MacIver News Service | May 31, 2019
As you got back into the swing of the things after a Memorial Day break, the Joint Finance Committee spent Tuesday discussing the funding of the UW System. They’ll continue debating Gov. Tony Evers’ proposed 2019-21 biennial budget next week. Keep up with the ongoing budget debate by following MacIver on Twitter.
This week, the GOP fought against the narrative of an impoverished UW System; Medicaid expansion cannot plausibly be continued as the national debt soars; and Assembly Speaker Robin Vos took the gas tax hike off the table. Before you enjoy the unofficial start of summer, here are some important articles for the fiscal conservative, in case you missed it.
The Democrats of the Joint Finance Committee continued to cry poverty for the UW System, despite an annual budget of $6.37 billion. Both sides agreed to keep the tuition freeze, but differed on whether the system needed earmarked funding to backfill tuition revenue losses. Republicans passed a $58 million spending increase for the system, but it wasn’t enough for JFC Democrats. Despite the Democratic narrative of an impoverished university system, UW is in great financial shape today, with program revenue balances at an all-time high.
Evers’ proposed plan to expand Medicaid coverage from adults with incomes at or below 138 percent of the federal poverty level is based on the premise of “free money” from the federal government. With a national debt north of $22 trillion, the government may not be reliable to continue backing such programs forever. Gov. Evers’ proposal would increase dependency on the government and could even drop 46,000 Wisconsin residents off of their heavily-subsidized plans on the Obamacare exchanges to be placed on government-run insurance.
Assembly Speaker Robin Vos reportedly told conservatives that an increase to the gas tax is now off the table to fund Wisconsin’s transportation projects. This marks a united Republican effort behind stripping Evers’ massive tax-and-spend budget plan. Gov. Evers’ proposal, which did not have majority support according to a recent Marquette Law School Poll, would have put Wisconsin in the top 10 list of highest gas taxes among all states. Instead, Republicans will look to raise various fees to raise money for transportation projects.
Since President Donald Trump ramped up the trade war with China by raising tariffs, a Bloomberg Economics Gauge reported China’s economy has taken a hit in May. China’s economic indicators currently stand in their worst place since January. The policymakers of China feel their country is able to stand strong despite the economic fall. Small businesses, however, are not feeling as confident in their current position in the trade war.
Dara Lee Luca and Michael Luca of the National Bureau of Economic Research found if the minimum wage is raised by $1, the chances of lower quality restaurants closing increase by 10 percent. Lower quality restaurants do not make enough profit to account for the increase in labor costs. These types of restaurants create positive social environments for neighborhoods and putting them out of businesses creates a lower level level of well-being. The consumer, business, and worker are all harmed in this case and face a lower future job growth rate without any replacements for the jobs lost.