Public investments in child well-being have the potential to make significant differences in children’s lives, according to a new report from the Foundation for Child Development and KIDS COUNT. Children who live in states that place a high priority on support for public education and access to health care, and that have revenue policies that support those programs, are better off than children who live in other states. In the words of the report authors, “States that spend more on children have better outcomes, even after taking into account potential confounding influences.”
Tuesday, January 31, 2012
Friday, January 27, 2012
Proposed Changes to Capital Gains Would Change How Much the Best-Off Pay in Taxes
In his State of the Union address, President Obama proposed what many are calling the “Buffett Rule,” which would ensure that taxpayers earning $1 million would pay a minimum of 30 percent of their income in taxes. This proposed policy is named after billionaire investor Warren Buffett, who spoke out against tax breaks that result in Buffett’s secretary paying a higher percent of her income in taxes than he did.
One of the reasons that very wealthy people sometimes pay a smaller percentage of their income in tax than middle class taxpayers is that a greater share of wealthy people’s income comes in the form of capital gains. Capital gains are taxed at a special low rate, lower than the rate that must be paid on income earned through work.
If implemented, the Buffett rule would raise an additional $50 billion in revenue, according to a new analysis by Citizens for Tax Justice. This amount would be very close to the cost of continuing federal unemployment benefits through the end of 2012. Only a very few of the best-off taxpayers would be affected by the Buffett Rule as proposed by President Obama – the top eight-hundredths of one percent, to be exact, according to CTJ. Yet while the President proposes policies to narrow the capital gains tax break, GOP candidates who are vying to oppose him are debating how much it should be expanded.
One of the reasons that very wealthy people sometimes pay a smaller percentage of their income in tax than middle class taxpayers is that a greater share of wealthy people’s income comes in the form of capital gains. Capital gains are taxed at a special low rate, lower than the rate that must be paid on income earned through work.
If implemented, the Buffett rule would raise an additional $50 billion in revenue, according to a new analysis by Citizens for Tax Justice. This amount would be very close to the cost of continuing federal unemployment benefits through the end of 2012. Only a very few of the best-off taxpayers would be affected by the Buffett Rule as proposed by President Obama – the top eight-hundredths of one percent, to be exact, according to CTJ. Yet while the President proposes policies to narrow the capital gains tax break, GOP candidates who are vying to oppose him are debating how much it should be expanded.
Wednesday, January 25, 2012
Is the Recovery Leaving Wisconsin Behind?
Wisconsin lagged behind other states in job creation in 2011, raising questions of whether the economic recovery is leaving Wisconsin behind.
State policymakers have placed a high priority on private sector job creation in Wisconsin, with frustratingly little to show for it. Between December 2010 and December 2011, Wisconsin added just 13,500 private sector jobs – barely keeping up with population growth. Jobs figures for December 2011 are preliminary and will be replaced with final figures in March.
It’s clear that Wisconsin is not making meaningful progress towards Governor Walker’s goal of 250,000 new private sector jobs. In fact, at this rate it would take nearly 19 years to create 250,000 new private sector jobs in the state.
State policymakers have placed a high priority on private sector job creation in Wisconsin, with frustratingly little to show for it. Between December 2010 and December 2011, Wisconsin added just 13,500 private sector jobs – barely keeping up with population growth. Jobs figures for December 2011 are preliminary and will be replaced with final figures in March.
It’s clear that Wisconsin is not making meaningful progress towards Governor Walker’s goal of 250,000 new private sector jobs. In fact, at this rate it would take nearly 19 years to create 250,000 new private sector jobs in the state.
Tuesday, January 24, 2012
“Shifting the Shaft” – DOC Lapses Fall Heavily on Local Aid for Juvenile Justice
The budget lapses recommended by the Department of Corrections (DOC) remind me of an expression that was occasionally used by a former Milwaukee-area Congressman, Jerry Kleczka. I’ve been observing Wisconsin politics long enough to remember when Kleczka served in the state Senate and co-chaired the Joint Finance Committee during the early 1980s.
Senator Kleczka was a strong-willed co-chair who watched the state’s purse strings carefully and who didn’t mince words. As I recall, he was known at the time as a fiscally conservative Democrat, although I think a better description would be to call him “fiscally responsible.” He believed in fiscal choices that would keep the budget in balance over the long haul – in contrast to the short-term solutions that were more frequently employed in subsequent years by lawmakers in both parties.
One of the indelicate expressions Kleczka would occasionally use was “shifting the shaft” – by which he meant that the state was shifting its own fiscal problems onto others, such as local governments or property taxpayers. That expression strikes me as an apt description of the DOC plan to make local governments bear a disproportionate share of the new round of budget lapses that the agency is making in the current fiscal year, particularly through cuts to Youth Aids.
Senator Kleczka was a strong-willed co-chair who watched the state’s purse strings carefully and who didn’t mince words. As I recall, he was known at the time as a fiscally conservative Democrat, although I think a better description would be to call him “fiscally responsible.” He believed in fiscal choices that would keep the budget in balance over the long haul – in contrast to the short-term solutions that were more frequently employed in subsequent years by lawmakers in both parties.
One of the indelicate expressions Kleczka would occasionally use was “shifting the shaft” – by which he meant that the state was shifting its own fiscal problems onto others, such as local governments or property taxpayers. That expression strikes me as an apt description of the DOC plan to make local governments bear a disproportionate share of the new round of budget lapses that the agency is making in the current fiscal year, particularly through cuts to Youth Aids.
Monday, January 23, 2012
Is the Wisconsin Budget Still in the Red?
The Department of Health Services (DHS) says Wisconsin has a deficit, notwithstanding the fact that the Governor has repeatedly said that he got the state budget into the black. A new WCCF blog post explains that DHS is using different accounting than the state typically uses because certifying that Wisconsin has a deficit would allow the department to eliminate or restrict BadgerCare eligibility for 53,000 adults.
See also Jason Stein’s very good explanation of the issue in an article in today’s Journal Sentinel.
Jon Peacock
See also Jason Stein’s very good explanation of the issue in an article in today’s Journal Sentinel.
Jon Peacock
Friday, January 20, 2012
State Revenue Up 4.7 Percent in First Half of 2011-12 Fiscal Year
The Department of Revenue (DOR) issued its December revenue report today. The new DOR figures show that revenue collections were up 5.0 percent in December, compared to one year earlier. For the first half of the current fiscal year, tax collections are up by 4.7 percent. That growth rate is well ahead of the assumption in the biennial budget bill that General Fund tax collections would increase by 3.0 percent for the full fiscal year.
Sometime next week we expect the Legislative Fiscal Bureau (LFB) to issue new budget estimates for the 2011-13 biennium. Today’s revenue numbers, coupled with the reduced estimate earlier this month of the state’s Medicaid deficit (which improved by $127 million GPR), make me more optimistic about next week’s report by the LFB.
Sometime next week we expect the Legislative Fiscal Bureau (LFB) to issue new budget estimates for the 2011-13 biennium. Today’s revenue numbers, coupled with the reduced estimate earlier this month of the state’s Medicaid deficit (which improved by $127 million GPR), make me more optimistic about next week’s report by the LFB.
Two Very Different Approaches to Waste, Fraud, and Abuse
Two new reports from the Governor’s Commission on Waste, Fraud, and Abuse show that Wisconsin policymakers have very different ideas about how best to reduce waste, achieve savings, and protect the state’s resources. The goal of the commission was to “identify waste, fraud, and abuse in state government programs and state appropriations and recommend solutions.” While that may seem straightforward, different groups of policymakers on the Commission took very different approaches to finding those savings.
The majority report of the Commission identified $456 million in potential savings in one year for state and local governments. The largest chunk of the savings – just over a third – comes from stepped-up efforts in fraud prevention in the supports the state provides for working-class families, such as BadgerCare and food assistance.
Nearly half a billion in savings in just one year would seem like a windfall for Wisconsin. But the minority report of the Commission pointed out several issues with the potential savings, some of which were technical and some philosophical. A large part of the proposed savings may not even be possible, the minority members of the Commission warned:
The majority report of the Commission identified $456 million in potential savings in one year for state and local governments. The largest chunk of the savings – just over a third – comes from stepped-up efforts in fraud prevention in the supports the state provides for working-class families, such as BadgerCare and food assistance.
Nearly half a billion in savings in just one year would seem like a windfall for Wisconsin. But the minority report of the Commission pointed out several issues with the potential savings, some of which were technical and some philosophical. A large part of the proposed savings may not even be possible, the minority members of the Commission warned:
“[The] report is full of ideas that have already been accomplished, are already being implemented or items over which the decision-making process rests in the hands of the federal or local units of government.”
Wednesday, January 18, 2012
Little Accountability in Subsidies Found
What happens when a corporation that receives public money for economic development doesn’t create the promised jobs? All too often, nothing, according to a new report from Good Jobs First that highlights how states often do not have policies in place to enforce job-creation commitments made by companies receiving public subsidies.
Active enforcement of job-creation requirements is important to make sure that public money is well spent. Merely having the requirements on paper without enforcing those standards risks turning economic development programs into corporate giveaways, the report warns.
According to Good Jobs First, in order to help insure that public money is well-spent, state economic development agencies should:
Active enforcement of job-creation requirements is important to make sure that public money is well spent. Merely having the requirements on paper without enforcing those standards risks turning economic development programs into corporate giveaways, the report warns.
According to Good Jobs First, in order to help insure that public money is well-spent, state economic development agencies should:
- Require corporate recipients to report back on job creation and other benchmarks, and make that information easily accessibly on-line;
- Verify company-reported figures;
- Penalize recipients not in compliance with subsidy requirements;
- Give state officials minimal discretion as to when to penalize recipients, as this often leads to watering down of enforcement mechanisms; and
- Publish detailed information on enforcement activities.
Tuesday, January 17, 2012
What Does Walker’s New Opposition to Health Care Exchanges Mean for the State’s Federal Grant?
Will the Governor Give up the Grant, Will Federal Officials End It, or Neither of the Above?
Politico posted a very interesting article on its website last night – “Scott Walker's health care dilemma” – relating to the question of whether Governor Walker will decide to terminate the Early Innovator grant Wisconsin received a year ago to cover costs associated with health care reform implementation. In recent weeks the Governor has been pressured to “return” the grant, after he said just before Christmas that the state would stop implementing the health care reform law.
As the article notes, Walker “is the lone Republican governor keeping an Early Innovator grant awarded early last year under the health reform law. ….He isn’t using the $37 million federal grant. He isn’t giving it up. And it may stay that way.” However, the Governor is under pressure from Senator Lasee and Tea Party activists to reject the federal funding. In addition, some Democrats are questioning how Walker can allow the grant funding to continue, and whether federal officials have to cut it off.
Politico posted a very interesting article on its website last night – “Scott Walker's health care dilemma” – relating to the question of whether Governor Walker will decide to terminate the Early Innovator grant Wisconsin received a year ago to cover costs associated with health care reform implementation. In recent weeks the Governor has been pressured to “return” the grant, after he said just before Christmas that the state would stop implementing the health care reform law.
As the article notes, Walker “is the lone Republican governor keeping an Early Innovator grant awarded early last year under the health reform law. ….He isn’t using the $37 million federal grant. He isn’t giving it up. And it may stay that way.” However, the Governor is under pressure from Senator Lasee and Tea Party activists to reject the federal funding. In addition, some Democrats are questioning how Walker can allow the grant funding to continue, and whether federal officials have to cut it off.
Friday, January 13, 2012
Wisconsin’s State Government Job Losses Lead the Nation
Wisconsin has lost a higher percentage of its state government employees than any other state, according to quarterly figures newly released by the federal Bureau of Labor Statistics. Wisconsin had nearly 8,000 fewer workers in state government in June 2011 than in June 2010. There are currently about 225,000 unemployed people in Wisconsin searching for jobs.
Even before these job losses, Wisconsin had one of the leanest state governments in the nation. In 2010, Wisconsin ranked 42nd among the states in the number of state employees per capita, according to the most recent figures available. That means Wisconsin’s state government is nearly 10 percent smaller the national average, compared to our state’s population.
Even before these job losses, Wisconsin had one of the leanest state governments in the nation. In 2010, Wisconsin ranked 42nd among the states in the number of state employees per capita, according to the most recent figures available. That means Wisconsin’s state government is nearly 10 percent smaller the national average, compared to our state’s population.
Thursday, January 12, 2012
Falling Support for Schools Threatens Wisconsin's Economic Future
Massive reductions in state and local support for education could inflict severe damage to Wisconsin’s public schools, according to a new report from the Wisconsin Budget Project. Wisconsin’s well-educated workforce has long been a foundation of the state’s economy. This blow to Wisconsin’s educational system threatens to undermine that key driver of economic development.
Nearly $2 billion in cuts over the next two years will leave students with fewer courses in math, science, and other core subjects, along with dwindling opportunities for career and technical studies. Class sizes have increased, and teachers and support staff have been laid off, not only hurting students but also adding to the state’s already elevated unemployment rate.
Nearly $2 billion in cuts over the next two years will leave students with fewer courses in math, science, and other core subjects, along with dwindling opportunities for career and technical studies. Class sizes have increased, and teachers and support staff have been laid off, not only hurting students but also adding to the state’s already elevated unemployment rate.
Tuesday, January 10, 2012
University System Takes it on the Chin
University of Wisconsin students will take longer to graduate, run up more debt, and have less access to high-need programs, University officials say. The reason: A state budget that requires the UW System to shoulder a disproportionately large share of the cuts.
The state’s two-year budget that passed last summer cut state support for the UW System by about nine percent, much larger than cuts made to other areas of the budget. In comparison, state support for prisons and other correctional services was cut by only about two percent. The state budget also paved the way for a 5.5 percent UW System tuition increase in each of the next two years, and froze the amount of tuition assistance available.
Now the state is once again making deep cuts to the UW System. The budget directed the state to find new, unspecified savings (also called funding lapses), on top of the specific cuts included in the budget. The Department of Administration has laid plans for $66 million of those additional cuts to come from the UW System over the next two years – including $46 million in cuts that need to be made yet this fiscal year, which ends in June. That means the UW System will in essence have to find a year’s worth of savings in one semester.
The state’s two-year budget that passed last summer cut state support for the UW System by about nine percent, much larger than cuts made to other areas of the budget. In comparison, state support for prisons and other correctional services was cut by only about two percent. The state budget also paved the way for a 5.5 percent UW System tuition increase in each of the next two years, and froze the amount of tuition assistance available.
Now the state is once again making deep cuts to the UW System. The budget directed the state to find new, unspecified savings (also called funding lapses), on top of the specific cuts included in the budget. The Department of Administration has laid plans for $66 million of those additional cuts to come from the UW System over the next two years – including $46 million in cuts that need to be made yet this fiscal year, which ends in June. That means the UW System will in essence have to find a year’s worth of savings in one semester.
Monday, January 9, 2012
2012 Brings Numerous Changes Adversely Affecting Working Families
As the calendar turned to 2012, many of Wisconsin’s working families began to feel the effects of state budget cuts and policy changes made in the biennial budget bill signed into law last July. According to a new synopsis of delayed budget changes by Wisconsin Council on Children and Families, working families are beginning this month to be adversely affected by a number of changes, such as reduced tax credits, higher health care premiums and copays, and a new waiting period for unemployment insurance benefits.
“The range of changes that will make things tougher for Wisconsin families starting this year is startling,” said Ken Taylor, executive director of the Wisconsin Council on Children and Families. “At a time when so many working families are just starting to get back on their feet in the wake of the recession, it’s troubling to see just how many policy changes are going to make it more difficult for them to bounce back economically.”
Read more in today’s WCCF blog post or in the new two-page synopsis of the delayed budget changes.
“The range of changes that will make things tougher for Wisconsin families starting this year is startling,” said Ken Taylor, executive director of the Wisconsin Council on Children and Families. “At a time when so many working families are just starting to get back on their feet in the wake of the recession, it’s troubling to see just how many policy changes are going to make it more difficult for them to bounce back economically.”
Read more in today’s WCCF blog post or in the new two-page synopsis of the delayed budget changes.
Wednesday, January 4, 2012
Get the Credit You Deserve -- In English, Spanish and Hmong
Each year WCCF updates a one-page brochure that helps educate people about the major refundable tax credits for low-income families -- the federal and state Earned Income Tax Credit (EITC), the state Homestead Tax Credit, and the federal child tax credit. Please help us get the flyer into the hands of low-income families who could benefit.
A few years ago, as part of EITC Awareness Day, the Secretaries of the Dept. of Revenue and Dept. of Children and Families encouraged state residents to check their eligibility for tax credits aimed at helping low-income workers and families. Their press release said an estimated 20-25% of WI taxpayers eligible for the EITC do not claim it on their returns. An even larger percentage of eligible households don't claim the Homestead credit.
You can find the updated version of the tax year 2011 flyer on the WI Budget Poject website. In addition to the English version, you can also get the flyer in Spanish and Hmong.
Jon Peacock
A few years ago, as part of EITC Awareness Day, the Secretaries of the Dept. of Revenue and Dept. of Children and Families encouraged state residents to check their eligibility for tax credits aimed at helping low-income workers and families. Their press release said an estimated 20-25% of WI taxpayers eligible for the EITC do not claim it on their returns. An even larger percentage of eligible households don't claim the Homestead credit.
You can find the updated version of the tax year 2011 flyer on the WI Budget Poject website. In addition to the English version, you can also get the flyer in Spanish and Hmong.
Jon Peacock
Tuesday, January 3, 2012
Much Smaller Medicaid Deficit Announced Today
$322 Million Reduction in Medicaid Deficit Provides Opportunity to Protect BadgerCare
The state got some very good fiscal news today, in the form of a letter stating that the Medicaid deficit is about $322 million less than previously estimated by the Department of Health Services (DHS). The state share of that reduction is $127 million – which is more than twice the size of the savings that would be realized from the provision in the budget bill that would end BadgerCare coverage of 53,000 adults, beginning in July 2012.
The state got some very good fiscal news today, in the form of a letter stating that the Medicaid deficit is about $322 million less than previously estimated by the Department of Health Services (DHS). The state share of that reduction is $127 million – which is more than twice the size of the savings that would be realized from the provision in the budget bill that would end BadgerCare coverage of 53,000 adults, beginning in July 2012.
Monday, January 2, 2012
Minimum Wage Rises in Several Other States – But Not Wisconsin
On the first day of 2012, eight states increased their minimum wages to adjust for inflation. More than a million minimum wage workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will see an increase in their paychecks.
Minimum-wage workers in Wisconsin will get no such bump in their paychecks. That’s because Wisconsin does not have a law requiring that the state’s minimum wage keep up with inflation. As a result, the lowest-income workers in Wisconsin are falling further behind.
Wisconsin’s minimum wage has been frozen at $7.25 since 2009. With no adjustments for inflation, the annual purchasing power of a minimum wage worker in the state has decreased nearly 7 percent between 2009 and 2012. If the minimum wage had kept pace with inflation, a full-time minimum wage worker in Wisconsin would earn an additional $1,070 in 2012.
Thousands of workers in Wisconsin work at the minimum wage – about 90,000 according to the latest count. An increase in the state’s minimum wage would help those workers support their families and make additional contributions to the state’s economy.
Tamarine Cornelius
Minimum-wage workers in Wisconsin will get no such bump in their paychecks. That’s because Wisconsin does not have a law requiring that the state’s minimum wage keep up with inflation. As a result, the lowest-income workers in Wisconsin are falling further behind.
Wisconsin’s minimum wage has been frozen at $7.25 since 2009. With no adjustments for inflation, the annual purchasing power of a minimum wage worker in the state has decreased nearly 7 percent between 2009 and 2012. If the minimum wage had kept pace with inflation, a full-time minimum wage worker in Wisconsin would earn an additional $1,070 in 2012.
Thousands of workers in Wisconsin work at the minimum wage – about 90,000 according to the latest count. An increase in the state’s minimum wage would help those workers support their families and make additional contributions to the state’s economy.
Tamarine Cornelius
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