Progressive Thinking

Senator Kathleen Vinehout writes about the delays Wisconsin farmers face in shipping grain to market.

MADISON - “The farmers are coming to me saying ‘we need drivers to get the corn to market. We need barges and trains to get the harvest to market.’” Barb Gronemus recently told me. “Kathleen you need to pay attention to problems with shipping grain.”

Former State Representative Barb Gronemus might be retired, but she’s still on duty answering the phone and making calls. One of those calls was to alert me to a growing problem farmers are facing getting grain to market. I began researching the situation and found former Rep. Gronemus was spot on.

Increased oil and sand shipments in the Midwest are delaying grain shipments. Some say the railroad companies are playing favorites because the oil industry pays a premium. Farmers worry they are losing money as their grain sits in storage instead of being transported to market.

Last month, the USDA predicted a record harvest in 2014. With abundant rain and cooler temperatures, corn yields are expected to top last year’s record with over 14 billion bushels according to the Wall Street Journal. The USDA also estimates a record soybean harvest in the next few weeks.

Recent studies conducted at the request of elected officials in North Dakota and Minnesota show significant losses to farmers because of a failure by rail companies to move grain.

North Dakota Governor Jack Dalryumple recently called the grain delays in the upper Midwest “an emergency situation” as he urged federal regulators to use their power “to provide an oversight role” as farmers struggle to get grain to market in a transportation system overburdened by the oil industry.

North Dakota Senator Heidi Heitkamp released a study she commissioned from North Dakota State University showing her state’s farmers lost over $66 million in four months because of delayed grain shipments. Researchers estimated a loss of over $95 million for delays in shipping the 2013 crop - which continue through the end of the year. No estimates were made for the 2014 crop.

Minnesota Governor Mark Dayton also urged federal action to aid farmers.

In a letter to the feds, Dayton asked that a study conducted for his administration be part of the National Grain Car Council’s agenda:

“We recently calculated that Minnesota farmers suffered losses of $109 million from March through May of this year…The study will highlight for the Council the dire circumstances that Minnesota farmers face and the need for increased accountability and clarity from the Burlington Northern Santa Fe (BNSF) and the Canadian Pacific (CP) Railroads.”

Minnesota’s governor further wrote that the feds compelled the railroad companies to publically report their progress on reducing the backlog in grain shipments. Farmers were promised by the railroad companies “matters would be different in this harvest season” and “transparency would be the new normal.” Yet, the mid-August filing with the federal government accounted for only 10% of the grain cars within the BNSF failed to address the backlog of grain shipments.

Federal officials are concerned CP cannot fill 30,000 requests for rail cars for grain and other products by October. In a New York Times article from late August federal sources reported the requests and a backlog of 1,336 rail cars for BNSF and nearly 1,000 for CP.

Wisconsin farmers suffer when grain can’t ride the rails. I could not find estimates on losses to Wisconsin farmers similar to the North Dakota and Minnesota studies. But local farmers and grain dealers are concerned.

Local farmers also expressed concerns that barges and trucks are filled with sand and the sand headed for the oil fields takes up valuable transport space for grain.

Yet, Wisconsin officials have made no mention of the impending crisis.

It’s time Governor Walker and Agriculture Secretary Brancel join our Midwestern neighbors in calling for federal action to put a priority on grain shipments. It’s also time Wisconsin researchers provide data on the potential loss to Wisconsin farmers if grain can’t move out of the state.

We don’t want Wisconsin farmers dumping grain because nobody’s answered the question, “where’s my train?’

The Walker Administration tried to hide the bad news by delaying the release of the final revenue numbers putting the Fiscal Year 2014 budget on a pace to be $115 million in the hole by next June 30.

MADISON - Wisconsin tax collections for the past year came in 2 percent short of estimates, the state Department of Revenue reported Thursday, news that puts the state's budget on track to be out of balance next year.

The figures show the state collected $281.2 million less for the fiscal year that ended in June than was anticipated by the nonpartisan Legislative Fiscal Bureau. That puts the two year budget to be on a pace to be $115 million in the hole by June 30.

The Walker Administration tried to hide the bad news by delaying the release of the final revenue numbers for Fiscal Year 2014. The delay lead to several State Senators, including Dave Hansen (D-Green Bay), to demand release of the numbers in a letter to Mark Huebsch, Walker’s Secretary of Administration on August 25.

A shortfall of this size will have a significant impact on the State Budget process, beginning with the agency budget proposals which are already being developed, and could lead to cuts in existing services. Such budget shortfalls also have a magnified impact on the long term structural deficit already run up by Walker. For example, a $100 million shortfall could lead to a structural deficit of $1.042 billion over time.

Gov. Scott Walker and the Republican-controlled Legislature have cut taxes by nearly $2 billion since Walker took office in 2011, including $500 million in March, a fact they've trumpeted on the campaign trail. Walker has also repeatedly claimed credit for ending the deficit in his ads as the justification for many of his actions against public workers and schools.

In a statement on the new State Budget Crisis, Senator Hansen said on Friday:

"This is the worst possible news. The size of the shortfall is even worse than expected-far worse.

Under the Governor's and the Republicans' failed leadership we now have a $281 million deficit, we are lagging our neighbors in job growth and family incomes are falling behind.

Not only are we dead last in job creation in the Midwest since the Governor took office, but he and the Republicans have driven our state finances into the ground while our neighbors pass us by.

Minnesota for example has a $168 million surplus, they eliminated their structural deficit and they are leading us on job growth.

Under Governor Walker and the Republicans Wisconsin is clearly not moving forward."

Sen. Kathleen Vinehout writes about the impact of shrinking state revenues for local schools districts while private “voucher” schools are receiving historically high per pupil state aid.

The 2013-15 State Budget set the private “voucher” school per pupil state aid at $7,856 for high school students and $7,210 for K-8 students. At the same time many school districts in the 31St Senate District are receiving far less state aid per pupil.

MADISON - “How is it possible that private voucher schools can receive almost four and a half times the state funding per student as our public school district receives in equalized aid,” Pepin School Superintendent Bruce Quinton wrote me.

As a new school year begins, students and parents see changes; for example, increased meal costs, larger class sizes, retiring teachers not replaced and fewer teachers’ aides. There are fewer janitors and delayed maintenance; longer bus rides and fewer field trips; fewer music and art classes.

Many public schools are forced to do more with less because lawmakers who voted for the last state budget increased state tax dollars to private schools. Nearly half of Wisconsin’s public schools will receive less aid this school year than the last – including many of our local schools.

Eau Claire received the largest dollar amount cut statewide – over $2.3 million while Pepin and Alma received the largest local percentage cuts - over 15%. At the same time, state aid per pupil going to private ‘voucher’ schools reached its highest point in state history.

In his letter, Superintendent Quinton noted the difference between amounts of state aid for Pepin to that of private schools: for the 2014-15 school year Pepin receives $1,667 per student; public tax dollars to private ‘voucher’ schools are $7,856 per high school student and $7,210 per K-8 student.

“Pepin Area School District taxpayers will pay an additional $70,119 in taxes to educate children in other districts this school year,” Mr. Quinton wrote. “I cannot comprehend why taxpayers are willing to subsidize a private voucher school education system, especially when research indicates that private voucher schools perform at best as well as the public school system and in many cases below their public school peers.”

A memo from the nonpartisan Legislative Fiscal Bureau (LFB) detailing figures from the 2013-14 school year show that Pepin’s state aid payment per pupil was $4,559 less than the per pupil state aid payment made to private ‘voucher’ schools.

The effects of reduced state aid for schools are many and include lower salaries for staff. The Eau Claire School District learned their base salaries fall below the 50th percentile of the market’s base salaries. This makes it difficult to attract and retain top quality staff.

A study released by the Wisconsin Budget Project, an arm of Wisconsin Council on Children and Families, recounts the effects of several years of slim funds to local schools. “As the new school year approaches, Wisconsin schools face significant challenges, including class sizes that have grown faster than the national average, an increasing number of students living in poverty, and a reduction in state support for education.”

Fewer state dollars means higher property taxes as schools unable to make ends meet head to referendum.

Voters in Mondovi, Altoona, and Black River Falls face a fall referenda vote to raise property taxes to pay for building improvements or, for Mondovi, school operations. Voters in Black River Falls will decide, among other projects, whether to replace the ‘temporary’ trailers which housed elementary students for many years.

Voters in Eleva-Strum passed a referendum to exceed the revenue limit under threat of “massive budget deficits” that would lead to reduction in funds for a school psychologist, janitors, a library aide and a bus route. The district is also considering closing elementary schools in Eleva and Strum.

Resolving problems facing local schools will require a shift in state policy. A majority of lawmakers must realize Wisconsin cannot afford two parallel school systems. Without significant increases in taxes we cannot use state tax dollars for both public and private schools. One will suffer while the other thrives. We can see this happening already in the Milwaukee area.

State Superintendent Tony Evers proposed changes to the school aid formula that would address some of the difficulties facing rural schools. In addition to his proposed changes, sparsity aid - which I created in the 2007-09 budget - must be expanded. There is no other aid that directly assists suffering rural schools with no strings attached.

Public education is the key to prosperity. Our future depends on our investment in our children.

Senator Kathleen Vinehout writes about raising the minimum wage. At nearly every event she attends, someone mentions the need to increase the minimum wage similar to action taken by Minnesota. Legislation to increase Wisconsin’s minimum wage was introduced but failed on a partisan vote. Other states have taken action to increase their minimum wage and found it benefited not only the workers but also the economy.

ALMA - “If there is one thing you could do to help it would be to raise the minimum wage.” A worker told me. She worked the last 8 years for a company that barely paid her $8.00 an hour.

“I’m the only breadwinner in my family. We can’t survive on my salary.” At $8 an hour the Eau Claire woman makes a little too much to be eligible for BadgerCare. She would gladly buy health insurance if she could afford it. But most of her money goes for basic living expenses: food, rent and fuel. Even car upkeep is a luxury.

A mom from Eau Claire’s south side told me about her daughter who is a teacher. “She doesn’t make enough. She works so hard and really cares for the kids. But she was driving on bald tires because she didn’t have enough money. I worried every time she got into the car.” Tears streamed down the mom’s face.

This summer I’ve heard more about low wages than ever before. Across Wisconsin wages have stagnated. A June/July 2014 report released by Wisconsin Taxpayers Alliance confirms Wisconsin wages trail the nation:

Average wages here have trailed the nation’s for years, but the gap has widened in recent years. Average wages in Wisconsin were 14% below the US average in 2013 compared to 10.8% below in 2003.

As with income and wages, employment growth here has also lagged. During 2000-13 job growth nationwide averaged 0.8% per year, vs. 0.3% here.

In a separate publication dated late July, the Taxpayers Alliance reports personal income, while improving compared to the US, still trails the nation’s average:

Part of the reason for lagging personal income is average earnings, which at $48,681 were 10.4% below US levels ($54,681) in 2012. Wisconsin earnings were also below the averages in Michigan, Minnesota, and especially Illinois, but still led Iowa by a slight margin.

Raising the minimum wage is a topic of much discussion among local people this summer. At nearly every gathering I’ve attended voters brought up the topic and asked me to support something similar to Minnesota’s law.

Last April, Minnesota lawmakers reached agreement on raising the state’s minimum wage. Starting this month, Minnesota’s minimum wage will increase over a 3-year period to $9.50 for large employers and $7.75 for small employers. The new law provides that by 2018, Minnesota’s minimum wage will be adjusted for inflation. Should the recession return, the law gives Minnesota an option to suspend the indexed increase in the minimum wage.

The new phased-in minimum wage increase has Minnesota leading the region. This spring Connecticut and 8 other states joined Minnesota in raising their minimum wage. Connecticut used a phased-in process similar to Minnesota’s: beginning at $8.70 and ending January 2017 at $10.10.

USA Today quoted Connecticut Governor Dannel Malloy as he signed the new law: “Increasing the minimum wage is not just good for workers; it's also good for business. This modest increase will give working families a boost, and it will contribute to our economy by getting just a little more money into the pockets of people who will spend it in their communities."

According to the National Council of State Legislatures, as of August 2014, 23 states and Washington, D.C., have minimum wages above the federal minimum wage of $7.25 per hour.

Wisconsin joined 37 other states in introducing legislation to raise the minimum wage. I joined my colleagues in supporting the bill, which was defeated in a partisan vote last January. Federal efforts to raise the minimum wage have also been unsuccessful.

Increasing the minimum wage would help many struggling families. The Center on Budget and Policy Priorities reports federal efforts to raise the minimum wage to $10.10 would benefit 17 million workers, largely women. Just under half - 47% - work full-time. The average minimum wage worker brings home half of the family’s earnings.

If we really want to help people in poverty and reward them for hard work, I suggest we raise the minimum wage – in phases – to $10.60. According to the Bureau of Labor Statistics $10.60 an hour would take us back in real dollars to the minimum wage of 1968!

Senator Vinehout writes about the savings to the state if the Governor and majority of Legislators had fully implemented the federal Affordable Care Act (ACA). She had asked the Legislative Fiscal Bureau to do a new estimate updated from the figures provided during the 2013-15 budget debate.

ALMA - “I’m so glad to see you,” Mary from Eau Claire told me at a recent neighborhood gathering. I asked how she was doing.

“It’s hard,” she admitted. “I work 32 hours a week. I make $8.00 an hour. I tried to get more hours but they won’t let me.” Her husband, Tom, lost his maintenance job at the university. He’s a 23-year Army Reserve veteran but there’s no pension and no new job in sight.

“My twin sister lives in La Crosse. I love her dearly. I haven’t seen her since Christmas. I’d love to visit her but when I get all the bills paid, I don’t even have $20 for gas to get me there and back,” Mary said. “And, I don’t have any health insurance. What if something happened to one of us?”

Mary and Tom (not their real names) aren’t eligible for BadgerCare and can’t afford a single new expense. The couple falls through the cracks of Wisconsin’s health insurance safety net. Hitting bottom with an unexpected medical expense would devastate them – and hurt all of us.

The holes in this safety net could be patched. Mending the net would help Mary, Tom, and couples like them while also bringing down the cost of health insurance for all the rest of us.

Mending the net would also make a big difference in the state’s ability to balance its books.

According to State Health Facts compiled by Kaiser Family Foundation, about 14% of those in Wisconsin between age 19 and 64 do not have health insurance.

Some of the uninsured found insurance through BadgerCare and some through the federal Marketplace. But others who were covered by BadgerCare are now without coverage.

The Milwaukee Journal Sentinel recently reported that of the 62,000 plus people who lost BadgerCare in April, less than a third found health insurance in the Marketplace by mid-June. Looking at the same data, Wisconsin Council on Children and Families analyst Jon Peacock reported, “I’m not optimistic that a very large portion of the roughly 38,000 people whose [health insurance] status is unknown have gotten private insurance outside the Marketplace.”

Peacock concluded these new –likely uninsured – people will “make it harder to reach the Governor’s goal of cutting in half the number of uninsured Wisconsinites.”

Under the Governor’s changes to the BadgerCare program, eligibility for most adults is limited to those who make under 100% of the federal poverty level – that means an annual household income of $11,670 for a single person. This limit is increased - for a single person- by more than $3,800 under the federal Affordable Care Act. And as family size increases, so does the income limit.

Under Wisconsin’s current BadgerCare program the federal government pays 59% of the cost of those covered by the program. However, the Affordable Care Act provides states additional dollars to cover 100% of “newly-eligible” groups for calendar years 2014-2016, 95% of costs in 2017, 94% in 2018, 93% in 2019 and 90% in 2020 and every year after. Those who voted for the most recent state budget turned down the additional federal funds.

I recently asked the non-partisan Legislative Fiscal Bureau (LFB) what the difference in spending would have been, compared to current law, if Wisconsin had fully implemented the federal health law.

Just in the current budget, the state would have saved $206 million (in general funds) and covered another 87,000 people. These numbers are substantially higher than the original estimates made by the LFB during the budget debate. This is, in part, because the state saw higher than expected enrollment in BadgerCare by the very poor.

Recent numbers show taking such action to implement the federal health law would save over $250 million in the next budget. Our Medicaid program is currently on track to run over $200 million in the red. Taking money offered by the feds is clearly the fiscally prudent action.

But more important is our moral obligation to help couples across the state like Mary and Tom.

By helping them, we help ourselves: every uninsured person who gains coverage helps lower insurance premiums for the rest of us.