MacIver News Service | January 24, 2018
By M.D. Kittle
MADISON, Wis. – In an upbeat State of the State address to the Legislature that was reminiscent and forward-looking, Gov. Scott Walker on Wednesday proposed a tax break for families and an ambitious initiative aimed at checking the escalating costs of health insurance.
The Republican governor, running for a third term this year, reminded Wisconsinites of the fiscal woes he inherited when he took office in 2011 and just how much has changed to the good since.
“Today, I am proud to delare that the state state of our state is historically strong,” Walker said to uproarious applause from the Republicans who have controlled both houses of the Legislature since they and Walker swept into power more than seven years ago.
Walker ticked off the highlights of a dizzying year of activity in state government, from delivery of a tax-deleting state budget to the landing of the biggest economic development deal in Wisconsin’s history.
He pointed to signs of hale health in the state’s economy, punctuated by a 3 percent unemployment rate – the lowest jobless rate in 45 years.
What a difference seven years make, Walker hammered home, as a crowded field of Democrats campaign to replace him.
“Eight years ago, things were not very good in our state. There were double-digit tax increases, billion-dollar budget deficits, and record job losses … and Wisconsin consistently ranked in the bottom ten states for business,” the governor said. “We don’t want to go back to those days.”
Looking ahead, Walker laid out an ambitious agenda (he calls it as much – Ambitious Agenda for 2018) for what promises to be an abridged, election-year legislative session. Some of his proposals come with new costs – sure to make fiscal hawks uneasy – but administrative sources say much of the new initiatives will be paid for with government savings or through funding already in the budget.
Walker wants to use a projected budget surplus expected to top $480 million to fund new child credits. Wisconsin families would receive $100 for every child, under 18 and living at home. The cost is pegged at $122 million annually.
“As I promised, when we have a surplus, we will give it back to you, the hardworking taxpayers,” the governor said. “This is your reform dividend. You deserve it.”
Walker and the Republican-controlled Legislature have delivered on some $8 billion in tax cuts – property, income, and others since 2011.
“I’m very interested in the Governor’s plan to help Wisconsin’s families with a refundable tax credit. It has the potential to make a real impact on working families in our state,” said Sen. Alberta Darling (R-River Hills), co-chair of the Legislature’s budget-writing committee.
The “Reform Dividend” was the theme of last year’s State of the State address, as Walker pushed for tax relief and a huge boost in education spending. The latter was once warmly embraced by one of Walker’s Democrat challengers in this year’s gubernatorial race, Superintendent of the Department of Public Instruction, Tony Evers.
Health Care Stability
Looking to fix the damage done by the Affordable Care Act – aka Obamacare – Walker proposes asking the federal government for a Section 1332 State Innovation Waiver that allows states to change their insurance market as long as consumer protections remain. It’s part of a package of initiatives he calls the Health Care Stability Plan.
The governor says he wants to stabilize the individual insurance market, which under Obamacare has seen premiums explode, tens of thousands of health insurance consumers forced out of their plans and insurers exiting the fragile market. Walker proposes creating a state-based reinsurance program similar to other states that have sought waivers. A funding partnership between the state and federal government, the initiative according to officials would create a corridor-based reinsurance program, adjusted annually based on actuarial analysis. The Walker administration anticipates the program would offer coverage up to 80 percent of claims above $50,000 and below $250,000, driving premium costs down.
Minnesota, which Democrats love to point at as the ideal progressive state, has a similar program in place. In 2016, Minnesotans braced for premium hikes soaring as high as 67 percent with insurers packing up. Democratic Gov. Mark Dayton was forced to acknowledge President Obama’s Affordable Care Act was “no longer affordable for increasing numbers of people.”
Minnesota’s Legislature created the new $550 million reinsurance fund to help defray costly claims for insurers. Some would call that a subsidy, but the design is to take a bite out of health care costs for some 200,000 people on Wisconsin’s individual market.
Walker also proposes a law guaranteeing coverage of pre-existing conditions.
“That way someone who has cancer or another serious disease or ailment will not have to worry about obtaining or keeping coverage,” the governor said.
On the health care front, Walker proposes a permanent waiver for the state to provide SeniorCare, the prescription drug assistance program for Wisconsin residents 65 and older. The state has sought an extension of the program four times since it was first approved in 2002. Walker asserts the state can “provide certainty and stability for those who depend on SeniorCare.”
Walker also pitched a welfare reform package he wants the Legislature to pass in a fast-moving special session.
“We want able-bodied, working age adults to work at least 30 hours a week or enroll in job training to get assistance. We want to expand welfare reform statewide. And we want to ensure that everyone getting public assistance can pass a drug test. If someone fails, we set aside resources to get them into rehabilitation because we understand that if we get them healthy, we can find a job for anyone in the state.
Walker proposes FoodShare cards include photo identification of the recipient, a measure aimed at cutting fraud. The new initiative also expands the work requirement for FoodShare recipients. And anyone who owns a home worth more than $321,000 would not be eligible for taxpayer-funded meals and other welfare programs.
Education and Economic Development
Building on record public education expenditures, the conservative governor pushed a plan to increase so-called Sparsity Aid in Wisconsin’s low revenue school districts. Legislation led by state Rep. John Nygren (R-Marinette) would increase aid by $6.4 million for the 2018-19 school year. The bill provides an increase from $300 per pupil to $400 for qualifying districts. And the “low revenue ceiling” for districts that spend less would rise from $9,100 to $9,400 per pupil for the 2018-19 school years, rising by $100 per year thereafter, up to $9,800 by the 2022-23 school year.
“In order to ensure accountability to local voters, districts where a referendum to raise the revenue limit was rejected by the voters within the past three years would not be allowed to raise their revenue limits,” the governor wrote earlier this month.
Walker also wants to spend $20 million to create a “Wisconsin Career Creator” program on college campuses statewide.
“With all of the new jobs being created in our state, we must have enough graduates with the skills to fill these careers,” he said, noting, among other significant economic development projects, the Foxconn Technology Group’s multi-billion dollar plan to create as many as 13,000 good-paying jobs in southeast Wisconsin. The unprecedented development project came with an unprecedented incentives package to seal the deal.
The governor proposes creating a Rural Economic Development Fund, at a cost of $50 million per year. The program would support the development of new businesses and the expansion of small businesses in rural areas. It also provides funding for training.
With the rural initiative, Walker is proposing a Family Farm Fund that would provide scholarships to encourage students to pursue ag-related studies at Wisconsin’s technical colleges or at the UW College of Agriculture.
In the shadow of the Lincoln Hills juvenile prison controversy, Walker reiterated a plan to close the troubled corrections center and create six smaller facilities throughout the state. The complex in Lincoln County would be converted to a medium security adult prison, likely focusing on alcohol and drug abuse treatment. The corrections reform plan, Walker said, would ultimately save tax dollars.
Walker’s progress report was, as expected, warmly received by members of his party, and roundly lambasted by his political opponents.
“Despite Governor Walker’s frantic attempts to improve his public approval ratings in a tough election year, Wisconsin residents will not be fooled. This election year enlightenment has shown that he has failed to deliver on his empty promises of the past and his misguided priorities have taken the state in the wrong direction,” said Senate Minority Leader Jennifer Shilling (D-La Crosse) in a press release.
“Every time we drive over a pothole or cast a ballot for a school referendum, voters see the underfunding of our roads and local schools,” she added.
“This afternoon, Governor Walker laid out an ambitious agenda that is only possible because of the progress we have made over the past seven years,” said Sen. Chris Kapenga (R-Delafield). “I am honored to be working side-by-side with Governor Walker to advance bold welfare reforms that will lead to more employment and self-sufficiency.”