Monday, February 19, 2018

End-of-session goodies tie Wisconsin's hands, and won't fix the roads

As the GOP-run Legislature tries to jam through a massive amount of legislation in the near future (before taking off on an 11-month paid vacation), I wanted to take a step back and look at where our fiscal situation is before a lot of the remaining funds are tossed out in this furious rush.

The Legislative Fiscal Bureau said last month that they projected $385 million will be left over at the end of this budget cycle on June 30 of next year. But that was based on $579 million being carried over from the end of Fiscal Year 2017, and the Legislative Audit Bureau found accounting errors in the annual reports that lowered the carryover by $21 million, meaning there is actually $364 million of cushion to play with for the rest of this budget, not $385 million.

Interestingly, one of the bills that will NOT be affecting the finances for 2017-19 is the Governor's plans to spend tax dollars to sub subsidize insurers in an attempt to hold down premium increases on insurance plans bought on the Obamacare exchanges. Due to an amendment that passed the Joint Finance Committee last week no payments will be made to insurers until August 15, 2019, pushing those costs into the next budget. Of course, the question then becomes whether insurance companies do anything to lower premiums that are being purchased on the ACA Exchange in Fall 2018 for the next year, because they'll have to wait several months to get that money back from any lowering of premiums (I am...skeptical).

Also worth noting, the LFB came out with its analysis of the Governor and Assembly GOP's plans to give out a $100-a-child tax rebate and a 2-day sales tax holiday in August. The price tag for these one-time stunts tax cuts are as follows.

$100-a-child tax rebate + processing- $122.9 million
Sales tax holiday- $51.5 million
TOTAL $174.4 MILLION

(Side note: I think the sales tax holiday number is BS, and intended to inflate the value of the tax cut, as Walker’s Department of Revenue claims 14 days of sales would get compressed into the 2 days of the weekend. But I’ll go with it for this post).

Now, let's look at most (but not all) of the goodies that either have already been handed out, or have been through the Joint Finance Committee in recent weeks.

Rural WEDC $50 million
Added funding for child care subsidies $48 million
WEDC “talent attraction” $6.8 million
Added Sparsity Aid $6.45 million
New drug court items for DOJ $3.8 million
Raising cap on Historic Rehab Credit $3.5 million
Raising cap of New Business Ventures $2 million
Tuition remissions for students in foster care $930,000
Outreach + mental health services for vets $900,000
Tax deduction for apprenticeship $800,000
TOTAL $297.58 MILLION

(Notice that not a dime of this extra money is going to this state's pothole-filled roads)

If all of those provisions were passed and signed into law, that would leave a little more than $66 million for ANYTHING else that may happen in the next 16 months as a result. That is less than 2 days of state operations, and while the LFB has made projections of the potential changes, we really don't know what effect the Piece of Shit tax bill from DC will have on state collections.

Oh, and have I mentioned that we already have major structural deficits looming in both Transportation and the General Fund for the 2019-21 budget cycle, and that any of these giveaways will drive the deficit even higher?

So maybe having all of these giveaways isn't such a bright idea if you care about keeping things running smoothly in Wisconsin, and lessening the chances of fiscal problems that would have to be fixed this time next year. But of course, that's the cynical plan of Walker and WisGOP. The goodies get handed out before November 2018, and then we end up paying a bigger price for those giveaways after the election.



1 comment:

  1. A couple of corrections- Apparently the amendment to add $24 million a year to child care was voted down by Joint Finance. They will add $8 million a year instead.

    Also, it looks like the money to pay for those added child care subsidies will come from the state's block grant of TANF from the Feds. Of course, this raises the structural deficit of TANF, which will have to be filled in with state tax dollars or other sources in the next budget.

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