Friday, May 22, 2015

Lower Wisconsin unemployment isn't always a good thing

I was taking advantage of an amazing weather day on the Memorial Union Terrace, so I didn't get to this until now. Yesterday featured the release of the April Wisconsin jobs report, and it was a classic case of how initial looks can be deceiving.
Place of residence data: A preliminary seasonally adjusted unemployment rate of 4.4 percent in April, down from 4.6 percent in March. The 4.4 percent rate is the state's lowest rate since April 2008 and is lower than the national unemployment rate of 5.4 percent in April. Wisconsin's total employment grew by 44,600 year-over-year while the number of unemployed declined by 33,900. Additionally, the state's labor force participation rate of 68 percent outpaced the national rate of 62.8 percent.

 Place of work data: The state added a statistically significant 50,900 total non-farm jobs and 48,500 private sector jobs from April 2014 to April 2015 (seasonally adjusted). Other statistically significant changes include a year-over-year gain of 11,000 jobs and a month-over-month gain of 3,600 jobs in manufacturing, along with year-over-year gains of 8,200 jobs in construction and 4,500 jobs in financial activities. Wisconsin added 5,400 private-sector jobs over the month, and private-sector job totals remain above pre-recession levels.
Sounds really good at first glance. But take a look on page 3, and you'll see this stat when it comes to figuring the unemployment rate.

April 2015 Wis labor force vs March 2015
Change in labor force -14,000
Change in employment -6,400
Change in unemployment -7,600

So that's why the unemployment rate dropped- 14,000 people left the work force! And that shrinking labor force has been the trend in Wisconsin for the last 3 months.

Wisconsin labor force
January 2015 3,120,800
April 2015 3,096,000
Change -24,800

In fact, if the labor force stayed at January's higher level, and total employment in the survey remained the same, Wisconsin unemployment would be 5.2% instead of 4.4%

The monthly jobs report also included the preliminary release of Wisconsin's numbers for the "gold standard" Quarterly Census on Employment and Wages, which goes through the end of December 2014, and I'll contrast this passage
A gain of 35,736 private-sector jobs with 17,560 jobs added in three major sectors: construction, manufacturing and professional services.
With this passage from the December 2014 Wisconsin jobs report four months ago.
A 12-month gain in private-sector jobs by a statistically significant 54,100 from December 2013 to December 2014 on a preliminary basis (seasonally adjusted), which is the highest December-to-December gain since 1999.
So that "massive" job gain has dropped by nearly 18,400 jobs as the more accurate data has come in.

If I didn't know better, I'd swear there's something behind the Walker Administration's initial releases constantly being better than the reality we find out later. I'm not saying there is, but it's becoming a disturbing pattern.

Wednesday, May 20, 2015

And now....back to WEDC trying to hide more stuff

Yes, that K-12 education bill has gotten us a bit off-track, because it's so regressive and was done in such a sneaky, underhanded fashion. But let's not forget what's coming up tomorrow, and that's the Joint Finance Committee's discussion of WEDC's budget.

And while Gov Walker is claiming that now wants to change the $55 million grant/regional loan program that's in the WEDC budget, let's keep our eyes on the JFC to see if they actually follow through with it. You may remember that proposal for also having this great passage.
7. As noted, details of the program have not been developed and it is unknown what the structure or composition of the regional organizations would be under the program or how specifically those dollars would have to be disbursed in the region. The bill would require WEDC to approve the structure, regional investment strategy, and administrative guidelines of the regional loan funds for each regional organization. In addition, each regional organization would have to make a report to WEDC, as would be required by the Corporation.
Yes, let's trust WEDC and their Board to come up with a fair strategy, and to make these companies follow through on their reporting requirements. On second thought, let's not, and if the GOPs on the JFC have an ounce of decency, this $55 million will be banished out of the budget entirely. We'll see if they do it.

Here's another item in tomorrow's meeting that hasn't gotten as much attention- where WEDC is trying to shield itself from certain Open Records laws. WEDC operates an information sharing system called the In Force Network, where WEDC workers, corporates, and other oligarchs trade information and other "development opportunities," and they don't want the casual citizen to find out what's been discussed, claiming that it's the equivalent of a closed office door. Of course, once the heat started rising on WEDC's shadiness, the Walker Administration did some serious backtracking, as you'll see in the second paragraph.
3. WEDC states that proprietary information of users on the In Force Network is confidential if the user is working with a company on a project, unless the information is shared with a partner or a WEDC employee. All state agencies and authorities may withhold records or documents from public access by applying a balancing test to determine if public interests favoring secrecy outweighs those favoring disclosure. The Corporation has raised concerns that, while its current policies retain confidentiality for information stored on the In Force Network, its current statutory exemption from the open records law does not include an exemption for personal or financial information stored by its users on the network. In response to programmatic audits performed by the Legislative Audit Bureau, WEDC collects detailed data from companies that receive awards, including personnel and payroll data. WEDC states that certain businesses that would otherwise apply for grants, loans, and tax credits offered by the Corporation do not feel comfortable with the possibility of subjecting their company's records, or their personal finances, to the state open records law and choose not to participate in economic development programs offered by the Corporation. The administration has requested the proposed statutory exemption from the open records law for information stored on the In Force Network to address these concerns.

4. On April 13, 2015, the administration sent a letter to the co-chairs of the Joint Committee on Finance requesting a number of modifications to the bill to address drafting errors and to clarify the Governor's intent. In that letter, the administration requested a modification to clarify the Governor's intent by deleting the recommended exemption from the open records law for records consisting of information on the In Force Network, or other similar CRM maintained by WEDC, unless the information is published to the In Force Network or other system by the Corporation or another economic development organization. Instead, the administration requested an exemption from the open records law for all information on the In Force Network, or other CRM maintained by the Corporation, that is stored to that network/system, including any state authority or state agency, federal or local governmental unit, or economic development organization. Additionally the person storing information to the network/system would remain the custodian of the information while it is in the custody of WEDC. Access to information stored on the network/system would be determined by the custodian of that information in accordance with state law.

5. The Committee could choose to modify the bill, as recommended by the administration, to more accurately reflect the Governor's intent. Under this alternative, a person would remain the custodian of any information that the person stored on the In Force Network or similar CRM maintained by WEDC and anything stored by that person on the network/system would become exempt from the state open records law. It is unclear to what extent information stored by a person on the network/system, and what types of information, might become exempt from public inspection under this provision as compared to current law.
Yeah, I'm not quite trusting these guys, especially when it's taxpayer dollars and write-offs that are being used as the bait for many of these companies to relocate and/or expand. Given the issues that have developed with WEDC in recent weeks, I'm guessing more shelter from oversight and accountability isn't the way to go.

And the third paper on WEDC also allows for looser regulations on WEDC grant recipients. I touched on this in an earlier post, but I'll reiterate a couple of passages here.
1. The budget bill would increase from $100,000 to $500,000 the threshold for when a grant or loan recipient must engage a CPA to determine whether the funds were expended in accordance with the grant or loan contract. WEDC has stated that the current threshold can be costly for persons receiving awards of less than $500,000 as compared to the benefit received by the recipient. According to WEDC, the typical cost of obtaining a schedule of expenditures from a CPA is $5,000, which would represent 5% of a $100,000 grant or loan award....

6. The bill would no longer require recipients of WEDC grants or loans to submit a schedule of expenditures of the grant or loan funds, which currently must include expenditures of any matching cash or in-kind match, signed by the director or principal officer of the recipient to attest to the accuracy of the schedule of expenditures. The Corporation indicates that a schedule of expenditures would still be created by an independent CPA on behalf of the recipient in order to attest to the accuracy of the expenditures; however, the recipient would no longer have to submit the schedule to WEDC.
The paper goes on to say that this would have exempted 44% of WEDC's grants in 2013-14. These provisions are also a nice way for the Walker Administration to take care of the "problem" of a lack of oversight of WEDC loans and grants- they'll simply remove the reporting requirements!

I fully expect the Dems to destroy the Walker Administration tomorrow as these items come up, and reiterate their calls for an emergency meeting to go along with their requested federal investigation. But the real story will be to see if the GOPs on the Joint Finance Committee are also angered and/or feeling the heat from these WEDC scandals, and decide not to allow the Walker boys to allow this slush fund hide any additional information. And we'll see if they finally pull the plug on an agency that has seemed to accomplish nothing other than to funnel taxpayer dollars to Walker donors, with any growth or business improvement being a mere accident.

EDIT- Mr. Unintimidated backtrack on the Open Records exemptions as well. These guys are really running scared right now, aren't they?

Vouchers > public schools last night. By the numbers

I wanted to recap the fiscal side to the sickening K-12 education bill that was jammed through the Joint Finance Committee late last night, because there are a lot of claims out there, and a look at the numbers will show just who the real winners in this bill are. I’ll give you a hint, it’s not public schools or communities that rely on them.
Here’s the 29-page motion that was developed in secret by the Wisconsin GOP and unveiled last night. And I’ll go over a few of the big parts of this.

School Levy Credit They’re going to still give away $105.8 million in each year, but instead of “double-paying” that in year 2 of the budget, they’ll just have the payment be in July of each fiscal year, same as before. This does cause an increase in the state’s GAAP deficit, as mentioned under Alternative #4 in the Legislative Fiscal Bureau’s paper on property tax credits.
Under AB 21/SB 21 [the Governor’s Budget Bill], the additional $105.6 million would be paid in July, 2016, relative to the 2015(16) tax year, and in June, 2017, relative to the 2016(17) tax year. By continuing to make the payment in July, rather than June, GPR expenditures would be reduced by $105.6 million in 2016-17, relative to the Governor's proposal [Alternative #4]. This modification would not affect the property tax estimates displayed in Table 1. Instead, this change would make $105.6 million GPR available for other purposes in 2016-17, but would increase the GAAP deficit by an estimated $80.2 million.
And that extra $105.6 million made available for Year 2 of the budget is what was grabbed to help pay for the increases in funding to K-12 schools in this omnibus. It’s the only way that a large sum of money could be added to the already-tight budget while still allowing it to balance (although as you’ll see, we may be heading over the edge anyway).

School aids The baseline K-12 aids stay the same as in Governor Walker’s budget (no change year 1, up 2.4% in year 2). But the source of contention was the $127 million that was cut from per-pupil aids in the Year 1, with $142 million added back in Year 2, for an $18 per-pupil change from 2014-15 (at $150 a student) to 2016-17 ($168 a student). In order to smooth out these wild fluctuations in K-12 funding, the GOPs on the JFC did some creative accounting, and the Per-Pupil aid paper from the LFB is a good source to follow along with.

The first step that was done was to get rid of the $150 cut for school year 2015-16, which is a total of $126.8 million. The problem is that there isn’t enough money available in 2015-16 to pay for all of that, as the Governor’s budget only gave $27 million of cushion beyond the state-required reserve limit. So how did they solve that problem? By shoving all of the increases into Year 2.
Provide $126,842,300 GPR in 2016-17 for per-pupil aid payments based on 2015-16 enrollments. Specify that, on a one-time basis, this aid be paid on a delayed basis on the second Monday in July of 2016. Specify that this delayed payment would be considered as moneys appropriated in 2015-16 for the purposes of calculating an increase in categorical aid funding per pupil.
Then they will add another $69.34 million for per-pupil aid in 2016-17, resulting in a new total of $196.18 million, or $250 per pupil. In addition, this amount is expected to be ongoing, so this means that the new base for future years becomes that $196.18 million, adding nearly $110 million to the state’s structural deficit for 2017-19.

If that’s all there was to this bill, with no further shuffling of funds, there might be a bit of concern about unfunded tax breaks and kicking the can down the road, but I’d think most people would be happy with the outcome. But the problem is that this is not all there is, as the voucher expansion and other provisions cut out a sizable amount of the K-12 funding increase.

The first part is easy enough to figure, and I mentioned this earlier this week. It uses the open enrollment basis to re-distribute aid from a child’s home district to the voucher school, albeit at higher amounts for vouchers ($7,210 for K-8 and $7,856 for high school vs. $6,647-$6,755 for open enrollment to public schools). This moves $18.4 million in year 1 and $29.4 million in year 2 from all K-12 districts vouchers, and the added per-pupil aids also play a role here, as the vouchers get another $4 million from the current program, while Milwaukee and Racine public schools have $1.3 million sent away from school aids based on that.

The often online-based “independent “2r” charter schools” also get a nice kickback in this bill, to the tune of $1.25 million, which also is taken away from public schools. The only extra help the public schools get are a one-time shot of $5 million in High-Cost Special Ed. Aid in year 2 (and some of that can go to CESAs and charters), and they get back $4.0 million due to the removal of a Walker plan for a Charter School Oversight Board, which would have given that money to operators of charter schools (they don’t need that with all the extra voucher money being thrown around).

So let’s add up the totals and see what we get. We’ll even allow for the assumption of “no loss of per-pupil aid in 2015-16, even though that money will be delayed into the next fiscal year.

Total K-12 public school aids, 2015-16
Per-pupil increase $0
MINUS voucher expansion -$18.4 million
MINUS current voucher program -$123,000
MINUS 2r charters -$108,000
TOTAL CHANGE IN AIDS -$18.6 million

Total K-12 public school aids, 2016-17
Per-pupil increase +$69.34 million
PLUS High-Cost Special Ed +$5.0 million
PLUS No Charter School Board +$4.0 million
MINUS voucher expansion -$29.4 million
MINUS current voucher program -$1.20 million
MINUS 2r charters -$1.14 million
TOTAL CHANGE IN AIDS +$46.6 MILLION

TOTAL CHANGE PUBLIC SCHOOLS 16-17 vs 14-15 +$28.0 million
TOTAL CHANGE VOUCHERS 16-17 vs 14-15 +$51.8 million


You’re reading that right. Under last night’s surprise omnibus bill, Wisconsin’s voucher schools got a bigger two-year bump in state aids than the K-12 public schools got under this bill. Now you see why the voucher lobby spent all that money to get GOP puppets put into the Legislature last Fall, and now those extra taxpayer funds give a sizable pot of money that can be kicked back Scott Jensen and other lobbyists, and to throw behind more GOP puppets in future years.

It’s why Wisconsin’s voucher game isn’t a bad scam if you’re in on it. But for the vast majority of us that aren’t, and actually care about educational outcomes, it’s a sickening recipe for disaster, and a major harm to Wisconsin’s ability to generate and attract talent. This is what Scott Walker really meant by “Open for Business”, and it has nothing to do with growing our economy.

Tuesday, May 19, 2015

Wisconsin public schools screwed even worse than we thought

I just read this, and I am stunned and sickened, maybe more than I was when I first read the "budget repair bill" that became Act 10.
Co-chair Alberta Darling, R-River Hills, and Rep. Dale Kooyenga, R-Brookfield, proposed the Opportunity Schools and Partnership Program for the Milwaukee district. Under the plan, failing schools would be put under the control of a commissioner who would be appointed by the county exec.

Up to three Milwaukee schools could be put into the program in 2015-16 and 2016-17 with up to five eligible in 2017-18 and each year after.

The motion would also create a parallel provision under which a similar program could be created districts that meet certain requirements, including a membership of more than 15,000 students. That would impact Madison and Racine, though they have not met other requirements to be put under the recovery program. Some of the other benchmarks include receiving the lowest rating on the most recent accountability report in any two consecutive years.
WHAT.THE.FUCK. How much money is Scott Jensen, the Waltons and the De Voses promising these scumbags?

Wispolitics.com has the whole motion (and there's 30 pages of it). Legislating by surprise in the middle of the night, with no public hearing on this bill, and on policies the GOP never ran on this November.

If it wasn't such a dirty word, I'd say recalls have to be in order. That's the only recourse we seem to have left (well, that's legal anyway).

NEVER VOTE REPUBLICAN AGAIN. And never allow any non-racist person under 50 with an IQ over 80 to sit out another election.


The WEDC follies roll on, and get worse

Here's a great summary on the unfolding scandal involving WEDC's politically-connected $500,000 loan to Building Committee, Inc. The article is courtesy of occasional Funhouse commenter "lufthase," and it shows how this guy tried for years to do a pay-for-play operation with Dems in the late 2000s, but the Dems wouldn't bite on it and give assistance to such sketchy characters with shaky plans. But once Scott Walker and the GOP made the state "Open for Business" in 2011, they were more than willing to play ball and kick back taxpayer funds to these guys.

Also props to Dee Hall and Matt DuFour on their two excellent articles exposing the BCI scam and just how the WEDC slush fund operated. Those scoops shamed the Journal-Sentinel into a rare act of journalism that blew this story wider yesterday. Patrick Marley and Jason Stein took a break from the paper's usual stenography and Walker puff pieces to call bullshit on Scott Walker's attempted evasions and "I know nothing" responses to this WEDC kickback.
The Sept. 9, 2011, letter from Paul Jadin, WEDC's chief executive officer at the time, was sent to William Minahan, owner of Building Committee Inc., a company that is now being sued by WEDC for defaulting on the unsecured loan without delivering the promised project and the jobs it was supposed to create.

Jadin said in his letter of intent that he was writing "on behalf of Governor Scott Walker" and noted "cc: Scott Walker, Governor" at the bottom.

Walker's top cabinet appointee, then Administration Secretary Mike Huebsch, urged WEDC officials to provide the loan, and Walker's then-chief of staff Keith Gilkes attended an initial meeting on it, according to records provided to the Milwaukee Journal Sentinel by the Walker administration.

"In closing Governor Walker and I are firmly committed to doing everything possible to expedite the processing and awarding of this incentive award," Jadin wrote in the letter.
So what's Mr. Unintimidated's response to this revelation? To whine about "partisan witch hunts" and have his lackeys give an excuse equivalent to "the dog ate my homework." This clown wants to be president? If it wasn't so serious that this crooked buffoon could be close to the button, it'd be hilarious.

And speaking of homework, it's pretty obvious that Walker and the WEDC staff wasn't too keen on doing theirs when it came to evaluating Building Committee, Inc.'s financial stability, as the J-S (sensing blood in the water?) is reporting tonight.
Building Committee Inc. and its owner William Minahan, a donor to Walker's campaign, indicated in their September 2011 application for the state loan that the company, its owners and officials had not been involved in any lawsuits or civil cases in the previous five years.

But online public records show that Minahan faced legal action by the state Department of Revenue in November 2010 for tax delinquency in the amount of $15,700 and that Building Committee was also sued for thousands of dollars in a money judgment case just over a year before Minahan signed the application. They were the first of many court actions that have been filed against Building Committee.

Assembly Minority Leader Peter Barca (D-Kenosha), a member of the Wisconsin Economic Development Corp. board, said that the loan should have never been made by the agency, given that a cursory search of online court records could have picked up the company's financial problems.

"A simple (Internet) search would have found it was there," Barca said.
Nice operation you got there, Scotty. Not incompetent or crooked in the least.

This story has serious legs, and I have a hard time believing that BCI are the only people who the Walker boys were being sketchy with. The US DOJ needs to take up Barca's request, and get the Feds on this case NOW.

Monday, May 18, 2015

GOPs try to magically avoid cutting K-12 tomorrow

Likely the big item in tomorrow's Joint Finance Committee meeting will involve state aids for K-12 schools. I'll leave out the possibility of suburban GOPs messing up Milwaukee Public Schools in this post (if you want to read the latest with that, take a look at what Andy at Wisconsin Soapbox said last night. There's definitely something afoot), and concentrate on a few of the school finance issues here.

As you may be aware, the Walker budget plans to cut $127 million in per-pupil aids in 2015-16, and then restores that and $15 million more for 2016-17. But the $127 million cut has angered many constituents and school districts, and the Legislative GOP (sensing that they'll be tossed out on their asses in 2016 if they let this stand) has been scrambling to try to find some way to put some of this money back.
While Republicans initially talked about simply restoring Walker's $127 million cut, which would still keep school funding flat, they are now advocating for putting more money in for the 2016-2017 school year.

"I'm pushing hard for that because a zero increase will be hell to pay when you go home," said Sen. Luther Olsen, a Republican on the budget committee from Ripon.

Rep. John Nygren, co-chair of the budget committee, said his goal is to increase funding by an additional $75 per student in the second year of the budget after holding it flat the first year. He called that a "reasonable" increase.
Of course, that would require a lot of money that a budget without extra revenues does not have. From looking at the Legislative Fiscal Bureau's paper on per-pupil aids and the various options that could be taken, it would take an extra $126.8 million just to keep funding flat in year 1 and up by $18 for year 2 (Option A2). If they want to quadruple that per-pupil increase in year 2 (like Nygren says), they'd need to add another $45 million to the budget bill on top of that $126.8 million in year 1. And that's money the budget doesn't have, for either year.

So maybe this is where some work gets done on the School Levy Tax Credit. I went over the issues with that last week, but the GOP Co-Chairs delayed action on those property tax credits so they could work simultaneously with the K-12 School Aids. I suppose trading the $211 million in School Levy Credits in 2016-17 could pay for a $75 increase per-pupil in year 2 (bye-bye $5 property tax cut), but I still don't see where the extra money is coming from for year 1. So let's see how they try to pull off this alleged increase in school aids, as it the money doesn't seem to be there, so it'll have to be done by seriously hurting some other part of a budget that has hurt a lot of areas already, and/or driving up the structural and GAAP deficits even higher.

And late on Friday, another monkey wrench was thrown in to school funding, as Robbin' Vos is still working to give a kickback to Scott Jensen and the other voucher lobbyists that helped elect Republicans to the Legislature last November. Vos's scam plan involves taking money out of the public schools, and throwing that money into the voucher schools- an estimated funneling of $48 million in taxpayer funds. Walker's budget would remove the 1,000-student cap on vouchers, and Vos not only would keep that, but would add a kicker to it that changes what happens to districts outside of Milwaukee and Racine that have students who take vouchers with them to attend a school. The LFB's paper on the "Choice Program" explains more.
28. The [Joint Finance] Committee could also consider an approach similar to the funding mechanism for the open enrollment program under current law. For incoming pupils in the Racine or statewide programs, the pupil's school district of residence would count the pupil in its membership for revenue limits and general aids, and therefore would receive revenue limit authority and general aid as though the pupil were enrolled in that district. The district's equalization aid or other state aid would be decreased by an amount equal to the per pupil amount paid by the state to choice schools attributable to pupils residing in the district. A district would not be able to increase its property tax levy to compensate for the aid loss, but would receive revenue limit authority based on the number of incoming choice pupils from that district. [Alternative D4]

29. If school districts count choice pupils in their membership for revenue limit purposes, property taxes could be affected in those districts if those pupils would have otherwise attended a private school. A three-year rolling average of a school district's public enrollment is used to calculate the district's revenue limit. Therefore, after three years, the school district of residence for a choice pupil who began participating in the program in 2015-16 or later would have full revenue limit authority for that pupil. The effect on property tax levies across the state would vary depending on the school districts of residence of incoming choice pupils and whether those pupils would have otherwise attended a public school. In 2014-15, the statewide average revenue limit per pupil equals $10,200.
The double-whammy about this is that the money taken away from the school because a kid attends a voucher is over $500-$1,000 HIGHER than the loss from open enrollment to a public school. And the $48 million lost by public schools in state aid from vouchers would likely offset a sizable portion of any increase in aid that Nygren and the rest of the GOPs on Joint Finance can come up with.

Even with the $48 million funneled to vouchers (a disgusting enough proposition), we still could get Rep. Nygren's desired increase in per-pupil aid if we merely kept tax rates for certain corporations at the same level they are today. But just like with the voucher lobby, the GOPs take care of their donors first and foremost, so the WMC crowd will get their unproductive tax cut, while the state's public schools starve and lessen the chances of providing the state with the human capital that is the real driver of a strong economy. As I've said before- with priorities like those, do you wonder why we continue to lag behind the rest of the country?

Keep your eyes peeled tomorrow as the JFC tries their shell games. There promises to be many of these in the next few weeks.

Sunday, May 17, 2015

State employees another casualty of bad Walker budget

Another item that'll come up in the jam-packed list of issues that Wisconsin's Joint Finance Committee will take up his week regards how much to set aside for state employees over the next 2 years. And as you will see, they are another group of people that are looking at even leaner times as a result of this Administration's fiscal recklessness.

As it stands today, Governor Scott Walker's budget counts on state employees getting very few bumps in pay over the next two years, with barely more than $29 million set aside in the Compensation Reserve for cover potential increases in wage and benefit costs. As the Legislative Fiscal Bureau's paper on Compensation Reserves and Employee Health Insurance Costs shows, even a menial pay increase would go over what's set aside in the budget for increased pay.
If a 1% general wage increase was to be provided to state employees (represented and non-represented) in each year of 2015-17, additional GPR funding of $21.1 million in 2015-16, and $42.4 million in 2016-17, would need to be reserved (this figure includes state agencies and the UW System). If a 1% general wage increase was to be annually provided to state agency employees only (represented and non-represented), additional GPR funding of $11.1 million in 2015-16, and $22.4 million in 2016-17, would need to be reserved.
In addition, the budget that Gov Walker submitted already counts on over $37 million in savings related to health care costs, and the paper goes over how this would happen.
With respect to health insurance costs, certain assumptions are made in the reserve calculations regarding health care inflation for 2016 and 2017. In addition, the budget bill would reduce reserve funding that would otherwise have been provided to offset estimated increased health care costs during the upcoming biennium to reflect two recommendations: (a) permitting full- and part-time state employees who are eligible to receive health care coverage, other than graduate assistants, to elect not to receive health care coverage and instead receive a $2,000 annual payment (this issue is addressed in a separate budget paper); and (b) unspecified programmatic modifications to the state group health insurance program which provides health insurance to state employees in order to generate $25 million GPR in savings over the biennium.
That move of paying state employees $2,000 a year to NOT take the state's health insurance plan is estimated to save another $12.5 million (click here to read more about that idea), but given that these savings are "baked into the cake", the danger is that if they fail to materialize, this creates even more budget holes that have to be filled.

That being said, the LFB says it appears that the budget will indeed see enough of a benefit from these moves not to have to worry about that gap opening up, but with a catch- it'll result in state employees (again) losing take-home pay and shelling out for increased out-of-pocket costs.
20. In its March 25, 2015, report Segal Consulting recommended: (a) introducing a $250 annual deductible and increasing the annual maximum out-of-pocket limit for single health maintenance organization (HMO) policies from $500 to $1,000; (b) introducing a $500 annual deductible and increasing the annual maximum out-of-pocket limit for family HMO policies from $1,000 to $2,000; (c) increasing the annual deductible from $200 to $500 and increasing the annual maximum out-of-pocket limit from $500 to $1,000 for a single policy under the standard plan; (d) increasing the annual deductible to $1,000 and increasing the annual maximum out-of-pocket limit to $2,000 for a family policy under the standard plan; (e) increasing the annual state contribution to health savings accounts (HSAs) for state employees under the high deductible health plan (HDHP) from $170 to $750 for a single policy; and (f) increasing the annual state contribution to HSAs for state employees under the HDHP to $1,500 for a family policy. Segal estimates that these changes, including increased deductibles and copays for state employees, could reduce state agency health care expenditures by $34.5 million annually.

21. Segal Consulting recommended for certain prescription drug levels shifting from fixed copays to a coinsurance approach where employees pay a percentage of the costs of prescription drugs up to specified caps. Segal estimated that this change could reduce state agency health care expenditures by $7 million in 2016. The consultant indicated that doubling the out-of-pocket limit for prescription drugs for employees could reduce state agency health care expenditures by $10 million annually.

22. It may be noted that the annualized value of the above changes identified by Segal Consulting would total $51.5 million. If the recommended opt-out payments would not generate reduced health care costs for the state group health insurance program, the combined total all funds reduction to the group health insurance program in 2016-17 under the budget bill totals $54,789,000. Further, increased costs to state employees above and beyond these recommendations may also occur as this does not account for health care inflation costs which will likely be passed on, in part, to state employees.
And you thought Act 10 meant that there would be no more concessions imposed on state employees? HAH!

Between the schools, state employees, local governments (who aren't seeing any extra shared revenues), unionized workers, and the poor, there aren't a whole lot of other people and entities that aren't looking at some kind of damage from what State Rep. Andy Jorgensen accurately called a "dumpster fire of a budget." It seems like the only people that don't end up with an extra burden in Scotty's budget are corporations (who are still keeping their M&A giveaway), the Road Builders (with the continuing funding of expressway megaprojects), WEDC recipients, and other members of the Governor's inner circle.

Funny how that works.