March 31, 2017
It is an honor and a privilege to serve you and the entire 77th Assembly District. It is very important for me to stay in touch with you on issues that personally affect you, your family, and our community. I welcome your feedback and will continue to work here in the legislature toward our shared goals and values by promoting job growth, strengthening education, and protecting our treasured natural resources. These are all key investments in the future of our community and our state.
I've developed this electronic newsletter to provide a simple but direct
way to communicate with you about my work as your legislator. I will be
sending out updates on a regular basis. To unsubscribe, simply
respond to this message with "unsubscribe" in the subject line.
As always, please do not hesitate to contact me to share your
thoughts or concerns about any issues facing state government. I look
forward to hearing from you!
Sincerely,
Terese
Berceau
State
Representative
77th
Assembly District
Wisconsin state government generates and spends over $37 billion each year, affecting every resident in a myriad of ways. The State Constitution requires us to craft a budget that “sets the level of authorized state expenditures for a certain period of time and the corresponding level of revenues projected to be available to finance those expenses.”
When you look at all sources of revenue, not just taxes, we rank 24th in the country in terms of spending on state and local government. That’s right in the middle of the pack.
Wisconsin obtains revenue from five main sources:
General Purpose Revenue (GPR) – money collected from state taxpayers from the sales tax, individual and corporate income taxes, excise taxes on alcohol and cigarettes, utility taxes, and insurance taxes.
Program Revenue (PR) – money collected from user charges such as license or inspection fees and tuition.
Segregated Revenue (SEG) – money designated for a specific fund other than the general fund. The most common example is that motor fuel taxes go to the Transportation Fund.
Federal Revenue (FED) – money from the federal government for a specified purpose
Bond Revenue – money the state receives from selling bonds to finance state building and highway projects and acquire land. This is borrowed money and generally has to be paid back with interest.
You can read the entire 1839-page budget HERE. The Fiscal Bureau summary of the budget is HERE. The Department of Administration publishes the Budget in Brief. The Fiscal Bureau also has an informational paper on the state budget process.
February - Governor introduces budget.
Early March - Non-partisan Legislative Fiscal Bureau (FB) completes first round of budget analysis.
Late March - Joint Committee on Finance (JCF) receives budget briefings from state agencies.
Early to Mid-April - JCF holds public hearings.
Late April/Early May - Late May/Early June - JCF executive session. The committee reviews the budget section by section to determine whether to adopt the governor’s recommendations or to make changes. If the committee cannot agree on a change, the governor’s position prevails. The committee passes its version of the budget. The Fiscal Bureau prepares a summary of the budget comparing the governor’s version with the JCF version. This process may take only a week to complete.
Late May/June - The legislature takes up budget bill. Democrats and Republicans caucus to decide whether to offer amendments to the budget or whether the JFC version will be the final product. Usually, there are changes made in each house. It is not uncommon for the legislature to caucus on the budget for multiple days or, in some cases, even longer than a week. The Assembly and Senate take up the bill for floor action. If there are differences between the houses, a conference committee may be necessary to reconcile the two versions of the bill. If this happens, both houses will need to approve or reject the entire conference committee version of the bill, which cannot be amended.
June/July - Budget bill sent to governor. He has the option to sign, veto, or line-item veto specific provisions. The legislature has the option to override any gubernatorial vetoes. That rarely happens, however.
While the state’s fiscal year (FY) ends June 30th, we do not face a government shutdown if the budget is not completed on time. Instead, the state continues to operate under the provisions of the previous budget as long as funds are available. This session we can probably anticipate passage in early-to-mid June.
The governor's proposed 2017 - 2019 state budget spends $76.4 billion - the largest budget in state history. That is $2 billion, or 4.2% over the last budget.
-
GPR - 45.2%
-
Federal - 28.9%
-
Program Revenue - 15.6%
-
Segregated Revenue - 10%
-
Bonding - .3%
Over the next two years, the budget allocates $440 million more than it generates, leaving the state with a net balance of only $12 million.
At the end of the budget, the state will employ 70,827 people, an increase of 415 over the last budget.
It assumes that agencies will lapse over $760 million back to the general fund.
Based on current law and the provisions in the proposed budget, the 2019 - 2021 budget starts off with a structural deficit of over $1 billion.
University of Wisconsin System
Since Republicans took control of state government in 2011, the UW System has lost almost $800 million in state support, excluding debt service. Last year, state support for the system was the lowest in state history when you adjust for inflation. For the first time in decades, WI recently dropped out of the top five universities in the nation in overall research expenditures. The backlog of necessary repairs to UW System buildings and infrastructure is estimated to be $2 billion.
The proposed budget increases GPR funding by $105.2 million. $42.5 million of that is performance-based funding to encourage “state priorities”, including affordability and attainability, work readiness, student success in state workforce, efficiency, service, and additional criteria. The actual metrics to determine whether performance meets these standards haven’t been identified.
The current tuition freeze will be extended one year. Tuition will be cut 5% in the second year of the budget. The state will make up for the lost revenue with $35 million in GPR funding.
The budget does not increase general financial aid, which would help the neediest students. It also does nothing to help the almost 1 million state residents who have a combined $19 billion in student loan debt.
The governor proposes to implement a “big brother” plan to monitor and record how many hours each instructor spends in the classroom. This could have significant consequences, especially for a major research institution like UW – Madison. Our campus brings in about $1 billion annually in research grants, yet professors won’t get “credit” for all the time they spend outside of the classroom conducting that research, applying for those grants, and publishing the results.
The budget also allows students to opt-out of allocable student fees that support activities and services for the entire campus community. This could decimate student organizations, student government, newspapers and radio stations on campuses, student transportation, and rape crisis services.
· Increases per-pupil aid by $250 per student in the first year of the budget and another $204 in the second.
-
Partially funded by expected savings from switching the state to a self-insured model for employee health insurance.
-
Allocating K-12 increases via per-pupil aid, instead of through equalization aid, means each student receives the same increase, regardless of the needs in a particular community, locking in existing inequities in funding.
-
Voucher students get an increase of $217 in each year of the budget.
-
Madison and some other districts might not be eligible for the per-pupil increase. The budget directs this increase to districts that require their employees to pay at least 12% of the cost of their health insurance. These districts don’t meet this threshold, mostly because they found insurance plans that cost less overall, even with the employees paying a smaller share.
-
Provides $6.5 million to address student mental health issues.
-
Prohibits new increases in revenue limits for energy efficiency projects.
-
No increases for special education costs. Special education categorical aids have been frozen since the 2008 - 2009 school year.
-
By the second year of this budget, state funding for voucher schools will have more than doubled since the 2010-11 school year.
-
Prohibits the Department of Public Instruction from requiring an existing choice school to provide its annual budget as proof of financial viability.
-
The non-partisan Legislative Fiscal Bureau estimates the voucher program will cost state taxpayers approximately $800 million through 2025.
-
Diverting so much state money from our public schools shifts the burden to local taxpayers. One hundred and fifty school districts held funding referenda last year - the highest number in a decade.
-
The $649 million dollar increase in this budget merely brings us back up to the level of K-12 funding that existed when the governor took office. Schools are still significantly behind when you account for inflation.
-
WI spends over $3 billion annually on transportation infrastructure – roads, bridges, airports, harbors, railroads, transit, bicycle/pedestrian facilities, the state patrol, and the Division of Motor Vehicles.
-
About 10%of the total state budget.
-
$1.6 billion a year goes to building state highways
-
$850 million goes for highway rehabilitation projects.
-
The vast majority of funding comes from the gas tax, vehicle registration fees, federal money, and borrowing.
-
During the past decade and a half, we’ve transferred about $560 million from the general fund to the transportation fund. That money’s not available for schools, health care, or parks.
-
We borrowed $800 million for transportation in the last state budget and the governor’s proposed budget contains $500 million in new bonding.
-
We are projected to be billions of dollars short over the next several years if we use current funding methods just to maintain current service levels and road conditions. Only 41% of WI roads are now considered to be in good condition. U.S. News and World Report ranked WI 49th out of the 50 states for the quality of our roads.
-
Bad road conditions cost people about $6 billion annually in car repairs, gas, delays, etc.
-
Debt service as a percentage of transportation dollars has almost doubled since the governor took office – from 11.5% to 22.9%.
-
Total transportation bonding is about $4.4 billion. That amount rises to $6.5 billion when you account for interest.
The proposed budget includes:
-
A $40 million increase in general transportation aids to counties and municipalities.
-
A $14 million increase in the Local Roads Improvement Program.
-
A $6 million increase in local bridge improvement program.
-
$77 million – total local government aid and assistance increase.
-
No increase in gas taxes or vehicle registration to fund roads or decrease borrowing. The governor said he would veto any increase added by the legislature. Republican leadership in the legislature said they wouldn't override a veto. (The state would have had an additional $467 million for transportation if we hadn't eliminated gas tax indexing in 2006.)
-
Verona Road project stays on schedule.
-
Moves forestry headquarters and 56 employees out of Madison to northern WI by January 1, 2018 at a cost of $17 million.
-
Considers transferring CAFO permitting from DNR to DATCP.
-
Eliminates 35.5 positions.
-
Raises admission $10 and camping fees $10/night at most popular state parks.
-
Doesn’t increase hunting and fishing fees despite a recent report that the DNR needed an additional $5 million to maintain current programs that conserve habitat for wildlife.
-
Eliminates the Natural Resources magazine, even though it is fully self-sufficient through subscription revenue.
-
Eliminates the Farm to School program, which connects schools with local farmers to promote nutrition and agricultural education, increases access to healthy food choices in schools, and expands markets for farmers.
-
Eliminates the forestry mill tax, the primary source of funding for the state’s forestry account, and instead transfers $180.5 million GPR.
-
Maintains current funding for recycling programs and the Stewardship Fund.
The proposed budget:
-
Includes a 7-year sunset on all new taxes, tax credits, deductions, and exemptions.
-
Reduces the Homestead Credit by $12.2 million, by eliminating about 20,000 people from the program.
-
Restores $10 million of the $71 million cut from technical colleges in previous budgets. $5 million is used to offset the proposed tuition freeze.
-
Increases need-based Wisconsin Grants:
-
$5.7 million for UW System students.
-
$1.88 million for technical college students. (Technical colleges asked for $23 million. 23,000 students were waitlisted last year.)
-
$2.62 million for students at private, non-profit colleges.
-
Eliminates the Educational Approval Board and transfer its functions to the Department of Safety and Professional Services.
-
Eliminates the Labor and Industry Review Commission, which is a national model started over 100 years ago. This will make it harder to appeal unfair decisions.
-
Increases property taxes on the median-value home this year. Home values have decreased overall since 2011.
-
Eliminates domestic partner benefits.
-
Require childless adults in Medicaid to participate in employment and training services.
-
Increases work requirements in the Medicaid Purchase Plan (MAPP) for people with disabilities and require proof of work or training.
-
Eliminates wait list for long-term supports for children with developmental and physical disabilities or severe emotional disorders.
-
Increases nursing home provider rates 2% each year.
-
Provides a 2% increase per year in the personal care program to support direct care workers.
-
Eliminates the Parole Commission.
-
Fails to address adequately the staffing shortages and massive overtime costs at correctional facilities.
-
Eliminates the Stray Voltage Program.
-
Eliminates the Bioenergy Council.
-
Eliminates the Judicial Council and Justice Commission.
-
Eliminates 6 positions at the Ethics and Elections Commissions.
-
Creates new barriers to accessing FoodShare and other basic safety net programs.
-
Increases foster care rates by 2.5% in each calendar year.
-
Caps the Historic Rehabilitation Tax Credit at $10 million, to be awarded based on job creation. Credit must be refunded if job goals not met.
-
Creates a back-to-school sales tax holiday for two days in August 2017 and 2018. (clothing under $75, computers under $750, certain school supplies under $75) This will cost the state about $11 million in lost revenue.
-
Cuts income taxes by about $200 million.
-
Provides flat funding for shared revenue to local governments.
-
Increases Earned Income Tax Credit for single parents with one child.
Self-funding State Employee Health Insurance
Earlier this year, the state's Group Insurance Board (GIB) voted to move the state to a self-insurance model for employee health insurance. Currently, the state and its workers pay premiums to 17 health maintenance organizations, which then take on the risk for paying medical claims. The existing system costs approximately $1.5 billion and covers a quarter million state and local employees and their dependents, who make up about 15% of the state's overall health insurance market.
The legislature's Joint Committee on Finance has to sign off on the move by May 1 if the plan is to be implemented by next January. Under the self-insurance plan, the state assumes the entire risk of paying those claims, which is risky as state employees are older than the general population, and thus tend to have higher medical costs. The GIB would contract with two statewide third-party administrators, which would in turn partner with five regional vendors.
The governor's proposed budget uses $60 million in projected savings to fund part of the per-pupil school aid increase and 2% general wage increases for UW System employees in 2018 and 2019. Frankly, I'm not exactly sure where those savings are going to come from.
Consultants previously told the state it could save up to $42 million a year under the best-case scenario. They also warned self-insuring could also cost the state up to $100 million annually. If the expected savings don't materialize, it will blow a hole in the budget and risk reducing or eliminating currently covered treatments for government employees. For example, certain services for diabetics, those in nursing homes, the disabled, and for newborns and new mothers are currently covered, but aren't required under state law.
The GIB claims it has the authority to switch 35,000 local government workers to self-insurance. However, a 1987 Attorney General opinion and a recent legal memo indicate the state constitution prohibits self-funding employee health benefits for those employees.
It is obvious the governor released this budget with his own re-election in mind. It tries to paper over the damage done in past budgets, in the hope Wisconsinites will buy his attempts to fix things and forget about the fact that he broke them in the first place.
Clearly, the governor's prescriptions aren't working. We still lag far behind our neighbors in the Midwest and the nation as a whole in job creation. After six years, we are still 90,000 jobs short of the 250,000 the governor claimed he would create in his first term. In fact, we've actually created fewer jobs than economists predicted we'd gain just due to the overall economic recovery as the country came out of the Great Recession. The governor's policies have proven to be worse than doing nothing at all.
I am especially concerned by the excessive micromanaging of the university system, which I find foolish and dangerous. It hurts students more than it helps them. The university has been the main economic engine of this state in recent years despite, not because of, the governor. I'm sorry to say but this budget is more about positioning the governor for re-election, not about positioning the state for success.
Like"
Terese on Facebook |
Follow Terese on Twitter |
E-mail Terese | (608) 266-3784
To unsubscribe to my E-Updates, please reply to this message with
"unsubscribe" in the subject line. |
|