State Budget Central

There are many local opportunities to advocate for the issues you care about in the upcoming State Budget. Please plan to attend as many of these as you can to show elected Republicans that despite their bought-and-paid-for majority, the people of Wisconsin don't support their regressive policies and failed trickle-down gimmicks. 
We especially want to pack the room for the April 18th Joint Finance Hearing in Spooner.

2017-19 WI State Budget Events in Our Area:
  • Rep. Romaine Quinn Budget Listening Sessions:
    • Fri., April 7 - 6:00pm - Rice Lake City Hall, 30 E. Eau Claire St, Rice Lake (map)
    • Sat., April 8 - 10:00am - Clear Lake Community Center, 560 5th St NW, Clear Lake (map)
  • Democratic State Legislators Listening Session (Rep. Dana Wachs and others):
    • Sat., April 8 - 10:00am - UW-Eau Claire Centennial Hall (more info)
  • Training & Info Sessions for Testifying before the Joint Finance Committee:
    • Wed., April 5 - 5:00pm - L.E. Phillips Library, 300 Eau Claire St, Eau Claire (map)
    • Tues., April 11 - 3:30pm - Shell Lake Arts Center, 802 1st St, Shell Lake (map)
  • Joint Finance Committee Hearing (this is the The Big One):
      • Tues., April 18 -10:00am to 6:00pm - Spooner High School, 801 Co. Hwy. A, Spooner (map)

    State Budget Issues and Priorities:

    Keep in mind that all of this is subject to change through the spring and early summer as the Joint Finance Committee reviews and amends the Governor's proposed budget.

    Helpful Budget Summaries:

    Fiscal Picture:
    • The total 2-yr budget is $76.4 Billion. This is the largest in WI history.
    • Federal funds provide $22 Billion, or about 29% of the total. (Recall that aversion to federal money was often cited as a reason for not expanding Medicaid/BadgerCare.)
    • The budget ends FY19 with a General Fund balance of just $82 million. While that may sound like a lot, it's only sufficient to keep our state government operating for 2 days, leaving zero margin for error in case of an economic downturn or incorrect revenue forecast.
    • The budget only balances thanks to the magic of "cash accounting."
      • Using Generally Accepted Accounting Principals (GAAP) that businesses use, this budget ends with a $2.1 Billion deficit in 2019.
      • Note that Walker pledged on the campaign trail that he would "require the use of GAAP accounting to balance every state budget, just as we require every local government and school district to do." He has broken this promise.
      • Another analysis (more forgiving than GAAP) shows that this budget will leave a $1.1 Billion "structural deficit" heading into the next budget in 2019.
    • The budget relies on $60 million in savings from the state switching to a self-insurance model for state employees. Under such a plan, state taxpayers assume the risks that are usually borne by health insurance companies.
      • It could save $60 million dollars, but it relies on a lot of (questionable?) assumptions. Along with predicting future healthcare costs, the state would need to accurately forecast exactly what ObamaCare repeal/replace and Medicaid are going to look like. And if state workers and retirees happen to need an unusual number of expensive surgeries or prescriptions any given year, we're all on the hook for that. It's a huge gamble with your money.
      • If those savings aren't realized (or if it actually increases costs), K12 districts and the UW System are first in line for cuts to make up the difference.
      • The self-insurance plan has already met bipartisan resistance in the legislature.
    Education:
    • Maintains current law that Private Voucher School enrollment increases to 2% of district membership in 2017-18 and 3% in 2018-19. Payments to voucher schools also increase by $434/student (over 5%).
      • Private Voucher School operators are forecast to take in over $540 Million in taxpayer funding over the 2 yrs of this budget
      • There are currently no voucher schools in Barron County. However, if one were to open in 2018 in Rice Lake, it could enroll up to 67 students on vouchers at a cost of over $520,000 to the Rice Lake Area School District.
      • Voucher School proponents frame their argument in terms of "choice" and "freedom," but parents have always been free to enroll their children in private schools if they so choose. The only thing new is that it is funded with taxpayer dollars:
        • Everyone is free to hire a private bodyguard or security company, but one must do so at one's own expense. One would never expect their County Sheriff's Dept to cover these costs with public funds, but that is how the voucher school program works.
    • K12 Funding is going up (that's good!), but the devil is in the details...
      • Walker will pitch this as a "record" for state K12 funding, but adjusted for inflation it's still less than K12 aid under Gov. Doyle.
      • The additional funding could face opposition from Republicans in the legislature looking to fund other priorities or reduce borrowing.
      • Wealthier districts will get a disproportionately large share of the new funding.
      • $73 Million of the new funding will be in the form of property tax relief, and will not have any impact on the classroom. Not bad in and of itself, but keep it in mind when you hear politicians bragging about the big numbers they're investing in K12 funding.
    • Increases funding to the UW System (tuition freeze in yr 1 and a 5% tuition cut in yr 2) and Technical Colleges ($10 Million for a tuition freeze).
    • Eliminates the Educational Approval Board, which regulates for-profit colleges. This seems reckless in light of the mess left when institutions like ITT Tech or Trump University abruptly shut down and leave students in the lurch or use deceptive recruiting practices.
    Corporate Welfare:
    • Maintains the extremely wasteful Manufacturing & Agriculture Tax Credit, which reduces the state income tax on many businesses and wealthy individuals to less than 1%, at a cost of over $300 Million a year (more than double its original projection). 
      • Pitched as a "job-creation" measure, this credit does not require any jobs to be created, and we've actually seen manufacturing jobs leave WI despite this credit. 
      • This budget includes a minor tweak that prevents businesses from claiming the credit on manufacturing that takes place outside of Wisconsin... which apparently had been A-OK since 2013.
    • Maintains a lower tax rate for capital gains than income earned from actually working. This loophole costs the state $164 Million per year, with almost half of that money going to the wealthiest 2%.
      • If WI repealed the Manufacturing & Ag credit and taxed capital gains at the same rate as regular wages, it would free up about $900 Million over a 2-yr budget. This would fund the entire WI Budget For All agenda, which includes Free Tuition at WI Technical Colleges, replacing lead water service lines, covering an additional 83,000 low-income Wisconsinites under BadgerCare, and much more.
    • Eliminates the prevailing wage for all state construction projects and prohibits municipalities from requiring construction contractors to use union labor. While these are pitched as cost-saving measures, evidence suggests the only sure outcome is lower wages for middle-income families.
      • A peer-reviewed study of over 4,000 publicly-financed construction projects found that "there is no measurable difference [in cost]... in public schools built with and with-out prevailing wage regulations."
      • The WI American Legion estimates that up to 2,000 WI veterans could lose their jobs if prevailing wage is repealed.
    • Stacks the deck against workers who file complaints alleging workplace discrimination or violations of the Family Medical Leave Act. Even if a judge rules that an employer engaged in discrimination, the worker who brought the claim could still be forced to pay their employers' legal fees. Setting aside that this has nothing to do with the state's finances, it will have a chilling effect on workers who have endured real harm and will dissuade lawyers from taking on these kinds of cases.
    • Re-starts the WI Economic Development Corporation's (WEDC) loan programs. In the wake of countless scandals, scathing audits, pay-to-play corruption, and widespread incompetence, WEDC was prohibited from originating new loans. This budget does away with that and allows WEDC to continue awarding loans (with no maximum dollar-amount), with two new caveats that should have been in place from day-one: (1) no WEDC loan can be "forgivable," and (2) new loans can only be funded by revenue from previous loans (i.e., the loaned funds will no longer come out of the state's general fund).
      • While those two caveats are an improvement, the bar is disgracefully low. WEDC has demonstrated beyond a shadow of a doubt that it is neither a responsible steward of our tax dollars nor is it even capable of doing effective, meaningful job creation. The "innovation" and "flexibility" that were supposed to make WEDC more impactful than the old Dept of Commerce have only allowed more tax money to be wasted on projects that enrich GOP campaign donors, while the state continues to bleed manufacturing jobs.
    Taxes & Revenue:
    • Reduces the state income tax rate by 0.1% on the two lowest income-brackets. Walker refers to this as a "$203 Million Tax Cut." An individual working and earning at least $28,000/yr would see their state income tax decrease by about $35/yr (or about $1.35/paycheck).
      • Adding less than $2 to everyone's paycheck is about the least effective thing the state could possibly do with $203 Million. The possibilities are endless, but that could install a lot of broadband, hire a lot of teachers, fund a substantial tuition reduction in the UW System, or even eliminate tuition altogether at UW-Colleges two-year campuses.
    Transportation:
    • The Transportation Fund faces a deficit of about $1 Billion. Walker's budget addresses this by $500 Million in new borrowing and delaying many state and interstate highway projects (which increases costs over the long run). The budget does not increase gas taxes or vehicle registration fees.
      • Many Legislative Republicans are strongly opposed to this level of borrowing, and are equally committed to holding the line on the gas tax. This threatens to blow up the whole budget. If the Transportation deficit can't be addressed with borrowing or increasing gas tax or other revenues, the most likely outcome is raiding the General Fund -- resulting in cuts to other state programs.
      • Walker also diverts $24 million per year from a fund for cleaning up petroleum contamination (think old gas stations) and uses it to help plug the Transportation deficit. The need for cleaning up this contamination isn't going to just go away, so this could lead to some big budget problems down the road.
    • The state will spend just over $1 Billion on Transportation debt service over the 2 year budget. Out of every dollar we spend on Transportation, almost 28-cents will go to making payment on debt.
    Low-Income Wisconsinites:
    • The Budget makes a number of changes to the FoodShare program (aka "Food Stamps"). While some of these changes may be well-intentioned, the Hunger Task Force states that they could harm thousands of families and children who really need the help:
      • Placing additional employment or job-training requirements on adults with dependent children puts those children at risk of food insecurity
      • We obviously want people who owe child support to make their required payments, but using the threat of revoking FoodShare benefits is counterproductive. If someone is poor enough to be on FoodShare and they fall behind on their child support, how does making them spend more on food help anyone or get them any closer to paying the child support that they owe? 
      • The required job training would be provided by out-of-state contractors at a cost to taxpayers of about $16,000 per job. Instead of using these contractors, Hunger Task Force recommends putting this funding into Technical Colleges and the WI Transitional Jobs Program, which have proven track-records.
    • Increases Medicaid premiums for some people with disabilities and "strengthens" existing work requirements for some programs.
    Environment:
    • Studies shifting permitting for Concentrated Animal Feeding Operations (CAFOs; factory farms) to the Dept of Agriculture, Trade, & Consumer Protection (DATCP). CAFOs generate huge amounts of animal waste, and their permits largely deal with protecting the land and water from excessive nutrients (which cause algae blooms) and bacteria. This permitting should stay with DNR, since they have the expertise to know how pollution interacts with land and water and the duty to protect our waters under the public trust doctrine.
    • Allows DNR to increase State Park Fees by up to $10, based on the popularity of each park. Continues the policy from the last budget that state parks are funded completely from user fees and not supported by tax dollars.
    • Eliminates DNR's "Wisconsin Natural Resources" magazine, which is fully-funded by subscriptions
    • Adopts CDC's 2012 definition of "lead poisoning." Wisconsin currently defines lead poisoning in children as 10 micrograms/deciliter of blood, at which point follow-up medical and public health services including home inspections are required. The budget would adopt the Center for Disease Control's threshold of 5 micrograms/deciliter, which has been in effect nationally for 5 years now.
    Justice & Corrections:
    • Eliminates the State Parole Commission and replaces it with one parole director who would report to Gov. Walker.
    Further Reading & Other Resources:

    LFB Summary of Executive Budget (Dept by Dept breakdown; 520 pages)

    Dept of Administration Executive Budget Page (every budget-related primary source document)

    2017 LFB Informational Papers - Deep-dives into every state govt program, with history and context!

    "WI Way Forward" - WI Legislative Democrats' Agenda

    Jake's Economic TA Funhouse - Excellent blog on WI state finances and economy

    WI Taxpayers Alliance Budget Press Release