The Assembly’s Bizarre War with Walker, Senate Over Budget

After unveiling their K-12 funding package at a press event yesterday, Assembly GOP leaders are hitting the road to gin up publicity, and they hope, support for the plan. An analysis can be found here.

Their proposal is the latest source of friction between the Assembly and Governor Walker and the Senate. Walker and the Senate have largely agreed on issues from property taxes, transportation, and Walker’s generous K-12 funding proposal.

Assembly leaders rolled out the funding plan in a press conference, then declared their intention to hit to road on a PR tour. Typically the time for such road shows – or as Sen. Leah Vukmir called it, a “dog and pony show” – would have been long passed and now would be the time for voting. However, the Joint Finance Committee cancelled both of its meetings this week, and whether the committee will meet next week isn’t certain.

By choosing to roll out their initiatives – which challenge Walker’s hard line on raising taxes both on property and gasoline – in grandiose fashion and then embark on a virtually unprecedented traveling circus to promote it, the Assembly appears to be waging a bizarre PR war against the Governor and their colleagues in the Senate.

The ongoing question is…why? MacIver Institute President Brett Healy talked about this on the Vicki McKenna Show today:

 

UW Finances: A Visual Guide

Note: the Joint Finance Committee debates UW System funding today (Update: JFC punted on UW funding; it’s unclear when they will take up those controversial votes). We over at the MacIver Institute spent a lot of time breaking down the UW budget as part of our Chart Smart series – so the busy taxpayer can keep up-to-speed on what’s going on. I’m reposting them here.

From the MacIver Institute:

These charts examine state support to the System, followed by the overall UW System budget, including federal dollars and gifts. Since the Governor’s proposed tuition freeze and tuition cut are on the docket for Tuesday, we also take a look at in-state and out-of-state tuition across public Big Ten schools. A history of program revenues offers a peek into the UW slush fund debate, sure to come up this week. Finally, we compare salaries for the average household in Wisconsin with employees of the UW System.

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Want more coverage? Head over twitter and check out @MacIverWisc for up-to-the-minute coverage of the UW budget debate and more!

Yes, Obamacare is Still a Disaster

The following commentary was originally posted at the MacIver Institute.

So, the House GOP’s attempt to repeal and replace Obamacare was unsuccessful. After months of political theater and seven years of opposition to the disastrous healthcare law, their American Health Care Act (AHCA) failed to garner enough votes from the far right and moderate wings of the Republican party to pass with the needed 216 votes.

Lost in all the drama and theatrics, however, is the big picture: Americans are suffering under Obamacare and will continue to suffer “for the foreseeable future,” as Speaker Paul Ryan lamented in a press conference after it became clear AHCA did not have enough votes to get through the House.

Congressional Republicans, President Trump, the House Freedom Caucus – all will come away with political wounds. But the tarnished image and lost political capital that the failure to pass AHCA will inflict on Washington politicians pales in comparison to the actual harm that Obamacare will continue to inflict on average Americans just trying to stay afloat.

One thing is certain: Obamacare is still an unmitigated disaster. Premiums are still spiraling out of control. Sky-high deductibles still make Obamacare insurance plans practically useless. And competition and choice are still on the decline.

In 2017, the average premium increase on the individual market in Wisconsin was 16 percent. In fact, one plan in western Wisconsin costs $51,000 per year in premiums for a couple unfortunate enough to be in their 50s with three children.

Sure, Obamacare subsidizes premiums for those at the lower end of the income scale. But if you happen to occupy the vast swath of America known as the middle class, you’re likely on the hook for the full bill – plus deductibles.

In a report last year that scoured the federal database of 2017 premiums in Wisconsin, the MacIver Institute found that an average family of four would fork over an average monthly premium of $1,609.11 for a platinum plan – $19,309.32 per year – while a mid-level silver plan would cost them $1,297.02 in average monthly premiums, or $15,564.24 per year.

While proponents of Obamacare like to point to premium subsidies for the poor, they leave out a key concern that Americans grapple with: sky-high deductibles. For a top-tier platinum plan in Wisconsin the average deductible is $900 for a family and $450 for an individual.

However, for a mid-level silver plan, the average deductible is $7,015.71 for a family and $3,491.92 for an individual. The average catastrophic plan deductible will be $14,300 for a family and $7,150 for an individual.

Obamacare’s downward death spiral is also forcing insurers out of the market. One-third of counties nationwide have just one insurance provider in the individual market. Last year, two major insurers left Wisconsin altogether.

Economics 101 teaches that robust competition drives down prices. Giving consumers a choice is also a matter of basic fairness.

However, proponents of Obamacare continue their efforts to prop up the law with scare tactics aimed at vulnerable populations.

One “report” put out by Citizen Action of Wisconsin claimed the GOP proposal would cost older premium payers thousands more per year, but it’s a two dimensional analysis in a three dimensional world. The liberal group’s so-called report hinges on cocktail napkin math, simply subtracting the AHCA’s refundable tax credits from Obamacare premium subsidies.

The group also claims out-of-pocket costs would increase, but fail to mention that the AHCA would’ve expanded health savings accounts (HSAs), tax-free accounts from which health expenses can be paid. Healthcare tax credits under the AHCA would’ve gone into HSAs – which an individual would then use to pay for out-of-pocket costs like deductibles. HSAs coupled with the AHCA’s tax credits would have made insurance portable from job to job and accessible to the self-employed and independent contractors.

Obamacare actually put a cap on how much pre-tax money individuals could contribute to an HSA, compounding the problem of the law’s astronomical deductibles. What good is having insurance – even if it’s provided for free at taxpayer expense – if you can’t afford to use it? Why have insurance when the deductible alone will bankrupt you? Perhaps that’s why some Wisconsin hospitals started waiving out-of-pocket fees for lower income patients last year to stem the tide of increasing ER visits by Obamacare recipients.

Let’s also not forget that Obamacare activists like CAW have constantly pushed Wisconsin to follow in the footsteps of Minnesota, which gave Obamacare a big hug, and is now paying the price. The Minnesota Mistake was brought into focus last year when the state was forced to shovel more than $300 million – in one year alone – into a rescue plan to help middle class Minnesotans absorb a 60 percent Obamacare premium increase. Minnesota practically begged insurers to stay in their market to stave off a complete collapse of the market.

The giant folly of the healthcare debate is that prognosticators like CAW and Obama himself constantly conflate health insurance coverage with actual health care. Conservative health reform, of which the AHCA was supposed to be just the first of several phases – introduces market forces into healthcare. When there’s price transparency, someone seeking care is actually able to shop around for better prices.

A healthcare system where providers actually compete over price conscious customers would have the same effect as any other competitive marketplace – rapid innovation, increased efficiency, and reduced costs. As Speaker Ryan points out, that very phenomenon is demonstrable in the cost of elective LASIK eye surgery, the price of which has actually dropped over the past 15 or so years – as has the price of flat screen TVs, smartphones, and anything else sold in an actual free market.

The GOP’s failure to pass AHCA is a setback. But, it is not a political setback like all the talking heads want you to believe. It is a setback because the death spiral that is Obamacare continues unabated and the American people continue to suffer because President Obama lied to them. If you like your health insurance, you will be able to keep it, and the ACA will bend the cost curve. Obama’s lies live on.

But it’s important for lawmakers to keep their eye on what’s important – Obamacare is a disastrous big government boondoggle that will cost taxpayers a trillion dollars in new taxes and threatens to collapse entire individual insurance markets.

As President Trump said on Friday after the AHCA was pulled, Obamacare will inevitably “explode.” But lawmakers can’t wait around for that to happen and then try to blame the Democrats. A solution that can pass the House and Senate and be signed by the president must be found.

Read the original post at the MacIver Institute.

About That Billion-Dollar Transportation Shortfall…

We’ve all heard the narrative that Wisconsin is facing a transportation funding deficit of a billion dollars. As narratives go, it’s a case study in framing a public discussion. But over at the MacIver Institute, investigative reporter Bill Osmulski does what it seems nobody else has ever bothered to do – question that figure.

Below is an excerpt. Click through to see the full story and an avalanche of facts about transportation funding in Wisconsin.

A billion-dollar shortfall in the next transportation budget started the debate about raising Wisconsin’s gas tax, which was so explosive, no one seemingly had the time to confirm there is a billion-dollar shortfall. If they had, the current debate might not be centered on the gas tax, but instead on how we fund roads in the first place, because there’s only a shortfall if you change the way Wisconsin funds transportation.

The current 2015-2017 state budget spends $2.8 billion on highways, and $855 million of that comes from bonding. That means about 30 percent of everything Wisconsin spends on roads is borrowed, and there are those who believe the state should not be borrowing at all to pay for roads. That was the cover story for a peculiar request the Legislative Fiscal Bureau received last summer.

Even though the DOT was about to submit a new budget request in less than two months, Fiscal Bureau was asked to project what the DOT’s budget would look like under an unlikely set of circumstances. The request wanted the Fiscal Bureau to omit all bonding under a cost-to-continue scenario. The result was a $939 million difference between the current budget and the next.

The billion-dollar transportation deficit was born.

That number started the narrative that Wisconsin has a transportation funding crisis. It didn’t matter that two months later the DOT presented its actual budget request that included spending projections, revenue estimates, current federal funding commitments, and existing bonding. That request also indicated there would be a shortfall, but at $449 million, it was less than half of the previous projection. When Governor Walker presented his budget proposal, he included $500 million in new transportation bonding to fill that gap, which would be the lowest amount since the 2001-2003 budget. It would also mean no delays on major projects currently underway.

Still, the fabricated billion-dollar deficit dominates coverage of the transportation budget, and it continues to frame the debate over the gas tax. Framing the transportation debate this benefits those who want to raise the gas tax. However, they will still readily point to bonding as an underlying concern.

Whole thing here.

Previewing the State Budget

As Wisconsin gears up for another monumental and contentious budget debate, the MacIver Institute posted a preview of the upcoming excitement – including summarizing the budget requests of the major state agencies, new “201” budget items, and the major battles that lie ahead:

Wisconsin state agencies are requesting more than $69 billion in total funding for the 2017-2019 biennial budget, a debate that is quickly taking shape as Governor Scott Walker prepares for his State of the State address Tuesday.

While most Madison insiders and the phalanx of lobbyists hovering about believe that the transportation debate will dominate and may even hold up the passage of the 2017-2019 state budget, the Governor has signaled that he is, once again, looking to make significant long-term changes to state government and the way it operates. Might we see the next big Act 10-like reform that will fundamentally change our state for generations to come? We will soon find out.

As we begin the ’17-’19 budget debate, we take stock of where Wisconsin stands and highlight for you, the taxpayer, all the important upcoming debates – from important policy discussions to petty back-biting and everything in between. While we are not sure where Gov. Walker and the Legislature will end up on the gas tax, tax reform, welfare reform or a whole host of other important issues, we are sure that the budget debate itself and legislative deliberations as the budget moves through the process will prove to be highly entertaining and completely mesmerizing.

This year, agencies have also been required for the first time to submit budget scenarios for a zero percent increase and a 5 percent decrease – named the “201” requirement after the 2015 Act 201 law that forced agencies to submit the different scenarios. Some agencies took the requirement seriously, while some listed shock-value cuts and others barely made an effort at all.

It’s a thorough analysis. Read the whole thing here.

Lisowski: New Report Card Standards Allow MPS to Escape “Failing” List, Racine Unified Added

This column by Ola Lisowski has been re-posted in part from the MacIver Institute:

Wisconsin’s Department of Public Instruction released new report cards for the state’s public schools, and some of the results have the public puzzled. The big news of the release was, as most expected, that Milwaukee Public Schools (MPS) fell off the list of failing school districts while five others took its place.

Racine Unified School District (RUSD) was categorized as failing to meet expectations with a score of 48.1 of 100. Eleven RUSD schools – 34.4 percent of the district – failed to meet expectations. That’s slightly higher than Milwaukee’s 27.6 percent of failing schools. However, at just shy of 10,000 students, the number of kids enrolled in failing schools at RUSD is much smaller than at MPS, where nearly 25,000 students attend failing schools. That should speak volumes to the size and scope of the issues these districts face.

The new report cards feature five key priority areas: student achievement, student growth, closing gaps, and on-track and postsecondary readiness. RUSD students outscored MPS students in three of these four metrics by an average margin of just over five out of 100 points. In the student growth category, however, RUSD students scored only a 26.1 compared to MPS’ 60.3.

RUSD also didn’t receive any deductions in the “student engagement indicators” category, which penalizes districts for low test participation, high absenteeism, and high dropout rates. MPS was penalized five points for an absentee rate of 21.1 percent, higher than DPI’s 13 percent or lower goal.

As such, the numbers reveal that it was mainly a lack of year-over-year growth that put RUSD in the failing category while MPS skated by.

Whole thing here.