Tuesday, May 5, 2015

WisGOP budgeting "We'll just figure it out later"

Today's Joint Finance Committee meeting had a number of issues where budget tricks were in place that require some kind of cut, but without mentioning what may have to be cut, leaving that decision for later (how "Unintimidated"). One example of this dealt with the treatment of those convicted of drunk driving, which may well be cut under Gov Scott Walker's budget, but in a back-door, hidden way.
Gov. Scott Walker’s plan would move the program to the Department of Health Services from the Department of Transportation. He also proposed eliminating the $731,000 annual appropriation from DOT. Instead DHS would have to fund the program through an annual $8.7 million appropriation that is already dedicated to things like mental health and substance abuse services.

Under the program, those convicted of OWI have to submit to an assessment to determine the extent of their alcohol use and their potential for a substance use disorder. A driver safety plan is then developed, establishing a treatment and monitoring plan....

Co-chair Alberta Darling, R-River Hills, defended the move, saying Republicans are not backing away from the program and are giving DHS the opportunity to determine if it can be managed through existing resources.

“If the department says, ‘Hey, we can’t do this,’ they can always comes back to us and ask for more money when we have more money,” Darling said.
Well great! They'll just magically find money that apparently falls out of the sky! The same method came through in another spending bill that JFC discussed related to the state's Supplemental Security Income (SSI) program.
6. DHS funds SSI benefits through a sum sufficient GPR appropriation. The amounts budgeted by the Legislature represent an estimate of the general fund commitment in the biennium, rather than a cap on allowable expenditures (as occurs under a sum certain appropriation, such as the Medicaid GPR benefits appropriation). This office accounts for any differences above or below the amount budgeted in sum sufficient appropriations in updated general fund condition statements.

7. Though the Governor's recommendation may potentially underestimate total SSI benefits in the 2015-17 biennium, the difference between the amount in the bill and the amount determined under the alternate methodology is small. As the amount in the bill appears reasonable, if low, and benefits are paid from a sum-sufficient appropriation that automatically pay out the necessary benefits, the Committee could maintain the amount of funding in the bill (Alternative 1).

8. However, the Committee may decide to budget more conservatively for SSI benefits, and adopt an amount of funding that reflects the alternate methodology described above. This would provide $1,068,100 GPR in 2015-16 and $1,337,700 GPR in 2016-17 (Alternative 2).
State Rep. Gordon Hintz asked for Alternative 2 to be approved, saying it was silly to have to come back later to find $2.4 million that they know they will have to pay for, but the GOP majority on the JFC decided on Alternative 1, putting off the funding part for another day.

In a related concern, the Governor's current budget document already assumes nearly $1 billion in budgeted money to be unspent over the two years, meaning any source of extra money has to go ON TOP OF THAT $1 BILLION. Known as lapses, having an amount of unspent money is relatively normal due to job vacancies and other savings. $1 billion is a whole lot to build in, but as you can see, the amount of lapses in the 2015-17 budget are possible, if the results of the budgets of the 2010s are any indication.

Lapses in first fiscal year of budget cycle
2010 $354.5 million (2.67%)
2012 $434.2 million (3.05%)
2014 $345.2 million (2.28%)
2016 (proj.) $295.0 million (1.85%)

Lapses in second fiscal year of budget cycle
2011 $651.3 million (4.57%)
2013 $750.0 million (4.97%)
2015 (proj.) $454.8 million (2.84%)
2017 (proj.) $700.0 million (4.11%)

Some of this result makes sense when you think about it, since the second year of a budget cycle has a larger base amount and has expenses start from a lower actual amount than is in the previous year's budget. But it's still remarkable to have that $700 million lapse already built into year 2, which goes on top of the "just figure it out" cuts and "we'll find the money later" expenses that I mentioned above. These lapses also have to be met, instead of merely being the result of lower-than-budget expenses that results in a large lapse and bigger surplus. The other problem is that base for the 2017-19 budget is higher than it would be if the lapses and budgeted amounts were lower, which causes more budget problems and cuts for the future (since the budgeted amounts are already ":baked in". This is sadly ironic given the large amount of cuts Walker's budget has in these two years, in that the stage is set for more likely reductions in a future year.

Of course, one of the places that the Governor didn't choose to cut in involved his own office, which will instead see an increase of 5% over current levels. This is on top of the added expenses for State Patrol security incurred while shuttling Gov Walker around the country on his presidential trips. Priorities, you know.

After Republicans in the JFC refused to reduce the increase in the Governor's Office budget today, the arrogance was rightfully called out by State Sen. Jon Erpenbach in quite a colorful way.
Sen. Jon Erpenbach, D-Middleton, noted there is perception and reality in politics, but both are the same in this case: it's not good to give the guv's office an increase when other places have to cut. He also noted Walker's office would get a $422,600 increase at a time when the UW System budget is facing a $300 million cut.

"The perception is that really sucks. The reality is, yeah, it does," Erpenbach said.
Here's what also really sucks in WalkerWorld. There is no long-term plan to run government efficiently or effectively through the budget, but it's merely to score political points, hide the eventual damage, and magically make the numbers add up at the time the budget is passed (even if the numbers never will really add up). For these people, the act of allocating government resources is not based on needs or past history, but is instead used as a tool to reward contributors (voucher schools, Gov's office flacks), and cripple and punish those who might go against the agenda (public education, DNR enforcement).

And you wonder why this state is floundering fiscally and economically?


  1. Jake,
    Thanks for all your analysis as an economics expert. Your work helps us "lay people" to see the big picture and point things out to our elected officials knowledgeably.

    The arena issue is a good example. Facts, like you provide, need to replace hype. Keep up the good work here and however else you can get the word out.

  2. Thanks for the very kind words, Virginia. That's kind of my hope with this blog, to help the average person sift through the BS and find the sources. It's merely a hobby, but one that not enough of our alleged "pros" in the writing business seem to care enough about.

    Spread the word along, especially after today's bad revenue news

  3. Of course Walker has to reward his closest staff.

    As Milwaukee County Exec., when he approved the furlough days for ALL Milwaukee County Employees he accidentally included his staff. To make up for those furlough days, his staff got pay raises.