Monday, May 23, 2016

UW faculty's lack of confidence in WisGOPs being proven correct

No-confidence votes from faculty continue to rack up across the state against UW System President/ WisGOP henchman Ray Cross, ranging from the UW flagships at Madison and Milwaukee earlier this month, to the 2-year Colleges late last week. It's quite obvious that faculty members have decided that they can't count on Cross and other UW Administrators to represent their interests against anti-UW legislators, and that there is no point in negotiating with either of these groups any more, and need to go public with their grievances.

And as events and statements come out, it's pretty obvious the faculty are right to think that way. Take a look at this "can't we all just get along" silliness from UW-Madison Chancellor Becky Blank.
“That kind of positive and healthy relationship is incredibly important; it is important to the university and it is very important to the state,” Blank said. “The current relationship is not as healthy in my opinion.”

Blank spoke after a week in which Walker ridiculed “groaning” UW faculty for a stack of no-confidence votes in UW System President Ray Cross and the Board of Regents. His press release prompted a rebuttal from the American Association of University Professors and a rating of “pants on fire” from the fact-checking website Politifact...

“The no confidences votes have obviously raised the ire of some legislators,” Blank remarked. “The response by the governor in his recent press release, I think, was neither healthy nor productive.

"But with dueling press releases, dueling op-eds, we are engaged in precisely the wrong conversation,” Blank said. “This is dangerous, should this continue.”
It would be dangerous if the WisGOP Legislature was acting in anything resembling good faith. But they're not, as articles like this one from the weekend show that GOP legislators and Governor Walker believe that stoking the anger of rubes against best and brightest academics is a way to get votes for November 2016's elections, so they have no interest in being partners with the UW.
Mike Mikalsen, a spokesman for Sen. Steve Nass, R-Whitewater, said voters don’t want to undo the changes Republicans have made.

“You can’t just feed the beast by throwing more state tax dollars in and more tuition money,” he said. “You have to force (the UW System) to adopt reasonable reforms to get them on the right track.”
That's nice, isn't it? The only "beast" associated with the UW System is the economic beast that generates billions of dollars in current research and jobs, and it keeps the talent pipeline humming to keep the state competitive for the future. Funny how "pro-business" GOPs don't seem to get this.

There's another beauty in that article where former GOP chair and current Grocers lobbyist Brandon Scholz is quoted as saying "“It will be difficult to sell tenure when you apply it to what people do for jobs in their district." This is the same Brandon Scholz who wanted to end Wisconsin's child labor laws five years ago and is now calling the Obama Administration's requirement of overtime pay for low-income jobs "divisive, callous, uninformed." Apparently teenagers and low-wage workers don't exist in GOP districts, Brandon?

More proof that GOPs are not to be trusted on UW System funding came from today's article from Steve Walters in Urban Milwaukee. Walters quotes Assembly Speaker Robbin' Vos threatening to further reduce funding and faculty protections as a result of the faculty not sitting back and accepting their prior cuts and reductions in worker rights.

But, in a WisconsinEye interview at the Republican Party state convention, Assembly Speaker Robin Vos called the faculty votes “not helpful” and a “big mistake on their part.”

Vos said he hopes he can keep state aid for the UW System in the next two-year state budget where it is now – $2.08 billion.

Vos’s statement sends this blunt message to UW faculty members with little or no faith in their bosses: You want state aid to the System increased? Not going to happen.

And, UW faculty should be thankful that legislators allowed the Regents to set new tenure guidelines because, Vos said, “I might have eliminated tenure altogether.” Vos said he only agreed to let the Regents enact new tenure guidelines at the request of Cross.
We'll leave out the silliness of Vos implying that there will be funds available in the next budget to give UW a funding increase anyway (there won't be as long as Walker is in office), but it shows that you can't negotiate with people like that. And ALEC authoritarians like Wee Wobbin' illustrate exactly why tenure needs to exist and be strengthened, because you bet that guy will put the kiobosh on any research that might show results such as a warming planet, the failure of trickle-down economics to raise revenues, or in the fact that voucher schools generally do not do any better with the same students than public schools (and many do worse).

This is why UW have acted properly in turning up the heat and public attention with these no-confidence votes of UW System leadership and the Walker-stacked Board of Regents. Being kind and acquiescing to the GOP leadership is exactly what those anti-intellectual thugs want, and it won't result in better funding or freedoms. So why not fight and work to get those thugs out of power, both by raising public awareness of the issue, and in actively supporting the election of pro-UW legislators in November to flip the State Senate and stop some of those cuts from happening? This includes Diane Odeen taking out GOP State Sen. Sheila Harsdorf (who "represents" River Falls and Stout) and Mark Harris winning the open seat in the Oshkosh-Fond du Lac area.

I know it's uncouth in some corners for academics to take political sides in statewide battles, but decency has been out the window in Fitzwalkerstan for more than 5 years, and it is well past time for UW administration, professors, staff to take on the combative stance that this dire situation requires.

Tourist season should remind us of need for better local govt financing

After spending the weekend in Green Bay doing tourist-related things as my wife and friends ran in a half-marathon, I was led to flash back to a document which discussed the impact of tourism on Wisconsin’s economy. This came out from the Wisconsin Department of Tourism last month, and with the Summer Tourism kicking off full-force this weekend, I wanted to go into the places in Wisconsin where tourism is important, and where there is very little of it. This is the type of information that should drive certain fiscal policy decisions in the state, but generally doesn’t when it comes to funding local governments, and I think that needs to change.

First of all, how do we define “direct tourism spending”? The Wisconsin Department of Tourism says it starts with the following:
Domestic visitor expenditure estimates are provided by Longwoods International’s representative survey of US travelers. These are broken out by sectors (lodging, transport at destination, food & beverage, retail, and recreation), by purpose (business and leisure), and by length of stay (day and overnight).
Then this information is cross-checked with items such as sales tax receipts, gasoline purchases, and local economic and employment data.

Based on those measures, here are the counties that the Tourism Department said are the ones that grab the highest amount of direct tourism spending in Wisconsin.

Top 10 counties for tourism spending
1.Milwaukee Co. $1,858.2 million
2.Dane County $1,154.1 million
3.Sauk County $1,005.3 million
4.Waukesha Co. $721.7 million
5.Brown County $613.7 million
6.Walworth Co. $509.6 million
7.Outagamie Co. $335.4 million
8.Door County $332.8 million
9.La Crosse Co. $236.1 million
10.Marathon Co. $235.9 million

Basically it’s the largest-population counties in Wisconsin along with traditional attraction areas like the Dells-Delton area (Sauk Co.), Door County, and Walworth County.

Another way to slice this impact is by adding population to the equation, as a way to see how reliant an area may be on tourism spending. If you work it out that way, you can see where many small-population communities have a strong reliance on tourism to stay afloat.

Top 10 counties, tourism spending per capita
Door County $12,079
Sauk County $11,488
Adams County $10,500
Vilas County $9,928
Oneida County $6,069
Sheboygan Co. $5,203
Walworth Co. $4,957
Shawano Co. $3,780
Marinette Co. $3,775
Iron County $3,296

(Quick note, Sheboygan County hosted the PGA Championship at Whistling Straits last year, and that in itself may have caused them to get a spot on this last. The spending in that county was significantly up from last year).

These top counties would be the ones most likely to benefit from a sales tax on goods and services, as non-residents bring in large proportions of money into the area, and take advantage of the goods and services a community offers. In addition, this could create a positive feedback loop where the extra sales taxes go back into amenities and services which enhance quality of life, and continue to attract tourism dollars.

While larger communities aren’t generally on this list when broken down per capita, I’ll note that Brown and Dane Counties were still in top 20 of Wisconsin counties for tourism spending per capita, and Milwaukee, La Crosse, Outagamie and Waukesha Counties were all in the upper half, despite their larger size. The counties which hold cities that get large amounts of tourism dollars (like Milwaukee, Dane and Brown) would also seem to benefit from a local funding shift away from property taxes and into sales taxes as a result.

Interestingly, the areas that are least reliant on tourism in Wisconsin also are relatively small-population, and all are located either near Green Bay/Appleton or are in the western half of the state. I also find it a bit alarming that many of these counties are on the border with other states, which you’d think would make them attract more tourist dollars just due to geographic proximity, and that isn’t happening.

Lowest 10 counties, tourism spending per capita
Menominee Co. $553
Calumet Co. $599
Pierce County $608
Lafayette Co. $706
Clark County $813
Grant County $827
Buffalo Co. $842
Pepin County $844
Kewaunee Co. $856
Trempealeau Co. $857

Without the boost in spending from outsiders, it makes these areas more likely to need sizable amounts of shared revenue and other non-sales tax sources to maintain local government spending levels. Either that, or they must continue to grow in population and/or tax base to keep the property taxes and other aids flowing. Some have been able to do this, like the counties of Menominee (population up 8.06% since 2010), Trempealeau (+2.55%), Grant (+2.03%) and Calumet (+1.62%). But the other 6 low-tourist counties have been hit with population losses since the start of the decade, with Buffalo (-2.91%) and Pepin (-2.40%) getting the worst of it.

You put these two issues together, and it indicates that perhaps a logical funding reform in Wisconsin could involve redirecting more resources to rural, low-tourist areas, with an extra emphasis on those places with declining population, as they are less likely to be able to raise revenues for services on their own. In particular, General Fund revenues like income taxes and state sales taxes could be the source for those communities to receive those funds, which evens the playing field throughout the state and could reduce the concerning trend where half of the state’s counties have lost population in the Age of Fitzwalkerstan, and most are in rural areas.

On the flip side, high-tourism and population growth areas would have some of their shared revenues reduced and/or redirected. But this can be made up for by freeing them up to use their community’s amenities to raise more revenue on their own. This could include an expansion of initiatives like the Premier Resort Tax and the Wisconsin Center Tax - added sales taxes that can be installed in places that require additional services due to large tourist populations, or earmarked for specific facilities designed to attract conventions and events that cause people from out of town to visit the area. The increased tourism of those areas also makes it more likely that the regressive sales tax is spread around to non-residents, and could be offset with lower property taxes and a lack of cuts in services that benefit local residents (streets, schools, etc.).

Wisconsin’s outdated local financing system relies heavily on statewide revenues being redistributed. This may help certain areas that are not large enough to generate top-flight services on their own, and some of this should even be expanded for low-income, low-growth areas of the state, to allow those citizens a legitimate chance of succeeding. But this has often come at the cost of reduced options for revenue at the local level. We only allow a 0.5% sales tax for local governments to take advantage of, and only on the county level. This has resulted in property taxes and sprawling growth to be the main source of support to local governments, and it is a system that has hamstrung large cities in particular, since most have fixed borders and much of its land has already been developed.

As a result, my modest proposal would allow cities and high-tourist areas more freedom to impose their own sales taxes and keep more of the funds that are being generated in their own communities. Likewise, this can be accompanied with property tax restrictions and perhaps targets on what the added sales taxes can be used for (like the proposed 0.5% sales tax for local roads that failed to pass the GOP Legislature this session).

If done right, this can be a win-win for the vast majority of communities in Wisconsin, and allow a better chance for the state to keep up the quality of life and natural beauty that attracts those tourists in the first place.

Sunday, May 22, 2016

A trip to Titletown

I'm heading back from a warm and good weekend in Green Bay, where my wife and our friends ran in the 1/2 marathon. Hadn't been to Lambeau since most of the renovations, and it was pretty awesome to get inside and see it in person.

More serious stuff will likely be back on Monday. But that's what Ive bern up to

Friday, May 20, 2016

April jobs fall hard in Wisconsin- indicating March was a mirage

As usual, going through the Walker Administration’s monthly jobs release is an exercise in searching and cutting through spin. And the April report that was released on Thursday was no exception. Take a look at this, and I’ll bold the big story that I don’t see reported in any state media today.
Place of residence data: A preliminary seasonally adjusted unemployment rate of 4.4 percent in April 2016, down from 4.5 percent in March 2016. The 4.4 percent rate is lower than the 4.6 percent rate in April 2015 and lower than the national unemployment rate, which remained at 5.0 percent in April 2016. Based on preliminary estimates, Wisconsin's total employment remained at a record high in April, growing by a statistically significant 61,100 year-over-year.

The state's labor force also remained at an all-time high in April 2016, and the labor force participation rate held at 68.8 percent, outpacing the U.S. rate of 62.8 percent.

·Place of work data: The state added a statistically significant 39,600 private sector jobs and 42,000 total non-farm jobs from April 2015 to April 2016 on a preliminary basis, including a significant gain of 8,800 jobs in construction. While preliminary April numbers estimate a one-month decline by 11,500 private-sector jobs, the March 2016 estimates were revised upward by 1,600 to show a one-month gain of 14,700 from February.
Wait, WE LOST 11,500 PRIVATE SECTOR JOBS LAST MONTH? That kind of seems like a big deal. But few if any media outlets have picked up on that one, so apparently the Walker DWD’s word-smithing paid off.

And it’s not like the rest of the country was having these same difficulties in April, since the state-by-state jobs report came out from the Bureau of Labor Statistics today, and Wisconsin was mired near the bottom of US state for last month. Meanwhile, our neighbor to the west was having the type of major job growth we claimed in prior months
In April 2016, 11 states had statistically significant over-the-month increases in nonfarm payroll employment and 6 states had significant decreases. The largest job gains were in California (+59,600) and Florida (+31,100). In percentage terms, the largest significant increases were in Minnesota and Missouri (+0.5 percent each). Pennsylvania (-16,900) and Ohio (-13,600) had the largest significant decreases in employment over the month, followed by Wisconsin (-12,600) and Virginia (-12,000). The largest over-the-month percentage declines were in Wyoming (-0.9 percent) and Hawaii (-0.8 percent).
In fairness, some of this job loss was a predictable correction from those too-good-to-be true job numbers the Wisconsin DWD was bragging about in March. My 4 loyal readers may remember yours truly saying as much last month, and I singled out one sector in particular for a snapback, as Wisconsin was one of only 2 states in the Midwest that was listed as adding jobs in this area for March.
(\We seem like quite the outlier, don't we? And February's manufacturing employment figures were also revised up for February, making the gain even larger. Knowing what is going on in the rest of the country and especially the Midwest, does that manufacturing number ring true to anyone here? It certainly doesn't to me.
Sure enough, take a look at April’s Wisconsin jobs report in the manufacturing sector and compare it to March’s revised figure.

Change in manufacturing jobs, Wisconsin
March +4,100
April -4,200

So we’re basically back to where we were in February for manufacturing employment, which rings truer (of course, it might look worse when Oscar Mayer and Tyson Chicken and other plants start shuttering this summer, but we’re not there yet).

I don’t want to take too much away from the progress on the household survey that makes up the “employment/ unemployment” part of the Wisconsin jobs report. Not only did the unemployment claim decline in April to 4.4%, but it also is being done despite growth in the Wisconsin labor force. This is a very different reason than what we saw with alleged declines in that stat in 2015 (which was due to alleged drops in the labor force. Both declines were later revised away).

Low unemployment is definitely a good thing, but Gov Walker made a dope of himself when tried to take credit for it, when tweeted this out, using a graphic that all but screamed #THANKSOBAMA!

So what I’m taking out of this April jobs report is that things weren’t booming as much as the Walker Administration made them out to be in the first 3 months of the year, and things didn’t immediately turn bust in April, despite the reported loss of 11,500 private sector jobs. This is likely an evening out of jobs figures which happens over the course of a few months in these reports, and Wisconsin is still averaging 4,875 private-sector jobs a month for 2016, which is pretty much in line with the national rate.

That’s an improvement over the subpar pace we’ve been on in the Age of Fitzwalkerstan, but it also means that the Walker jobs gap is little different than it was at the start of the year- just over 95,500 private sector jobs, and 90,000 jobs overall.

I bet Scotty and the WisGOPs won't be tweeting out those charts when they try to talk up their record before the November elections.

Wednesday, May 18, 2016

Despite headlines, Wisconsin also having middle class hollowed out

The recent release from the Pew Research Center on America’s middle class has led to an interesting “two sides of the coin” analysis when it comes to figuring out what’s been happening in Wisconsin in the 2000s.

First of all, let’s take a look at what the Pew Center defined as “middle income” for this survey.
In this report, “middle-income” Americans are defined as adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. 7 In 2014, the national middle-income range was about $42,000 to $125,000 annually for a household of three. Lower-income households have incomes less than 67% of the median and upper-income households have incomes that are more than double the median.

The income it takes to be middle income varies by household size, with smaller households requiring less to support the same lifestyle as larger households. Thus, a one-person household needed only $24,000 to $72,000 to be middle income in 2014. But a five-person household had to have an income ranging from $54,000 to $161,000 to be considered middle income.
Based on that definition, 51% of Americans were considered middle income in 2014, a decline from the 55% that fell under that category in 2000. It’s noteworthy that several mid-size cities in Wisconsin were listed as having the largest percentage of residents in their metro areas as being “middle income.” As the Pew report notes,
A distinct geographical pattern emerges with respect to which metropolitan areas had the highest shares of adults who were lower income, middle income or upper income in 2014. The 10 metropolitan areas with the greatest shares of middle-income adults are located mostly in the Midwest. Wausau, WI, where 67% of adults lived in middle-income households in 2014, had the distinction of leading the country on this basis, followed closely by Janesville-Beloit, WI (65%). Sheboygan, WI, and four other Midwest areas also placed among the top 10 middle-income areas.
The Eau Claire area also made the top 10, with 61% of its households being considered middle income. The Pew Report notes that many of the Midwestern areas that had a disproportionately large amount of middle-class households also tended to be disproportionately reliant on manufacturing, and most were in markets that were not in the top 50 for population in the U.S.

The “Wisconsin has a lot of middle-class” meme got a lot of play in the media when the Pew report came out last week, and it is an interesting stat. But it doesn’t tell the whole story. First of all, the Madison and Green Bay-Appleton areas are missing from the report, likely because their metro areas were expanded in recent years, so it was taken out of the Pew analysis. The other large metro area in the state didn’t have the same “huge middle class” dynamic that some medium-size metros did, as Milwaukee’s middle-income ratio was 52.6% in 2014.

That was still above the U.S. average of 51%, but Pew also reports that the Milwaukee area had sizable slippage in this category between 2000 and 2014. This is especially true when you look at the increase in lower-income households in Milwaukee, which seems to be the destination of most individuals who departed the middle-class.

2000 vs. 2014, Milwaukee metro vs US
Lower income
2000- U.S. 28%, Milwaukee 19.8%
2014- U.S. 29%, Milwaukee 25.5%
Change- U.S. +1%, Milwaukee +5.7%

Middle income
2000- U.S. 55%, Milwaukee 58.9%
2014- U.S. 51%, Milwaukee 52.6%
Change- U.S. -4%, Milwaukee -6.3%

Upper income
2000- U.S. 17%, Milwaukee 21.3%
2014- U.S. 20%, Milwaukee 22.0%
Change- U.S. +3%, Milwaukee +0.7%

And this trend of changes within the classes is what the Wisconsin Budget Project looked at in their analysis of the Pew research study. As you’ll see from this graphic, other than Eau Claire and (barely) Sheboygan, more often than not, any drop in middle-class Wisconsin households was due to people sliding into the lower class in those communities.

And then the Budget Project expands outward into the rest of the state, and shows that Wisconsin went against the national trend in this time period, as only 7 states had a higher difference between people going into the lower class vs going into the upper class. They weren’t alone in the Midwest for this trend, but it’s also in marked contrast to our neighbors to the west in Minnesota and Iowa.

Change in % in upper income vs lower income 2000-2014
Iowa +3.9%
Minn +3.3%
Ill. -1.6%
Wis. -1.9%
Ohio -2.6%
Ind. -5.0%
Mich -8.6%

Tamarine Cornelius at the Wisconsin Budget Project says it’s no coincidence that Wisconsin’s middle-class has struggled in the 2000s, particularly given what sector makes up a sizable portion of its economy.
One of the reasons that Wisconsin’s upper income tier has grown more slowly than our lower income tier is that there are far fewer jobs in manufacturing than in past decades. A bigger share of Wisconsin’s jobs are in manufacturing than in almost any other state, and those jobs often pay solid wages that allow workers to climb into the middle class. But the manufacturing sector has shrunk dramatically across the country, making those jobs harder to find, and forcing some former factory and foundry workers in Wisconsin to take jobs that pay less.

The decline in unionization is also one of the reasons Wisconsin’s middle class is giving way to the lower income group. Between 2000 and 2014, Wisconsin had one of the largest drops in the share of workers who belong to a union. Unionized workers earn more in wages and other compensation than non-union workers who are otherwise the same, and the higher wages help push additional households into the middle class. Union workers are also better off than their counterparts with regards to health insurance, retirement, and paid time off.
Note that the last year of this analysis is in 2014, before (right-to) work-for-less was passed in Wisconsin, and manufacturing slowed down with the oil bust and the strong dollar. Combine that with the increasing tax cuts and incentives that Governor Walker and WisGOP have handed out favoring the rich and corporate, and it doesn’t seem like Wisconsin’s 1.9% gap between rich and poor will be closing any time soon.

There are plenty of other angles to go at with the Pew Report “middle-class” report, so give it a click and see what you can find.

Can the Walker Admin read revenue documents? Or are the numbers themselves misleading?

Given Governor Walker’s decision last week to “scoop and toss” $101 million in debt into future years, I surmised that it must have been a tax revenue shortfall that had emerged in Wisconsin after tax filing season ended. This made the release of April’s tax revenue report by the Wisconsin Department of Revenue a crucial one, to see if that hypothesis was correct.

Well, the DOR sent out the release late yesterday afternoon, and the result was…unclear. Here’s the reason why.

Income tax revenues, Wisconsin April 2016 vs April 2015
Actual figures -20.22% (!)
Adjusted figures +12.73% (!)

Income tax revenues, Wisconsin FY2016 vs FY2015
Actual figures +1.33%
Adjusted figures +6.46%

Total tax revenues, Wisconsin FY2016 vs FY2015
Actual figures +1.82%
Adjusted figures +4.54%

What’s with the big adjustment? The DOR document explains.
Individual income tax collections in fiscal year 2016 was affected by late postings in withholding. These occur whenever a month ends on a holiday or weekend, causing the due date for withholding payments to move to the first working day of the following month instead of the last day of the current month. Year-to-date amounts for fiscal year 2016 were also affected.
So looking at the calendar, what this means is that 2015’s income tax withholding payments were supposed to be in by April 30 (a Friday), but 2016’s didn’t have to come in until Monday, May 2. I could see a related argument that income tax filings not being due until April 18, 2016 would have a similar effect, although 11 days is a long time between mailing and having the payment hit DOR’s records.

In itself, having these adjustments is fairly common, and they snap back over the following month or two, depending on how the calendar falls. But it’s the amount of the adjustment that caught my eye. Over $296 million! And it makes all the difference in how the revenue picture looks for the rest of the fiscal year, especially since sales (only up 1.3%), corporate (down 9.3%) and excise taxes (-4.6%) all disappointed in April.

If income taxes are truly up 6.46%, then that’s pretty much in line with the Legislative Fiscal Bureau’s estimates in January of a 6.61% increase for this fiscal year. And the 4.54% increase in overall revenues is slightly over the total revenue increase of 4.36% that LFB made in January. So no revenue issues should exist if this is true.

But here’s the danger if that adjustment is overestimated, and adjusted revenues “fall” in May as a result. Let’s use the actual figures through April 30, and see what would result if that held for the rest of the year compared to the LFB’s January estimates.

Income tax +1.33% DOWN $386.8 MILLION from estimates
Sales tax +2.95% DOWN $14.5 MILLION
Corp. tax -0.05% UP $14.4 MILLION
Excise tax +1.18% UP $1.0 MILLION

This makes me wonder some more about the Walker Administration’s decision to scoop and toss last week. If revenues were truly on the mark, then there wouldn’t be any immediate budget concerns, because the 2015-16 budget has a $284 million cushion built into it. This $284 mil assumed that the state would pay the $101 million debt payment that the Walker boys decided to skip out on in favor of paying more money down the road. Which leads me to ask an obvious question.

WHY WOULD THEY SKIP MAKING THAT PAYMENT? Are they thinking there is some magic high-interest investment out there for that extra $101 million to make money off of over those 8 years. Seems like quite a gamble in exchange for having to pay $13 million in principal and interest in each of the next 8 years. This is especially true if buy into Gov Walker’s BS about “The Obama economy” making things worse off in the future, because a failing economy in the future would make it even more foolish not to pay your bills now while you can.

No, that doesn’t add up. Which leads me to conclude one of two options.

1.The Walker Administration panicked when they saw the actual revenue figures, didn’t understand the adjustment part, and thought that even with the built-in budget cushion there would be a deficit of nearly $102 million, (amazing how close the numbers work out there). So in their minds, the “scoop and toss” allowed them to avoid having to do a budget repair bill in the Summer before the 2016 elections, and hide the real damage until the next budget deliberations begin this Winter. This theory makes some sense if you realize the decision to skip the debt payment was announced right after April’s revenue numbers came in.

2.The Walker Administration knows the income tax adjustment is going to be much smaller than $296 million, and they know a budget shortfall is coming, so they took care of the “scoop and toss” now, as they didn’t want to play the “hope and pray” game on figures being better in May and June. The hoping and praying comes later, as they try to avoid a budget repair bill in the already-tight budget for 2016-17.

So the Walker fiscal people are either dumb, or they’re cynically manipulating the numbers. Either answer indicates a group of people unfit for office, but I’ll leave it up to you to decide which direction they’re taking (I truly don’t have an answer on this one).

As for the revenue picture, I guess we have to wait for May’s figures in a month, when the adjustment snaps back, and we see if the 2015-16 budget is actually on track. Stay tuned.

Tuesday, May 17, 2016

Wisconsin Tech Council- "Stop cutting the UW and Tech Colleges"

I’ve been waiting for certain business groups to start stepping in on the future of the University of Wisconsin System, as the defunding and anti-academic actions from Governor Walker and his Wisconsin GOP allies are causing damage to Wisconsin’s image and ability to cultivate talent. To their credit, the Wisconsin Technology Council stepped up to the plate, and are getting headlines today that read “Cutting UW, tech college funding again would hurt economy.”

That finding was part of a 28-page report the Tech Council made on the future of higher education in Wisconsin, and the headline seems to be drawn from this part of the paper’s conclusion.
It is important to recognize that only three states out of 50 are spending as much on higher education per student today as they did before the Great Recession, which means cuts in higher education have been a national trend. Within that context, however, it’s important to understand where efficiency ends and competitive advantage is threatened. According to the Center on Budget and Policy Priorities, Wisconsin spent 16.5 percent less in inflation-adjusted terms in 2008 through 2015. That decline in real spending suggests further cuts would harm access, affect overall quality and erode economic competitiveness.

• Does it make sense for state government to provide just 20 percent of the UW System’s total budget but to exercise a much higher degree of control over its tuition, capital projects, personnel decisions and more? Further, do current administrative transfer practices between the state and the UW System contribute to a lack of transparency about true costs of operation?
I'll answer that second one. No, it makes no sense that these dingbats demand tighter controls on something they fund less and less of. But that's how authoritarian goose-steppers roll.

From those two main points, I want to go into detail on the 3 main recommendations that the Tech Council is making, and then riff off of them for a bit.

1. In making funding and programming choices, policymakers should compare UW-Madison with its national peers (the nation’s top 25 research universities as defined by the National Science Foundation) and UW-Milwaukee with its peers (those 20 institutions in major metropolitan areas that aren’t “flagships” but which offer doctoral level work and have an urban mission).
This would indicate that the Tech Council wants basically a three-tier system for supporting the UW System

3.All other 4-year UW campuses (aka “comprehensives”)

I think there’s a lot of sense to this, as the research-and-Med School flagship in Madison and a UWM that has increasingly housed research-based business incubators are definitely going in a different direction than the other schools, and perhaps they should be funded differently. The Tech Council recommends having dedicated state funding for research at Madison and Milwaukee, and asks that researchers be freed up from teaching loads in order to use their time more wisely, and possibly use the discoveries to enhance the teaching side at a later point.

From a policy side, I’d argue that this also leans toward giving a larger proportion of “regular instructional” state aid to the comprehensive UW System schools and away from Madison and Milwaukee. Those other 11 campuses will not have as much research funding, enrollment size or donor base that UWM or Madison will, and will rely more on state aid to make up the difference. As a Madison grad, I have no problem with that trade.
2. Examine ways to speed time to graduation, which varies greatly within the UW System; consider ways to improve portability of credits within institutions; and accelerate programs that allow high-school students to get a “head start” on college through advanced placement courses and similar strategies. Wisconsin’s private colleges and universities offer a ready example. Both the UW and Wisconsin’s private nonprofit colleges and universities have instituted three-year degree programs, flexible degrees which give credit for prior learning and blend on-line and face-to-face learning, and encourage AP and Course and Youth Option programs. The real challenge is that only a few take advantage of these opportunities – again, perhaps, because funding of Wisconsin Grants is so low that students have to work so much that it lengthens their time to degree.
I’m not a huge fan of gimmicks like UW's new “Flex Option” degree, mostly because I think face-to-face exchange with peers and instructors is a key part of undergraduate education, and separates UW from a diploma mill. But the example of the private schools using accelerated degree programs makes some sense to me, and making it easier to transfer credits from high school and other colleges is something that should be automatic- how is either the student or the resource-starved university helped when the credits don’t transfer?

Also note the call for more Wisconsin Grants, to lessen the chances of students having to take extra time to graduate because they can’t go full-time. The underfunding of Wisconsin grants for higher education came up a couple of years ago, as the LFB reported in July 2014 that nearly 41,000 Wisconsin students couldn’t get the grants because the state hadn’t set aside enough funding for them. In the 2015-17 budget, $2.6 million was added to grants for technical education (Item 4 in this summary), but that is estimated to reach less than 1,200 of those students in need of aid. Later bills as part of Gov Walker’s “Higher Ed Affordability” package added another $950,000 for grants, but that falls far short of meeting the needs that the Tech Council and the LFB have shown

It seems that the Tech Council is calling for higher tuition but also higher financial aid to be available from the state to allow students to pay that tuition. They bemoan the underfunding of Wisconsin grants in the report, and also include a chart which compares in-state tuition and fees at UW schools compared to public universities in other Big Ten states. It shows Wisconsin’s average in-state tuition of $8,781 in 2014-15 was lower than 5 of our 6 Midwestern peers (only Iowa is lower), and it was more than 30% lower than public universities in New Jersey and Pennsylvania. In addition, the Tech Council said Wisconsinites get a relatively good deal for their tuition dollars, even with our lower cost-of-living compared to other places.

Tuition and fees as % of median household income, Big 10 states 2013-14
Mich 23.8%
Penn 23.7%
Ill. 22.0%
Ohio 21.4%
N.J. 20.6%
Ind. 17.7%
Minn 17.2%
U.S. 16.6%
Wis. 15.8%
Iowa 14.3%
Neb. 13.6%
Mary 13.0%

To give a bit of perspective, if Wisconsin raised that ratio to 17.5% (between Indiana and Minnesota), that would mean an in-state increase of around $930 (just over 10.6%). So if that $930 per-student increase was spread across all 151,000 Full-Time Equivalent students for this year, it would translate into $140 million in added revenue a year- enough to make up for the cuts Gov Walker and the WisGOP Legislature imposed on the UW System in the 2015-17 budget. (Yes, I know some UW students come from out-of-state. I’m assuming that $930 increase would apply to them too. If you want to change it so the Coasties pay a bit more and the Sconnies pay less and the average is $930, I won’t argue with it).

Going to a higher-tuition, higher-aid model seems like a good idea on its face, but good luck getting an increase for Higher Ed Assistance from Governor Dropout, who seems to be more than content to pose about freezing in-state tuition without a care for how that lack of resources restricts UW quality and the range of classes available for students. This is especially true given that it seems we might well have a revenue shortfall and budget deficit for not only this Fiscal Year, but for the 2017-19 budget as well.

3. The UW Board of Regents, working with its Tenure Policy workforce and responding to legislative initiatives, has approved policies that reflect best tenure policy practices nationally as well as within the UW System. Clear tenure policies help attract talent in a competitive industry. In a world with changing economic, social and political needs, the Regents and the UW System should monitor how tenure may continue to evolve over time while protecting core principles of academic freedom and freedom of expression.
WHOA! Gonna have to disagree with you on that one. The recent UW tenure changes certainly have not protected academic freedom and freedom of expression. That is clear from the attitudes exhibited in Ray Cross’s emails and in statements from various Walker-appointed Regents at the meeting in April when these changes were passed into law. These anti-faculty types clearly want to be the ones who decide which majors have “value” and which don’t, and manipulate UW resources and curriculum accordingly. That doesn’t sound much like a “best practice” or “academic freedom” to me. But it’s also not a surprising point of view from a business-based organization, who ultimately drill down everything in life to dollars and cents.

See, the problem with the recent moves and statements by Walker, other WisGOP hacks, the Walker-appointed Regents and President Cross is not only the weakening of tenure (bad enough), but also that they are pressing their thumb down on the university’s mission, and denigrating the value of highly-educated workers that deliver a quality product of human capital. It doesn’t take a lot of imagination to see the Kochs or the Bradleys (Hi, Regent Michael Grebe!) or WMC deciding that certain disciplines (cough-CLIMATE SCIENCE-cough) just don’t fit into their plans, and they use the underfunded status of the UW System to weed out things they don’t like in favor of imposing their “facts” into the classroom.

I would hope the Tech Council isn’t being na├»ve on where the weakening of tenure could lead to, and instead could demand that the Legislature and the Kochs and other outside force BUTT OUT of micromanaging the UW System curriculum, and instead be a willing partner in keeping the UW System strong and respected.

But perhaps some of this was written before the callous, anti-academic attitude of Walker and his allies was thrown out in the open this month. Either way, the Tech Council should clarify what they mean “how tenure may continue to evolve”, and should make sure they give the benefit of the doubt to the instructors and researchers that have spent tens of thousands of dollars to get the Master’s and Doctoral level qualifications that allow them to take research to the next level. There is also a mention of closing and consolidating certain campuses, and I’d be interested in finding out just which UW schools the Tech Council had in mind.

In all, it’s an intriguing group of thoughts, and largely supportive of an institution that deserves to be supported. It’s a good addition to what needs to be a wider-ranging in-depth conversation, and a whole lot more worthwhile than the absurd “divide and conquer” crap that’s been floated out there by the Wisconsin GOP over the last few weeks. Let's see if any further talk comes from it.