Progressive Thinking

This week Senator Kathleen Vinehout  writes about budget priorities and how she crafted an alternative budget that would leave the state with no structural deficit and a strong balance at the end of the biennium.

ALMA - “Two years ago, Wisconsin made tough choices,” wrote Robert from Mondovi. “The deficit was eliminated, costs were controlled and Wisconsin was back on the track to prosperity.”

The Buffalo County man wanted “relief for the hardworking people of Wisconsin”.

With that in mind, I took a close look at state finances and discovered problems. I talked with the Legislative Fiscal Bureau analysts and read their papers. I sharpened my pencil and considered options.

The recently passed $70 billion budget spends $4 billion more than the last budget. It is estimated to create a half a billion dollar deficit going into the next budget - even though we started with more money. The economy is improving. Tax revenues are up - a little less $1.5 billion.

Lawmakers who voted for the budget (I was not among them) argued some of the new revenue be returned to taxpayers. Tax rates were changed in this budget. Average taxpayers making $45,000 a year will save about $84 in 2014; about $1.60 a week.

But this budget reaches historic debt levels. As debt increases, more tax dollars go to make debt payments; sort of like using your paycheck to pay the credit card bill.

In the last legislative session instead of making ‘credit card’ payments coming due, Wisconsin postponed paying some debt bills. This was not the first time, but it was the largest total debt postponement.

My mother always said, “Actions have consequences.” She was correct. In this budget the debt not paid comes due with a higher payment - making those ‘credit card’ payments a bigger share of what the state bought with tax dollars.

The rule financial experts follow is no more than 4% of tax money should be spent on debt payment. Ideally debt should be 3 to 3.5% of total general revenue. In the new state budget, debt payments are above the danger zone at 5.25%.

Fewer dollars are left for new investments in the ‘meat and potatoes’ of state government: K-12 and higher education, courts and prisons, local government, and health care.

The result: public schools, the UW, courts and prisons, and local government all received cuts or very modest increases but much less than their share of the $4 billion in new money.

Health received three times its share - over half - of the increase in new money. There will be more health spending but fewer people receiving health services. Why? The Governor won’t accept the federal Medicaid dollars to cover people making between $11,500 and $15,300 a year - costing Wisconsin more including tens of millions of dollars in administration contracts.

So, what would happen if Wisconsin accepted the federal Medicaid money, expanded Family Care (which saves money), invested in drug courts, mental health, schools, and the UW. What if we scrapped the tax rate cut and instead invested in the state’s rainy day fund?

To answer those questions, I put together an alternative budget. I restored money to eliminated agriculture programs and gave all the ‘bed tax’ money back to nursing homes. I fixed a deficit in childcare provider funds and restored cuts to courts and the UW. I paid cash for some new construction projects.

To address two problems facing our state – deteriorating K-12 education and addiction and mental illness - I invested in “Fair Funding for our Future” proposed by State Superintendent Tony Evers and made a big down payment on drug courts and mental health treatment.

On the revenue side, I eliminated new private school state spending and several expensive new initiatives. I didn’t buy 80 new vehicles, got rid of new tax breaks and tax rate changes, and made changes in health administration. I set aside over $600 million in the state’s checkbook which wiped out the structural deficit going into the next budget and had almost $400 million in cash left over.

Wisconsin must wisely invest our $4 billion in new money, set some aside and not be too quick to give folks a $1.60 a week tax cut. This is a much smarter approach and in the long run could provide that ‘relief’ Robert wanted for Wisconsin’s hardworking people.

This week Senator Kathleen Vinehout’s column focuses on voucher schools.  In a last minutes amendment included in the Assembly version of the budget, the Assembly majority created a loophole in the agreed upon cap on enrollment in the voucher school expansion.  Kathleen explains the impact of this provision and calls for a veto.

MADISON - Senators had debated budget passage for nearly eight nonstop hours. In a little over six hours the two-year state budget would be headed to the Governor.

Assembly Minority Leader Peter Barca beckoned me off the Senate floor. “There’s something you need to know,” he said. “Something in the budget no one seems to understand.”

A few of us gathered in a nearby conference room. “There are two ways a private school can get state tax dollars,” Representative Barca explained.

If a “choice” private school is in Milwaukee or Racine, the school can enroll any number of students. The state would pay tuition, up to a new dollar limit, for these students.

New to this budget was a statewide expansion of public money for private schools. Twenty-five schools would be chosen across the state. Together these schools could enroll up to 500 students in the first year of the budget and 1,000 students in the second year.

But, in a last minute amendment, a loophole was created.

A third option allowed any of the 112 “choice” schools in Milwaukee and Racine to move around the state and enroll an unlimited number of public school students in their private school at taxpayers’ expense. These schools would not be subject to the enrollment ‘cap’ of 500/1,000 students.

Listening to the explanation I was concerned this last minute amendment would cost more money, leaving less to our struggling public schools. I also worried private for-profit schools could set up ‘satellite’ schools across the state. Others expressed similar concerns.

Superintendent of Public Instruction Tony Evers issued a statement saying, “Without any advance notice or debate, Assembly Republicans passed a last minute amendment that will increase the cap on statewide vouchers by 40 percent in each year.” He pegged the total cost of the state cost of the private school program at $420 million over the next two years.

Senator Schulz who voted with Democrats to remove the voucher expansion said in a statement, “When my Senate colleagues negotiated the statewide expansion of the voucher program with the Governor and the Assembly, a hard cap on enrollment was the deal breaker. It appears the deal is already broken.”

Public money for private schools has not proven to be an effective use of taxpayer dollars. The over twenty-year-old program should be reevaluated with the same rigor applied to our public schools. Instead a coalition of the politically well-connected sought to expand the reach of private, sometimes for-profit, schools across Wisconsin- beginning with suburban Milwaukee and Racine.

Lobbying groups hired three former Assembly Speakers and, according the Democracy Campaign, spent nearly $10 million over the past 10 years- much of this in the last election cycle.

Beneficiaries of the expansion include the School Choice Wisconsin Board Chairman, Mr. Andrew Neumann who oversees operations of several voucher schools.

Andrew’s father, Mark Neumann started his first “taxpayer-funded school with 49 students and in eight years has mushroomed to nearly 1,000 students in four schools,” according to a 2010 Milwaukee Journal Sentinel article.

The article went on to report that Mark Neumann, a former gubernatorial and US Senate candidate, “operates three religious based schools in Milwaukee, a fourth nonreligious school in Phoenix and has plans to build clusters of schools across the country”. By 2010, the Journal Sentinel reported, Neumann’s Hope Christian schools received nearly $22 million from state taxpayers.

It’s hard for western Wisconsin residents to understand the intense marketing and efforts of enticement that come with public spending for private schools. What once began as an effort to help poorer families escape failing inner city schools has turned into a rush for taxpayers’ cash with little oversight or accountability.

I urge the Governor to veto budget provisions that allow taxpayer funded ‘franchise’ private schools to expand statewide without limits. These majority party efforts to slip changes into the state budget without debate or knowledge by the minority party or the press is a bad practice.

The state budget is already loaded with nearly 100 items of unrelated policy. Like each of those record-breaking number of policy items, this new expansion of private, franchise schools needs its own public vetting.

Budget includes statewide school voucher plan and rejects federal assistance to provide access to affordable health care options for state residents. Republican plan does little to cut taxes for average citizens or create jobs.

MADISON - Senate Republicans passed the state budget by a one-vote margin just after midnight Friday, moving it on to Gov. Scott Walker’s all but assured signature.

The budget passed 17-16, with Sen. Dale Schultz (R-Richland Center) joining all Democrats in opposing it. Walker can alter the plan using his vast line-item veto powers, but few expect any substantial change to it’s key provisions.

The budget would cut state income taxes by $651 million, mostly for wealthy taxpayers, and create a new statewide school voucher program that would allow children who meet income thresholds to use taxpayer money to attend private schools, including religious schools.

In a statement released after the budget was approved, Walker said he was proud of the Legislature for its work on the budget.

The state schools superintendent raised concerns a little-noticed provision in the school voucher plan that could lead to a flood of students attending private schools at taxpayer expense. Superintendent Tony Evers said late Thursday that attorneys are reviewing the issue but that he is worried about it.

The provision could "essentially negate any kind of caps," Evers said. "That would make a separate system of publicly funded private schools."

However, the matter is far from clear, Evers said. Bob Lang, the director of the nonpartisan Legislative Fiscal Bureau, said it would be up to Evers to determine whether such satellite schools would be subject to the cap.

While the Republicans wanted to characterize the budget as a big tax cut, it would actually only cut income taxes by an average of $150, raise property taxes by $29 on the typical home and reject a key element of the federal Affordable Care Act, or Obamacare.

The budget passed includes the governor’s plan to reject nearly $1 billion in federal assistance to provide access to affordable health care options for all state residents. Experts estimate Walker’s plan will stick Wisconsin taxpayers with approximately $75 million in additional costs the first year, with fewer people under coverage.

The budget provides no major provisions to improve Wisconsin’s dismal performance in job creation under Walker. The Democrats stressed that Wisconsin ranked 44th in private-sector job creation in the last quarterly jobs census.

"We are worse now than we were two years ago," said Sen. Jon Erpenbach (D-Middleton). "And we’re not trending up. We’re trending down. Wisconsin’s economy is actually contracting … And this budget won’t do anything about that."

Sen. Jennifer Shilling (D-La Crosse) denounced the budget as a "road map to mediocrity" that "doubles down on the failed policies of the past."

Three and a half hours into the debate, the Senate fell briefly into turmoil as protesters chanted, "Focus on jobs, not on vaginas" — a response to the Legislature’s vote last week to require women seeking abortions to get ultrasounds.

In a statement issued early this morning, State Senator Dave Hansen (D-Green Bay) said that “since 2011 Governor Walker and the Republican majority have been doing everything they can to move Wisconsin 60 years back and 1,000 miles south”. He goes on to say that “this is the wrong budget at the wrong time for all the wrong reasons”.

In a summary provided by the Milwaukee Journal-Sentinel, the nearly 1,400-page Joint Finance budget bill would:

Tax cuts. Cut income taxes by $651 million over two years and provide $30 million a year in income tax savings for the parents of the nearly 100,000 private school students in Wisconsin. Families could receive an income tax deduction of up to $4,000 for private school tuition paid for each kindergarten through eighth-grade student and up to $10,000 per high school student.

School funding. Provide public schools with $150 more per student in state aid and local property taxes this fall and another $150 increase in 2014-’15, for a total of $289 million over two years. However, because of the $50 one-time per-pupil bump to many districts in this past school year, the proposed $150 per pupil funding increase in 2013-’14 would represent a $100 per-pupil increase this fall over current spending.

Health care. Shift nearly 90,000 people from the BadgerCare Plus program into a new online insurance marketplace, where the participants are supposed to find replacement health coverage. A detailed analysis of the plan by the Legislative Fiscal Bureau found that many of the people now receiving BadgerCare Plus coverage through Medicaid likely would not buy the more expensive insurance through the marketplaces.

In doing so, Republicans are passing up a federal offer to cover 84,700 more people in Medicaid than their plan and receive enough additional federal tax money over the next two years to pad the state budget by $119 million even after covering the cost of those additional people, according to the Fiscal Bureau.

Walker has said he wants fewer people on government coverage and is concerned that the federal government won’t keep its commitment to the higher Medicaid funds over the long term.

Residency. Repeal all residency rules for teachers and other workers for local units of government with one exception: Local officials could still require police, fire or emergency personnel to live within 15 miles of the boundaries of their jurisdictions.

Bail bonds. Allow for-profit bail bondsmen in Wisconsin for the first time since 1979, with judges able to opt out of the system. The program would be limited for the first five years to Milwaukee, Waukesha, Kenosha, Racine and Dane counties.

State property. Allow the Walker administration to sell state assets including parking garages, university dormitories and roads.

Senator Kathleen Vinehout gives an overview of provisions included in the AB 40, the 2012-15 State Budget Bill and the impact of some of those provisions. Spending in this budget does not decline and includes the revenue lost to the state as a result of the tax cuts, leaving less revenue for the state’s largest financial investments: local government, education, health care and corrections. It also increases debt and leaves a structural deficit for the future.

MADISON - “I love to eat dessert first,” the Prescott man said as he munched on cake. He smiled and said, “The problem is you don’t have room for the good things you need to eat.”

The first course of dessert in the state budget is a tax cut for about seventy five percent of tax filers. For a taxpayer making $30,000 a year the tax cut would be about $50 a year and for someone making over $300,000 about $1,500.

Tax rates would be collapsed - income at the $14 an hour range would be taxed at the same rate as income made at the $150 an hour range.

“It’s hard to be against a tax cut,” my colleague told me. “But the rest of the budget suffers because of this cut.”

The tax change would permanently remove about $600 million of state revenue. Because spending is not reduced – this budget spends $4 billion more than the last – a half a billion dollar structural deficit is created down the road.

The second course of dessert is almost 100 policy changes unrelated to the state’s finances that, in many cases, reward special interests or benefit certain lawmakers. One example is elimination of the UW sponsored Center for Investigative Reporting; another is overturning a Supreme Court decision on lead paint.

The real meat and potatoes of state government are state operations and funding sent to our local communities, colleges and universities. The state budget affects many parts of our lives. For simplicity’s sake I’ll mention just a handful of major programs with a few details on what’s in the budget.

Six items make up 85 percent of the state budget: health, K-12 education, corrections, transportation, the UW system and local government. Each of these areas of spending deserves a thorough look at how to improve operations. Unfortunately most of the discussion on the budget hasn’t focused on the meat and potatoes.

Health spending increases by over two billion dollars despite the Governor’s proposal to end BadgerCare for nearly 100,000 people. A simple change in eligibility would have saved over one hundred million in state funds. Instead the state spends more and fewer people are covered by Medicaid.

K-12 education receives a slight increase, but a large part of this goes to fund a statewide expansion of public spending for private schools.

The prison budget adds millions more to account for an increase in the prison population. Drug court, community policing and other programs to reduce crime and addictions are eliminated or in jeopardy.

Money for roads and bridges is dwindling, as autos are more efficient. As gas tax collections fall, lawmakers consider other ways to fund transportation. Instead of solving this long-term problem, the budget transfers nearly half a billion from the general fund – leaving less to fund K-12 schools, UW and other state expenses.

Local government and the university system receive very little additional money leaving questions about how these entities will cut services as they try to cover increasing costs.

Long-term finances are stable but precarious. The economy is improving. Tax collections are expected to increase. But financial forecasts are inconsistent. For example, budget writers built into the budget several hundred million in new tax collections. Yet a recent forecast by the Philadelphia Federal Reserve shows Wisconsin’s economy contracting over the next six months.

This budget continues to increase debt. Not enough money is put away should the state face another economic down turn. Following the law and setting aside 2% of the general fund as a cushion in the state’s checkbook could improve finances. Instead, the Governor changes the law and keeps a mere half a percent as a financial cushion in the reserve fund.

Every parent who tells their children not to eat dessert first knows there will not room for the meat and potatoes. They also know there’s going to be a crash from eating all that sugar.

Wisconsin’s fiscal sugar crash is likely to show up in the spring of 2015 when the next Governor and lawmakers pick up the pieces set in motion in June of 2013.

APPLETON - In 2011, Rep. Reid Ribble voted to give away our right to privacy and, last week, we see its shameful consequences.

With Ribble’s permission, federal agents searched and seized personal telephone and electronic communications. In a single vote, Ribble erased what thousands of patriotic Americans died for — our right to privacy and our freedom of speech. As events in Washington show, freedoms lost are hard to regain.

The excuse offered by Ribble to allow the government to spy on all Americans was based on ignorance and fear. His statement reads in part, “While I have reservations with programs that put civil liberties at risk, the provisions that we voted on yesterday are carefully balanced to protect our vital, constitutionally protected civil liberties. These provisions permit law enforcement engaged in foreign terrorism investigations to carry out their duties without curtailing our rights. I’ve heard from law enforcement officials, other members of Congress and leaders from both parties that these tools have prevented attacks on our country and are necessary in our fight against terrorism.”

Without curtailing our rights? Ignorance is no excuse, for there is no reason to give up our freedoms. Ben Franklin agreed: “Those who give up their liberty for more security neither deserve liberty nor security.”

Thomas Jefferson also warned about ill-informed politicians: “If a nation expects to be both ignorant and free, it expects what never was and never will be.”

Human history has proven there will never be an honest excuse for giving away our freedoms. Never in Wisconsin’s 8th District history has an elected official been so easily duped into giving away our civil liberties.

By contrast, this same issue arose in the House of Representatives late at night on Aug. 4, 2007. Due to time constraints, I was not permitted to speak against a similar bill to deprive us of our Fourth Amendment rights. Instead, I submitted this handwritten statement:

“Our nation has faced many challenges in our history, and none more serious or deadly than our battle against violent extremists. Make no mistake, we must do whatever it takes to defend America and keep hostilities from our shores. We must be tough and we must be smart. We have the tough part right, and now more than ever we must be smart.

“The bill now before the House asks the American people to give up our Fourth Amendment rights without firing a single shot, even when the facts reveal we already have laws to allow intelligence agencies to protect all of us.

“The Senate-sponsored bill trades our Fourth Amendment rights for a false promise of security. It pretends to offer our people the reassurance that the current attorney general — a man few believe to be honorable or honest — will exercise good judgment in defending all of us.

“Our nation has lost faith in this administration’s competence and has lost faith in the ability of President Bush to understand and obey the rule of law. Having lost our faith in this president, we must not lose our constitutional rights as well. We must defend our nation, and we can continue to do so under the rule of law.”

Elections are about choices and consequences, and sadly the election of a man with poor judgment resulted in the loss of our right to privacy and a diminution of our freedom of speech.

It will be difficult to regain our freedoms, but by working together, we will. Next election, vote for someone else, someone with good judgment who will fight to restore and protect all our rights and freedoms.

— Dr. Steve Kagen is an Appleton resident who represented Wisconsin’s 8th Congressional District from 2007 to 2011.