Department of Children and Families budget 

• Siphoning off federal funds for low-income families – The budget transfers almost $19 million per year more to the Dept. of Revenue from the Temporary Assistance to Needy Families (TANF) block grant, to supplant state funding for the Earned Income Tax Credit (EITC). This siphons off funding intended for low-income families – ostensibly to strengthen the EITC, but the bill actually reduces total state and federal spending for that credit by $14 million over the next two years.
• Early education – The bill reduces funding for Wisconsin Shares child care subsidies by $35 million, based on lower cost projections, and squanders the opportunity to use those savings to increase reimbursement rates and improve child care quality.
• Wisconsin Works (W-2) – It cuts the W-2 appropriation by $13.4 million over the next two years, which is premised upon very unrealistic assumptions about declining participation. The Finance Committee assumed that participation would fall by 1% per month, starting in April, but it actually climbed by 4% in April.

Health Care

• Restricting BadgerCare for parents – Beginning in 2014, the bill ends BadgerCare coverage for nearly 90,000 parents, which will be an economic hardship for many families as some of those parents move into private coverage with much higher cost-sharing, and as some of those parents become uninsured. An alternative plan, which would cover 85,000 more adults in BadgerCare than the Governor’s plan, would actually save state taxpayers $149 million in the 2013-15 biennium.
• BadgerCare for children – The budget bill seeks to resurrect changes DHS proposed in 2011, which could cause 29,000 children to lose BadgerCare coverage if federal officials allow those changes to be implemented.

K-12 education

• Inadequate increase in school aid – After deep cuts for schools in the last budget, the state is using its improved fiscal situation to only increase school aid by 1.5% in 2013-14 and 2.8% in 2014-15. Those modest increases mean that schools are going to continue to lose ground to inflation.
• Vouchers –The budget expands the school voucher program statewide, which is likely to divert a steadily growing share of the funding desperately needed for public schools.

Juvenile justice

• Increase in secure detention – A late, undebated amendment lengthens from 180 days to 365 days the maximum length for placing juveniles in secure detention in local facilities – many of which are ill-equipped for lengthy stays – without any minimum quality standards.

Department of Workforce Development

• Unemployment insurance (UI) – Contrary to the recommendations of the Unemployment Insurance Advisory Council, the bill includes policy changes that will make it more difficult for some parents and their families to receive UI benefits.

Starting the next budget in a hole

• Because much of the income tax cut in the bill is funded with one-time revenue, it is expected to cause a $505 million hole in the 2015-17 budget. That will continue to put downward pressure on spending because the first half billion dollars of revenue growth will have to be used to close that hole, before addressing any increases in costs from inflation, population growth, or other spending needs.

Jon Peacock