Saturday, April 6, 2013

LAB - Walker Admin cut libraries and hoarded USF funds

File this one under "reports out media chose to pass over because it requires 10 seconds of analysis." It's a very crowded file in this state, but this is worth adding to it.

The Legislative Audit Bureau handed out a report this week on the state's Universal Service Fund. The USF is a state-administered fee that goes on most communications, including cell phones, land lines, and cable TV systems (you'll see it on your bills if you look closely enough), and the idea is that the money will be used to help expand availability of communications technology and help offset some of the costs that businesses would have to take on to build these communications lines. As the summary of the LFB report brings up, the USF helps fund a large amount of the state's public Internet and Library services.
The USF has been the sole funding source for Aid to Public Library Systems since FY 2008-09. The Educational Telecommunications Access Program is managed by the Department of Administration (DOA) and subsidizes access for approximately 1,000 pre-K-12 public, private, and charter schools; technical colleges; public libraries; and other educational institutions to a state-supported broadband network known as the BadgerNet Converged Network.

Not surprisingly, this fee has been used in recent years to fill budget holes and/or allow tax revenues to be used for other purposes, a trend that started 10 years ago when the Doyle Administration tried to clean up the fiscal mess from the Thompson/ McCallum years but wanted to keep funding local public libraries.
The State used general purpose revenue (GPR) as the sole funding source for the Aid to Public Library Systems program, which is managed by DPI, until 2003 Wisconsin Act 33 first required the USF to fund a portion of that aid in FY 2003-04. As part of the State’s efforts to address budget shortfalls, additional USF resources were used for public library aids.
The state also used $1.2 million of excess USF funds in 2010-2011 to help close the massive GPR budget hole that opened up as a result of the Great Recession.

The Walker Administration continued the USF in the 2011-2013 budget, albeit with a slight cut in the rate according to the PSC, but at the same time put in a $1.7 million cut to library aids to local communities.
USF revenues decreased again from FY 2010-11 to FY 2011-12 due to a $1.7 million, or 10 percent, decrease in the assessments for Aid to Public Libraries, and lesser reductions to assessments for Library Service Contracts and the Educational Telecommunications Access Program for school districts. There was no change in assessments for UW System BadgerNet Access in FY 2009-10, FY 2010-11, or FY 2011-12.

Appropriations for the DPI programs under 2009 Wisconsin Act 28 continued the trend of using the USF for funding the Aid to Public Library Systems in place of GPR. USF appropriations for Aid to Public Library Systems began in FY 2003-04 at $2.1 million and have increased in the intervening years to $16.7 million in FY 2010-11. That trend changed under 2011 Wisconsin Act 32, the 2011-13 Biennial Budget Act, when Aid to Public Library Systems was reduced to $15.0 million for FY 2011-12.
This cut meant that local communities and school districts had to find another $1.7 million to make up for these cuts in a time when shared revenues were also being cut, and the ability to make up the difference in property taxes or sales taxes was also limited. Interestingly, the fund took in about $1.7 million more than it spent out for that budget year, which means the cut to library aids could have been restored, giving some huge relief to local communities and schools.

That's bad enough on its own, but it also came after years of similar hoarding of the USF fee. A quick look at the 2011-2012 finances of the USF in the first year of the Walker budget makes this look a whole lot worse. As the LAB summary brings up
Our report includes a recommendation for DOA to ensure that an administrative fee it charges the USF for services related to use of the BadgerNet Converged Network reflects only the actual costs of providing those services. We estimate that at least $4.3 million of the $5.4 million that has accumulated in a DOA appropriation represents excess administrative services fees paid by the USF.
Basically, they're saying the DOA is skimming extra funds above what it actually costs to take care of its administrative duties in taking care of the USF books and distributing the money. This is extra "revenue" when looked at on the GPR budget side, and can be used to fill budget holes and fund other duties that the USF isn't supposed to be paying for (kind of like how the Walker Administration banked $25 million in federal foreclosure funds, and used it to help create our current budget "surplus").

And this leads to the Walker Administration's current policy on broadband and other communications, which is a helluva kicker. The LAB notes that the DOA may lower some of these fees to make up the difference, and that the upcoming budget plans to spend more of these dollars to expand availibility of new technology in Wisconsin.
The PSC has indicated that it will evaluate the overall fund balance at the end of FY 2012-13 to determine if an additional offset of provider assessments is appropriate when setting the rates for FY 2013-14. We note that 2013 Assembly Bill 40, the Governor’s 2013-15 biennial budget proposal, creates a broadband grant program funded by $4.7 million in USF funds. This program would be administered by DOA, in consultation with PSC, to expand broadband access in underserved areas.
These are good moves on their face- bringing our underserved areas up to speed on communications is a great way to improve economic competitiveness in a lot of areas. However, there's yet another Walker failure lurking behind this move, and it results from a clssic "pose over policy" move that these dingbats made in 2011.
State officials are returning $23 million to the federal government, saying there were too many strings attached to stimulus money that was supposed to be for expanding high-speed Internet service in schools, libraries and government agencies.

The money was to have boosted broadband connections in 380 Wisconsin communities, including 385 libraries and 82 schools. It also could have been used to improve police, fire department and hospital communications in rural areas....

Wisconsin received the grant a year ago from the National Telecommunications and Information Administration. It was part of the American Recovery and Reinvestment Act, which included about $7 billion in grants, loans and loan guarantees to extend broadband to underserved rural areas and was compatible with President Barack Obama's goal of making high-speed Internet available to 98% of Americans by 2016.

The money would have been used for the BadgerNet Converged Network, which brings the Internet to schools, libraries, and state and local government agencies. It would have paid for 200 miles of fiber-optic cable, improving the Internet connections at hundreds of public facilities.
So instead of taking federal money with little to no cost to state taxpayers, the Walker boys decided to spite turned down these millions of dollars, only to spend nearly $5 million in state dollars 2 years later. If this sounds a lot like the train fiasco and the current "work makes you free" Medicaid plan, it's only because it is, and turning down the broadband money was every bit as stupid.

So not only has the Walker Administration hoarded funds from the USF that could have been used to relieve the pressure of budget cuts on communications access, they also turned down federal money that also could have lessened these burdens, lowered the costs to the state, and had a more wide-ranging effect than the upcoming budget initiative ever will. It's a great illustration of the combination of fiscal mismanagement, idiotic posing, and failed policy that has been the hallmark of the 27 months of the Age of Fitzwalkerstan, and just because the media didn't cover this failure on the USF and communications technology doesn't mean it isn't happening.

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