Non-Fiscal Proposals Are at the Heart of the Current Budget Stalemate

Wednesday, February 23, 2011 at 4:21 PM by

The point of the “budget repair” bill that has generated so much controversy in Wisconsin for the past week or so is to fill a projected deficit in the current fiscal year. Republicans generally put the shortfall at $137 million, and although that figure and the existence of a deficit are disputed by some, it’s a defensible number. On the other hand, the contentions that Wisconsin has a fiscal “crisis” are grossly exaggerated. This Wisconsin State Journal article by Dee Hall explains how various stakeholders are interpreting the state’s budget numbers.

In light of the fact that a debt restructuring proposal included in the bill would save $165 million in the current fiscal year, it would appear that solving the immediate deficit challenge wouldn’t be very difficult, especially after public employee unions made a key concession – agreeing to the Governor’s demand that they contribute substantially more for their health care benefits and pensions.

Yet even though the solution to Wisconsin’s immediate deficit problem is within reach, the political stalemate continues, and at the root of that stalemate are numerous non-fiscal policy measures that were proposed by the Governor and approved by the Joint Finance Committee. This post contains a brief description of most of those measures, and links to additional information about them.

The Legislative Fiscal Bureau is (LFB) is usually asked after each budget is introduced to make a list of the proposals in the bill that are non-fiscal policy items, meaning that they either have no fiscal effect, or that the policy implications outweigh any potential fiscal effect. In other words, these changes will have little or no effect, at least in the short-term, on closing the state’s budget gap. Often times the Joint Finance Committee initiates its work on a budget bill by stripping all of the non-fiscal items and directing them to be introduced as separate pieces of legislation, so they can get more deliberative consideration outside of the budget process. That was not done for this “budget repair” bill.

The following are some of the measures included on the LFB list of non-fiscal measures in the “budget repair” bill. Some of these changes, particularly the ones regarding collective bargaining rights, have garnered statewide and even national attention. Others non-fiscal policy items in the bill have received little attention.
  • Changes to Medical Assistance – This provision would give the Department of Health Services the ability to rewrite Medicaid policy with little or no input from the Legislature or the public. Decisions made by an unelected state official could supersede state statutes relating to Medicaid services for more than 1.1 million Wisconsinites, including the elderly, people with disabilities, and working families. The changes could affect policies such as eligibility, premiums, services covered, and a wide range of other important aspects of Medicaid policy. The Fiscal Bureau memo about non-fiscal policy measures states the Medicaid provisions would “remove the entire Legislature from determining substantial elements of the medical assistance program.” For more information, read WCCF’s news release.
  • Changes to Public Employee Collective Bargaining – This action would very substantially limit the collective bargaining rights of public employees in Wisconsin, with the exception of law enforcement and firefighters. Public sector unions would not be able to bargain on anything but wages, and those increase could not exceed the inflation rate. The bill would also allow public employees to avoid making payments to unions and require annual certification for unions. This provision has garnered tremendous attention and opposition. Jason Stein and Patrick Marley outline the details of these proposed changes in a Milwaukee Journal-Sentinel article.
  • Repeal of Collective Bargaining Rights for UW System Faculty and Academic Staff – Collective bargaining rights were granted to UW faculty and staff in the 2009-11 budget. This budget adjustment bill repeals those rights. The University of Wisconsin-Madison has a website devoted to budget issues that describes the effects of this provision, should it go into effect.   
  • Collective Bargaining for Day Care Providers – This would eliminate collective bargaining for child care providers. 
  • Dissolution of Wisconsin Quality Home Care Authority – The budget adjustment bill would delete all statutory references to the WCHCA, an independent public authority that works to improve the supply and quality of independent home care workers. A Milwaukee Journal-Sentinel PolitiFact article estimates this action would also repeal collective bargaining rights for about 5,000 home health care workers.
  •  Replacement of Classified Positions with Unclassified Positions – This increases the number of positions appointed by the Governor by 37, an increase of 53 percent, giving him greater control over state agencies. Dee Hall explains the implications of this action in a Wisconsin State Journal article.
  • Transfer of Career Executive Employees – The bill would allow career executives to be transferred among agencies with the agreement of the agency directors
  • Firing State Employees – During a state of emergency declared by the Governor, state employees who do not show up for any three work days may be fired, if the absence is not part of approved leave. Workers who participate in strikes, sit-downs, slowdowns, sick-ins or other job actions may also be fired.
  • No-Bid Privatization of State-Owned Power Plants – The state may sell any state-owned power plant or contract for private operations of these plants, without first requiring bids. The Fiscal Bureau did not include this provision in its list of non-fiscal policy items, but has not included any revenue estimates for this change. For more information, read the Milwaukee Journal Sentinel Business Blog post by Thomas Content. A post on Salon by Andrew Leonard examines the rampant speculation in the liberal blogosphere that this item in the bill is a favor for the Koch brothers, who were substantial contributors to the Governor’s campaign.

Including non-fiscal policy in the state budget is nothing new, and neither are calls to remove non-fiscal policy from the budget. It’s important to remember that these provisions have no fiscal effect in 2010-11, and some may not have much fiscal effect beyond that. These policy changes should be considered primarily on their own merits and not in the context of a fast-track bill intended to close Wisconsin’s immediate budget gap. Moving these items into separate bills or at least into the biennial budget bill would be a quick way to resolve the current budget stalemate.

Jon Peacock
Tamarine Cornelius

Categories: 2011 budget repair bill, 2011-13 biennial budget, Blog, Medicaid, public employees | Comments Off on Non-Fiscal Proposals Are at the Heart of the Current Budget Stalemate

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