Friday, March 27, 2015

If GOP leggies want to reduce cuts, where's the money coming from?

So now I see that even the GOP goofballs in the Wisconsin Legislature are signaling that they're going to abandon some of Gov Walker's unnecessary overhauls. This includes plans to keep Senior Care operating as it currently does, as revealed in this story yesterday.
Gov. Scott Walker's proposal to require enrollees in the popular SeniorCare prescription drug program to first sign up for Medicare Part D coverage is dead, the Republican co-chair of the Legislature's budget committee said Thursday.

Walker's idea ran into bipartisan opposition in the Legislature, and the AARP and other groups representing senior citizens strongly disapproved of it. They feared the changes would increase costs for prescription drugs making it difficult for cash-strapped older people to make ends meet....

"I wouldn't say changes are off the table," Nygren, of Marinette, said of SeniorCare. But he said the current structure of the program will be maintained. SeniorCare members whose annual income is less than $18,832 pay $30 per year, as well as co-pays of $5 for generic drugs and $15 for brand name drugs. Costs increase along with a person's income.
Also this month, Assembly Speaker Robbin' Vos and other GOP legislators have indicated that they want to reduce the size of Walker's proposed $300 million in cuts to the UW System. These legislators are starting to understand that they'll have to deal with the consequences of Walker's pose-filled budget, and public blowback and self-preservation are starting to outstrip party loyalty.

There's one problem with the GOP legislators' plans to restore these programs - WHERE ARE THEY GOING TO PAY FOR THIS? If you look at the numbers in Walker's budget, it's held together by a string, even with all the cuts to education and Senior Care and other programs, and with increases in tax revenues of 4.7% next year and 3.8% in 2016-17. I haven't heard those Republicans say anything about raising taxes or even closing any loopholes to raise revenues, so where are those funds going to come from?

Not that I'm really one to help the WisGOPs, but I do have a suggestion if they want to restore some of these funds in order to head off a mass revolt at the polls in 2016. The Wisconsin Budget Project noted that a Walker and WisGOP-supported tax cut for corporations and agribusiness has cost the state much more revenue than anticipated.

The Manufacturing and Agriculture Tax Credit gradually reduces income tax rates for businesses engaged in manufacturing or agriculture. When the credit is fully phased in in fiscal year 2017, many businesses engaged in those activities will not have to pay any state incomes taxes at all, and others will have their income taxes reduced by at least 95%.

The projected cost of virtually eliminating income taxes for manufacturers and agricultural producers has ballooned since lawmakers passed the measure in 2011. This year, the tax cut is slated to reduce taxes for businesses by $152 million, more than twice as much as was originally estimated. Once the tax cut is completely phased in, the credit will cut taxes for business by a whopping $285 million per year, a price tag $156 million higher than originally expected...

Given the poor design of the tax cut and its burgeoning costs, the best thing for lawmakers to do would be to eliminate the tax credit entirely. However, the Legislature’s focus on cutting taxes makes outright repeal unlikely. It would be more politically palatable for lawmakers to compromise by simply halting the phase-in of the credit at the 2014 level. That move would increase state revenues by $226 million over the upcoming two-year budget period, and still give manufacturers a hefty tax cut.
The state's revenue collections for February continue this trend of declining corporate revenues, as they were down 23.2% compared to February 2014, and are now down 9.35% for the fiscal year to-date. A 9.35% decline for the entire fiscal year would leave corporate revenues $60 million below the already-lowered revenue estimates that were in the LFB estimates 2 months ago, and start the state in a lower base, making it even harder to come up with the revenues to reduce Walker's budget cuts.

Regardless of what type of bubble-world Scott Walker and other right-wingers live in, the fact remains that there needs to be some kind of revenues to allow for state agencies to function, and for Wisconsinites to get the services they expect. And barring some kind of unforeseen massive windfall in revenues from tax season (coming from people who hire folks to avoid paying those taxes), there will not be the money available to restore those funding levels under current law. Which sure makes you wonder what other shell game or cuts in other areas can be cooked up by the Legislative GOP to avoid the cuts that their constituents are telling them not to allow.

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