Joint Finance Hopes to Finish Budget Tuesday, Take Votes on Medicaid Expansion and Tax Cut

MacIver News Service | June 3, 2013

[Madison, Wisc…] The Joint Committee on Finance is hoping to finish up its work Tuesday on Governor Scott Walker’s 2013-2015 budget proposal and, with that self-imposed deadline looming, major portions of the budget and how the state will pay for each remains unanswered at this time.

Still to be decided on Tuesday are Governor Walker’s plans to reject the Obamacare Medicaid expansion, cut income taxes by $343 milllion, reduce the rates of the bottom three income tax brackets, funding public education, implement performance based funding for school districts, add a special needs scholarship for children to attend choice schools, and a major school choice expansion to failing school districts with at least 4,000 students.

Under Walker’s healthcare reform plan, the number of uninsured adults aged 19-64 in Wisconsin would be reduced by more than 200,000 people according to the administration. The plan would lift the cap on enrollment for BadgerCare, Wisconsin’s version of Medicaid, which has been in place since 2009 due to an influx of participants that are above the poverty line.

Currently, one in five Wisconsinites is covered by Medicaid, with some that earn up to 300 percent of the poverty level, which is $70,560 for a family of four.

Walker would like to reduce the amount of people that are “dependent on government,” which is a main reason the Governor rejected the multi-billion dollar national expansion of Medicaid.

The Governor’s plan would reduce the eligibility for BadgerCare to 100 percent of the poverty level for childless adults aged 19-64. Those above the limit would be transitioned to the healthcare exchange set up by the Affordable Care Act.

Assembly Republicans have been united behind Governor Walker’s decision to reject the federal expansion. However, there are some State Senators who have come out in favor of accepting the federal funds that may only be temporary.

The MacIver News Service previously reported that Sen. Terry Moulton (R-Chippewa Falls) and Sen. Jerry Petrowski (R-Marathon) publicly supported accepting the federal funds for the Medicaid expansion.

Both Senators are in a very small minority within their own party. A recent poll showed that 91 percent of Republican voters in Wisconsin support Governor Walker’s decision to reject the expansion.

JFC will also take up Governor Walker’s proposed $343 million tax cut, which lowers the bottom three tax bracket rates. Rep. Kooyenga introduced a plan last week that would add $409 million in tax relief to Walker’s budget for a total income tax cut of $752 million.

Kooyenga’s tax reform plan cuts all tax rates and reduces the tax brackets from five to three by 2015. His proposal also eliminates many tax credits that are used by less than one percent of the state’s population.

The bold tax reform proposed by Kooyenga has received almost unanimous support in his own body of the legislature, but there is pause amongst some Senators about the size of the tax cut.

Some are worried that decreasing the rates even more than Walker’s plan will reduce tax collections enough to create a $1 billion structural deficit, but a recent analysis from the Legislative Fiscal Bureau says that with modest three percent annual economic growth the plan would result in a $507 million structural surplus.

The Committee will take up funding for the Department of Public Instruction and the school choice expansion as well. JFC was originally supposed to debate these subjects last week, but they were delayed until this Tuesday. A full analysis of the education topics can be seen here.

JFC is expected to meet for their last executive session on the Governor’s budget on Tuesday at 10am.

Check back for updates or follow the MacIver Institute on Twitter (@MacIverWisc) for live coverage of the JFC session.