More money shuffling, this time on Child Care

There's a relatively small, arcane maneuver in tomorrow's Joint Finance meeting that gives a bigger indication of how this governor (and he's far from the only one) tries to pull budget tricks to allow for short-term funding of an initiative before an election, but nothing after it.

In this case, the Walker Administration tried to sneak through $3.3 million using federal block grant money last month. Those funds were intended to be used to make mandated changes to the state’s Child Care Development Fund (CCDF) and putting in a new system for its Wisconsin Shares child care program, where benefits can be automatically deducted using methods such as telephone system and a swipe card.

That request just happened to be around the same time that the Joint Finance Committee was going to be considering the Department of Children and Families’ budget for 2017-19, so the JFC will consider both requests together. The problem is that the state’s block grant to counties (known as Children and Family Aids (CFA)) is barely any more than it was 8 years ago ($68.3 million in 2016-17 vs $67.5 million in 2009-09), while needs for child-related services has continued to increase.

To help counties deal with the tight budgets that have inevitably resulted from pushing the burdens of services down to them, the Walker Administration plans to use more Federal money in this budget.

The [Governor’s budget] bill would increase the CFA allocations to counties by providing $1.25 million FED in 2017-18 and $5.00 million FED in 2018-19. Increased funding would allow counties to hire additional staff, thereby reducing caseloads and improving turnover rates. Further, additional funding could alleviate the increased costs associated with the abuse of opioids and other drugs. Therefore, the Committee may wish to approve the Governor's recommendation without modification.

One problem (and nod if you’ve heard this one before). The Federal money is not slated to be around later, which would leave either the state or the counties on the hook for picking up the rest after the 2018 elections.

12.DCF indicates that the federal funding provided under the bill would not be an ongoing source of revenue, and would instead spend down the opening balance of one-time Title IV-E reimbursement funds previously received for the cost of providing out-of-home care services. Thus, the estimated ending balance of Title IV-E funds ($3.3 million) in 2018-19 would likely not be sufficient to fund the proposed CFA increase in future years without additional state funding. Compared to 2018-19, it is estimated that an additional $5.0 million GPR would be required in each year of the 2019-21 biennium. [This annual $5.0 million amount is reflected as a 2019-21 general fund commitment in the Fiscal Bureau's March 23, 2017 memorandum to the Legislature.] Because the proposed funding source is not ongoing, the Committee may wish to provide GPR funding for a portion of the increase to the CFA in 2018-19 in order to avoid an unfunded commitment in the next biennium (Alternative 2).

In other words, it may be wise to use more state money now to avoid having to shell out $10 million to maintain this higher amount in the next budget (you know, the one with the $1 billion structural deficit?).

This may be where the $3.3 million in block grant funds may come in. Since it’s a block grant, might this be a source of funds that takes care of two problems at once? The $3.3 million could be used to help pay for the increased county aids, and save some federal Title IV-E money so state taxpayers don’t get socked with $10 million in extra spending just to keep funding at the same level in 2019-21.

Sure, these things are kind of wonky, but keep your eyes on how all of this federal and state money interacts. Because you can bet Gov Walker will try to use that extra federal money as proof that he “made a bigger investment” in services, even when it takes legislative action to actually divvy up the money in a responsible way that doesn’t cause us fiscal problems later.