Ten Reasons Why This a “Robin Hood in Reverse” Budget

Tuesday, August 6, 2013 at 9:58 AM by

In a long Q & A format interview in the Capital Times, I described a number of the faults of the 2013-15 budget bill. One of the defects I mentioned in that interview is that the bill employs a “Robin Hood in reverse” strategy for allocating resources. Because the article doesn’t provide much explanation of the reasoning behind that charge, I feel obligated to elaborate.

Actually, I think there is a very broad range of reasons for concluding that the recently enacted budget shifts resources from the poor to the rich. A new Wisconsin Budget Project paper explains ten of those reasons, which are summarized more succinctly below:

1) Diverting federal block grant funds for low-income families – The bill siphons off funding from the federal block grant known as Temporary Assistance to Needy Families (TANF) and indirectly uses those funds to build up the state’s surplus, which helped lawmakers enact larger income tax cuts that primarily benefit the wealthy.

2) Cutting funding for the welfare to work program, despite a sharply rising caseload – Although the shift in TANF block grant funding assumes a one percent per month decline in participation in the welfare to work program known as Wisconsin Works, or W-2, enrollment has actually risen substantially in the first six months of 2013 and was 11% higher in June than the budget assumed. 

3) Cutting $31 million from the funding for child care subsidies – The budget bill cuts the Wisconsin Shares child care subsidy program by $31 million over the next two years and squanders an opportunity to use the savings to make long overdue investments in the quality of early education.

4) Adopting a large package of tax cuts that excludes hundreds of thousands of taxpayers – One fourth of income tax filers in Wisconsin won’t benefit at all from the $651 million of income tax cuts in the budget, and over half the benefit of those cuts will go to people making over $100,000 per year.

5) Cutting taxes for the wealthy in a way that creates a deficit that will affect all Wisconsinites – Because the budget bill uses a short-term surplus for an ongoing income tax cut, it creates a budget hole or “structural deficit” of about $500 million at the outset of the 2015-17 biennium.

6) Removing more than 90,000 adults from BadgerCare – The bill cuts in half the income eligibility ceiling for adults participating in BadgerCare, which is expected to cause nearly 90,000 low-income parents and about 5,000 childless adults to lose their BadgerCare coverage.

7) Resurrecting changes that could cause 29,000 children to lose BadgerCare coverage – The budget revives proposed changes to BadgerCare that were withdrawn early in 2012 and were projected at that time to cause about 29,000 low-income children to lose their coverage if or when those policy changes are approved by federal officials.

8) Tightening eligibility for unemployment insurance benefits for jobless workers – The bill makes a number of changes in the rules relating to unemployment insurance, such as increasing the work search requirement and making it easier for employers to dismiss workers without having to pay them UI benefits.

9) Making it more difficult to qualify for federal Food Share benefits – The budget bill re-imposes a work requirement for many able-bodied adults participating in the food stamp program, known as Food Share, which is estimated to cause 31,350 Wisconsinites to lose about $72 million per year of federally-funded benefits for food purchases.

10) Shifting K-12 education increases away from equalization aid – Because relatively little of the modest amount of new funding for K-12 education is being distributed through the equalization aid formula, the budget bill undermines the longstanding goal and constitutional requirement to equalize opportunity for all students.

Although there are also a few positive measures in the biennial budget, on balance the bill shifts resources from Wisconsin’s neediest residents to those who are well off. At a time of increased poverty and a widening gap between the rich and the poor, the new budget bill will almost certainly widen that gap even more.

For a somewhat more thorough explanation, see our two-page Wisconsin Budget Project paper.  See also the three-page WCCF summary of the budget issues affecting children and families.

Jon Peacock

 

Categories: 2013-15 biennial budget, BadgerCare Plus, Blog, ECONOMIC SECURITY, EDUCATION, income taxes, K-12, TANF, unemployment benefits | Comments Off on Ten Reasons Why This a “Robin Hood in Reverse” Budget

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