Legislature’s Response This Week to New Data on W-2 Growth May Answer that Question

I’ve said on a few occasions that the fiscal plan being considered in the legislature this week is a “Robin Hood in Reverse” budget.  Just how true that is will be decided this week, as legislators debate the budget bill and consider new figures that contradict a key assumption underlying the bill’s diversion of funding intended to serve low-income families.

As someone who prefers objective statements of fact to subjective sound bites, I’ve been hesitant to broadly and loudly declare that this is a “Robin Hood in Reverse” budget – at least until we have very solid data backing that conclusion. A key piece of that data can now be found on the Department of Children and Families (DCF) website, because the new Wisconsin Works (W-2) statistics contradict the budget bill’s assumption about declining participation in that program. That assumption has been used to justify cutting W-2 spending and siphoning off the savings to use for other purposes, such as the proposed income tax cut. A new issue brief by the Wisconsin Budget Project explains the widening gap between budget reality and the overly optimistic assumption about W-2 participation. It analyzes the very substantial fiscal consequences of several more realistic scenarios, and explains how the problems could easily be remedied by using federal block grant funding as intended, rather than transferring substantially more to the Department of Revenue.  Read more in this Wisconsin Budget Project Blog post.

Few, if any, state legislators have yet seen the new W-2 figures that undermine the case for cutting the program’s spending.  After learning about the new data, perhaps lawmakers will adjust the W-2 budget accordingly – which would substantially weaken my strongest argument for the assertion that this is a Robin Hood in Reverse budget (and I would be very happy to be be disabused of that viewpoint).  On the other hand, if legislators fail to acknowledge the significance of the new data and don’t protect the block grant funding needed for W-2, that would provide firm evidence that this budget intentionally redistributes funding from the poor to the rich.

Jon Peacock