Progressive Thinking

A statewide expansion of the voucher program as touted by the Governor and majority party legislators could cost over $600 million in state tax dollars.  Money from the same pot as funding for public schools which already have experienced a cut of $1.8 billion over the past four years.

MADISON - “Your information is always thorough, concise and very readable,” Carol wrote to me. “Today I heard that [Governor] Walker said he would lift the cap for vouchers if he wins re-election. What would that do to our public schools? The state budget? I hope you will research this and publicize your opinion.”

Whether to cut back or expand state-funded subsidies for students attending private schools is a hot topic of debate. Passage of the most recent state budget started a process many see as the beginning of a statewide, unlimited opportunity for students to attend private schools with state tax dollars – or an unlimited drain on public school funding – depending on one’s perspective.

With passage of the last state budget, children attending private schools could use tax dollars through the form of a ‘voucher’. This state-funded subsidy is $7,210 per year for a primary and middle school student attending a private school and $7,856 for a high school student attending a private school. (Many public schools receive far less per pupil state funding.)

The budget was written so state-funded vouchers were paid first and had an unlimited drawn down on public school funds. I likened this – in my farmer vernacular – to a bucket full of water with a garden hose attached to the bottom with a valve to slow the flow.

The valve, of course, is the limit on the number of vouchers.

The rules, established by the 2013-15 state budget, limited the program to 500 students in the last school year and 1,000 students statewide this school year. These numbers do not include the Milwaukee and Racine voucher students.

Removing the cap – as suggested by the Governor, the Speaker of the Assembly and many candidates – would get rid of the valve altogether.

The justification for this dramatic change in school funding is rhetoric implying the failure of public schools and the superiority of a private education. But after 24 years of experimentation in Milwaukee, research shows no significant achievement benefits for students attending tax-funded private schools over public education.

In western Wisconsin public schools have a stellar record of achievement – despite dwindling resources.

This spring the Eau Claire Leader-Telegram reported local public schools scored above the average on statewide testing in math and reading while most Eau Claire private voucher students “bow[ed] out of state tests.” Statewide “private school voucher pupils fared poorly compared to those in public schools,” the paper’s headline read.

So how much would unlimited statewide expansion of vouchers cost Wisconsin taxpayers? In the 2013-14 school year there were approximately 120,000 private school students. Of these students, 92,400 students pay privately for tuition. State taxpayers fund 27,400 private school voucher students.

The nonpartisan Legislative Fiscal Bureau estimates an average per student voucher cost of $7,333. Subsidizing just the current private school students at this rate would cost taxpayers $677 million. This assumes no public school students go to private schools and no income limits are set for student’s families.

Statewide expansion could, presumably, affect all 900,000 students not currently in the state subsidized voucher program. But recent experience shows 75% of statewide voucher students already attended private school.

Public schools that lost students to private schools lost state aid. School districts that don’t have students attending state subsidized private schools also lose state aid. Often, districts must go to property taxpayers to make up lost aid.

There is no way to know how many private school parents would choose a voucher or how many public or charter school parents would send their children to state subsidized private school.

Public schools already suffered a cumulative $1.1 billion loss in general aid over the past four years. These cuts came at a time of increased overall state spending. In the last four years the budget grew by $4.5 billion. Revenue is dwindling now because of a series of tax cuts – putting public education at risk for a new round of cuts.

It’s foolishness to think Wisconsin can afford unlimited taxpayer subsidized vouchers, keep our high quality local schools and lower taxes. Actions have consequences. Cuts to local schools hurt students and raise property taxes.

Senator Kathleen Vinehout writes about the recent reports of a structural deficit going into the next biennial state budget, her conversations with the Legislative Fiscal Bureau and agency reports showing shortfalls in Medicaid and Transportation funds. These fund shortfalls are not included in the structural deficit reported by the Legislative Fiscal Bureau.

MADISON - “I don’t want another cent from the state until you guys pay the bills,” the business-owner from Durand told me. “I am tired of hearing about tax cuts and deficits.”

“I want all the bills paid: schools, roads, Medicaid, the tech colleges, the debt, all of them paid. Then talk to me about giving me my money back.”

News of the rising structural deficit going into the next state budget has many people offering advice about budgets. People aren’t happy about talk of a new round of tax cuts in the face of an expected $1.8 billion budget shortfall.

Many are asking whether the projected ‘surplus’ that justified the last tax cuts was real. Most everyone is convinced ‘tax cuts’ really mean “vote for me and pay for it later.”

“Why does the state give away money when local government hasn’t gotten its fair share in 20 years?” an Eau Claire woman recently asked. She read about local officials considering a registration fee on vehicles.

“They need money to plow the streets. We end up paying more when the state does these tax giveaways. Why doesn’t the state just give the city what it needs to keep up the roads?”

I recently met with Legislative Fiscal Bureau (LFB) staff to get to the bottom of the state’s fiscal problems. The Bureau is the nonpartisan arm of the Legislature that advises lawmakers on budget matters. I learned revenue numbers – tax receipts collected by the state – are down. Corporate income tax receipts are particularly down – over 9% below budget estimates.

New tax cuts to certain business took a toll on money used to pay the state’s bills. For example, reduced taxes on manufacturing and ag businesses are estimated to cost over $50 million just in this past budget year.

The state has bills that are sum sufficient – must be paid in full regardless of whether or not they are over budget – such as the state’s fast growing Medicaid program. These bills are not figured into the recently released shortfall numbers. Earlier this summer the Department of Health Services (DHS) reported the Medicaid program was over $90 million in the red.

Part of the budget problems stem from an ideologically motivated decision to not take several billion in federal funds that would free up hundreds of millions in state cash that could be sent to schools, cities and counties.

Budget problems don’t end with the state’s general fund budget – the part of the budget that pays for health, education, the UW, prisons and local government. There is also a serious gap in the state’s Transportation Fund.

Not paying bills today has long-term impacts on services we take for granted, like schools. Many superintendents are forced to delay maintenance and capital improvements. One superintendent showed me a budget in which he had zero dollars put aside for capital improvements.

Governor Walker and legislators who voted for the past two budgets took over $1 billion cumulative out of public schools over the past four years- at a time when they spent more than $4 billion in new money over the last budget of Governor Doyle.

The effect of spending cuts to our communities might not be seen right away. There’s a lag between passing the state’s two-year budget and witnessing the effect of a lack of state funds on local services. At first these cuts may show up in small ways: new towel fees for sports, higher prices for school lunch, reduced city pool maintenance, fewer snowplows on the road, and higher fees for city water.

But over time, the effect of fewer state dollars and the resulting delays in maintenance turns into higher property tax bills when, for example, schools go to referendum to pay for maintenance or to simply cover the costs of operations.

Over the years, a community can become a less desirable place to live. Local elementary schools close. Class sizes are bigger. Roads crumble. Pools close.

The Durand businessman ended his recent advice by saying, “If you give away money you need to pay bills, it’s going to cost all of us more in the long run”

I couldn’t agree more.

Senator Kathleen Vinehout writes about the delays Wisconsin farmers face in shipping grain to market.

MADISON - “The farmers are coming to me saying ‘we need drivers to get the corn to market. We need barges and trains to get the harvest to market.’” Barb Gronemus recently told me. “Kathleen you need to pay attention to problems with shipping grain.”

Former State Representative Barb Gronemus might be retired, but she’s still on duty answering the phone and making calls. One of those calls was to alert me to a growing problem farmers are facing getting grain to market. I began researching the situation and found former Rep. Gronemus was spot on.

Increased oil and sand shipments in the Midwest are delaying grain shipments. Some say the railroad companies are playing favorites because the oil industry pays a premium. Farmers worry they are losing money as their grain sits in storage instead of being transported to market.

Last month, the USDA predicted a record harvest in 2014. With abundant rain and cooler temperatures, corn yields are expected to top last year’s record with over 14 billion bushels according to the Wall Street Journal. The USDA also estimates a record soybean harvest in the next few weeks.

Recent studies conducted at the request of elected officials in North Dakota and Minnesota show significant losses to farmers because of a failure by rail companies to move grain.

North Dakota Governor Jack Dalryumple recently called the grain delays in the upper Midwest “an emergency situation” as he urged federal regulators to use their power “to provide an oversight role” as farmers struggle to get grain to market in a transportation system overburdened by the oil industry.

North Dakota Senator Heidi Heitkamp released a study she commissioned from North Dakota State University showing her state’s farmers lost over $66 million in four months because of delayed grain shipments. Researchers estimated a loss of over $95 million for delays in shipping the 2013 crop - which continue through the end of the year. No estimates were made for the 2014 crop.

Minnesota Governor Mark Dayton also urged federal action to aid farmers.

In a letter to the feds, Dayton asked that a study conducted for his administration be part of the National Grain Car Council’s agenda:

“We recently calculated that Minnesota farmers suffered losses of $109 million from March through May of this year…The study will highlight for the Council the dire circumstances that Minnesota farmers face and the need for increased accountability and clarity from the Burlington Northern Santa Fe (BNSF) and the Canadian Pacific (CP) Railroads.”

Minnesota’s governor further wrote that the feds compelled the railroad companies to publically report their progress on reducing the backlog in grain shipments. Farmers were promised by the railroad companies “matters would be different in this harvest season” and “transparency would be the new normal.” Yet, the mid-August filing with the federal government accounted for only 10% of the grain cars within the BNSF failed to address the backlog of grain shipments.

Federal officials are concerned CP cannot fill 30,000 requests for rail cars for grain and other products by October. In a New York Times article from late August federal sources reported the requests and a backlog of 1,336 rail cars for BNSF and nearly 1,000 for CP.

Wisconsin farmers suffer when grain can’t ride the rails. I could not find estimates on losses to Wisconsin farmers similar to the North Dakota and Minnesota studies. But local farmers and grain dealers are concerned.

Local farmers also expressed concerns that barges and trucks are filled with sand and the sand headed for the oil fields takes up valuable transport space for grain.

Yet, Wisconsin officials have made no mention of the impending crisis.

It’s time Governor Walker and Agriculture Secretary Brancel join our Midwestern neighbors in calling for federal action to put a priority on grain shipments. It’s also time Wisconsin researchers provide data on the potential loss to Wisconsin farmers if grain can’t move out of the state.

We don’t want Wisconsin farmers dumping grain because nobody’s answered the question, “where’s my train?’

Sen. Kathleen Vinehout writes about the impact of shrinking state revenues for local schools districts while private “voucher” schools are receiving historically high per pupil state aid.

The 2013-15 State Budget set the private “voucher” school per pupil state aid at $7,856 for high school students and $7,210 for K-8 students. At the same time many school districts in the 31St Senate District are receiving far less state aid per pupil.

MADISON - “How is it possible that private voucher schools can receive almost four and a half times the state funding per student as our public school district receives in equalized aid,” Pepin School Superintendent Bruce Quinton wrote me.

As a new school year begins, students and parents see changes; for example, increased meal costs, larger class sizes, retiring teachers not replaced and fewer teachers’ aides. There are fewer janitors and delayed maintenance; longer bus rides and fewer field trips; fewer music and art classes.

Many public schools are forced to do more with less because lawmakers who voted for the last state budget increased state tax dollars to private schools. Nearly half of Wisconsin’s public schools will receive less aid this school year than the last – including many of our local schools.

Eau Claire received the largest dollar amount cut statewide – over $2.3 million while Pepin and Alma received the largest local percentage cuts - over 15%. At the same time, state aid per pupil going to private ‘voucher’ schools reached its highest point in state history.

In his letter, Superintendent Quinton noted the difference between amounts of state aid for Pepin to that of private schools: for the 2014-15 school year Pepin receives $1,667 per student; public tax dollars to private ‘voucher’ schools are $7,856 per high school student and $7,210 per K-8 student.

“Pepin Area School District taxpayers will pay an additional $70,119 in taxes to educate children in other districts this school year,” Mr. Quinton wrote. “I cannot comprehend why taxpayers are willing to subsidize a private voucher school education system, especially when research indicates that private voucher schools perform at best as well as the public school system and in many cases below their public school peers.”

A memo from the nonpartisan Legislative Fiscal Bureau (LFB) detailing figures from the 2013-14 school year show that Pepin’s state aid payment per pupil was $4,559 less than the per pupil state aid payment made to private ‘voucher’ schools.

The effects of reduced state aid for schools are many and include lower salaries for staff. The Eau Claire School District learned their base salaries fall below the 50th percentile of the market’s base salaries. This makes it difficult to attract and retain top quality staff.

A study released by the Wisconsin Budget Project, an arm of Wisconsin Council on Children and Families, recounts the effects of several years of slim funds to local schools. “As the new school year approaches, Wisconsin schools face significant challenges, including class sizes that have grown faster than the national average, an increasing number of students living in poverty, and a reduction in state support for education.”

Fewer state dollars means higher property taxes as schools unable to make ends meet head to referendum.

Voters in Mondovi, Altoona, and Black River Falls face a fall referenda vote to raise property taxes to pay for building improvements or, for Mondovi, school operations. Voters in Black River Falls will decide, among other projects, whether to replace the ‘temporary’ trailers which housed elementary students for many years.

Voters in Eleva-Strum passed a referendum to exceed the revenue limit under threat of “massive budget deficits” that would lead to reduction in funds for a school psychologist, janitors, a library aide and a bus route. The district is also considering closing elementary schools in Eleva and Strum.

Resolving problems facing local schools will require a shift in state policy. A majority of lawmakers must realize Wisconsin cannot afford two parallel school systems. Without significant increases in taxes we cannot use state tax dollars for both public and private schools. One will suffer while the other thrives. We can see this happening already in the Milwaukee area.

State Superintendent Tony Evers proposed changes to the school aid formula that would address some of the difficulties facing rural schools. In addition to his proposed changes, sparsity aid - which I created in the 2007-09 budget - must be expanded. There is no other aid that directly assists suffering rural schools with no strings attached.

Public education is the key to prosperity. Our future depends on our investment in our children.

Senator Kathleen Vinehout writes about raising the minimum wage. At nearly every event she attends, someone mentions the need to increase the minimum wage similar to action taken by Minnesota. Legislation to increase Wisconsin’s minimum wage was introduced but failed on a partisan vote. Other states have taken action to increase their minimum wage and found it benefited not only the workers but also the economy.

ALMA - “If there is one thing you could do to help it would be to raise the minimum wage.” A worker told me. She worked the last 8 years for a company that barely paid her $8.00 an hour.

“I’m the only breadwinner in my family. We can’t survive on my salary.” At $8 an hour the Eau Claire woman makes a little too much to be eligible for BadgerCare. She would gladly buy health insurance if she could afford it. But most of her money goes for basic living expenses: food, rent and fuel. Even car upkeep is a luxury.

A mom from Eau Claire’s south side told me about her daughter who is a teacher. “She doesn’t make enough. She works so hard and really cares for the kids. But she was driving on bald tires because she didn’t have enough money. I worried every time she got into the car.” Tears streamed down the mom’s face.

This summer I’ve heard more about low wages than ever before. Across Wisconsin wages have stagnated. A June/July 2014 report released by Wisconsin Taxpayers Alliance confirms Wisconsin wages trail the nation:

Average wages here have trailed the nation’s for years, but the gap has widened in recent years. Average wages in Wisconsin were 14% below the US average in 2013 compared to 10.8% below in 2003.

As with income and wages, employment growth here has also lagged. During 2000-13 job growth nationwide averaged 0.8% per year, vs. 0.3% here.

In a separate publication dated late July, the Taxpayers Alliance reports personal income, while improving compared to the US, still trails the nation’s average:

Part of the reason for lagging personal income is average earnings, which at $48,681 were 10.4% below US levels ($54,681) in 2012. Wisconsin earnings were also below the averages in Michigan, Minnesota, and especially Illinois, but still led Iowa by a slight margin.

Raising the minimum wage is a topic of much discussion among local people this summer. At nearly every gathering I’ve attended voters brought up the topic and asked me to support something similar to Minnesota’s law.

Last April, Minnesota lawmakers reached agreement on raising the state’s minimum wage. Starting this month, Minnesota’s minimum wage will increase over a 3-year period to $9.50 for large employers and $7.75 for small employers. The new law provides that by 2018, Minnesota’s minimum wage will be adjusted for inflation. Should the recession return, the law gives Minnesota an option to suspend the indexed increase in the minimum wage.

The new phased-in minimum wage increase has Minnesota leading the region. This spring Connecticut and 8 other states joined Minnesota in raising their minimum wage. Connecticut used a phased-in process similar to Minnesota’s: beginning at $8.70 and ending January 2017 at $10.10.

USA Today quoted Connecticut Governor Dannel Malloy as he signed the new law: “Increasing the minimum wage is not just good for workers; it's also good for business. This modest increase will give working families a boost, and it will contribute to our economy by getting just a little more money into the pockets of people who will spend it in their communities."

According to the National Council of State Legislatures, as of August 2014, 23 states and Washington, D.C., have minimum wages above the federal minimum wage of $7.25 per hour.

Wisconsin joined 37 other states in introducing legislation to raise the minimum wage. I joined my colleagues in supporting the bill, which was defeated in a partisan vote last January. Federal efforts to raise the minimum wage have also been unsuccessful.

Increasing the minimum wage would help many struggling families. The Center on Budget and Policy Priorities reports federal efforts to raise the minimum wage to $10.10 would benefit 17 million workers, largely women. Just under half - 47% - work full-time. The average minimum wage worker brings home half of the family’s earnings.

If we really want to help people in poverty and reward them for hard work, I suggest we raise the minimum wage – in phases – to $10.60. According to the Bureau of Labor Statistics $10.60 an hour would take us back in real dollars to the minimum wage of 1968!