A breaking Legislative and State Budget Update from the Wisconsin State AFL-CIO.
Prevailing Wage: Repeal Still on the Table
Despite public statements last week to the contrary, efforts to repeal our State’s Prevailing Wage laws are very much alive. Early this morning, the Assembly Labor Committee released a public notice, barely within the required 24 hour window, informing the public that it will hold a hearing tomorrow morning on Assembly Bill 32, the bill that if passed without any amendments would repeal our State’s Prevailing Wage laws. An executive session, where the Labor Committee members will vote on any amendments to the bill and the bill itself, will be held immediately after the hearing. Attached to this email is a flyer with more information on the importance of a Prevailing Wage. The hearing details are as follows:
Wednesday, May 27
Wisconsin State Budget: Update
The powerful Joint Finance Committee (JFC) began its deliberations on April 15 and is nearing the end of its deliberations. It has not yet, but will soon, deliberate on final, important components of the State Budget such as the UW System, Workers Compensation, and Transportation – in addition to combining non-budgetary policy issues like prevailing wage that Governor Walker did not include in his proposed budget. Therefore, we must continue to be vigilant as the JFC’s deliberations wind down this week and the full Legislature begins its work to approve and amend the JFC’s proposed budget.
Austere State Budget: Created by the Walker Administration’s Failed Policies
Governor Walker and his Republican-controlled Legislature have politically manufactured a budget crisis. You may remember that heading into this budget process, State Departments requested $2 billion more in funding than our tax revenue would allow. This does not have to be the case if the JFC made two decisions.
One important decision that the JFC could make is to decrease Governor Walker’s 2011 tax cut for millionaire owners, which will be fully implemented in 2016. This particular tax cut, the 2011 Manufacturing and Agriculture Tax Credit, is costing the State more money than expected – twice as much, in fact. This tax cut for millionaires allowed factory and farm owners’ state income tax rate to fall from over 7% to 0% over 5 years. 2016 will be the final year of implementation. The loss of tax revenue due to this one tax break results in a cost of over $500 million in the next budget cycle, which is at least $275 million more than expected.
Another important decision that the JFC could make is to accept the federal dollars to expand our State’s Medicaid program, BadgerCare Plus. The non-partisan Legislative Fiscal Bureau projected in February that the State would save $345 million in the 2015-17 budget cycle if it expanded BadgerCare to include more low-income adults and accept the federal Medicaid dollars. This may sound counterintuitive, but the following from the LFB shows just how much we are spending and losing, all for our Governor’s political ambitions: in the next budget cycle, our State will spend $1.12 billion on BadgerCare; if we expanded our BadgerCare to cover more adults and accepted the federal expansion dollars, we would only spend $776 million on BadgerCare. Therefore, by not accepting the federal dollars, Wisconsin will expend more tax revenue to cover less adults.
Of course, this decision could be reversed by JFC or the Legislature at any time, if the State wished to prudently spend state tax dollars, and lessen our borrowing obligations.
Budget Issue Update
As Governor Walker’s proposed budget winds its way through the Republican-controlled, JFC, a bad budget is being made worse by harmful decisions that will go to the Legislature for approval. Just last week, decisions were made to many departments, including the following:
One hour before debate began, Republicans released their 29-page educational plan. The plan did not receive any public hearing and was crafted in secrecy. It continues to upend Wisconsin’s strong tradition of great public schools and commitment to local control. The 51 point plan was approved along party-lines in the dark of the night. Despite the rhetoric, the Republican plan will likely result in Wisconsin’s per pupil funding falling below the national average for the first time in history.
- Cuts to Funding Levels
Under the plan approved by the JFC, public schools would, at first blush, receive a freeze in funding the first year of the budget and then would receive $70 million increase (about $100 per pupil) in funding the second year of the budget. However, this scheme will not pan out as such, as the state wide voucher system will receive money directly from public school districts. Therefore, there will be at least a $48 million cut to public school districts during the budget cycle.
The JFC-approved expanded voucher system would allow for voucher schools to receive $7,200 for each K-8 pupil and $7,800 for each high school pupil. Again, the tuition would come from the local public school district. The first year, only 1% of the school district’s potential students could receive the voucher. However, every year thereafter for ten years, the percentage would increase by 1%. The cap would be lifted entirely the tenth year.
These cuts to education come at a time when the vast majority of states are increasing funding for public schools.
- Milwaukee OSPP details & impact on Madison and Racine
The Republican-controlled JFC secretly developed a plan to split up public schools in Milwaukee without receiving public input or giving notice to parents or taxpayers. Their plan is called “Opportunity Schools and Partnership Program” and was introduced, debated, and passed in the dark of the night. The OSPP plan for now is limited to Milwaukee, but part of the larger plan is to recreate the OSPP in Madison and Racine (districts with 15,000 or more students).
The OSPP calls for the Milwaukee County Executive (who is currently Chris Abele, a politician without a college degree or background in educational policy) to appoint a Commissioner who would receive funds from the Milwaukee Public School District and would generally manage three to five schools that are currently within the Milwaukee Public School District – however, he or she would select a business, nonsectarian group, or individual to operate the schools.
The Commissioner would fire all the staff at these schools and hire new staff or re-hire existing staff. The staff would not be school district employees under Act 10 and also would not be subject to civil service rules. The staff would be terminable at will. However, the Commissioner could only be terminated by the County Executive for cause.
- Changes to Teacher Licenses
Under the JFC-approved education plan, any individual could become a licensed teacher in Wisconsin if they pass a test and have experience in the technical field that s/he will teach. No bachelor’s degree or coursework in education necessary.
- Changes to Electing the Racine Unified School Board
In an affront to local control, the JFC approved a plan that would upend how Racine taxpayers have chosen to elect their school board. The plan dictates that nine geographical districts must be drawn from which each school board member would be elected. There is no evidence that taxpayers from Racine wanted the JFC to dismantle their way of electing their school board members.
- Any Claim that Funding to Public Education Is Increased is False
The JFC is touting that it restored Governor Walker’s $127 million cut to schools the first year of the budget and then provided a 1% increase in funding the second year of the budget. This is not accurate for two reasons. First, the JFC does not include the $48 million that will come out of the coffers of the public schools that are forced to pay for the increased voucher subsidy. Second, the JFC employs an accounting trick by providing schools a large payment in July 2017, which is outside of the budget and will start the next budget cycle in the red.
Governor Walker’s proposed budget cut 60 night tower Correctional Officer positions at every prison across the State, leaving night towers vacant at a time when prisoners are most likely to escape. The JFC accepted this dangerous proposal, with the exception of one prison in a JFC member’s district. Representative Schraa (R-Oshkosh) represents Waupun and argued in favor of keeping the night tower Correctional Officers positions at the Waupun Correctional Institution through January 2017 because the prison sits in a residential community. Clearly, all night tower Correctional Officers provide an important public safety and every prison should be fully staffed at night. However, JFC voted to eliminate all of the positions, with the exception Waupun because it is situated in one of the JFC members’ districts in the majority party.
III. State employees’ Health Care
The JFC, in concert with the State’s Group Insurance Board that met the same day, approved the Governor’s plan to change State employee health care by shifting over $80 million in health care costs to employees over two years. The changes will affect state employees and their family members, who combine for total almost a quarter-million people. The changes will result in the doubling of out-of-pocket and deductible costs and the quadrupling of prescription drug costs. This comes at a time when the vast majority of State workers will not see a raise in some time. The changes will go into effect on January 1, 2016.
- Educational Approval Board
The JFC voted to keep the critical Educational Approval Board as-is. The Educational Approval Board (EAB) is an important board that oversees for-profit colleges; its mission is to “protect Wisconsin’s consumers and support quality educational options.” There are almost 250 for-profit colleges in Wisconsin; combined, these institutions took in more than $350 million in tuition last year. While for-profit colleges enroll less than 10% of all higher-ed students, they account for 26% of all federal loans and almost 50% of all students who default on their loans. The EAB provides a critical role for oversight of these businesses. Governor Walker proposed to eliminate the EAB and transfer some of its functions to two different agencies; this move would surely incapacitate the State’s ability to regulate for-profit colleges. The JFC, noting the EAB’s importance, voted to reject the Governor’s proposal to eliminate the EAB.
Working people across the State were concerned with the Governor’s many proposals to move and merge agencies and departments for purely political reasons. However, one merger in particular was creating much consternation: the merger of the successful Wisconsin Housing and Economic Development Authority (WHEDA) and the failed Wisconsin Economic Development Corporation (WEDC). Since its creation in 2011, WEDC has been troubled by scandals and failures. Earlier this month, the Legislative Audit Bureau released a scathing report outlining even more egregious examples of the WEDC’s failure to follows laws and even its own rules, provide transparency, and an accurate accounting of the small number of jobs it has created. The criticisms of WEDC are now bipartisan: the JFC voted to reject the merger of the successful WHEDA and WEDC, and remove Governor Walker as Chairman of the WEDC Board of Directors.
Budget: Next Steps
The JFC’s will meet this week, on Wednesday, May 27 and Friday, May 29. It may even meet on Saturday, May 30 to finalize its deliberations. We urge you to contact your legislator and members of the Joint Finance Committee to raise our voices to reject any changes to Prevailing Wage, reject Governor Walker’s proposal to split and transfer of the Workers Compensation System, lower borrowing for Transportation, protect the UW System, and put working families first in our State in every decision that will come before the JFC and Legislature in the coming weeks.
Joint Finance Committee Members can be reached through the Legislative Hotline at 1-800-362-9472
Sen. Alberta Darling (Co-Chair) (R)
Sen. Luther Olsen (Vice-Chair) (R)
Sen. Sheila Harsdorf (R)
Sen. Leah Vukmir (R)
Sen. Thomas Tiffany (R)
Sen. Howard Marklein (R)
Sen. Lena Taylor (D) Sen. Jon Erpenbach (D)
Rep. John Nygren (Co-Chair) (R)
Rep. Dale Kooyenga (Vice-Chair) (R)
Rep. Amy Loudenbeck (R)
Rep. Dean Knudson (R)
Rep. Michael Schraa (R)
Rep. Mary Czaja (R)
Rep. Chris Taylor (D)
Rep. Gordon Hintz (D)
We look forward to standing with you as we raise our voices on important issues that will affect working families across our State. If you have any questions, please contact Legislative & Research Director Teresa Mambu-Rasch, JD, either via email email@example.com or via cell (414) 418-2241.
Teresa Mambu-Rasch, J.D.
Legislative and Research Director
Wisconsin State AFL-CIO
6333 W. Bluemound Road
Milwaukee, WI 53213
office- (414) 771-0700
cell – (414) 418-2241