Progressive Thinking

There are many myths concerning the 2013-15 State Budget just signed into law in June. Senator Kathleen Vinehout presents each myth and provides the facts about the budget - the state spends more; the state is left with a deficit and greater debt.

MADISON - “The State is spending less.” “This budget took a deficit and turned it into a surplus.” “Wisconsin has paid off its debt.” Which of these are true statements regarding the new state budget?

The answer is NONE of the above.

Getting information about what’s happening in Madison is one of the most common complaints of my constituents. The slow summer news cycle allowed writers and readers to begin to catch up on, for example, the plethora of policy unrelated to the budget.

Lost in most budget reviews are the basic financials – the fundamentals of the budget.

Myth number one says the state spending is less and implies the size of government is smaller.

But, according to numbers released by the nonpartisan Wisconsin Taxpayers Alliance, the 2013-15 budget spends $4 billion more than the previous. In fact, state spending is greater than it has ever been in Wisconsin’s history.

The new spending goes to a number of expensive new programs. Half of the $4 billion goes to health spending. But for first time in many years there are fewer people covered by state health programs. Nearly 100,000 people are expected to lose state health coverage by January. Not taking federal money for Medicaid expansion left the state budget and citizenry in worse shape.

Myth number two says this budget took a deficit and turned it into a surplus.

The opposite is true. A recent Legislative Fiscal Bureau (LFB) report tells the story. The 2013-15 budget began with a small surplus. Tax collections are improved. Wisconsin is emerging from the recession. The state had a bit more money to spend.

But the recently passed budget spends more than it is projected to collect in revenue.

When spending is greater than revenue – a deficit exists. Lawmakers are bound by the state constitution to balance the budget.

To do this, budget writers carried money over from the last fiscal year to create a technically balanced budget. But when spending exceeds revenue the imbalance catches up with us in the next budget creating a “structural” (or built in) deficit.

A recent report from the LFB pegs this deficit at the end of the 2015-2017 budget at MINUS $545 million.

People are rightly confused about the difference between the deficit and the debt. Sometimes lawmakers use the terms interchangeably. But they are very different.

A deficit is a mismatch between spending and revenue - spending more than money coming in. Debt is borrowing and must be paid back. Spending more than money coming in can certainly lead to more borrowing. This is exactly what’s happening in Wisconsin.

The third myth says the state eliminated the debt. This is false. In fact, state debt reaches record levels in the 2013-15 budget.

Why? The budget increases borrowing by more than $2 billion. Almost half of this borrowing goes to transportation spending. In addition, debt payments not made in the last legislative session catch up to lawmakers.

When debt payments are not paid, interest adds up. In the depths of the recession, Governor Doyle delayed debt payments to gain cash and keep government going.

In the 2011-13 legislative session, Governor Walker did not pay an even larger amount of debt payments coming due. Because debt payments were not made more money goes to pay off debt in this budget than ever before.

I often hear smart budget decisions mean better times ahead. But delaying debt payments always has a cost. This budget pays that price in a greater percent of tax dollars going to pay off debt than ever before in our history. New borrowing only adds to the debt. As a result state debt reaches an all-time high of $14.7 billion - or about 101% of general tax revenue.

Another myth even state officials parrot is the only alternative to spending cuts is tax increases. This assumes everything in government is at peak efficiency. This is far from the truth.

Smarter budget decisions mean smarter spending decisions. An example is paying debt bills when they are coming due – so as not to add interest and penalties.

But to do that would not have allowed the “surplus” used to justify the modest but politically popular tax cut.

This week, we focus on the issue of Treatment Alternative Diversion or TAD. Studies show investment in TAD would save taxpayer dollars that currently go to incarceration.

ALMA - “You need to read this book,” the judge told me. “Then you need to get every other Legislator to read the book before you take another vote.”

The book was Clean written by David Sheff.

“Addiction is a preventable, treatable disease, not a moral failing. As with other illnesses, the approaches most likely to work are based on science – not faith, tradition, contrition, or wishful thinking,” writes Sheff.

David Sheff is a journalist whose son suffered from drug addiction. A decade ago he sought answers to help his son. In 2008 he wrote about his son’s addiction in A Beautiful Boy.

Clean is Mr. Sheff’s call to action to wake up, learn and act to “overcome addiction and end America’s greatest tragedy.”

Part of the tragedy is the great number of treatments that don’t work and aren’t based in science. Treatment of most illnesses has moved to evidence based practices or those treatments based in science. For the most part, the treatment of addiction has not.

Difficulties arise partly because of the nature of the disease itself. For example, denial is a symptom of the disease - making it difficult to diagnose. Relapse is part of recovery making it difficult to determine success.  Mental illness often contributes to addiction. Sheff writes at least a third of those with a psychiatric disorder abuse drugs or alcohol. Diagnosis involves accurately assessing underlying mental illness.

Some treatments do work. Effective treatments include cognitive behavioral therapy, motivational interviewing and dialectical behavioral therapy. DBT therapists assist clients in emotional regulation and distress tolerance.   Those with addictions can recognize cravings and tolerate them.

Misdiagnosing and mistreating addiction and related mental illness comes at a tremendous cost to the individual, the addict’s family and to our society.

Often those with addictions are sent to prison with court-ordered treatment for addiction and later released from prison without having received required treatment. It should be no surprise that roughly 60% of Wisconsin’s prison population is a repeat offender.

Failure to adequately diagnose and treat addiction costs all of us. For example, the recently passed state budget spends almost $100 million new dollars to renovate prisons and address the expected 2% increase in the prison population.

Over 60% of Wisconsin’s prison population is addicted to drugs including alcohol according to a 2009 audit by the Legislative Audit Bureau. The audit also found over 30% of inmates are mentally ill. Over three quarters of women in Wisconsin prisons are mentally ill.

The solution lies in correctly diagnosing and treating the addiction and preventing further crime.

Treatment Alternative Diversion (TAD) programs include drug and alcohol court, day reporting centers, mental health treatment courts and other initiatives. These programs are highly successful at reducing recidivism and treating substance abuse and mental illness.

Local courts in Western Wisconsin are among the leaders in alternative courts that work to end addiction in our communities. I recently spoke with individuals who work with those struggling with addiction. I learned how drug courts teach accountability, provide structure and save jobs, families and lives.

Yet the programs are underfunded. Few who are eligible are able to participate in the interventions.

During the budget debate I introduced an amendment to invest $75 million in TAD which would yield over $150 million in savings. Instead budget writers put a meager $1 million in new TAD spending. The Governor and Republican legislators who voted for the budget refused to recognize results that show the first million invested by the state in seven pilot programs saved almost $2 for every $1 invested.

Numbers from a 2011 study released by the Office of Justice Assistance project with a $75 million investment Wisconsin would cut annual prison admissions by nearly 40% and cut jail admissions by 21,000. Recidivism rates would fall by as much as 16% and crime rates would drop by 20%. There would also be a drop in the number of children in foster care.

Not quantified by the study are the lives and families restored. I now know what must be done, thanks to the judge who set my summer reading.

Take a look at this book. Then help me act to end addiction.

Senator Kathleen Vinehout of Alma writes about the reality facing many entities, including municipalities and counties, of small government. Deep budget cuts and shrinking resources make it difficult for state government to provide assistance to communities in need. Kathleen met with officials in Arcadia – one of those communities hit hard by flooding and by shrinking state government.

ARCADIA, WI - People were friendly but anxious. They’d come to a meeting with local leaders to learn about protecting Arcadia from flooding.

Arcadia is nestled in a beautiful valley. Water from the surrounding hills drains into the Trempealeau River that runs right through town. Next to the river is the sprawling international headquarters of Ashley Furniture.

Ashley’s spokesperson began the recent meeting by sharing jobs created and businesses supported: 4,700 jobs created in western Wisconsin. More than 670 local and regional businesses supported.

Local leaders nodded. Many in attendance owned companies that benefited from Ashley’s location.

The problem is how to pay for upgrades to dams, dikes and levees needed to protect the city from flooding when rains drained water from surrounding hills right into the center of town.

Everyone remembered summer storms of 2010 that flooded Arcadia. Company representatives made it clear if storms came again and the company had to be rebuilt it would be in another country. Not in Arcadia.

The company asked for $13 to $20 million to improve the levy along the river.

Congressman Ron Kind said pending legislation could help. The Water Infrastructure Finance and Innovation Act - passed the Senate but was tied up in the House because Republican Congressional leaders did not want to spend the money.

An Army Corps of Engineers official explained Corps programs and limits. Times are tough. Funding cuts had eroded the Corps’ building authority.

Local officials explained they did not have the resources to pay for the project. Upstream the Mayor of Independence explained he needed help too.

Digging out Bugle Lake in Independence would hold more water running off the hills. Better yet, put in erosion structures, grass waterways, buffer strips and other conservation efforts. Keep rain on farm fields where it could do some good.

But the Governor and Legislators who voted for the state budget cut back funds for farmer conservation efforts.

Wisconsin Economic Development Corporation (WEDC) officials did have money and were close to an agreement for another part of the project. But WEDC officials didn’t want state efforts washed away with the next big rain.

What was unspoken in the room but on everyone’s mind: elections have consequences. Folks were running up against the new world of smaller government that many of them had promoted. The easy political talk about “cutting government” had turned into real cuts to real programs they wanted and needed.

It is a lesson we all need to take to heart. Let’s be real and specific when we talk about budgets and taxes and spending. Be careful what you ask for. You may get it.

The reality of the budget is this: 85 percent of state spending goes to six priorities upon which most of us agree -- transportation, education, health, local government, prisons and our public universities.

Programs like farmer conservation and dam, dike and levy repair make up a small part of state government. That part is getting smaller. Therefore, there is little money to slow water coming through fields into the Trempealeau River. We need money to keep water on the fields to nourish crops and out of downtown Arcadia.

I came away from the meeting realizing once again that we are a community.

Workers depend on companies for jobs. Companies depend on workers to get the job done.

Everyone depends on the infrastructure created by government, a government that together we have created.

We all have a part in making political decisions. What we decide will shape the communities in which we live, making them better or worse places to raise a family, find a job, and run a business.

This week Senator Vinehout writes about a poll conducted at the Jackson County Fair regarding the Citizens United Supreme Court decision and money in politics.  Most fairgoers favored amending the constitution to change the Citizens United decision.  Across Wisconsin, efforts are ongoing to push an amendment to the U.S. Constitution that states inalienable rights belong to human beings only, and that money is not a form of protected free speech under the First Amendment and can be regulated in political campaigns.

ALMA - “Corporations are not people,” the Black River Falls woman told me. “People in corporations already get a vote and a chance to speak out just like the rest of us. Giving corporations a vote and a chance to speak out means those people are getting two votes. That’s not fair.”

That statement summarized the opinion of three quarters of the fairgoers in Jackson County who chose to stop and vote on the statement “corporations are people.”

“We should amend the constitution to limit money in politics” garnered support from nearly 9 in 10 participants in the voluntary poll. A nearly unanimous 98% of fairgoers voting in the poll agreed with the statement “Every citizen should be encouraged to vote.”

Although unscientific, the poll does reflect attitudes across the United States related to the 2010 Citizens United Supreme Court decision which held that corporations and unions can spend as much money as they like in elections. The court decision opened the door for the “super PACs” of the 2012 presidential race.

In a later 2012 court ruling, Knox v Service Employees International (SEIU) Local 1000, the high court limited the ability of unions to use money in campaigns making the inequality in contributions between unions and corporations even greater.

Immediately following the high court decision on Citizens United an ABC News Washington Post poll of over 1,000 adults found 8 in 10 opposed the court ruling and 72% favored legislative action to reverse the court decision. People of all political persuasions were opposed to the decision including 73% of those who strongly agreed with the Tea Party’s position on issues.

A 2012 Greenburg Quinlan Rosnex Research poll found 56% of respondents agreed the constitution should be amended to change the Citizens United decision and nearly as many agreed that corporations should not have the same rights as people.

Fairgoers told me corporations’ “speech” is not the same as individual’s speech. The dollars corporations can sink into campaigns far outweigh most people’s ability to contribute to campaigns. Because of the 2012 rush of corporate money in campaigns people feel more distant from and more cynical about the operations of government.

But this feeling has not kept people from being involved in efforts to change things.

Efforts are afoot across Wisconsin to amend the U.S. Constitution to change the Citizens United decision. The group, Move to Amend and others around the state are organized to push an amendment to the U.S. Constitution that states inalienable rights belong to human beings only, and that money is not a form of protected free speech under the First Amendment and can be regulated in political campaigns.

I recently co-sponsored a bill that would call for a statewide advisory referendum on the Citizens United decision.  Voters would be asked if they support action by Congress and the State Legislature to amend to the Constitution to state that only human beings are endowed with constitutional rights, and money is not protected speech.

Most fairgoers hadn’t heard about formal efforts starting the process to amend our constitution. But they were eager to share their opinion about money in politics.

Many felt money from outside the state of Wisconsin should be banned from campaigns. Others felt outside groups should not be allowed to campaign. Still others wanted the veil of secrecy lifted from so-called “independent expenditure” groups – those private third party groups with appealing sounding names that spend so much money in campaigns.

Overall, citizens wanted to express their opinions and wanted elected officials to listen. And they wanted to learn, in an unvarnished way, what was really happening in Madison.

I put together a slide show about the state budget and brochure summarizing provisions of the budget. Fairgoers took time to look at the printed version of the slide show and offer their opinions on the state debt and the deficit.

When I left late one night, a woman stopped me and said, “I really appreciate you being here – you’re the only state elected person I got the chance to speak with. Thanks for coming.”

To everyone who stopped to vote or to offer an opinion I say thanks! I value your opinion!

This week Senator Kathleen Vinehout writes about her visits to area county fairs. While at the fair, Kathleen visited the exhibits and chatted with the exhibitors. She also got to listen to the pulse of the communities through her conversations with fair goers.  Politics and local issues are as much a part of the fair as cotton candy and carnival rides.

ALMA - The rain and wind didn’t stop Elaine from coming to the Trempealeau County Fair. She brought the quilt she and her 90-year-old mother finished together.

“It’s special to me,” she told me. “I want to show it off!”

Across Wisconsin folks are picking the best of the flowers, quilts and corn stalks. Youngsters are whipping up tasty treats from scratch. Teens are washing cattle, training horses, and arranging flowers.

It’s fair time.

County fairs have a deep tradition in our state. Waukesha County claims the oldest county fair in the state. In fact, this first county fair was held before Wisconsin was even was a state!

The old agricultural expositions, as they were sometimes called, became a place for city folks to meet country dwellers and for farmers to show off their prize crops and cattle. Fairs helped grow the dairy industry. During fair-time farmers learned the latest in new agriculture techniques and competed against each other in categories from corn to quilts.

Today competition is focused more on youth. But many county fairs provide an open class for arts and crafts, food, and agricultural products – giving people of every age a chance to show off their best.

As a 4-Her, I lived for the county fair. Now I enjoy talking with youngsters and sharing their enthusiasm.

Recently I spent several days at the fair and learned things have changed a bit.

Instead of sugar cookies, the 5^th graders are making granola bars. In addition to tied quilts, youngsters are involved in robotics. Digital photography replaced the old 35mm film.

But the enthusiasm of youth and the warmth of the community have not changed.

Fairs are a great time to catch up with constituents and listen to the pulse of the community.  It is also a time to discuss the current challenges facing our communities.

This summer I listened and learned more about sand mines from all sides of the issue. I learned from the technician who worked in the propellant plant in Jackson County. I listened as the local official shared concerns about balancing the needs of many constituents. And many of the people who live adjacent to mines shared worries about land, sand, roads, air and water.

I heard from those proud of their work to make the fair a special event. For example, the fair supervisor of youth projects who wanted to share the importance of 4H. She made sure to tell me the youth she’d worked with – over 40 years – never ended up in jail.

Lots of folks wanted to talk about state politics. Everyone had an opinion. Lots of folks had advice. Pretty much all of them agreed we needed more common sense in Madison.

When it came time for judging, it was the youth who stole the show. The hours of preparation made a difference in the show ring. From the shining coat of the lop-eared rabbit to the Holstein heifer that stood picture perfect every time she stopped.

I carry the memories I could not capture on film; like the girl who spent most of the afternoon walking her tall Suffolk sheep all across the fair ground. The sheep was fashionably decked out in a lime green Spandex sheep tube – something like a coat.

Even more fashionable was the fair queen and her attendant. They were dressed in their finest – but with a twist. Both young women were attired in lovely dresses but the queen had on her barn boots and the attendant wore her cowboy boots.

Only at the fair!

Wisconsin has more than 75 fairs in every corner of the state. Coming up soon are the Jackson County Fair in Black River Falls and the Buffalo County Fair in Mondovi both the first weekend of August.

Don’t forget the Wisconsin State Fair in West Allis August 1^st to 11^th.

You can find more information at the Department of Tourism website:

http://www.travelwisconsin.com/things-to-do/entertainment-attractions/fairs-festivals

or the Wisconsin Association of Fairs website: http://www.wifairs.com/wifairs.asp

This week Sen. Kathleen Vinehout writes about the problems with phone coverage in rural Wisconsin. Often in rural areas cell coverage can be spotty or simply nonexistent. People rely on their land-line phone to communicate with the rest of the world. Legislation was passed in 2011 that ended the requirement of a “provider of last resort” protection for consumers so Kathleen teamed up with AARP to reinstate this requirement.

ALMA - “My cell phone doesn’t work at home, so here’s my home number,” I told the constituent. “My home phone is the best way to reach me.”

If you live in rural Buffalo, Eau Claire, Trempealeau, Pierce, or at least eight other northern or western Wisconsin counties you or your neighbors likely have poor cell coverage. A recent analysis of the coverage maps of 5 major firms shows customers in at least 12 Wisconsin counties face a lack of cell coverage.

Most of us in rural counties have adapted. We don’t expect the cell phone to work and we don’t bother calling cell numbers for rural neighbors. But what happens if you pick up the old landline and it’s dead?

That’s what residents in Fire Island, New York are now facing. And if big phone companies have their way, your landline could be gone by the end of this decade.

A recent story in the Washington Post detailed the problems local residents of Fire Island faced after Hurricane Sandy. Following the storm, residents discovered their home phone company, Verizon, refused to repair torn and waterlogged phone lines.

Customers surrounding Washington, D.C. complained of aggressive Verizon sales representatives forcing customers to abandon their copper line home phones in return for expensive newer technology. Customers who want to return to their copper line phone cannot switch back.

According to the National Regulatory Research Institute, Wisconsin was one of 21 states that deregulated phone companies between 2010 and April 2012. The study detailed similar legislation pending in another 14 states. The American Legislative Exchange Council (ALEC), a corporate “bill mill”, is a driving force behind telephone deregulation.

The predominant carrier in Wisconsin, AT&T, lobbied for the deregulation bill that passed early in 2011. One provision of the new law ended the 100-year-old agreement between customers and the utility that brought reliable phone service to every part of Wisconsin.

When the deregulation bill was debated in the Senate I authored several amendments to protect consumers including one to keep the requirement for the “provider of last resort.” This meant if no other phone company provided service for you, your local phone company couldn’t come in and pull the plug.

Unfortunately my amendment failed and the new law passed that allowed companies to quit serving areas regardless of whether or not customers have other options. This part of the new law went into effect in early May 2013.

At the time the law passed, proponents argued a federal law protected people from losing local phone service. But last November, AT&T petitioned the federal government to remove those requirements.

According to the July Washington Post article, AT&T wrote that 70% of customers in their 22-state region chose to use wireless or internet based voice services. The company claimed landline phone service was “obsolete”.

But for many of us having a landline phone is not just a convenience; it is critical for commerce, health and safety. Rural electricity can be unreliable, law enforcement is far away, internet can be dial-up and fax machines are vital to rural commerce.

Many rural businesses could not function without a landline phone. Companies rely on the phone for orders, connecting with vendors and approving credit card transactions or checking bank balances.

Our Wisconsin countryside is aging.  Sometimes elderly folks need heart monitors or Lifeline services. But these services don’t work over cell phones. The industries of rural Wisconsin, agriculture and mining, top the list for dangerous occupations. The landline phone can mean the difference between life and death.

Ambulance response time may already be 20 minutes; driving somewhere to find cell coverage means more precious time lost when lives are on the line.

The health and safety of our neighbors should concern us all. This is why I teamed up with AARP Wisconsin to draft and promote legislation that would reinstate the “provider of last resort” law.

This summer I am working with advocates to bring attention to potential problems in rural Wisconsin without a landline phone and the need for this legislation.

Please spread the word. And give your neighbors a call - while you still can.

This week, Senator Kathleen Vinehout writes about the slice of life in Wisconsin that can be seen in the work of Wisconsin artists. Kathleen includes links to upcoming events and the Wisconsin Tourism webpage that provides a complete listing of art and cultural events in the state.

MADISON - When I asked my sister about a cake for her birthday, she smiled and said, “I’d rather have pie … and art.” So we sat down to blueberry pie and then headed off to an art fair.

Wisconsin has over 215 art fairs. The diversity and creativity is limited only by Wisconsin ingenuity which I’ve decided is limitless!

There is no better way to see what a creative human mind and skilled hands can achieve than by observing art and speaking directly to the creators.

Art fairs are an opportunity for artists to find a home for items they fashioned. Often working through the winter to produce art, many artists spend the summer driving to art fairs to sell their wares.

There is something intimate and rare about the relationship between an artist, her cherished work, and the new owner who finds extraordinary delight in owning a splendid piece.

I attended the 55^th Annual Art Fair on the Capitol Square which attracts 450 artists with another 120 or so artists “Off the Square”. The definition of art was broad and included textiles, jewelry, sculpture as well as paintings, photographs and prints. And I found art that stepped outside the boundaries of classification.

There were framed pictures of 3D vegetables and fruit that jumped right out of the frame; 3D mosaics made of individual tiles of ceramic and the life-sized metal moose sculpture that nodded its head at delighted patrons. Quite an addition to any Wisconsin garden!

Wisconsin art is a slice of Wisconsin life. The beauty of our state is reflected in the creative designs of the artists. For example the husband and wife team of Pfipsen Olivova Studios in River Falls used their inspiration from Mississippi River to create beautiful jewelry with the flowing lines of water.

Steve, a UW-RF graduate, met his lovely wife Katia when he was studying glassmaking in the Czech Republic. They merged their lives and created a successful artistic collaboration. They said “Wisconsin and its people inspire you to do art.”

A slice of Wisconsin life shows up again and again in the work of her artists; whether it be the shoreline of Lakes Superior and Michigan; the rolling hills of western Wisconsin or the city skylines of Milwaukee and Madison. Farm life reigns supreme: cows, barns, fields, chickens, cheese, fruit and vegetables…lots of vegetables. I could certainly see our love of gardening expressed through the eyes of the artists.

I was also impressed by the use of recycled materials. I saw sculptures made of scrap metals; creatures made of recycled tins; stained glass surrounded by old barn windows frames – complete with many layers of white wash; metal flowers made with old spoons; even clocks made of forks and spoons.

Artists from other states captured life in Wisconsin. Like the Florida man who said he knew more about our state than a lot of us. He used old junk toys to make 3D sculptures. He also collected images of Wisconsin icons, like the Mars Cheese Castle in Kenosha, “Hamburger Charlie” from Seymour and of course Bucky Badger, to create a collage any Wisconsinite would treasure.

If I’ve inspired you, be sure to visit the Stockholm Art Fair, July 20 from 10am to 5pm at the park along the river. You can also visit the Spirit of the St Croix Art Festival, September 21-22 in Hudson.

The Spirit of Wisconsin is alive among Native American artists who gather along Milwaukee’s Lake front September 6-8 at the Indian Summer Festival – the state’s largest Native American cultural event. You can find out more at www.indiansummer.org

Several fall art tours offer a glimpse into how Wisconsin artists bring art alive in their studios and galleries. The Fresh Art Tour in western Wisconsin is October 4-6 (www.freshart.org) and the Earth, Wood and Fire Artist Tour is October 26-27 (www.earthwoodandfiretour.com).

To learn more, try the state Department of Tourism website www.TravelWisconsin.com and click on the art and culture link. You will see Buffalo County’s own Prairie Moon Sculpture Garden and Museum in Cochrane featured on Wisconsin’s Tourism website!

This week, State Senator Kathleen Vinehout talks about the future of WiscNet, the University of Wisconsin's successful internet service, and the lobbyists from GOP allied commercial telecommunications companies who want to eliminate it from bid competitions.

MADISON - “It’s a sad day when political pressures from telephone company lobbyists keep us from working together? It’s frustrating, yet fascinating,” read a recent statement from WiscNet officials.

At issue is the decades old relationship between the University of Wisconsin and WiscNet and whether, despite separating from UW, WiscNet will be allowed to contract with the University to provide internet services.

The internet was developed by researchers and education institutions. The Department of Defense and many universities contributed to its creation. To this day universities share data on super-fast connections created and maintained through cooperative efforts of the universities themselves.

WiscNet was a natural outgrowth of work at the UW and its desire to share the internet with public and nonprofit entities. At least 38 other states have similar research and education networks. Many networks operate under the auspices of the state universities and today continue to provide services to local county and municipal governments, health care institutions, libraries and schools.

The thinking is: sharing services lowers the cost of government.

WiscNet evolved into a nonprofit that served 500 members including three quarters of public schools, all libraries, technical colleges, state agencies, the legislature and the court system.

A 2012 Legislative Audit Bureau report showed WiscNet accomplished its goal to bring low-cost internet to public entities. WiscNet fees were substantially lower than published commercial prices especially for high bandwidth users. The audit also showed the network functioned in ways that revealed its UW parentage – sharing staff and using the UW personnel, benefits and accounting systems.

WiscNet’s success attracted the attention of commercial telecommunications companies, especially AT&T. The telecommunications giant is a big player. AT&T spent almost $1 million lobbying state legislators in the last session with 21 lobbyists working on their behalf - more than half were employees. According to the Center for Responsive Politics, last year the company spent $17 million nationwide and ranked 10^th out of over 4,000 organizations that lobbied in 2012.

Lobbyists found fertile ground in the State Capitol for germinating their argument that the public sector should not compete with the private sector. Slipped into the 2011-13 budget was a provision that stopped the UW from being a partner in WiscNet. But internet services provided to the UW could still be competitively bid and – presumably- if WiscNet won the bid in open competition they could be awarded a contract like any other company.

This is exactly what happened this spring - in an open and competitively bid process, WiscNet was awarded a contract to provide services for the UW Madison. Part of the justification for this selection was that WiscNet’s initial equipment cost was 85% less than AT&T’s bid. The university claimed it was following the Supreme Court decision that “insures[s] that the public receives the best work or supplies at the most reasonable price”.

In June, AT&T threatened the University in a letter. The UW responded noting they followed the letter of the law in the procuring services from WiscNet; but would be withdrawing their award to WiscNet citing “business and political considerations—including the potential for ongoing appeals, litigation and legislative changes”.

Instead of competitively bidding services, UW Madison will now “begin transitioning to the operation of our own network.” This action prompted the Senate and Assembly higher education-related committees to call a public hearing to further delve into operations at the UW.

All the uncertainty surrounding WiscNet concerns many local superintendents. I spoke with a few local schools districts and learned some schools are ending their relationship with WiscNet and others are leery about the future and looking for options.

One local Instructional Technology Director said he was watching carefully and wondering if his job truly was to bring the lowest cost, best service to his school district.

People complain about the cost of government and encourage schools and local governments to work together. But when the 8,000 pound gorilla shows up in the Capitol and complains they can’t win a bid, often legislators are too eager to change the rules.

Things have gone too far when big companies threaten the state because they’ve lost a bid.

This week Senator Kathleen Vinehout  writes about budget priorities and how she crafted an alternative budget that would leave the state with no structural deficit and a strong balance at the end of the biennium.

ALMA - “Two years ago, Wisconsin made tough choices,” wrote Robert from Mondovi. “The deficit was eliminated, costs were controlled and Wisconsin was back on the track to prosperity.”

The Buffalo County man wanted “relief for the hardworking people of Wisconsin”.

With that in mind, I took a close look at state finances and discovered problems. I talked with the Legislative Fiscal Bureau analysts and read their papers. I sharpened my pencil and considered options.

The recently passed $70 billion budget spends $4 billion more than the last budget. It is estimated to create a half a billion dollar deficit going into the next budget - even though we started with more money. The economy is improving. Tax revenues are up - a little less $1.5 billion.

Lawmakers who voted for the budget (I was not among them) argued some of the new revenue be returned to taxpayers. Tax rates were changed in this budget. Average taxpayers making $45,000 a year will save about $84 in 2014; about $1.60 a week.

But this budget reaches historic debt levels. As debt increases, more tax dollars go to make debt payments; sort of like using your paycheck to pay the credit card bill.

In the last legislative session instead of making ‘credit card’ payments coming due, Wisconsin postponed paying some debt bills. This was not the first time, but it was the largest total debt postponement.

My mother always said, “Actions have consequences.” She was correct. In this budget the debt not paid comes due with a higher payment - making those ‘credit card’ payments a bigger share of what the state bought with tax dollars.

The rule financial experts follow is no more than 4% of tax money should be spent on debt payment. Ideally debt should be 3 to 3.5% of total general revenue. In the new state budget, debt payments are above the danger zone at 5.25%.

Fewer dollars are left for new investments in the ‘meat and potatoes’ of state government: K-12 and higher education, courts and prisons, local government, and health care.

The result: public schools, the UW, courts and prisons, and local government all received cuts or very modest increases but much less than their share of the $4 billion in new money.

Health received three times its share - over half - of the increase in new money. There will be more health spending but fewer people receiving health services. Why? The Governor won’t accept the federal Medicaid dollars to cover people making between $11,500 and $15,300 a year - costing Wisconsin more including tens of millions of dollars in administration contracts.

So, what would happen if Wisconsin accepted the federal Medicaid money, expanded Family Care (which saves money), invested in drug courts, mental health, schools, and the UW. What if we scrapped the tax rate cut and instead invested in the state’s rainy day fund?

To answer those questions, I put together an alternative budget. I restored money to eliminated agriculture programs and gave all the ‘bed tax’ money back to nursing homes. I fixed a deficit in childcare provider funds and restored cuts to courts and the UW. I paid cash for some new construction projects.

To address two problems facing our state – deteriorating K-12 education and addiction and mental illness - I invested in “Fair Funding for our Future” proposed by State Superintendent Tony Evers and made a big down payment on drug courts and mental health treatment.

On the revenue side, I eliminated new private school state spending and several expensive new initiatives. I didn’t buy 80 new vehicles, got rid of new tax breaks and tax rate changes, and made changes in health administration. I set aside over $600 million in the state’s checkbook which wiped out the structural deficit going into the next budget and had almost $400 million in cash left over.

Wisconsin must wisely invest our $4 billion in new money, set some aside and not be too quick to give folks a $1.60 a week tax cut. This is a much smarter approach and in the long run could provide that ‘relief’ Robert wanted for Wisconsin’s hardworking people.

This week Senator Kathleen Vinehout’s column focuses on voucher schools.  In a last minutes amendment included in the Assembly version of the budget, the Assembly majority created a loophole in the agreed upon cap on enrollment in the voucher school expansion.  Kathleen explains the impact of this provision and calls for a veto.

MADISON - Senators had debated budget passage for nearly eight nonstop hours. In a little over six hours the two-year state budget would be headed to the Governor.

Assembly Minority Leader Peter Barca beckoned me off the Senate floor. “There’s something you need to know,” he said. “Something in the budget no one seems to understand.”

A few of us gathered in a nearby conference room. “There are two ways a private school can get state tax dollars,” Representative Barca explained.

If a “choice” private school is in Milwaukee or Racine, the school can enroll any number of students. The state would pay tuition, up to a new dollar limit, for these students.

New to this budget was a statewide expansion of public money for private schools. Twenty-five schools would be chosen across the state. Together these schools could enroll up to 500 students in the first year of the budget and 1,000 students in the second year.

But, in a last minute amendment, a loophole was created.

A third option allowed any of the 112 “choice” schools in Milwaukee and Racine to move around the state and enroll an unlimited number of public school students in their private school at taxpayers’ expense. These schools would not be subject to the enrollment ‘cap’ of 500/1,000 students.

Listening to the explanation I was concerned this last minute amendment would cost more money, leaving less to our struggling public schools. I also worried private for-profit schools could set up ‘satellite’ schools across the state. Others expressed similar concerns.

Superintendent of Public Instruction Tony Evers issued a statement saying, “Without any advance notice or debate, Assembly Republicans passed a last minute amendment that will increase the cap on statewide vouchers by 40 percent in each year.” He pegged the total cost of the state cost of the private school program at $420 million over the next two years.

Senator Schulz who voted with Democrats to remove the voucher expansion said in a statement, “When my Senate colleagues negotiated the statewide expansion of the voucher program with the Governor and the Assembly, a hard cap on enrollment was the deal breaker. It appears the deal is already broken.”

Public money for private schools has not proven to be an effective use of taxpayer dollars. The over twenty-year-old program should be reevaluated with the same rigor applied to our public schools. Instead a coalition of the politically well-connected sought to expand the reach of private, sometimes for-profit, schools across Wisconsin- beginning with suburban Milwaukee and Racine.

Lobbying groups hired three former Assembly Speakers and, according the Democracy Campaign, spent nearly $10 million over the past 10 years- much of this in the last election cycle.

Beneficiaries of the expansion include the School Choice Wisconsin Board Chairman, Mr. Andrew Neumann who oversees operations of several voucher schools.

Andrew’s father, Mark Neumann started his first “taxpayer-funded school with 49 students and in eight years has mushroomed to nearly 1,000 students in four schools,” according to a 2010 Milwaukee Journal Sentinel article.

The article went on to report that Mark Neumann, a former gubernatorial and US Senate candidate, “operates three religious based schools in Milwaukee, a fourth nonreligious school in Phoenix and has plans to build clusters of schools across the country”. By 2010, the Journal Sentinel reported, Neumann’s Hope Christian schools received nearly $22 million from state taxpayers.

It’s hard for western Wisconsin residents to understand the intense marketing and efforts of enticement that come with public spending for private schools. What once began as an effort to help poorer families escape failing inner city schools has turned into a rush for taxpayers’ cash with little oversight or accountability.

I urge the Governor to veto budget provisions that allow taxpayer funded ‘franchise’ private schools to expand statewide without limits. These majority party efforts to slip changes into the state budget without debate or knowledge by the minority party or the press is a bad practice.

The state budget is already loaded with nearly 100 items of unrelated policy. Like each of those record-breaking number of policy items, this new expansion of private, franchise schools needs its own public vetting.

Senator Kathleen Vinehout gives an overview of provisions included in the AB 40, the 2012-15 State Budget Bill and the impact of some of those provisions. Spending in this budget does not decline and includes the revenue lost to the state as a result of the tax cuts, leaving less revenue for the state’s largest financial investments: local government, education, health care and corrections. It also increases debt and leaves a structural deficit for the future.

MADISON - “I love to eat dessert first,” the Prescott man said as he munched on cake. He smiled and said, “The problem is you don’t have room for the good things you need to eat.”

The first course of dessert in the state budget is a tax cut for about seventy five percent of tax filers. For a taxpayer making $30,000 a year the tax cut would be about $50 a year and for someone making over $300,000 about $1,500.

Tax rates would be collapsed - income at the $14 an hour range would be taxed at the same rate as income made at the $150 an hour range.

“It’s hard to be against a tax cut,” my colleague told me. “But the rest of the budget suffers because of this cut.”

The tax change would permanently remove about $600 million of state revenue. Because spending is not reduced – this budget spends $4 billion more than the last – a half a billion dollar structural deficit is created down the road.

The second course of dessert is almost 100 policy changes unrelated to the state’s finances that, in many cases, reward special interests or benefit certain lawmakers. One example is elimination of the UW sponsored Center for Investigative Reporting; another is overturning a Supreme Court decision on lead paint.

The real meat and potatoes of state government are state operations and funding sent to our local communities, colleges and universities. The state budget affects many parts of our lives. For simplicity’s sake I’ll mention just a handful of major programs with a few details on what’s in the budget.

Six items make up 85 percent of the state budget: health, K-12 education, corrections, transportation, the UW system and local government. Each of these areas of spending deserves a thorough look at how to improve operations. Unfortunately most of the discussion on the budget hasn’t focused on the meat and potatoes.

Health spending increases by over two billion dollars despite the Governor’s proposal to end BadgerCare for nearly 100,000 people. A simple change in eligibility would have saved over one hundred million in state funds. Instead the state spends more and fewer people are covered by Medicaid.

K-12 education receives a slight increase, but a large part of this goes to fund a statewide expansion of public spending for private schools.

The prison budget adds millions more to account for an increase in the prison population. Drug court, community policing and other programs to reduce crime and addictions are eliminated or in jeopardy.

Money for roads and bridges is dwindling, as autos are more efficient. As gas tax collections fall, lawmakers consider other ways to fund transportation. Instead of solving this long-term problem, the budget transfers nearly half a billion from the general fund – leaving less to fund K-12 schools, UW and other state expenses.

Local government and the university system receive very little additional money leaving questions about how these entities will cut services as they try to cover increasing costs.

Long-term finances are stable but precarious. The economy is improving. Tax collections are expected to increase. But financial forecasts are inconsistent. For example, budget writers built into the budget several hundred million in new tax collections. Yet a recent forecast by the Philadelphia Federal Reserve shows Wisconsin’s economy contracting over the next six months.

This budget continues to increase debt. Not enough money is put away should the state face another economic down turn. Following the law and setting aside 2% of the general fund as a cushion in the state’s checkbook could improve finances. Instead, the Governor changes the law and keeps a mere half a percent as a financial cushion in the reserve fund.

Every parent who tells their children not to eat dessert first knows there will not room for the meat and potatoes. They also know there’s going to be a crash from eating all that sugar.

Wisconsin’s fiscal sugar crash is likely to show up in the spring of 2015 when the next Governor and lawmakers pick up the pieces set in motion in June of 2013.

Will the truth on Walker's medicaid blunder get out of the Madison-Milwaukee echo chamber? Republican lawmakers are fooling themselves and the public if they believe Walker's talking points on health care reform, says Senator Kathleen Vinehout in her latest column on the Governor’s plan for Medicaid that was affirmed by the Joint Finance Committee.

MADISON - “We want to make things better,” one of the Finance Committee members recently told his colleagues. This Medicaid plan, he said, “Protects taxpayers, strengthens the safety net and lowers total cost to taxpayers.”

What actually happened would cost the state a hundred million more dollars than full Medicaid expansion, drop coverage for 84,000 people and leave almost half a billion of federal dollars on the table in this coming budget.

Only half of those who lost Medicaid will likely ever sign up for private insurance. When they do, their federal cost to taxpayers will be $3,000 more per person than if they had stayed on the Medicaid program.

Some lawmakers argue the safety net will be strengthened by opening up the Medicaid doors to all those who make less than $11,500 a year for a single person; that those who lose Medicaid are easily covered under the exchange and in the long run taxpayers save.

The problem: private insurance costs more to buy and more to administer. Poor people are unlikely to sign up for something they can’t afford.

Fiscal Bureau analysts caution the “take-up” rate, meaning those poor families who actually sign up for private insurance, will be much less than the near perfect number estimated in the administration’s budget.

This concern is justified. According to a Congressional Budget Office (CBO) study from last summer, an estimated one half of those losing Medicaid will never buy private insurance.

Those who do will receive federal tax credits and subsidies. Because of the increasing cost of subsidies and credits, CBO estimates federal spending would rise by roughly $3,000 per person by 2022. This is the difference between exchange subsidies of about $9,000 per person and estimated Medicaid savings of roughly $6,000.

Some analysts are quietly grateful at least the Governor decided to allow those up to 100% of the Federal Poverty Limit (FPL) - $11,500 for a single person - to receive Medicaid. Anyone below 100% of FPL is not even eligible for subsidies or tax credits. This limited lawmakers’ choices.

The majority of the state’s budget writing committee affirmed the only choice the Governor had if he wanted to continue to argue that he still opposed “ObamaCare”: cover those with incomes at or below 100% of FPL and drop (or phase out) Medicaid for parents who now receive Medicaid and make up to twice the FPL.

Simply put – if you make under $11,500 as an individual or $15,500 as a couple you will be eligible for Medicaid. If not, you’d better find out about the exchange because you can’t get on Medicaid.

Three additional factors add sting to this decision. Unlike the federal law, the Governor’s plan does not modify your income by dropping 5% to determine eligibility. Second, the plan changes the law to require that depreciation be counted as income. This is a big change for farmers who argue depreciation is not real money they can save but an adjustment on tax forms. Third, 18 year-olds are no longer covered unless they are still in high school or technical college and will graduate by age 19. Foster children are still covered until age 26.

Republican leaders appear to be following the Arkansas approach of partial Medicaid expansion. However, if Arkansas is the model, the Governor might have duped Republicans on the Finance Committee.

To move towards the Governor’s plan, the feds require the state to seek a waiver of federal law. If Arkansas’ case is prologue, Wisconsin may be required to treat those dropped from Medicaid as if they are still on Medicaid - with choice of at least two qualifying health plans and “wrap-around” Medicaid-like services if benefits are less or cost sharing is more.

Correspondence from the feds to Arkansas makes it clear the feds will evaluate each waiver on a case-by-case basis. Budget language makes it a clear this waiver must be sought and followed. This leaves a lot up the air.

Especially for elected officials who want to hit the campaign trail saying, “I said ‘no’ to ObamaCare.”

This week Senator Kathleen Vinehout writes about Rep. Kooyenga’s proposed tax reform plan.  Kathleen appreciates that he wants to have a conversation about tax reform, but she does not support his proposal.  She offers to work with him on a bi-partisan proposal that is modeled after what experts tell us: Taxes should be low, broad-based, and transparent. Tax policy should not favor one type of business over another.

MADISON - Get rid of tax credits for dairy farmers? No tax breaks for meat or food processing plants? Get rid of credits for ethanol? Cut beginning farmer credits?

You’ve got to give Representative Dale Kooyenga credit. The Brookfield Republican isn’t afraid to take on the dairy state’s sacred cows.

Just as the state’s budget writing committee is wrapping up their work and Legislative leaders are about to broker a deal on public education and health, Rep. Kooyenga announces a proposal to rewrite the income tax code.

He seems to start with agriculture in mind. I bet there aren’t many cows in Brookfield.

Last summer, Representative Kooyenga and I served on a committee studying changes to the state’s income tax code. So it didn’t surprise me to see he was working on income tax reform.

But his timing in unveiling the proposal and what seem to be big changes for farmers and ag-related businesses almost ensure its demise.

That’s too bad because Wisconsin’s complex tax system needs reform.

The complexity is the product of tax loopholes, not tax rates. The State Legislature rarely meets a tax credit it doesn’t like. The result is a cumbersome tax code that hasn’t been seriously evaluated since 1999 and then the Legislature ended work without repealing a single tax credit.

There are 73 possible state adjustments after you file your federal taxes and there are dozens of credits to modify those adjustments. In the 2013 Department of Revenue report, I counted 37 credits that totaled $1.5 billion in lost revenue. My friends at the Revenue Department will remind me that the credits interact with each other and can’t always be added together: more complexity.

Messing around with state income tax is frightening for anyone who runs an operation dependent on the state. That’s because so much of what the state buys is paid for by income taxes. State income tax makes up over half of the general fund – the source of state money for health, education, local government, corrections and universities. Wisconsin is more dependent on income taxes than all but 11 other states.

While I commend the Brookfield Republican for getting this conversation started, I don’t agree with details of his proposal. For example, the proposed lowering of tax rates for high income earners - over $300,000. I don’t support his plan to allow millionaires to offset high off-farm earnings with (part-time?) farm losses. Currently no farm loss is allowed if it exceeds $600,000.

The plan favors the wealthy and doesn’t include serious reform of property tax – the part of our tax system most out of line with the national average. Start-up companies are most burdened by property tax which impacts job creation.

In the interest of advancing reform, I’d offer to be a bipartisan partner in the discussion.

First, let’s agree on a few ground rules. The goal of tax reform must be revenue neutral – meaning when all the tax breaks and loopholes are ended, every dime must go to lowering rates – but not one penny below the total dollars saved by tax changes.

I know Republicans who are too tempted to lower rates more than what we can afford. And some Democrats are very tempted to plow savings into new spending.

Second, reform must be bipartisan, regardless of the party in power. Why? Because in this hyper-negative political environment, no rookie in a swing district is going to be comfortable voting to end a tax break to (name your favorite good cause) unless they know the party against them also voted to end the same break.

Third, all taxes should be on the table. Property taxes can be regressive. Sales tax is almost always regressive. An income tax change on one group should be considered in the context of all other taxes that groups pays.

Finally, no tax break is sacred. All should be regularly evaluated even if they are not eliminated. We badly need a process to evaluate what we get for our investment.

The experts agree. Taxes should be low, broad-based, and transparent. Tax policy should not favor one type of business over another. But getting there is not for the faint-hearted. And timid does not describe my friend Dale.

So, while you’re at it, Dale, maybe get rid of the Lambeau Field tax check-off?

Oh, you just did?

Senator Kathleen Vinehout writes about the need for DNR staff to inspect the growing number of frac sand mine operations. The number of sand mine operations has grown significantly since the summer of 2012 and staff is needed at DNR to monitor them. The Joint Finance committee voted down a motion to fund the needed 10 positions.

MADISON - “We really need concerned citizens to be our eyes and ears,” wrote DNR Storm Water Specialist Ruth King in response to citizen complaints about frac sand mines. “I am only a half-time employee and cannot be everywhere at all times.”

Ms. King’s appeal was reported in an article written by Kate Prengaman of the Wisconsin Center for Investigative Journalism who closely follows the growing sand mine industry.

“Nearly a fifth of Wisconsin’s 70 active frac sand mines and processing plants were cited for environmental violations last year,” wrote Prengaman. She quoted Air Management Specialist Marty Sellers who said he sent letters of noncompliance to “80 to 90 percent” of the sites he visited.

The DNR’s limited resources means some frac sand mines are not inspected or only inspected when citizens complained about the mine.

To address the staff shortage, the state budget includes two positions as dedicated sand mine monitors. However, additional positions were recently considered by the Legislature’s Joint Finance Committee.

Monitors are needed to oversee air quality during mine construction and operation. New inspectors would monitor compliance with storm water rules, high capacity wells, wetlands and endangered resources. Inspectors review permits, blasting and fugitive dust control plans, discuss best management practices with the operator, inspect equipment and review company operation reports.

The Joint Finance Committee was informed about the sand mine industry through a paper written by the nonpartisan Legislative Fiscal Bureau (LFB) which provided detailed information on the industry that has exploded in western Wisconsin.

“Three years ago there were 5 industrial sand mines and 5 industrial sand processing plants in the state,” wrote LFB analyst Kendra Bonderud. “DNR officials recently estimated that as of April 1, 2013, there are 105 industrial sand mines and 65 industrial processing plants in the state, which is two to three times the number the Department was aware of in the summer of 2012.”

The LFB paper noted last summer the DNR reviewed staffing needs for permitting, compliance and monitoring of frac sand operations. At that time, the Department estimated 10.2 full-time positions were needed to oversee the 54 known sites. The fast growing industry now needs two to three times more inspectors.

Joint Finance Committee member Senator Jennifer Shilling offered an amendment to fund at least those 10 positions. Still, the majority of Finance Committee members voted down Shilling’s amendment.

Adequately funding sand mine monitors is important for neighbors, local government and the mine owners and workers. I receive many calls of neighbors concerned about mine operation. Local government officials are stretched thin and are often unable to monitor the mines. Most counties have few staff dedicated to the inspection of mines. Workers need necessary health and safety protections. Owners that do follow the rules are at a competitive disadvantage with those who do not.

Citizens are rightly concerned when the state relies on them to monitor mine safety. It was from citizens that I learned of one of the most serious violations. Last year Preferred Sands’ mine in Trempealeau County had a mudslide that affected a neighboring property. The WI Center for Investigative Journalism reported this mine also had “multiple violations of its air quality permit”. The violations are now being considered by the Department of Justice.

Trempealeau County is the epicenter of sand mining. With 28 mines there is no higher concentration in the state. Recently, citizens delivered to Trempealeau County Board Supervisors petitions with 821 signatures in favor of a year-long sand mine moratorium. Petitioners were upset when supervisors ignored the stack of signatures and instead failed to pass the moratorium on new county mines.

Citizens should not be charged with the monitoring of mines in their neighborhoods. If Wisconsin allows sand mining, Wisconsin must invest in staff to monitor compliance with the law.

Not all 170 mines and processing plants are up and running. But it is reasonable to expect they will be by June of 2015, the end of the upcoming state budget. The Legislature should act to phase-in the funding for all 32 needed positions before the final passage of the two-year state budget.

MADISON - “I strongly supported the bipartisan Wisconsin Stewardship Fund,” a self-described Republican man from Eau Claire wrote to me.

“Conservation issues are near and dear to my heart. I will oppose any politician who does not listen to all Wisconsin constituents and give these issues due process.”

The letter came the week the state budget writing committee took up the Knowles-Nelson Stewardship Fund.

Named for Wisconsin conservation minded Republican Governor Warren Knowles and Democratic Governor Gaylord Nelson the bipartisan program usually gathers broad support. Created in 1989, the Stewardship Program provides money for purchase of lands for recreation and preservation.

According to the state’s Blue Book, over the two decades of its existence, the program spent over $500 million to acquire over 500,000 acres. State officials often work with land conservation groups who acquire the land with grants from the state and donations from individuals and use volunteer labor to maintain the land.

Just a year ago the Nature Conservancy purchased the “Twin Bluffs”, 161 acres of bluff land overlooking the Mississippi River village of Nelson. The land acquisition was made possible with a $300,000 grant from the Stewardship Program. Landowners sold land to the Nature Conservancy to protect the land including protection from sand mine development.

The state uses bonding authority – the sale of bonds is how the state takes on debt- to finance the Stewardship Program. Increasing debt was the justification for members of the budget writing committee to vote to cut the Stewardship Program.

In a partisan vote, the committee trimmed funds by a little more than 20% in the first year of the coming budget and another 9% going forward. Land conservation groups were justifiably unhappy with the cuts.

But what they found more disturbing was the Finance Committee’s vote to require the state sell over 10,000 acres of Stewardship land in the next four years and require the sale of at least 250 acres more of farmland every year for the next seven years.

The Finance committee action will have conservation officials draw a line around the boundaries of projects established by May 1, 2013 and sell all land not within those boundaries and acquire no new land that is not within these boundaries.

In this rather cryptic description I was left to wonder what exactly the budget committee had in mind for land sales over the next few years.

Using increasing debt as the justification for the seeming shutdown of future projects may be the way Republicans obtain citizen support for the changes to the Stewardship program.

The gentleman who wrote to me about the Stewardship Fund shared his thoughts on spending:

“I voted Republican in the last election largely because I thought it was imperative to bring our state spending under control by making tough decisions. I still support that objective and the way it was done”.

That debt is climbing is indisputable. But conservation groups, like Gathering Waters Conservancy, argue the cause is not the Stewardship Fund. While state debt has increased, the program’s contribution to the debt remained relatively stable.

Cynics in the Capitol suggest there is another intent among leaders that has nothing to do with reining in state debt. Some allege there is a connection between the Governor’s request in the budget to sell off state assets in possible “no bid” contracts and the sale of thousands of acres of Stewardship land.

Clean Wisconsin, an environmental leader in the state, in a prepared statement, asked “What will they sell? The 400 acres of Stewardship land at Devil’s Lake? Protected parts of the Ice Age Trail? It’s disheartening and frustrating that the Legislature put stewardship back on the chopping block and now wants to sell off these precious resources to the highest bidder.”

I would argue that if the sale of state assets passes as written, there may be a sale – but it doesn’t have to be the highest bidder.

No conservation-minded Democrat or Republican should support a no-bid sale of state Stewardship land.

MADISON - “There’s a heck of a lot of things they didn’t tell me when I signed on,” admitted the chief of the Governor’s lead jobs agency during a recent hearing before the Joint Committee on Audit.

Reed Hall, CEO of the Wisconsin Economic Development Corporation (WEDC), spent several hours grilled by Audit Committee members. He agreed troubles existed but insisted WEDC was on a new track with plans to correct problems. Later in the hearing two lawmakers with experience as business executives provided solutions.

“I voted for WEDC and thought it was a good idea,” said Senator Tim Cullen, a former insurance executive. “Taking the best practices of the private sector and using them in WEDC was a good idea.”

But what was exposed in a recent audit of WEDC was the worst, not the best, of any business. The agency was run without basic managerial processes in place, without policies, without oversight of delinquent loans or consistency in loan or grants awards, without a clear budget or consistent accounting practices.

Accounting records couldn’t be reconciled to the point that the year-end financial report of the state of Wisconsin included only an estimate of the agency’s expenses.

And there was no evidence to support claims of tens of thousands of jobs created.

State law requires jobs be independently and annually verified through a sample of records. The public must know if jobs ‘promised’ by companies are actually created. Auditors determined this never happened. In more half of the company awards made, the business never even filed required reports.

State law also lays out a process to ensure dollars go to programs whose effectiveness can be measured. Because the agency failed to follow the law auditors were unable to determine if any program was effective in creating jobs.

For example, laws require WEDC to establish goals and expected results for each program. Reports should then be compared with expectations so lawmakers can make proper future funding decisions based on actual program outcomes.

WEDC failed to even identify expected results for a third of all programs it administers; let alone whether companies achieved expected results. Without expected results or company required reports detailing compliance it was impossible to determine if any program met its intended purpose.

WEDC awarded over $60 million in loans and grants and over $100 million in tax credits. They supervised local government in the sale of almost $350 million in bonds for projects.

But they kept members of the WEDC Board in the dark about inadequacies in oversight, internal processes and compliance with the law.

“The Board is toothless,” testified Board member and Assembly Minority Leader Peter Barca. “The Governor loves to control everything.”

“The Board must make the hiring decisions,” said Barca. “I’ve never served on a Board that does not hold the CEO accountable. They [WEDC executives] are free to ignore anything the Board says.”

Lawmakers Barca and Cullen recommended the Board be restructured and empowered. Audit and Finance committees be established and meet bimonthly, committee chairs and a lead director be created; committee chairs should set their own agendas; board members should serve for fixed terms.

Barca concluded with an ominous observation, “Key staff people are still misleading this committee, even today…. To this day they go around obfuscating jobs created, what role did they play to retain them?”

The answer is unclear and not auditable. With no budget, no company reports in over half of cases reviewed and no program expectations for a third of programs, one might think lawmakers shouldn’t increase WEDC’s funding.

But that’s exactly what happened in the Joint Committee on Finance only hours after the conclusion of the Audit Committee hearing.

Law requires the co-chairs of Finance to serve on the Audit Committee to ensure audit findings are reflected in budget decisions. Neither co-chair attended the Audit hearing. None of the recommendations on board changes were included in the Finance Committee action.

Rather than rush to create the appearance of a problem solved, legislative leaders should heed the advice offered the Audit Committee and create a board that bulldogs WEDC management into complying with the law. It’s the board’s responsibility; it’s time they were given the authority.

MADISON - “In Wisconsin, we don’t make excuses, we get results,” said Governor Walker as quoted by the Associated Press. The governor was unveiling his $75 million budget initiative earlier this year to economic development professionals across the state.

While the new dollars are still being the debated, the spending of existing economic development dollars recently took center stage among Legislators.

The Legislative Audit Bureau (LAB) released a stinging indictment of mismanagement and poor oversight at the Wisconsin Economic Development Corporation (WEDC). The audit reviewed 30 economic development programs during the 2011-12 fiscal year. WEDC awarded $41.3 million in grants, $20.5 million in loans, provided $110.8 million in tax credits to businesses and individuals, and authorized local government to issue $346.4 million in bonds.

Auditors found not a single job created by this investment was verified by WEDC. More than half of the required reports had not even filed by businesses receiving assistance. Without evidence it was impossible for auditors to determine if contractually specified performance, including required job creation, ever happened.

In page after page of the 120-page report auditors outlined management failures and violations of current law.

Companies and projects that were not eligible still received awards. In violation of the law, WEDC paid for activities provided before the date of the company’s contract. Awards were given by WEDC over amounts limited by law. One company received $2.5 million in credits through a job creation program and never even promised to create jobs. Another company received $57,000 per job in clear violation of program limits on dollars given per job.

Delinquent loans were not tracked and collected. One loan was restructured six times to avoid the business making payments. Another business that failed to pay on a loan that was almost 14 years old received another loan twice as big. Some loans were forgiven; one of which was made to a company that hired the same firm WEDC hired to improve its record keeping.

Auditors documented at least seven instances where this firm, Baker Tilly, had potential conflicts of interest because the firm represented and provided consulting services to companies seeking awards with WEDC during the time Baker Tilly had access to information on WEDC’s awards and recipients.

Wisconsin’s premier metric “Job Creation” could not be verified on any of the millions of taxpayer dollars that went out the door.

The metrics for tracking job creation programs were set to law following a disturbing audit over six years ago. Senator Lassa and I along with other now retired lawmakers spent a year fixing these problems. Following systems in other states we set rules requiring goals, benchmarks and evaluation to make sure the business did what was promised and the people’s dollars were wisely invested.

In January, 2011 I wrote:

All this work is about to be thrown out the window. And to be replaced by a dark pantry with a sign on the door reading ‘Just Trust Us’.

Moving at break neck speed through the Legislature is a bill to abolish the state commerce department and create a private corporation. The bill gives this private corporation unlimited state bonding (or borrowing) privileges and makes it exempt from many state laws including employment law.

Two years later auditors found even the limited version of what remained of the law was not followed. The problems of mismanagement and the appearance of impropriety are not limited to Wisconsin.

Earlier this year, the Chicago Tribune reported the federal government is investigating the Illinois economic development agency and the state auditor warned for twenty years controls on state money are not adequate. New York Times reporters documented Governor Cuomo’s actions using New York’s economic development agency to hire friends and shore up contributions for his possible run for president.

Both Illinois and New York have Democratic governors. Regardless of party, there is no excuse for mismanagement and poor oversight.

Lawmakers must demand change. If everything doesn’t have to be made public, the temptation to break the law is much greater. Every parent knows you can’t leave kids in the pantry with the door closed.

Note: The Joint Legislative Audit Committee has scheduled a public hearing on the WEDC audit for Thursday.

MADISON - “What’s happening to the UW reserve money?” the woman asked. She was concerned about criticism of the University of Wisconsin. “It seems like they want to attack the UW,” she told attendees at the Mondovi Town Hall Meeting.

A recent memo from the Legislative Audit Bureau (LAB) and the Legislative Fiscal Bureau (LFB) revealed nearly a billion dollars in what appeared to be reserve funds carried over from the last budget year.

Legislative leaders reacted by calling for a freeze on UW tuition. Other lawmakers want to cancel the promised $181 million increase to the UW. University officials cautioned most of the money was obligated to student financial aid or support of high demand programs like business and engineering. They say unrestricted does not mean uncommitted.

Nothing was clear except the UW’s so-called “unrestricted net assets” took a big increase in the past few years.

LAB reported in January the sizable growth of UW unrestricted net assets – or dollars not restricted by the funding source. Auditors reported UW unrestricted assets at $860.2 million. These assets increased by $624.9 million over five years.

The discovery of a large sum of unrestricted net assets comes on the heels of sustained tuition increases. It also comes at a time when the Legislature gave the UW new freedoms in how to spend money.

In recent years, as state funding to the UW dropped, university officials asked for and were granted new authorities. Changes in the last budget made funds formerly directed for a specific purpose into a flexible block grant; to allow the UW to spend as it saw fit while honoring the needs of all campuses.

New authorities granted in the last budget allowed the UW to set its own travel policies. Beginning this summer the state gave the university system contracting authority for supplies and materials unique to the UW, and the UW Madison was to develop a new system-wide personnel system.

This decision was made after many problems and much expense with the last personnel system. Even with recognition of the system’s problems, officials failed to stop recent overpayment of the health insurance and retirement of some employees. This discovery led the Joint Committee on Audit to approve an investigation of the UW personnel system as its first audit of 2013.

The discovery of large sums in reserve fractured the trust building between the UW and the Legislature. Sharp words and threats came from leaders when details about the exact purpose for which the money was set aside were hard to find.

My legislative colleagues on both sides of the aisle called for a freeze in tuition. Some said planned UW budget increases should be scrapped.

The surprise in the Legislature over the discovery of these dollars may reflect the general obscurity of the financial matters of the state and not any attempt by the UW to conceal cash.

Across the country, as in Wisconsin, legislators turn to the Comprehensive Annual Financial Report (CAFR) to learn of the state’s fiscal health. Hoping to find cash to balance the budget, legislators identify what appear to be cash balances.

But few state reports are as opaque as the CAFR. Auditors examine finances according to governmental accounting standards. While this method may assist bonding agencies in comparing risk, it does not provide legislators with necessary detailed financial and management information. So in Michigan, California and Wisconsin lawmakers seek funds the universities say are already committed.

Exactly what money is in reserve and what money is already committed is unclear.

This is why my Audit Committee colleagues and I recently directed the Legislative Audit Bureau to review the dollars and their oversight.

It is right for us to ask questions and we know the questions to audit: are the unrestricted net assets commitments or reserves? They can’t be both. What is the appropriate level of reserves necessary for a $5.5 billion operation like UW? What oversight do system officials provide and is this oversight adequate?

My legislative colleagues should slow their rush to judgment until auditors complete their investigation. It’s always better to make decisions based on facts.

BLACK RIVER FALLS - “Black River Falls is grappling with high phosphorus in the water,” the woman told me at the Town Hall Meeting. “The phosphorus is coming from farms up river. Why cut funding to conservation staff that help farmers keep manure out of the river?”

Buried in the 2013-15 state budget is removal of almost $5 million or over a quarter of cost-share funding to create structures to reduce run-off and preserve topsoil. The budget proposal also cuts nearly $2 million for local county conservation staff who assist farmers in creating and monitoring these structures.

It’s been a difficult spring for farmers. Many turned to spreading on frozen and snow covered ground. Now with the melting season underway, phosphorus from the manure finds its way into waterways.

State and federal rules clamped down on phosphorus discharged by city wastewater treatment plants and cities are crying foul. They claim the state is shortchanging them by taking away money used to help farmers control run-off. The increased cost of phosphorus cleanup will fall unfairly on city ratepayers.

Local people also raised concerns about several other changes in the budget of the Department of Agriculture, Trade and Consumer Protection (DATCP). The Governor proposes getting rid of popular programs like the Buy Local, Buy Wisconsin, the Agriculture Development and Diversification, and the Grazing Lands Conservation Initiative programs.

Buy Local, Buy Wisconsin is a competitive grant program launched in 2008 to strengthen the ‘value added’ aspects of Wisconsin agriculture. If we can keep more of the food dollar in Wisconsin, the entire state benefits. Local folks used these programs to develop markets for local produce, meat, fish, and cheese. With a small investment, the program created $4 million in new food sales over three years.

The Agriculture Development and Diversification grant program was created in 1989. Since then it has funded 342 projects with an investment of $6.9 million according to its website. This program leveraged $49 million in new capital investments and over $140 million in economic returns.

For example, James Altwoes of Mazomanie wanted to reestablish hops growing and processing in Wisconsin. With grant support he developed new technology, reached out to new buyers and involved 1,000 people through workshops focused on growing hops.

I often hear from farmers who benefited from the Grazing Lands Conservation Initiative Program. Intensive rotational grazing is a technique many used to keep cattle rotating from one pasture to another to increase the consumption of high quality feed and preserve plants and topsoil. The practice is not as easy as you might think.

Technical assistance from the Grazing Program helped farmers hone their skills at recognizing noxious weeds and early signs of needed pasture maintenance. The popular local ‘pasture walks’ were part of the outreach provided by this program.

Cutting popular and effective programs was not the only part of the state budget that drew complaints from rural people. Many were concerned about the changes facing rural schools and BadgerCare. I will cover these topics in upcoming columns.

Removing the ban on foreign corporations and foreign individuals from owning large tracts of Wisconsin land has many farmers upset. Older folks express concern about the control of food by foreign companies. They remember the rationing of World War II. They see land ownership as a way to protect the security of our country.

Younger farmers, trying hard to get started in farming, are worried foreign companies will increase the competition for land and drive up prices. I have yet to find a person attending a town hall meeting who thinks changing the law on foreign companies owning large tracts of land is a good idea.

Like foreign land ownership, the change in conservation funding is an issue that cuts across city dwellers and rural residents alike. People see the connection between high costs for city ratepayers and dirty water from farm run-off. They do not see cutting conservation money as a wise decision when cities are facing higher phosphorus standards.

Especially this year the late spring snow keeps cattle on concrete pads and winter manure storage over capacity. As one rural woman said, “we all live somewhere down stream.”

State Senate leader, Kathleen Vinehout, gives the inside story of how Walker and the Republicans in Madison have spent our State into a structural debt that will hold Wisconsin’s economy back for decades.

MADISON - “Pardon my tardiness,” I told the crowd gathered at a Town Hall Meeting. “I spent 20 minutes stuck in the mud.” Rural folks nodded in understanding. Spring has turned many unpaved roads into mud.

Stuck in the mud is an apt metaphor for Wisconsin state finances.

Debts and deficits; GAAP and gaps; bonding and borrowing; all these terms make it hard to follow what’s happening with the state’s fiscal health.

Wisconsin cannot run a deficit. Unlike the federal government, every budget must be balanced. But what exactly does that mean?

When state leaders make funding commitments to coming years they can create a ‘structural deficit’ which means the future years’ expected revenue won’t cover the expected spending.

This happened regularly over the past 20 years. A 2013 memo from the nonpartisan Legislative Fiscal Bureau (LFB) shows more in store in the future.

My colleague summed up the concern. “I cannot support a budget that has that kind of a structural deficit and I know several other Senate Republicans who feel the same way,” Senator Rob Cowles (R-Allouez) told the Milwaukee Journal Sentinel.

Commitments made in the proposed 2013-15 state budget leaves the following two-year budget with a significant shortfall.

Much has been made of the work done to create a budget surplus at the end of this fiscal year. LFB staff report the state ending up with a nearly $500 million surplus. The main reason is improvement in revenue from tax collections.

But the LFB memo has many folks talking about projections for a shortfall of $644 million in the 2015-17 state budget.

Deficits, structural or otherwise, should not be confused with debt. The state sells bonds to raise capital with a commitment to later pay back the bondholders. This is state debt.

The Wisconsin Taxpayers Alliance calculated debt per person rose 131.9% over the past decade. My research with the LFB shows state debt more than tripled from $4.4 billion in 1996 to $14.2 billion in 2012.

Money spent on debt payments can’t be spent on roads or classrooms so financial staff remind legislators to hold spending in check. Historically the state's debt management threshold is no more than 4% with a target of annual GPR debt service between 3% and 3.5% of all general fund spending. Debt payments go well into the danger zone at 5.28% in the first year of the 2013-15 budget.

One very troubling part of the current budget was the sale of more debt to avoid making payments coming due.

Even though the current budget had $1.8 billion projected in new revenue, the Governor did not pay $560 million in debt payments coming due. More debt was incurred as some bonds were sold at a premium to gain cash up front. This gave the appearance of the state having more cash. But the long-term effect was an increase in principle and interest.

The 5.28% of tax money spent on debt in the 2013-15 budget is the direct result of payments owed but not made in the past.

Deficits and debt are two measures of fiscal health. A third, rather unique to state government, is the GAAP Gap. This measures the gap between how the state budgets - on a cash basis - and generally accepted accounting principles (GAAP).

Since 1982 when the Attorney General interpreted the constitutional requirement for a balanced budget as “cash” accounting not “accrual” accounting, the state often committed more to spending than available resources. According to the Taxpayers Alliance, in 2011 only California and Illinois had a larger GAAP deficit than Wisconsin.

When revenues came in higher than expected, Governor Walker put half of these revenues into the rainy day fund as required by law. This, and his work paying other commitments, helped lower the GAAP deficit from $2.9B to $2.2B. But spending in his new budget increases the GAAP gap to $2.8B by 2015.

It’s important to remember the GAAP deficit only looks at the gap between money coming in and money going out in the next year. The real long-term health is better measured by the long-term commitments – i.e. debt.

Looking ahead, Wisconsin finances do seem stuck in the mud.