The Wisconsin Budget Project Needs Your Support

The Wisconsin Budget Project produces high-quality research, clear and accurate data, and trusted policy analysis. And we make all of it available - for free - to everyone. We believe that this leads to more inclusive public debates, more voices being heard, and policy choices that better reflect the interests and values of everyone in our state, especially low- and moderate-income families.

If you agree that this is important, please consider a (tax deductible) donation to the Wisconsin Budget Project today. 

It’s hard to imagine a time when the significance of state budget choices has been so obvious. The decisions made earlier this year in the budget and budget repair bills are having profound effects on access to health care and human services, the quality of K-12 education, the affordability and quality of higher education, and the quality of life for thousands of public sector employees.

During a time when struggling low-wage workers have needed more help, the state budget substantially reduced the support to help keep them in the workforce and out of poverty – because of budget choices such as cutting the Earned Income Tax Credit, eroding the Homestead property tax credit, reducing child support enforcement, raising health care premiums and co-pays, and undermining access to child care subsidies.

These choices were avoidable. The Wisconsin Budget Project and our co-workers at WI Council on Children and Families played a leading role in organizing the Better Choices for Wisconsin coalition and developing the Wisconsin Values Budget, which illustrated how the state budget could be balanced without making such harmful cuts for Wisconsin’s families and its middle income and low-wage workers.

In the coming year, Wisconsin will face additional budget challenges and will debate the direction of future budgets. The WI Budget Project and WCCF will be actively engaged in documenting the consequences of the budget choices made in 2011, in developing alternatives to the budget slashing approach, and in advocating for a balanced solution to Wisconsin’s fiscal difficulties.

But at a time when our work is more important than ever, the Budget Project will be taking a substantial hit in our support from national funders. We need your help to close the hole in our budget, as we work to shed light on how Wisconsin can develop a better state budget.

With your help, the WI Budget Project will continue to play a critical role as a leading voice for tax and revenue policies that support the public investments that have made Wisconsin a great place to live and do business.

Thanks for your support.

Jon Peacock

Taking a Closer Look at the Pace of Job Creation in Wisconsin

Recent jobs figures show that Wisconsin is making only minimal progress towards Governor Walker’s goal of 250,000 new private sector jobs. If Wisconsin continues to create jobs at the same rate as it has over the first 11 months of 2011, it would take more than 14 years to create that number of jobs in the private sector.

The number of private sector jobs in Wisconsin has been growing at a snail’s pace, but the total number of jobs has grown even more slowly. Wisconsin has been shedding jobs in the public sector, leading to layoffs and job loss for our teachers, librarians, and bus drivers. The result is that it would take more than half a century to add 250,000 jobs – public or private – to the Wisconsin economy at the current pace.

Looking ahead to the 2012 State Budget: How Green is the “Recovery”?

News from Within and Outside Wisconsin Sends Mixed Signals on Revenue Growth

As I monitor Wisconsin’s fiscal prospects, I try to decipher any tea leaves (not tea bags) I can find, including omens of fiscal health outside our state. The news over the last few weeks has been mixed –making me a little bit less worried about the prospects for getting through 2012 without a new deficit, but still apprehensive about the state’s fiscal health over the next several years.

In this post I’ll examine the fiscal and economic data revealed in recent weeks, including a somewhat encouraging revenue report from the WI Department of Revenue (DOR) in mid-December, as well as a mixture of positive and cautionary data from several other sources. A few reports from outside Wisconsin suggest that although revenue collections are looking up now, ongoing growth will be tepid and federal budget cuts may cause new economic challenges, as well as troublesome holes in federal aid for the states.

Ten Most Popular Posts of 2011

2011 was a budget year like no other in Wisconsin’s history. We take a look back at the year with a Top Ten list of the Wisconsin Budget Project’s most popular blog posts.

#10 Questions to Ask Before Privatizing Government (June 3, 2011)
Ten basic questions to help policymakers, the public, and the media debate privatization proposals.

#9 Grim Days for Schools, with Grimmer Days Ahead (November 16, 2011)
Severe budget cuts to public education in Wisconsin have resulted in thousands of job losses, larger class sizes, and fewer academic opportunities for students.

#8 Public Employees Receive First Diminished Paycheck (August 25, 2011)
Public employees with relatively low salaries or hourly wages stand to lose thousands of dollars a year, the equivalent of as much as six months of grocery costs.

#7 Value of Governor’s “Tools” in Dispute (April 13, 2011)
Many local governments will not be able to take full advantage of the “tools” proposed by the Governor and will be negatively impacted due to circumstances beyond their control.

#6 Icing on the Cake for Corporations, Crumbs for Working Families (June 10, 2011)
Wisconsin can’t afford a significant new tax break for corporations, especially one that doesn’t require businesses to create a single new job. Meanwhile, working families are required to shoulder higher taxes.

#5 DOA Document Puts 2011-13 Deficit at $3.6 Billion (February 8, 2011)
An explanation of how the Department of Administration calculated the size of the budget deficit.

#4 Non-Fiscal Proposals Are at the Heart of the Current Budget Stalemate (February 23, 2011)
Solving the 2011 budget shortfall wouldn’t appear to be very difficult, but numerous non-fiscal policy measures proposed by the Governor in the budget repair bill led to a political stalemate.

#3 Five Things You Might Not Know About Public Employees in Wisconsin (November 1, 2011)
Did you know that Wisconsin has a leaner public sector than all but 11 other states? And that relative to our population, the number of public employees in Wisconsin has declined over the last decade?

#2 Ten-Year Tax Cut Tally Tops Two Billion (June 11, 2011)
Many of the tax cuts put into place in 2011 are delayed or phased in, meaning that their annual price tag will grow steadily over the next several years. The ten-year cost of the tax cuts: $2.3 billion.

…and the Wisconsin Budget Project’s most popular blog post of 2011:

#1 Budget Includes Tax Increase for the Working Poor and Tax Cut for Wealthiest (March 14, 2011)
By increasing the taxes paid by the working poor and decreasing taxes paid by the wealthiest state residents, the Legislature has made its priorities clear.

Tamarine Cornelius

DOA Announces $123 million of Funding Lapses (Cuts); More to Come

UW System and Children’s Programs Hit Hard by Lapses Announced Today

This afternoon the Walker Administration announced its plans for lapsing $123 million to the General Fund.  (I wonder why news like this so often comes out late on a Friday before a big holiday?)  The biennial budget requires the Department of Administration to allocate $174 million of lapses, and today’s announcement covers just the first fiscal year – meaning that there will be at least $51 million in additional lapses sometime during the next 18 months.

The biggest hit is to the UW System, which has to give back $46 million. Several programs for children and youths are also absorbing substantial blows. The lapses include almost $18.6 million from federal bonus funding for children’s health care, $8.3 million from the Department of Children and Families (DCF), and about $4.7 million from juvenile corrections (primarily Youth Aids).

The Link Between Budget Cuts and Job Loss

In tough times, the worst thing the state can do is further shrink the economy. Yet that’s just what the Governor and Legislature seem intent on doing, according to a new report from the Institute for Wisconsin’s Future (IWF). The resulting job loss has thrown 18,000 Wisconsin residents out of work in the private sector alone.

There’s no question Wisconsin’s economy is stuck in neutral. New jobs figures show that Wisconsin has lost jobs for five straight months, and Wisconsin ranks last among the states in recent economic performance.

IWF’s report points to policy decisions by the Governor and Legislature as the reason for Wisconsin’s economic doldrums:

"When huge amounts of money are taken out of the economy, as Governor Walker’s policies are doing, it hurts almost everyone. Businesses have fewer customers; workers have fewer jobs; state and local governments have less tax revenue."

Wisconsin Ranks Last in Economic Index for August through October

The Federal Reserve Bank of Philadelphia tracks economic indicators for each state on a monthly basis and prepares a map comparing the states’ economic trends over the last three months. Let’s hope the next map, likely to come out later this week, has better news for Wisconsin than the last one – when the Badger State had the worst rating among all 50 states.

The ratings are based on a measure they have developed called the coincident index, which combines four state-level indicators: nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements. The map for the 3-month period August through October singles out Wisconsin as the lone state highlighted in red, which represents the lowest category. Our state practically jumps off the page because it’s in such marked contrast to surrounding states.

The Five Worst State Budget Ideas of 2011

In 2011, the Legislature made many ill-advised budgeting decisions, decisions that will have long-term negative effects on Wisconsin’s ability to create family-supporting jobs. The Wisconsin Budget Project takes a look back at 2011 to identify the five worst budgeting ideas of the year.

#5: Shortchanging our economic future
A well-educated workforce is critical to laying the groundwork for the state’s economic future. We should be committing resources to building our educational system, to ensure that the children of today will be productive workers in tomorrow’s economy. Instead, the Legislature made very deep cuts to K-12 education, so deep that Wisconsin has the unfortunate distinction of cutting more education dollars per student than almost any other state in 2012. That’s no way to build future prosperity.

Lemons, Lemonade, and the State’s New Job Numbers

Employment is down, but DWD argues the preliminary data has consistently short-changed Wisconsin

I suspect that part of the job description for the Department of Workforce Development (DWD) Secretary and his staff is to make lemonade when the latest batch of jobs and unemployment statistics deals the state the data equivalent of lemons. I don’t think that’s unique to the current Administration; I have little doubt that it has long been the case – in Wisconsin and elsewhere. With practice, labor agencies get very good at it.

The latest example comes from the DWD press release about today’s Wisconsin employment numbers. That release is a stark contrast to the Journal Sentinel article today, which states in the headline that Wisconsin lost an estimated 11,700 private-sector jobs in November. The article by John Schmid goes on to note that the October to November drop was “the deepest since April 2009 when the nation was in the throes of the recession.” 

Turning Down Federal Rail Money Leaves State Taxpayers on the Hook

A year ago, Wisconsin turned down a federal grant for high-speed rail. Now, a new memo shows that Wisconsin taxpayers have incurred or will incur between $65 and $84 million in costs that would have been covered by the federal grant. This leaves the state with fewer resources to shore up Wisconsin’s transportation system.

The grant for high-speed rail is part of the $1.3 billion in federal money that Wisconsin has bypassed, summed up in a new report from the Wisconsin Budget Project. That report found that state budget cuts or incomplete funding of state programs meant Wisconsin did not capture an additional $506 million of federal funds that were available over the current biennium. In addition, Wisconsin turned down $803 million in two large federal grants, including the grant for high-speed rail.

How Wisconsin Surrendered $1.3 Billion in Federal Money

According to a new report from the Wisconsin Budget Project, Wisconsin families will lose out on more than $1 billion in federal money for health care, job training, child support, education, and transportation as a result of decisions at the state level.

 

State budget cuts or incomplete funding of state programs meant Wisconsin did not capture an additional $506 million of federal funds that were available over the current biennium. In addition, Wisconsin turned down $803 million in two large federal grants, including a grant for high-speed rail. Federal spending in Wisconsin was $800 per person below the national average in 2010.
 

DHS gets preliminary approval for some of its BadgerCare cost cutting

A letter sent today by the Centers for Medicare and Medicaid Services (CMS) gives Wisconsin preliminary approval to make some cost-cutting changes to BadgerCare, while notifying state officials that the federal waiver review process for most of the changes won’t be completed on the accelerated schedule sought by the Walker Administration.

The Department of Health Services (DHS) has proposed cutting about $554 million from Medicaid and BadgerCare in the current biennium (a task that grew considerably more difficult as DHS took almost 8 months from when it was delegated the responsibility for the cost cutting to when the department announced a preliminary outline of its plans). The state General Fund share of the proposed cuts would be about $220 million.

The proposed changes to BadgerCare would reduce GPR spending by about $116 million GPR in the current biennium, accounting for a little over half of the total savings. On November 10, DHS submitted a waiver request to CMS seeking authority to make about $90 million of the proposed cuts to BadgerCare in ways that potentially violate the “maintenance of effort” (MOE) requirements in the federal health care reform law. The letter sent today by CMS to DHS Secretary Dennis Smith addresses the proposed MOE waiver.

Major, Profitable Corporations Pay Little in State Income Taxes

Many consistently profitable corporations pay little or no state income tax, depriving state residents of the resources needed to support public education, a solid transportation system, and safe communities. A new report by Citizens for Tax Justice and the Institute on Taxation and Economic Policy profiles 265 Fortune 500 companies, and determines that 68 of them paid no state income tax in at least one year from 2008 through 2010. The companies reported almost $117 billion in pretax profits in those no-tax years. The New York Times covered the report this morning.

Dismal Jobs Figures Highlight Need to Continue Federal Jobless Benefits

It’s too soon to allow the federal unemployment benefits program to end at the end of the year, as will happen unless Congress acts to extend it. Federal unemployment benefits provide a boost to the economy, by putting money in the pockets of people who will spend it right away. These benefits act as a lifeline for families struggling in an economy that has only one job opening for every four people looking for work.

Re-authorizing federal unemployment benefits is important not just for the national as a whole, but for Wisconsin in particular. Job growth in Wisconsin has been slower than anyone wants, and recent jobs figures in Wisconsin are downright grim. Between July and October 2011, Wisconsin lost 21,200 jobs – about as many jobs as there are in all of Douglas County. Over the last year, the national unemployment rate has slowly declined, but Wisconsin’s hasn’t budged.

Right now, Wisconsinites have access to a total of up to 86 weeks of jobless benefits - 26 weeks of state-funded benefits and 60 weeks of federal benefits. If Congress does not re-authorize federal unemployment benefits, the duration of benefits will be cut back to 26 weeks, shorting the period of benefits by more than a year.