Monday September 25, 2017

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Citizen Action of Wisconsin, Robert Kraig

Citizen Action of Wisconsin, Robert Kraig

Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St., Suite 300, Milwaukee, WI 53204.

WEDC’s Poor Accountability Record Makes Foxconn a Scandal Waiting to Happen

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
User is currently offline
on Wednesday, 13 September 2017
in Wisconsin

walker-terry-gou-foxconnIndependent analysis reveals 14,000 jobs deficit for existing corporate tax credits and loans is greater than the direct job creation claim for the Foxconn deal. A full 60% of WEDC-supported corporations have failed to meet job creation goals.


STATEWIDE - On a media call Monday, Citizen Action of Wisconsin, State Rep. Amanda Stuck, and State Rep. Jonathan Brostoff released a new analysis of Wisconsin Economic Development Corporation (WEDC) data showing that the troubled economic development agency has an extremely poor record of holding corporate recipients accountable for their jobs promises. The analysis, which comes from the agency’s own self-published data, provides additional evidence that WEDC is completely unqualified to manage the gigantic Foxconn deal, which would be by far the largest job creation tax credit program ever issued by an American state. Audio of the call can be found here.

The Citizen Action of Wisconsin analysis examines job creation tax credits issued by WEDC three years ago and longer to allow time for corporate recipients to execute the hiring plans they submitted to WEDC. The analysis finds a large gap between “Actual Job Creation” (the jobs companies actually reported creating) and “Planned Job Creation” (the jobs that were promised in return for tax credits).

Key Findings

  • Of the 337 WEDC awardees with established job creation goals at least 3 years old, 60% (203 awardees) failed to meet their goals. (company list available on our website)

  • Of the 203 awardees that have not met their job creation promises, the difference between their actual job creation as reported by WEDC and their goals are 14,744 jobs. This means the WEDC job creation gap is larger than the total number of direct jobs being proposed by Foxconn in the best case scenarios (13,000 jobs).

  • The numbers would be even worse if WEDC kept net job creation numbers, because it is well documented that many WEDC recipients have outsourced other jobs while taking state tax credits.

  • WEDC has a very poor record of taking back tax credits when corporate recipients fail to fulfill their job creation promises. WEDC has only sought to claw back $9.9 million from 24 companies, less than 12% of companies who have not met their job creation goals after 3 years. WEDC does not report how much of this money has been successfully recovered.

  • The 203 companies that still have not hit their jobs goal in at least 3 years have already received $94.8 million in verified tax credits from WEDC, with another $158 million awarded but not yet dispersed.

“The Walker Administration's abysmal record of holding corporations accountable for their job creation promises makes the Foxconn deal a scandal waiting to happen,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “Any Senator or Representative that is thinking of voting for the Foxconn deal this week should think long and hard about whether they want to be held accountable for potentially the biggest economic scandal in Wisconsin history.”

As both data sets used in this analysis are self-reported by WEDC itself, they indicate the best-case scenario for job creation. The Legislative Audit Bureau found in May that all of WEDC’s job creation claims should be treated as suspect because the agency has failed to implement basic verification procedures. Given the continued refusal to implement basic accountability procedures, it is highly likely that WEDC’s performance record is much worse. The Legislative Audit Bureau concluded that WEDC does “not contractually require grant and loan recipients to submit information sufficiently detailed to allow it to determine the extent to which jobs were actually created or retained.” In addition, the Audit Bureau found that “WEDC did not collect sufficiently detailed information from tax credit recipients about their existing employees. Collecting such information will help WEDC determine in future years the extent to which recipients actually created or retained contractually required jobs. WEDC also did not comply with statutes because it did not annually verify jobs-related information submitted by recipients on the extent to which contractually required results were achieved.”

“Given WEDC’s record of scandal, the Foxconn deal does not make sense even if you believe in extreme corporate welfare,”said State Representative Jonathan Brostoff (D-Milwaukee).

“I have been told by WEDC when trying to help my constituents that the agency has no way of verifying with the Department of Revenue which companies have claimed job creation tax credits or how much they’ve recovered from those that don’t follow through on their commitments,” said State Representative Amanda Stuck (D-Appleton). “We have no guarantees that we will get the public’s money back from Foxconn if they do not follow through on their promises. I want to know that we have a system in place to protect our state.”

TABLE 1: Select companies receiving WEDC awards 3 years ago or more

WEDC Award Recipient


Kohl's Corporation

Was awarded $62.5 million in 7/12 to create 3,000 jobs. Currently listed as having allegedly created 473 jobs and received $18.3 million. Company outsourced 67 employees to India in 12/13.

Kestrel Aircraft Company, Inc.

Was awarded $20 million in credits and loans in 1/12 to create 1,265 jobs according to WEDC’s tracking. Currently listed as having allegedly created 45 jobs and received $717,500 in verified credits. Company announced in 10/16 they will not create the facility.

Plexus Corp

Was awarded $2 million in 8/11 and $15 million in 6/12 to create 350 jobs. Currently listed as having allegedly created 43 jobs and received $8.9 million in combined verified credits. In 7/12 the company announced layoffs of 116 workers and moved their operations overseas.

Laserwords U.S. Inc.

Was awarded $375,000 in 12/13 to create 286 jobs. Currently listed as having allegedly created 42 jobs and received $51,168 in verified credits. In June 2017 was certified as having outsourced 48 out of 55 jobs to Mexico

Exodus Machines Incorporated

Was awarded $1.1 million in loans in 10/12 to create 250 jobs. Currently listed as having allegedly created 35 jobs. In 9/16 the company was certified as having outsourced 20 jobs.

Hampton Products International

Was awarded $420,000 in 9/12 to create 140 jobs. Currently listed as having allegedly created 3 jobs. In 4/2015 was certified as having 29 jobs outsourced

W.W. Grainger, Inc.

Was awarded $500,000 in 7/11 to create 130 jobs. Currently listed as having created 0 jobs and received $50,000 in verified credits. In 8/15 the company was certified as having outsourced jobs to Panama

Green Box NA Green Bay, LLC

Was awarded $1.1 million in loans and $95,000 in grants to create 116 jobs. WEDC’s records show it as having created 41 jobs in one record and 64 jobs in another record. The company owner was investigated in 2016 for defrauding financial institutions.

Oneida Seven Generations Corp.

Was awarded $2 million in loans to create 22 jobs. Currently listed as having created 0 jobs. The company was listed as in default and WEDC sought to recover $1.99 million in 9/14, to date it is not clear how much WEDC has recovered.

Novation Companies, Inc.

Was awarded $750,000 to create 88 jobs. Currently listed as having created 68 jobs. The company was revealed to have not been located in the Sherman Park neighborhood of Milwaukee where WEDC listed them, and was actually purchased by another company after layoffs.

 

The full analysis can be viewed here

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Deliberate Sabotage Threatens Health Coverage

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
User is currently offline
on Tuesday, 28 March 2017
in Wisconsin

americanhealthcareactWith repeal efforts in Washington on hold for now, the biggest immediate threat to affordable health coverage may be sabotage by the Trump Administration, Congress, and states like Wisconsin.


STATEWIDE - In the aftermath of the implosion of the Affordable Care Act replacement plan late Friday afternoon, the biggest immediate threat to affordable health coverage may be deliberate sabotage by the Trump Administration, Congress, and states like Wisconsin where conservative politicians are bitterly opposed to the health care law. With the legislative vehicle for radical restructuring the American health care system closed for the time being, State Innovations Waivers with states like Wisconsin may become the new method for achieving the goals of repeal.

After House Speaker Paul Ryan pulled his replacement bill on Friday President Donald Trump said: “I’ve been saying for the last year and a half that the best thing we can do politically speaking is let Obamacare explode. . . . It is exploding now.” But the Congressional Budget Office and independent researchers conclude that the Affordable Care Act (ACA) as currently constituted will be stable for years to come. This assumes that the Trump Administration does not use its substantial administrative power to undermine the health care law.

The willingness of conservative politicians to play politics with the health coverage of the American people has been in evidence since the original passage of the ACA. As Citizen Action of Wisconsin has continuously documented, the Walker Administration has sought to sabotage the ACA by encouraging healthy people to buy substandard policies outside of the market; refusing to enact robust rate review; turning down Medicaid expansion; hamstringing health care navigators, rubber stamping health insurance industry mega mergers, and seeking waivers that would allow insurance companies to take larger profits. Taken together the Walker Administration has aided and abetted the on-going effort of the national for-profit insurance companies to continue to insure healthy people and find ways to avoid people with pre-existing health conditions.

The conservative majority in Congress has also played a major role in sabotaging the ACA. For example, they dramatically cut risk adjustment payments to insurance companies who insure more people with health conditions. This hit insurers that were doing the right thing with huge unexpected costs, driving many out of the the ACA marketplace and many new health care Co-ops out of business.

Before the failure of the latest legislative attack on the ACA last week, there were already indications of an intent to sabotage the health care law by not enforcing the individual mandate, pulling public promotion in the final weeks of open enrollment, not defending against a Congressional lawsuit that could pull tax subsidies from moderate income Americans, allowing substandard health insurance policies to be sold, and by cooperating with with states like Wisconsin that want to undermine the law. Trump’s selection of the vehemently ideological Tom Price as Health and Human Services Secretary is also evidence of an intent to disrupt the ACA. Major media outlets such as the New York Times, Washington Post, and Politico are now reporting that the Trump Administration may double down on sabotaging the health care law.

If the Trump Administration adopts sabotage as the next front in it’s attack on the Affordable Care Act, the biggest opportunity for radically changing the health care law may be State Innovation Waivers which under the ACA can be negotiated starting this year. These waivers permit states to submit plans to dramatically restructure health coverage. The Walker Administration would be an ideal partner for Secretary Price to develop a State Innovation Waiver which undermined the purpose of the ACA.

With conservatives in charge of the government they have a solemn moral obligation to uphold the laws of the land and to protect the welfare of the American people. It is stunning that conservative politicians are so bent on getting their way that they are willing to play politics with the lives of their own constituents by throwing sand into the gears of the American health care system. The right of every American to have quality affordable health coverage ought not to be a partisan issue. Now that the American people have resoundingly rejected their disastrous replacement plan, it is time for conservatives to take on the responsibility of actually governing by working with Democrats to move beyond the divisive health care battle and improving and building on the Affordable Care Act.

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Trump-Ryan Care Suffers Stunning Defeat

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
User is currently offline
on Saturday, 25 March 2017
in Wisconsin

paul-ryan-sadMILWAUKEE - It was one of the greatest victories for American democracy in years when Donald Trump and Paul Ryan were forced to pull their dangerous health care replacement bill just minutes before the scheduled vote.

Against all odds, and without power in Washington, average citizens stopped Trump and Ryan dead in their tracks!

A few short months ago, pundits thought that the repeal of the Affordable Care Act was a foregone conclusion. If it was not for the unprecedented democratic resistance in Wisconsin and across the country, they would have been right.

Right-wing talk show hosts are already spinning that the crash and burn of Trump-Ryan Care had nothing to do with grassroots protests. But it is well known the Republican leadership was trying to rush the bill through because they were afraid of coming home to face their own constituents during the next Congressional recess.

While this victory should renew our faith in the potential of American democracy, we need to understand that we won a major battle, but have not yet won the war.

I am proud to say that Citizen Action of Wisconsin is leading the charge against the unthinkably cruel attack on health care rights. We turned up the pressure on House Republicans this week by holding 10 major organizing actions across Wisconsin.

This is far from over. We must gather our energies for the next stage of the fight. We need to keep on fighting until we have established health care as a fundamental right in America--once and for all.

******

We need your help. We can continue to organize a powerful opposition if we have the resources.

Make an express donation to fund this effort by clicking here.

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New $0 Deductible Health Plans Introduced

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
User is currently offline
on Friday, 30 September 2016
in Wisconsin

healthcareNew health insurance plans offer relief from runaway pharmaceutical prices. Wisconsin health consumers will save over $209 million.


WISCONSIN - At news conferences in four cities yesterday Citizen Action of Wisconsin announced that for 2017 some major insurance carriers in Wisconsin will be offering new health plans designed by the federal government to provide immediate relief from skyrocketing prescription drug prices and other medical costs. The announcement took place in Appleton, Wausau, Milwaukee, and Madison.

Deductibles jumped 40% this year in Wisconsin, yet the Walker Administration has refused to take any meaningful steps to address high medical prices. To fill the gap, advocates and state legislators took matters into their own hands by directly lobbying Wisconsin health insurance companies to adopt new Federal plans designed to combat high deductibles.

The savings generated because of the introduction of these new plans are dramatic. The average health consumer purchasing insurance on the Affordable Care Act marketplace stands to save $1,462 Rx deductibles and $3,482 on other high value medical services. Overall Citizen Action of Wisconsin estimates the new plans will save Wisconsin health consumers over $209 million per year in lower deductibles.

At the Capitol news conference Senator Jon Erpenbach and Representative Melissa Sargent represented Democratic legislators who joined Citizen Action in asking Wisconsin health insurers to offer “Low Out-of- Pocket” plans.

These new health plans will have the following common features:

  • $0 deductibles for prescription drugs (generic, brand name and specialty)

  • $0 deductible for Primary Care Visits to Treat an Injury or Illness

  • $0 deductible for Specialist Visits

  • $0 deductible for Mental/Behavioral Health and Substance Abuse Disorder Outpatient

  • Manageable co-pays that do not differ company to company.

Four companies have so far confirmed to Citizen Action their intention to introduce ”Low Out-of-Pocket” health plans on the Affordable Care Act marketplace for 2017.

  1. Molina Healthcare

  2. Common Ground Healthcare Cooperative

  3. Group Health Cooperative of South Central WI

  4. Network Health

“The introduction of new cost saving health plans in Wisconsin shows it is possible to use the tools provided by the health care reform law to make tangible progress on medical and prescription drug affordability,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “Even more progress on skyrocketing health care costs would be possible if Governor Walker and conservatives in the State Legislature would cease their efforts to sabotage health reform, and join health advocates in working to guaranteed quality affordable health care in Wisconsin.”

Chart:

Average Current 2016 Deductibles by County (reduced to $0 for some services in “Low Out of Pocket” Health Plans)

Counties With Plans

Average Rx Deductible*

Average Medical Deductible*

42 County Average**

$1,462/year

$3,482/year

Brown County

$1,464

$3,422

Dane County

$634

$3,311

Kenosha County

$1,480

$3,580

Manitowoc County

$1,464

$3,422

Marathon County

$1,284

$3,457

Milwaukee County

$1,952

$3,702

Oneida County

$1,284

$3,457

Outagamie County

$1,781

$3,521

Racine County

$1,952

$3,702

Rock County

$618

$3,266

Shawano County

$1,346

$3,363

Sheboygan County

$1,464

$3,422

Waukesha County

$1,562

$3,404

Winnebago County

$2,023

$3,523

Wood County

$1,284

$3,457

* - Average deductible based on all silver plans available in county 2016 individual market without cost sharing

** - 42 county weighted average shows what the average resident in these 42 counties that will feature Low Out-of-Pocket health plans currently see for deductibles. Weighted by total enrollment.

More information on the features of the new health plans, and on savings in each Wisconsin County, can be found here.

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Ron Johnson Senate Hearing Will Showcase Sabotage of Affordable Health Care

Posted by Citizen Action of Wisconsin, Robert Kraig
Citizen Action of Wisconsin, Robert Kraig
Robert Kraig is Executive Director, Citizen Action of Wisconsin, 221 S. 2nd St.,
User is currently offline
on Thursday, 15 September 2016
in Wisconsin

ron-johnsonWitnesses include Walker Administration insurance bureaucrat who is part of efforts to undermine access to affordable health care in Wisconsin.


WASHINGTON, DC - This morning Senator Ron Johnson, Chair of the Senate Homeland Security & Governmental Affairs Committee, will hold a hearing on the state of health insurance markets. Observers of health policy expect the hearing to try and build support for repealing the Affordable Care Act (ACA).

Senator Johnson, an arch opponent of guaranteed affordable health care, is expected to use the hearing to advance his desire to return to the days when insurance companies profited through discrimination based on preexisting conditions, age, and gender. Johnson will likely claim that big for profit insurance companies pulling out of ACA marketplaces is a reason to repeal health care reform, rather than for holding those highly profitable corporations accountable. At least one health insurance company is pulling out in retaliation for the Obama Administration enforcement of the nation’s antitrust laws.

One of the challenges in implementing the ACA continues to be conservative state officials who are willing to use their power to undermine access to affordable health care for their own constituents. These actions include rejecting coverage for low income residents and enabling for profit insurance companies to continue to profit by selling policies to healthy people and avoiding those with health conditions.

The first witness on Sen. Johnson’s hearing notice is Wisconsin Deputy Insurance Commissioner J.P. Wieske, who had been one of the leaders in Governor Scott Walker’s efforts to sabotage the health care reform law.

The record of actions the Walker Administration is long and troubling. Here is a sampling:

  • The Walker Administration made Wisconsin the only state in the Great Lakes region to reject enhanced Medicaid dollars, kicking 77,000 people off the state’s BadgerCare program. New research shows that states like Wisconsin who refused Medicaid dollars forced more people with health conditions onto the ACA marketplace, increasing premiums by about 7%.

  • The Wisconsin Insurance commissioner sought a waiver from the rule that health insurance companies spend at least 80% of premiums on medical care, the so called 80/20 rule.

  • The Wisconsin Insurance Commissioner allowed health insurance corporations to game the system by allowing the continued sale of substandard lemon plans, which according to research by Milliman, Academy of Actuaries, and Rand Corporation, increase ACA marketplace premiums by up to 10% by allowing insurance companies to continue to cherry pick healthier customers. There are as many as 45,000 Wisconsinites on these so-called transitional plans. These skimpy plans also are dangerous for customers who face serious medical conditions.

  • The Wisconsin Insurance commissioner has been extremely lax on health insurance rate review, failing to find a single health insurance industry rate request to be excessive in 5 years. The Walker Administration has been an advocate of “file and use,” strongly opposing legislation that would require the health insurance corporations to prove rate increases are justified. More vigorous rate review has reduced premiums in other states.

  • The Wisconsin Insurance Commissioner put unnecessary and burdensome restrictions on health insurance navigators not required by federal law, of the kind that were thrown out by a federal court in Missouri. This likely raised premiums by reducing enrollment in ACA marketplace plans.

It is deeply troubling that conservative politicians like Senator Johnson see the continued efforts of the big health insurance corporations to deny coverage to people with health conditions as an opportunity to undermine health reform. Now that big insurance is working actively to sabotage a system designed to guarantee them customers, it is long overdue that we return to the idea of robust public option. A public option would hold big health insurance accountable by giving health consumers a choice and taking away their leverage to abandon whole parts of the country just to jack up their already swelling profit margins.

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