If you were planning to celebrate the fiscal New Year today, I hope you haven’t let your spirits be dampened by the fact that we don’t have a new budget yet. Although the budget process this year has been extremely disappointing, the failure to finish by July 1 isn’t a serious concern – thanks to a very sensible statute that allows spending to proceed at last year’s level until a new budget is enacted. Read more
The problem with this year’s budget process is the fact that it’s been more than a month since legislators have had an open meeting to debate the budget bill. For the entire month of June, which is when the biennial budget is generally debated on the floor of each house of the legislature (and sometimes also in open caucus meetings), all of the budget debates took place behind closed doors. That’s a problem not only because the public has been shut out of the process for over a month, but also because once we get to see the product of those private meetings there will be little or no time to review and react to the budget changes.
The process of open deliberations on the state budget bill has ground to a halt, as leaders in the majority party negotiate behind closed doors in an effort to resolve some of the unsettled budget issues. The result of this strategy and the delayed timetable is likely to be substantially less opportunity for the public to weigh in with legislators regarding the numerous issues that emerge during the closing stages of the budget process. Read more
One of the positive aspects of the Governor’s budget proposals is an investment in Department of Revenue positions to increase tax compliance and improve collection of state and local debts. But despite the fact that those additional positions will yield a tremendous return on the investment, some conservative legislators have balked at providing more staff for DOR. The issue may be debated in the Joint Finance Committee (JFC) this Thursday or Friday, May 29 or 30. (Update: JFC consideration of the DOR issues have been postponed until June 2.) Read more
By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds Read more
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.
Legislators Change Guidelines for Agency Requests and Using Unanticipated Revenue Read more
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.
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 Read more : 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.
If Legislators Are Truly Serious about Responsible Budgeting They Won’t Postpone a Long-Overdue Increase in State Reserves Read more
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.
Involving Stakeholders in Family Care Changes Could Serve as a Model for Other Budget Improvements Read more
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.
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 Read more . 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.
Finance Committee Shows Its Independence but only Removes 14 of the 49 Non-fiscal Measures from Budget Read more
As the Joint Finance Committee (JFC) took its first votes on the budget bill last week, there were some encouraging signs, as well as some disappointing developments. The most encouraging thing was simply that the committee showed a willingness to think independently and not rubber stamp everything proposed by the Governor. In light of the large number of controversial fiscal and policy changes in the budget, I’m relieved that the early indications are that the JFC members in both parties are willing to exercise their own judgment about the Governor’s proposals. More specifically, I was very happy to see the committee vote to preserve several independent government entities that help make or influence policy and that the budget bill proposed to eliminate. A theme in this budget that has gotten relatively little attention is that the Governor has recommended abolishing or weakening numerous independent boards or advisory councils, thereby weakening the role of stakeholders and ordinary citizens in guiding the administration of state programs.