Progressive Thinking

Spending on Wisconsin’s Medicaid Program, which provides health care for low-income families, is going up. Where is the money going? Is health care really costing that much more?

MADISON - Medicaid is the joint federal-state program that pays hospitals, doctors, nursing homes and other health professionals to provide care for low-income families, including frail elderly persons and individuals with disabilities. It has been the fastest growing part of the state budget.

What’s going on with Medicaid spending? Where is the money going? Is health care really costing that much more?

We pondered these questions at a recent gathering of regional health administrators in La Crosse. I shared budget numbers from the nonpartisan Legislative Fiscal Bureau.

The state budget is growing – it’s $7.5 billion more than a half-dozen years ago – with health accounting for about $3 billion of the increase.

But the number of people served by the state’s programs grew by only 20,000. Did each new person really cost the state $12,500 a month?

Why are costs increasing so fast at a time when the number served by the state has slowed?

After the presentation, a local health administrator said to me, “I wonder what happened to all the money. The hospitals haven’t seen a raise in a long time. I don’t think the doctors have either.” I can add from many conversations with local administrators, nursing homes haven’t seen much of a raise either.

Just where did the money go?

In 2011, an audit by the nonpartisan Legislative Audit Bureau (LAB) shed some light on the Medicaid program. Auditors found the Department of Health Services (DHS) spent 40% of administration on contracts with private companies to manage the state’s programs. In four years, those contract dollars increased 73%. Almost 1,100 full-time private company employees are working under just one of those contracts.

Auditors reported contract amendments to private companies running Medicaid were made without legislative authorization and without budgeted appropriations. The contracts were no bid and were not reported to DHS’ own purchasers, accountants or procurement managers.

Contract dollars have also increased over the years. For example, in fiscal years 2016-17, private companies getting paid to administer Medicaid reaped a 30% increase or $120 million more than the prior budget.

Most astounding, auditors found DHS could not answer basic questions about how much each “subprogram” (i.e., BadgerCare, SeniorCare, Family Care) cost taxpayers.

“If my CFO [chief financial officer] couldn’t tell me how much we were spending, he would be fired on the spot,” one hospital administrator told our group.

Others had similar reactions. “What you are asking from DHS is what we do every day,” one told me. “We are constantly doing the math to see how to deliver better service at a lower cost.”

Getting health programs running properly benefits all of us. Money going directly to well-run health service means people stay healthy and are more productive. Money spent on no bid health contracts to companies who can’t help the state answer basic management questions – like what are we spending the money on – is money that can’t buy roads, teachers or nurses.

Wise management means looking at all options for funding. Using federal money to cover health costs frees up state dollars for other investments.

For example, expanding Medicaid under the Affordable Care Act would cover an additional 83,000 people and save almost $400 million state dollars in the next budget.

This is money that could be spent on roads, teachers, or nurses.

Lawmakers need to ask detailed questions about health care – just like every other program. The department needs to start providing detailed answers. Let’s begin with “Where did the money go?”

Sen. Vinehout writes about the staff shortage facing many Wisconsin school districts and Superintendent Evers’ Work Group on the teacher shortage.

ALMA, WI - “Who will be my teacher?” my son asked me years ago. For a brief point in time, the teacher was the most important person in his young life.

As children head back to school and parents scramble with new schedules, schools are facing their own scheduling headaches. This year a teacher shortage hit many local schools. Around the state, school districts have hundreds of vacancies.

Recently, I presented an overview of state education budget issues in Viroqua. At least a dozen local superintendents, school board members, principals and teachers were in the audience. Following my presentation, the conversation turned to the teacher shortage.

Educators described an environment in which teachers in certain high demand subject areas move from one school district to another based on the best offer.

Two superintendents from neighboring school districts laughed when they realized they spent the summer bidding against each other to snag the same teacher. “Now we have teachers who come back [to our school] and say, ‘I’m getting a $6,000 increase in an offer from another school.’”

A staff member paid a $12,000 raise creates problems in districts where teachers went seven years with little raise in pay. John, a local teacher, told the group, “The impact on morale is just horrendous.”

Many superintendents, including State Superintendent Tony Evers, saw this crisis coming. Mr. Evers took a number of steps, including the creation of a Working Group on School Staffing Issues.

“Act 10 created a ‘free agency’ environment where competition for high demand and talented teachers is fierce, and financial and geographic differences put many districts at a competitive disadvantage,” stated the group’s final report submitted this summer.

I recently spoke with former Durand Superintendent Jerry Walters who now administers CESA 11, a regional cooperative sharing educational services. He explained post-retirement benefits tended to “give teachers a sense of loyalty”. After Act 10, and the loss of benefits, teachers are like sports player – open to the highest bidder. Few districts can compete in this new world.

School districts have state-imposed revenue caps limiting what they can spend. People are the heart of the school and make up nearly 80% of a district’s budget. Some districts are very short on funds. They gave few raises for many years.

“But some have money to do this,” Mr. Walters told me. “Some Minnesota schools [for example] offer a $10,000 signing bonus… For districts left behind this creates attraction and retention issues…Ultimately it’s the smaller, poorer school district at the bottom of the food chain.”

Rural schools are at a particular disadvantage. Many rural school districts pay ten percent of their budget in transportation costs and have a low revenue cap, which means they don’t have the money to make special offers.

A teacher who worked in Milwaukee, Oconomowoc, Tomah and Westby said, “As long as there is a Middleton, we will lose teachers in Westby.”

To compound problems, fewer students are going into teacher education programs. An April 2016 Journal Sentinel story reported some teacher education programs have 20% to 40% fewer students than a few years ago.

At the Viroqua event, a local elected official, Karen Dahl told the group, “Young people don’t want to go into education because [some in] Wisconsin denigrate the profession and the value of education.”

State Superintendent Evers’ working group offered some solutions to the teacher shortage: cultivate “grow your own” teachers especially in rural areas; make it easier to hire in an emergency; add flexibility so teachers can take on new roles; strengthen ties between K-12 and university teacher education and change recent laws that limit retired teachers from part-time work.

But the simplest part of the solution starts with each of us. I spoke with a math teacher who closed her Facebook page because of negative comments about her profession made by “friends.” She said, “I was in the grocery store and a neighbor came up and said that he didn’t want to pay my salary because I ‘wasn’t worth a dime.’”

Words hurt. And you can help.

Providing every child a great education means getting great people to enter and stay in teaching. We must appreciate the work educators do every day. Our children need an answer to the question, “Who will be my teacher?”

Western Wisconsin was hit with severe rainstorms in the past few weeks, floodwaters washed out roads and left silt everywhere, in the house, the garden, the barn, and the farmyard. Sen. Vinehout provides important information for flood victims and others.

ALMA, WI - “It gets overwhelming,” my neighbor told me. We were walking through her flooded barnyard. Floodwaters left silt everywhere: in the house, the garden, the barn, and the farmyard.

Family members were working hard to clean up. But they were filled with unanswered questions: where to go and what to do?

Western Wisconsin was hit with several severe rainstorms in the past few weeks. Early morning on August 11 parts of Buffalo County received 5 ½ to 11 ½ inches of rain in just 45 minutes. The beautiful rolling hills intensified the power of the water as it raced towards the lowest point.

Huge gullies opened up. Roads washed out. Crops were damaged. Fence lines washed away. Pastures became lakes. Cattle and pigs were lost. Concrete buckled. Trees were uprooted. Small sheds floated away. Farm machinery flooded. Flower and vegetable gardens were covered with black muck.

Roads and driveways acted as dams with water pouring across and eventually washing away the road. Many people lost all or part of their rural driveway. But others lost their home and nearly every possession. The flood seriously affected farms and homes along creeks or rivers.

Rain continued to fall in the coming week. New storms frustrated cleanup efforts and discouraged many people. Temporary road repairs washed away as more water came racing down the bluffs.

County and town officials worked hard to keep people safe and roads open. However, the rural nature of Buffalo county made it hard to get word out to every one affected by the storms.

County workers set up a hotline to call and report damage and to collect details on the problems people face. If you have flood damage, please call 211. If you are using a mobile phone you should call 1-800-362-8255.

It is important for people to report all types of flood damage, even if the damage is covered by flood insurance. The type of damage and the estimated costs of repair are details county officials need when applying for state and federal help. Under federal emergency management rules, the cumulative totals of damage and repair costs determine the level of help available.

Immediate help is available including free flood cleanup kits, bottled water, and rural well testing for areas where flooding may have caused well contamination. These supplies are available at four locations in the county: Gilmanton and Lincoln Town Halls, Ponderosa Bar and Grill in Cream, the Waumandee State Bank and the county Health Department at the courthouse in Alma. The Red Cross and county staff are working to help families displaced by the floods.

Long-term problems are going to take the work of many to solve. Town, county and state officials are meeting to go through options and programs that may assist people.

Repairing rural roads is a huge challenge for every town board. For many years, the state budget provided less money than towns needed to keep up with routine wear and tear on roads. With the recent floods, new problems appeared and old problems are worse.

Likewise, conservation structures – dams and so forth – were not built to handle the storms we experienced. Again, state support has lagged behind needs.

Representative Chris Danou and I will be working with our local officials to find any available emergency assistance. But we need your help in compiling a list of damage and needs.

If you lost crops or fencing or if your farm needs grading or repair of conservation structures, please report the damage. The application process for various programs takes time and your phone call will get that process started.

Disasters bring out the best in the community with neighbors helping neighbors. However, when the damage is more than one person or a whole neighborhood can take care of, it is important to call the county hotline at 211. By calling, folks can get assistance and the county gets a better understanding of the extent of the damage.

You can reach me at 608-266-8546 or toll free at 1-877-763-6636 or email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Cleaning up our neighborhood is going to take a long time. Taking a break from the cleanup to make a phone call is a very important first step.

$472.1 million in awards to businesses through August 1 this year produce fewer new jobs, but would go far in covering the cost of reforming our state’s flawed school funding formula or funding repairs for local roads.

ALMA, WI - “Where did all that money go?” Dennis asked me during a recent visit to the Jackson County Fair.

Dennis is one of many constituents who ask where the money for schools and roads is as our state recovers from the recession. Economic recovery means more money and more money should equal more resources for the public. Instead, state funds are very tight. For example, state aid to local public schools is less now than in 2006.

One reason is that the state is not collecting tax money from some large, and in several cases, very profitable companies. Recently I received a memo from the nonpartisan Legislative Fiscal Bureau detailing the awards given out for one large tax credit known as the Enterprise Zone Tax Credit. This credit – originally conceived to help rural communities – has morphed into large credits for single companies.

The memo contained a list of the total awards made and the companies that received them:

Amazon.com $10.3 million

Bucyrus International, Inc. $20.0 million

Direct Supply $22.5 million

Dollar General Corporation $ 5.5 million

Exact Sciences Corporation $ 9.0 million

Fincantieri Marine Group, LLC $28.0 million

InSinkErator $15.5 million

Kestrel Aircraft Company, Inc. $18.0 million

Kohl’s Corporation $62.5 million

Mercury Marine $65.0 million

MKE Electric Tool Corporation $18.0 million

Northstar Med. Radioisotopes, LLC $14.0 million

Oshkosh Corporation $47.0 million

Plexus Corporation $15.0 million

Quad/Graphics, Inc. $61.7 million

Trane US Incorporated $ 5.5 million

Uline, Incorporated $18.6 million

W Solar Group, Incorporated $28.0 million

Weather Shield Mfg, Incorporated $ 8.0 million

TOTAL (through Aug. 1, 2016) $472.1 million

All of those award amounts are refundable tax credits. This means a company can claim the credit directly against taxes owed. If the company owes little or nothing in taxes and claims the credit, they can receive a payment from the state in the form of a refund.

Owing little or nothing in state taxes is made possible, in part, by changes in tax law for corporations that date back to 2011. Majority legislators passed the Manufacturing and Agriculture Tax Credit that resulted in very low tax liability for some. A recent study released by the Wisconsin Budget Project found most of this credit goes to reducing taxes for millionaires, including “some tax filers with incomes of over $1 million receiving tax cuts of more than $100,000.”

That list of Enterprise Zone Tax Credit awards includes the total credits that can be claimed over a 16-year period (2009-2024). Different companies are on different schedules. One company’s contract began in 2009. Seven of the listed companies have contracts that go back to 2010. The remaining contracts were written since 2011. The credits are awarded for various business activities. Some credits are given for jobs created or retained, for training or buying from Wisconsin companies. In every case, the “Enterprise Zone” created is the footprint of the company itself.

Credit compliance is overseen by the troubled Wisconsin Economic Development Corporation (WEDC), which does not have a good track record for independently verifying that jobs were created. Three separate audits by the nonpartisan Legislative Audit Bureau showed that not one single job created was independently verified.

Earlier this year, the Wisconsin State Journal reported that WEDC’s claims of jobs created were based on “faulty calculations”. They went on to report, “The agency gave out almost $90 million more in awards, but the total number of related jobs fell by nearly 6,000.”

The cost of the Enterprise Zone Tax Credit and the Manufacturing and Agriculture Tax Credit would go far in covering the cost of reforming our state’s flawed school funding formula or funding repairs for local roads.

Funding for road repair is something on the minds of many in Wisconsin. We were reminded once again that in a short time the power of Mother Nature and water can demolish our roads. I offer my heartfelt thanks to the road crews, law enforcement, emergency management, the Red Cross and county officials all of whom worked tirelessly to keep the people safe in the aftermath of the torrential rains and flooding that hit western Wisconsin. We will not be back to normal for a while but we are all safe. If you need help please call 211. And read Rep. Danou’s column this week.

This survey on Internet access now being conducted by the Public Service Commission will paint a more accurate picture of broadband coverage in Wisconsin. Participate and your responses will help inform lawmakers on how to bring our state into the twenty-first century.

ALMA, WI - Do you have a great Internet connection? Less than what you’d prefer? Makes it impossible for you to do your work or your children’s homework? No service at all?

Make your opinion known!

The state is taking a survey of how Wisconsinites connect to the Internet. The survey is free – and ironically – available online. Those without Internet – or such a slow connection they cannot fill out a survey – can let their voice be heard by calling the following toll-free phone number - (877) 360-2973.

Home connections and businesses are measured in separate surveys. You can reach the residential survey here: https://www.research.net/r/WI_PSC_broadband_survey

Businesses can voice their opinion here: https://www.research.net/r/WI_PSC_business_broadband_survey

To prepare for the survey, make sure you know your Internet provider and the number of electronic devices in your home or business that connect to the Internet. The survey will ask for your address, the type of problems you experience, and if you have students in the home who also have Internet problems.

The Public Service Commission – the state agency responsible for supervising public utilities – is conducting the survey. The state must improve information on who is well served and who is not. The current map of where broadband exists is based on information from the companies who provide the service – not from customers.

As a consequence, the state broadband map is inaccurate. Service in an area that appears covered on the state map can be very uneven.

Some companies inaccurately described both the areas they cover and the speed available. People complained about the inaccuracy of the state map and the illusion the map conveys to policymakers.

In conversations with the State Broadband Director earlier this year, I shared examples of how the map misinformed state leaders. For example, one company advertised speed with the modifier “up to” as in “up to 10 Mg.” However, the company didn’t tell the consumer the only way to get that speed is if he lives right next to the company’s equipment and no other customer tries to get on the Internet.

A few years ago, large companies successfully lobbied to remove state oversight of telecommunication companies. Consumer protections and penalties for companies not complying were removed. This makes keeping companies accountable very difficult. The lack of oversight encourages some companies to look for ways to appear to provide coverage without actually delivering it.

Some companies provide fabulous service at a very reasonable price. They do this despite the lack of oversight by the state. Many of these companies are local, customer-owned cooperatives. The Co-op model provides accountability directly to local customers who serve as the Co-op directors. People with problems call a local person or walk into a local office. In western Wisconsin, cooperatives are leading the way to build out reliable, high speed broadband to rural customers.

Pitted against the smaller local companies are the large telecommunication companies with expensive lobbyists in Madison. The result of the uneven resources between small, local companies and large multi-national companies means the Public Service Commission often views the large companies as “walking on water” while having little information about the small local companies who are working the real miracles.

Broadband has become a necessary service to all communities. In the twenty-first century, broadband is as necessary as electric power was nearly one hundred years ago. Businesses cannot function without broadband. Young people know more than many how vital fast Internet is to life today. They are leaving rural Wisconsin because they do not have reliable, fast and unlimited access.

State and federal money has been invested in building out broadband. Too often however the large companies used the access problems in rural Wisconsin to apply for that money and then did not deliver the goods to our underserved areas.

Just tracking the company’s progress in building out service is difficult for the state because there is no independent verification of new customers served.

If you have great service, poor service or no service at all, please take the time to fill out the survey and let your voice be heard. Your investment in time will help those working hard to bring Wisconsin into the twenty-first century.