Progressive Thinking

26 years ago, Wisconsin lawmakers started the Parental Choice Program in Milwaukee, the first Taxpayer-subsidized private schooling. It started with just over 300 students, now there are more than 30,000. Today, private schools are getting 20% more state aid per student than the public schools educating everyone else’s children. Why?

ALTOONA, WI - Some 26 years ago, Wisconsin lawmakers blazed a new trail by creating the nation’s first scholastic welfare program. It started in Milwaukee, expanded to Racine, and then was taken statewide. It started small, with just over 300 students. Now there are more than 30,000 in the program.

It’s officially called the Parental Choice Program. If there were truth in labeling, it would be called what it is: Taxpayer-subsidized private schooling. The small number of families getting the subsidies already had a choice. In fact,most of them were exercising their option to have their children privately schooled before handouts were ever offered.

So here’s what this boils down to: People who showed they have the means to send their children to private schools are now able to continue to send them to private schools but have the rest of us taxpayers pay their tuition for them.

The real kick in the teeth for taxpayers is that the value of the public-funded vouchers for private schooling is considerably higher than the amount of state aid for each student attending a public school in Wisconsin. The state is spending $236 million this school year on the Milwaukee, Racine and statewide “Parental Choice Programs,” and is cutting state aid to public schools by $75 million to help pay for it. Next year, the cost of the vouchers that scholastic welfare recipients receive will rise to $258 million and $83 million will be taken from the public schools to help cover the cost. This year, each voucher is worth $7,210 for elementary and middle school students and $7,856 for high school students. Next year, taxpayers will be picking up the tab to the tune of $7,323 for each elementary and middle school student and $7,969 for each high schooler. Meanwhile, when you look at all the different forms of state aid to public schools, the amount being spent on each of the more than 870,000 students attending public schools is less than $6,000.

Let that sink in for a moment. The private schools serving scholastic welfare recipients are getting roughly 20% more state aid per student than the public schools educating everyone else’s children are getting.

The lobbyists who sold Wisconsin lawmakers on this scheme a quarter of a century ago insisted at the time that the program would create competition and ultimately boost student achievement. It hasn’t. Students getting taxpayer-subsidized private schooling are doing no better than their public school counterparts. If anything, they actually are doing somewhat worse. And that holds true in other states that followed Wisconsin’s lead.

So why does Wisconsin keep throwing good money after bad? Scholastic welfare is a raw deal for taxpayers and a decades-long failure as an educational policy, but it has been very good for the campaign coffers of state politicians.

And why is so much money thrown at politicians to keep expanding a program that has never delivered on its promises? This is all about propping up private and parochial schools whose enrollments have been plummeting nationwide. Sure enough, while private school enrollments in Wisconsin were falling statewide, they were increasing in the counties where the scholastic welfare program was started. Keeping failing private schools alive is the one thing this program has succeeded in doing. That’s why the program was expanded statewide in 2013.

Sen. Kathleen Vinehout attended a meeting with business people, elected officials, telecommunication companies, and the State Broadband Director to discuss what can be done to solve the problems with rural broadband connectivity.

LA CROSSE, WI - “I don’t want to promise you fiber where fiber is not going to come,” Kent Disch, AT&T Wisconsin External Affairs Director, told Ellsworth community leaders.

Pierce County business leaders and elected officials gathered with telecommunication company representatives and local cooperatives to push for resolution to Internet problems.

Business leaders asked companies why they would not or could not bring services to businesses that were more than willing to pay. A concrete company owner noted his company is growing but lack of good broadband “is a bottleneck.” Broadband is needed to prosper.

One after another, the business leaders, county board members, and a former mayor shared community problems. People could not join mandatory webinars or attend virtual conference meetings. Locals frequently experienced dropped Internet connections. The Internet would not work at certain times of the day.

Families could not obtain services they needed for the business of life. Teens drove across the river to Minnesota to download files. Elderly women had inadequate phone service. Others completely lost phone service with no plans by the company to replace old copper lines. Some couldn’t get Internet at all.

“How motivated is AT&T to work here?” a local business owner asked. Clearly frustrated, she said, “I am still waiting for voicemail [for my business phone]. And it’s been ten years!”

“It’s not a great business investment to put in copper or fiber,” the AT&T representative told the group.

Here was part of the problem. Local people live in an area lacking large concentrations of people. The network of fiber is more valuable to a company as more people are connected. Without some type of incentive, the companies appeared uninterested or unable to connect rural residents.

Earlier this year three companies, AT&T, Frontier, and CenturyLink received more than $570 million in federal money to build rural broadband. As reported in the Milwaukee Journal Sentinel, Wisconsin is second only to California in the dollars given to the states through the Connect America Fund II program. Wisconsin also made a very modest investment of a few million dollars in grants to expand broadband.

With this incentive, one would think things were great and build-out would be coming soon. But, not so fast - maybe six or seven years - no commitments.

“We’re not going to go trenching through a bluff,” said the AT&T representative. “We are figuring out what facilities we have. We are a large wireless company…how do we leverage [our assets] to get the best bang for the buck…where can we grab the low hanging fruit…where do we have cell towers with capacity…there is a lot of engineering that goes into this.”

Throughout the discussion, residents learned the place they chose to live was largely responsible for the problems they experienced. Soaring bluffs, rocky outcrops, rolling hills – our beautiful state – was responsible for our lack of broadband.

People at the meeting reviewed maps of connectivity. However, the maps did not accurately show the void in service coverage.

“We know the map is incorrect,” said Angie Dickison, State Broadband Director as she handed me a brightly colored map of our Senate District. “Why?” I asked. She replied, “Data comes from the providers. Reporting is done on census block. If just one person receives service the entire census block is covered.”

When I asked specific questions about resolving people’s problems I learned most problems could be solved.

Does the Internet drop you? Your service is “oversubscribed” meaning there are too many people on the line. Is it hard to get on at certain times of the day? There are too many people and not enough equipment. Having problems with lag-time on the computer? A common problem with satellite service as the signal travels to outer space and back again.

Could the state get an accurate internet connectivity map? Yes. But the law requiring companies to provide detailed data was changed with the telecommunication “modernization.”

Wisconsin lost the levers of power to require certain actions by companies (such as providing basic phone service to everyone) by deregulation. Now, it seems, we are relying on the goodwill of the company and the lure of public dollars to bring broadband to rural areas.

But will the company deliver? There are no promises.

Ever since the 1980's, the American economy has been under the spell of "trickle-down economics", a theory that produces feed-the-rich policies. They have made the rich vastly richer, and everyone else’s earnings stagnant. But there’s a geyser ready to blow, if we’re smart enough to shift our attention from supply to demand.

ALTOONA, WI - For close to 40 years now, the American economy has been under the spell of supply-side theory, better known on the streets as trickle-down economics. The theory is that expanding the economy’s capacity to produce more goods is the best way to stimulate economic growth. In practice, that theory produces feed-the-rich policies — such as steep cuts in the income taxes corporations and the wealthiest Americans pay — aimed at encouraging private investment in businesses, production facilities and equipment.

Those policies have worked like a charm in one regard. They have made the rich vastly richer. With everyone else’s earnings stagnating, the gap between America’s rich and the rest has grown dramatically by every statistical measure since trickle-down took hold of our economy. Trickle-down economics has been a colossal failure when it comes to producing shared prosperity. George H.W. Bush called it “voodoo economics” for supercharging the accumulation of national debt, but its biggest sin is that America was growing together before the supply-siders took over and has been growing apart ever since.

There are conspicuous reasons why the only thing trickle-down economics does well is produce income and wealth inequality. Feed the rich and they don’t eat much of what they are fed. They store it away. They amass more wealth. Every dollar added to their net worth is a dollar out of circulation that creates no multiplier effect in the economy. Put more money in the pockets of everyday workers and consumers and they spend it. That creates demand. When someone wants to buy, someone else is eager to sell. The economy is stimulated.

That’s the fundamental flaw in supply-side theory. You can shower incentives on corporations and the superwealthy to supply more goods, but if no one is buying what they are making the new factories will be shuttered in no time. Demand drives economic growth, not supply. Shared prosperity doesn’t trickle down, it springs from the ground up like a geyser.

Shifting from failed trickle-down economics to geyser economics means concentrating on stoking demand rather than trying to politically manipulate supply. Boosting wages is a good place to start. The federal minimum wage has been increased 22 different times, and every time supply-siders screamed that increasing it would be a jobs killer. Never worked out that way. The national gross domestic product (GDP) steadily grew through every minimum wage increase. And states that increased their own minimum wages have seen faster job growth than those that didn’t. That’s because workers earning more end up spending more. Good capitalists figure out how to supply what consumers are demanding. They scale up their operations to meet the increased demand, and that means hiring rather than laying off.

A critical next step toward geyser economics is overhauling our tax system. America effectively has two tax systems, one for the rich and another for the rest. That needs to change. We don’t need new taxes. We do need to make sure everyone pays the ones we already have. That will reduce the share of total taxes paid by low-income and middle-class Americans, leaving them with more to spend on other things. Demand will be further stoked.

Big business handouts are a favorite recipe in the trickle-down cookbook. Funny how so many of the handouts wind up hidden in shell companies and tax havens overseas and don’t actually create any additional supply — or jobs — here at home. States have fallen in love with this recipe too. Wisconsin’s corporate welfare office spends hundreds of millions of dollars a year, creates no noticeable economic stimulation and hardly any jobs, and can’t even seem to keep track of how the taxpayers’ money is spent.

For the sake of free market capitalism and shared prosperity, geyser economics is predicated on doing away with crony capitalism. We’re better off taking the money wasted on handouts to corporations and the ultrawealthy and investing it instead in things like affordable, debt-free education. An entire generation of young Americans is buried under a mountain of college debt. With them spending 20, 30, even 40 years paying off student loans, think of how many are putting off purchases of cars and houses and other such goods. Imagine what it would do for auto manufacturers, car dealers, home builders and realtors if we made education as affordable for today’s youth as it was for us older folks. You don’t think they’d gladly supply what legions of young Americans would suddenly be able to buy?

There’s a geyser ready to blow, if we’re smart enough to shift our attention from supply to demand.

JFK asked us to serve our country, but we Americans have been mostly asking what our country can do for us since at least the 1980s. Republican politics especially has been of the “me first” variety. Is it time to ask what we can do for our country again?

ALTOONA, WI - For the last several decades, American politics has been “me politics.” Reflecting on the famous line in John F. Kennedy’s 1961 inaugural address, it’s hard not to notice that we Americans have been mostly asking what our country can do for us since at least the 1980s.

In their own ways, both major parties mirror the self-centeredness of the modern American psyche.

Republican politics has been of the “me first” variety, focusing on how best to enable the most ambitious and enterprising and ruthless and privileged among us to elbow their way to the front of the line. The result has been heretofore unimagined levels of prosperity for some, but also grotesque levels of income and wealth inequality.

Democratic politics has been of the “me too” kind, concentrating on getting previously excluded or disadvantaged segments of the population more rights and opportunities. As a result, historic advances have been made in such areas as civil rights, women’s rights, gay rights and disability rights. The gains have not come without a cost to Democrats as they have lost much of their appeal to blue collar Americans, especially working class white men.

Two generations worth of emphasis on individual advancement and self fulfillment have been both good and bad. Americans have grown more equal in some ways, more unequal in others. Some have prospered, others have been left behind. Many have finally secured a seat at the table, which is good. America is more divided and politically polarized than it has been in a very long time, which is not.

What “me politics” has done for us and to us is striking and significant, but equally striking is what is missing and can only be provided by a resurgence of “we politics.”

The list of missing things is long, but here are three in need of resuscitation for starters:

• Public service. Doing for others at personal sacrifice has fallen out of fashion. Even serving in elective office now smacks of self dealing more than at perhaps any other time in our nation’s history, evidenced by the revolving door between Congress and the lucrative lobbying trade. The same game is on prominent display in statehouses across the country. True public service is not a training program to prepare for plum jobs paying six- and seven-figure salaries.
• Mutual support. Being there for each other takes many forms. Neighbors helping neighbors. Communities pulling together. Service to country. This ethic is at the heart of “we politics.”
• Common good. Me politics is about private interests. What is yours and what is mine. We politics is about the public interest and what is ours. It cultivates an understanding that we’re all in this together and we need each other. That understanding prompts us to act in ways that enrich the commonwealth. Such action has become too rare.

For a long time now, American politics has been me politics. Change is in the air. You can feel it. But we won’t move from me to we automatically. It has to be done consciously and will take concerted effort. It’s time to ask what we can do for our country again.

In the past, schools used referenda primarily for building and maintenance projects, but state cuts to school funding are forcing more school districts to use them to pass the cost of educational programs to local property tax payers.

MADISON - “School districts these days more or less live and die by these referendums in terms of their ability to sustain programs and staff,” Dan Rossmiller of the Wisconsin Association of School Boards (WASB) recently said as reported by the Isthmus.

So far in 2016, voters approved more than three-quarters of the 85 ballot referenda to raise property taxes to send more local dollars to schools. The nearly 77% pass rate is much higher than a few years ago.

People are voting to raise property taxes to keep their schools alive.

Recently I met with officials from the Department of Public Instruction (DPI) to understand school funding trends. I learned there was a big shift in the success of referenda. Prior to 2011 (and the deep school cuts that year) about half of school referenda passed. In the past five years about two-thirds passed.

Historically, communities voted to raise school property taxes to build buildings. Prior to 2011, nearly two-thirds of referenda votes were for the purpose of raising debt for building projects.

After 2011, over half of the votes to raise school property taxes are to fund current educational costs. But there is a limit to how much people can raise their property taxes to pay for current operations.

Back in 2012, the community of Gilmanton raised the school portion of their property taxes by over 40% to keep their beloved school alive. After the vote, many constituents told me “voters will never again” be able to afford such an increase in property taxes.

At a recent legislative breakfast, local school officials pleaded with lawmakers to increase state aid. School officials spoke of local “referenda fatigue” meaning people just can’t afford to raise their property taxes even though they want to keep the school district afloat.

Superintendent Dr. Connie Biedron reviewed the different ways the state cut funds to schools: cuts in state aid, local school districts paying for Milwaukee charter schools, local school districts paying for private school vouchers.

“I’m so grateful people are supporting schools by passing the referendum, but we are facing a continual decline in state funding”, said Dr. Biedron, “Communities can’t continue to tax more. They just can’t support taxing more.”

Prescott is a community that recently voted down a referendum for “existing educational programs and staff”. The February loss means the district is facing cuts of nearly 10% of its budget.

Just over river from Prescott, in Minnesota, voters do not face the same harsh realities of raising property taxes or facing deep cuts to schools.

Minnesota funds about two-thirds of school budgets with state aid. Only 30% comes from local sources like property taxes. Todd Langenfeld, a Prescott resident active in the referenda discussion, told me, “Wisconsin made a commitment to fund schools with two-thirds state funding. But we are well below that.”

The state of Wisconsin contributes about 45% (compared to Minnesota’s 64%) of the cost of schools, while locals contribute almost half.

Mr. Langenfeld continued, “To make up the difference, Prescott goes to referendum. If the state kicked in more, people would pay less in taxes.”

When the state pays less, people face awful choices; raise property taxes just to stay even with the cost of educating children or keep property taxes the same and cut children’s educational opportunities.

For Prescott, state funding this year covers about 53% of students’ costs. But two years ago, the state aid covered about 55% of the school district budget. Given rising costs and the expiration of a “non-recurring” referendum (renewed since 1999), it is not surprising voters faced a hard choice.

Prescott voters will get another opportunity to support their schools on May 25, 2016 when a special election will be held on another referendum. This time voters will be asked to make permanent (or recurring) the expiring referendum.

The immediate lay-off of teachers, cuts in student activities, cancelling bus routes, and closing buildings may be averted with the passage of the May referendum.

However, voters all around the state must solve long-term problems by electing a Legislature willing to tackle the tough questions of how to increase permanently the state share of money for our children’s education.