Policymaking is in the Eye of the Beholder

By James Wigderson
Special Guest Perspective for the MacIver Institute

The Joint Finance Committee of the Wisconsin Legislature is about to go to work on the state budget as proposed by Governor Scott Walker, and already the committee chairmen State Rep. Robin Vos and State Sen. Alberta Darling have identified 21 “policy items” they will be removing.

It’s a biennial complaint that the state budget contains items that are not directly related to the state’s finances. The situation is often exacerbated when the governor is of a different party of one or both houses of the legislature.

The reason for putting policy items in the state budget is simple. In theory the state budget must pass eventually. By putting policy items in the budget, they get passed, too.

For example, former Governor Jim Doyle tucked into the last state budget primary enforcement of the mandatory seat belt law. He also included mandatory auto insurance and increased the minimum auto insurance coverage that could be purchased. Ironically, the legislature passed the repeal of the increased minimums as a separate bill rather than send the issue through the budget process again.

This year is no exception and the state’s Legislative Fiscal Bureau identified an entire list of items they say meets the definition of “policy” items rather than “fiscal” items. From that list, Legislative Leadership have picked 21 items that are being removed from consideration in the proposed state budget.

Of course, “policy” is in the eye of the beholder.

Some items are relatively clear-cut. The first item on the chopping list is a proposal by the governor to no longer require the Joint Committee on Legislative Organization concur with the governor on the appointments for the federal-state relations office in Washington D.C. It’s easy to see why the executive branch doesn’t want to ask the legislative branch for approval if it doesn’t have to, and why the legislative branch might have the opposite view. However, it’s not really a fiscal item.

On the other hand, Vos and Darling removed from the proposed budget provisions that would have reduced the number of state mandates in education. Specifically, the governor’s budget would have eliminated the mandate for a reading specialist in each school district. Had this provision remained, there would have been nothing preventing a school district from retaining the position, but it would cease to be mandated by the state.

Checking the numbers at the MacIver Institute’s WisconsinOpenGov.org, last year Wisconsin taxpayers spent $28,155,605 in total compensation for reading specialists. That’s a lot of money for a non-fiscal item.

With the reduction of state aid, keeping the reading specialist requirement amounts to an unfunded state mandate. Perhaps the Brown Deer School District could find a better use for the $191,131 that it paid in total compensation to reading specialists last year.

Leadership also removed the proposal by the governor to allow school districts to schedule less than 180 days of instruction annually. In order to receive state aid, school districts would have been accountable for the number of hours of instruction annually in the governor’s proposal. School districts will be held accountable for both the number of hours and the number of days annually, reducing their flexibility. So if a school district wanted to reduce the number of days to avoid higher utility costs, for example, it would not be able to do so.

In the area of health care, legislative leadership chose to maintain the state requirement that private health insurance policies and municipalities provide coverage for contraceptives. Aside from the larger moral debate, such a mandate (like all insurance coverage mandates) has the effect of making insurance costs higher. There is a real financial impact on private insurers and their customers. The maintaining of the contraception coverage requirement for local governments that self-insure also amounts to another unfunded mandate.

It is also interesting to note that this mandate was passed as part of the last state budget under Governor Jim Doyle. By failing to deal with the issue, legislative leadership is acquiescing to the bad policy-making in the last budget while still having a real fiscal impact on local governments.

These debates over what constitutes “policy” reveal just how interconnected the finances of the state government and local governments are. Even if an item does not directly affect the state’s bottom line, it may have a very real impact on the taxpayer. We can also see how even refusing to include so-called “policy” items an also have an effect fiscally and even perpetuate the mistakes of state budgets past.