Legislative Fiscal Bureau paper (#215) , federal law would allow the state to transfer up to $12.3 million more to DOR in the next biennium, in order to back out state General Fund dollars for the EITC.

Optimally, legislators should decrease the use of TANF funding for the EITC, which is what the Department of Children and Families (DCF) proposed last fall in the budget request they submitted to the Department of Administration.  Read more

New Figures Highlight Need to Adjust Homestead Credit

Monday, May 11, 2015 at 5:27 PM by

Wisconsin’s property tax credit for low-income homeowners and renters is declining because – in contrast to most of the rest of the tax code – it isn’t adjusted for inflation.  New figures released last week by the Legislative Fiscal Bureau (LFB) show the credit is falling even faster than the Governor’s budget assumed, and the following chart illustrates the decline.   

Property-tax-cut-for-wisconsin-residents-with-low-incomes-continues-to-shrink Read more

Lawmakers Don’t Need Additional Tax Revenue to Avoid Worst of Budget Cuts

Wednesday, May 6, 2015 at 10:13 AM by

Lawmakers hoping to avoid some of the damaging budget cuts proposed by Governor Walker had pinned their hopes on tax revenues coming in higher than originally anticipated, thereby boosting the resources available to invest in Wisconsin’s schools, communities and workforce.

However, new estimates released today show no increase in tax revenue over the original projections.

That news is sure to put key GOP legislators in a bind, especially ones who have indicated they would like to undo some of the damaging cuts in the Governor’s budget and make budget changes that have strong public support. The legislature’s budget committee even postponed their deliberations last week, hoping for news of higher-than-anticipated tax revenues. That hope has now been dashed.

Fortunately, there is another way to build a budget that invests in Wisconsin and avoids the worst of the cuts proposed by Governor Walker, even without higher than anticipated tax revenue.

By reallocating resources and avoiding new tax cuts, legislators can support Wisconsin’s excellent public schools, a university system that drives innovation, and a healthy workforce. Read more

Wisconsin Would Save More than Any Other State by Expanding Medicaid

Tuesday, May 5, 2015 at 6:09 PM by

National Analysis Illustrates Budget Benefit of Expanding BadgerCare

From a budget perspective, no other state has nearly as much to gain as Wisconsin from expanding Medicaid coverage for low-income adults. That fact is vividly illustrated by the graph below, which is from a report issued last week by Kaiser Commission on Medicaid and the Uninsured.   

Among the 21 states that have yet to expand Medicaid to cover low-income adults up to 138% of the federal poverty level, all the rest would have to spend a little more state funding (before accounting for indirect benefits), whereas Wisconsin is the only state that would have a large savings.  The Kaiser Commission’s report concluded that by expanding BadgerCare and qualifying for additional federal funding, “Wisconsin would see its state spending on Medicaid decline by nearly 5 percent.”  The other 20 states that haven’t expanded Medicaid yet would achieve larger gains in health insurance coverage, but the state share of their Medicaid spending would increase slightly, in the range of 2% to 6%. Read more

Waiting for Good Dough: Budget Process Is Put on Hold

Wednesday, April 29, 2015 at 4:39 PM by

Budget Committee Waits for New Revenue Estimates, Despite Other Options

The budget process came to a halt this week, and the surprising hiatus in Joint Finance Committee deliberations brings to mind the Samuel Beckett play Waiting for Godot.  In this case, the “good dough” awaited by the JFC is a higher estimate of tax collections that might be issued by the Legislative Fiscal Bureau sometime next week. Let’s hope that the committee’s wait isn’t in vain, like the long wait for Godot.  

It has already been a week since JFC last met, which is very unusual at this point in the budget process, and the next meeting won’t be held until  Tuesday, May 5th.  That’s disappointing because the delay is likely to compress the decision-making process, despite the fact that there are good alternatives for freeing up needed revenue without raising taxes.  Read more