For the remainder of 2011 , however, beginning in April 2011, the bill provides
that state employees, as well as employees of public authorities created by the state,
who work more than 1,565 hours a year shall pay $84 a month for individual coverage
and $208 a month for family coverage for health care coverage under any plan offered

More facts for you Boom Boom. Maybe eventually you will read them. You can read can't you? I wish I only paid $208 a month.

Police preparing for possible Capitol clashes Saturday 

Madison police said Friday they are worried about clashes between opposing political groups when supporters of Gov. Scott Walker descend on the Capitol on Saturday, when a sixth day of protests against the governor's collective bargaining proposal is planned.

"We do have concerns about tomorrow," said Madison police spokesman Joel DeSpain. "We don't want this to become something that would blemish what we has been a positive week."

Conservatives who support Walker's plan to limit the collective bargaining rights of public employee unions are staging a rally at noon Saturday at the Capitol. Union protests began Monday and have attracted upwards of 25,000 people a day.

Command staff of Madison police, Capitol police, the Wisconsin State Patrol and Dane County Sheriff's Office will meet Friday afternoon to plan for Saturday.

As of 2 p.m. Friday, Madison police had made no arrests related to the protests. But Capitol police arrested nine people Thursday.

"We would just urge people to maintain the decorum and civility they've shown all week and not be baited into situations," DeSpain said. "To have this sort of movement for a sustained period of time is unprecedented in recent history.

Analysis: Despite budget woes, state less in crisis now than two years ago 

Sweeping governmental changes are needed, Gov. Scott Walker and his backers claim, because the state is a facing money problems like never before.

"We cannot ignore the fact that Wisconsin is in a fiscal crisis," Sen. Alberta Darling and Rep. Robin Vos, co-chairs of the Joint Finance Committee said following passage of the budget repair bill by that committee Wednesday. "Our state is $137 million in the red. While some people are content with doing nothing, the consequences of inaction are dire."

The bill curtails collective bargaining rights for all public employees in the state, with the exception of firefighters and most police officers, and requires some 350,000 participants in the Wisconsin Retirement System to begin contributing toward their pension. Public workers must also pick up a larger share of health insurance premiums.

But are state finances really "in crisis?" Budget figures can be moving targets, of course, depending on who is spinning the numbers, but a closer look at the state's finances suggests that while there are major problems to be addressed, the situation is better now than it was two years ago.

A Jan. 31 memo from the Legislative Fiscal Bureau estimates the state will actually finish the fiscal year on June 30 with a $56 million surplus. That is $54 million more than state administrators estimated and far more than the $137 million in red ink that Darling and Vos refer to.

Neither Vos, R-Rochester, nor Darling, R-River Hills, responded to requests for comment for this report, but those accounting differences have Democrats claiming Republicans are overstating the depth of the problem to push a hard-right agenda and break public worker unions.

"In our conversations with the non-partisan Legislative Fiscal Bureau, it has become blatantly evident Governor Walker has manifested this fiscal crisis as a Trojan horse in order to enact unfair public policy in the name of fixing the budget," says state Rep. Mark Pocan, D-Madison.

Scot Ross of the left-leaning group One Wisconsin Now went a step further, calling the Walker plan a "handout in special interest spending to his corporate pals."

Ross was referring to $117.2 million in tax breaks approved by the Republican-controlled Legislature in January. Those items making health savings accounts tax deductible, tax deductions for businesses that relocate and tax exclusions for hiring new employees.

Ross and others have said those tax breaks alone have created the shortfall through the end of this budget cycle that Darling and Vos have cited. But the $117.2 million figure cited by the Fiscal Bureau refers to the cost of those tax breaks over the next 2.5 years, not just the next few months.

Going forward, it is clear Wisconsin has some serious budget issues to face. Estimates say the state is facing anywhere from a $3.1 billion to $3.6 billion deficit in the upcoming two-year budget cycle.

That amount represents about 13 percent of total annual state spending, according to Andrew Reschovsky, professor of public affairs and applied economics at UW-Madison.

"The short answer is that we are arguably in a crisis ... but the crisis is the large size of the fiscal 2012 and 2013 budget gap, not the 2011 gap, which is relatively modest," he says.

Reschovsky says states like California, Nevada and Arizona are in far worse shape than Wisconsin, although he didn't want to underplay the problems here.

"I'd put Wisconsin somewhere in the middle of all the states, maybe a little worse," he says.

Still, Reschovsky agrees that Wisconsin is arguably in better shape financially than it was two years ago when the state was facing an estimated $6 billion deficit for the 2009-2011 budget cycle.

Former Gov. Jim Doyle was able to reduce the deficit then through a combination of furloughs for state workers, increases to the cigarette tax, a move to combined reporting for corporate tax collections and a boost in income taxes for those in the upper bracket. The state was also helped by $1.3 billion in one-time federal stimulus funding.

Moreover, state tax collections have continued to rise as the economy recovers. In January, the state collected $1.46 billion in revenue, up 7.1 percent from a year ago.

And Wisconsin's unemployment rate of 7.5 percent is better than the 9 percent for the U.S. as a whole. While the state has lost thousands of manufacturing jobs, the recession has not hit as hard here as other places.

Wisconsin is also in far better shape than other states when it comes to funding pensions for its retired public workers. The $72 billion Wisconsin Retirement System is over 97 percent funded, according to the Center of Retirement Research, a non-partisan think tank.

By comparison, the Illinois teachers fund, for example, is only 52 percent funded. Other states from California to New Jersey are facing tremendous liabilities in their public pension systems going forward.

Walker's plan to have public employees cover half of their pension costs and pay more for health insurance is designed to save $30 million through the end of the current fiscal year and $300 million over the next two years.

The $300 million in savings from the pension and health plan changes amounts to about 8 percent of the current budget deficit estimates, meaning there's a lot more cutting that would need to happen to close the gap.

Pocan says Walker's calculation of the state's budget problem is skewed by the fact that a significant portion of the gap in the next biennium is driven by agency budget requests, which always come in higher than what the actual funding turns out to be.

For example, in 2009-2011, agencies requested a 9.7 percent increase in general purpose revenue dollars, but were actually given a 2.6 percent reduction. That amounted to a $3.5 billion difference between the budget request and actual spending, although $1.3 billion of that reduction was due to the federal stimulus money.

A better comparison might be the 2007-2009 budget, when agency requests were reduced by 2.1 percent for a $1.6 billion difference between requests and actual spending.

In either case, Pocan maintains Walker has manufactured a crisis to push a hard right-wing agenda that will raise his national profile among conservatives.

"The only way you can slip a bunch of bad policy into law in Wisconsin is to disguise it as something else," he says. "You create a crisis, claim you are the sole path to solving it, enact whatever measures are necessary and be a hero to the people."

Ross took special aim at the recently enacted $48 million in tax breaks for health savings accounts or HSAs, which he says primarily benefit upper-income earners. According to a 2008 report from the federal Government Accountability Office, the average annual income of HSA participants was $139,000, at least in 2005. Nearly half of participants then reported withdrawing nothing from their accounts the previous year.

"This is evidence that HSAs are serving as tax shelters for the wealthy," says Ross.

He also rapped the $67 million in tax breaks for companies that add workers.

"This tax shift is so ill-conceived at best the benefit provided to job creators would be less $1 a day per now job," he says, quoting figures from the Associated Press.

Economist Estimates Two-year $3.1 Billion Wisconsin Deficit
A short paper released Wednesday by Professor Andrew Reschovsky, an economist at UW-Madison's La Follette Institute, explains that a conservative estimate of the structural deficit in Wisconsins next biennium is $3.1 billion. That figure approximates the gap between revenue and spending in 2011-13 if one assumes 3 percent per year revenue growth and modest increases in spending to maintain current services. It represents a shortfall of about 10 percent of projected spending needs.

A Journal Sentinel article by Jason Stein does a nice job of explaining the reports findings and the reactions of the gubernatorial candidates.

For any of you who have a desire to understand the differences between the various sorts of deficit figures that tend to get thrown around, let me provide a quick tutorial regarding three of the ways that one can calculate the budget gap for the next biennial budget:

1) The structural deficit is a calculation made occasionally by courageous people like Professor Reschovsky who are willing to stick their neck out and make assumptions about revenue and spending growth. It represents the gap between the amount of General Purpose Revenue (GPR) the state can reasonably expect to take in during the next biennium and the spending that is needed, based on certain assumptions about the amount of additional spending that will be needed to preserve current services. (Im glad that Reschovsky is willing to tackle such a calculation, so I dont feel a temptation to try it.)

2) The structural imbalance This is a less debatable calculation that the Legislative Fiscal Bureau performs from time to time. Its the amount of GPR growth that is needed in the next biennium to maintain existing commitments (such as phased-in tax cuts or newly created programs), with flat funding for everything, and no increases for inflation or caseload growth. The advantage of this figure is that it sidesteps the potentially controversial questions of how much taxes might increase and how much additional spending is essential to maintain the status quo.

3) Later in the budget process, its common for a larger figure to emerge for the budget deficit or budget gap, usually after all the agency budget requests for the next biennium have been submitted and tallied and after there are new estimates of the revenue that can be expected in the next biennium. Typically, its a figure that compares those revenue estimates with the total of the agency budget requests. As such, it is sometimes a controversial figure because conservatives often argue that the agency requests are inflated even though for the last couple of biennial budgets most agencies have been following orders to submit bare bones, cost-to-continue budgets. At the outset of the last biennial budget, that deficit figure was more than $6 billion.

In early July, the Legislative Fiscal Bureau issued a memo that said the GPR structural imbalance going into the 2011-13 budget is about $2.5 billion. However, that number is now considerably too low because of factors like the Supreme Court ruling that the state will have to pay back (with interest) the $200 million transferred several years ago from the medical malpractice fund, and because of increased costs for Medicaid and BadgerCare Plus. In addition, the July LFB memo assumes that federal law will allow the states lapsed estate tax to be restored automatically next year, but it appears highly unlikely that Congress will actually allow that to happen.

Professor Reschovsky started from the LFB numbers, and then made adjustments to reflect more recent developments. However, as I noted above he went beyond the structural imbalance calculation by actually estimating revenue increases (3% per year) and made fairly conservative assumptions about needs for additional spending (1.75% more per year in areas outside school aids and Medicaid). .

One can move the spending and revenue assumptions up or down a little, but the bottom line wont change very much. Anyone who takes an honest look at the states fiscal situation can see that Wisconsin policymakers have another extremely challenging budget ahead of them, which cannot be balanced without some combination of: deep cuts in state services and/or local aid, increases in state taxes and fees, or extensions of some of the federal fiscal relief that is currently scheduled to expire.

That fiscal challenge would grow immensely if candidates who have pledged tax cuts get their way.

Jon Peacock,
Project Director

Surplus my ass...

http://wisconsinbudgetproject.blogspot.com/2010/09/economist-estimates-two-year-31-billion.html 

"K_Buz" wrote:

It has taken hold with conviction: the idea that Wisconsin Gov. Scott Walker ginned up a phony budget crisis to justify his bold bid to strip state employees of most bargaining rights and cut their benefits.

A volley of e-mails, blog posts and inquiries to reporters followed a Madison Capital Times editorial on Feb. 16, 2011, that said no state budget deficit exists for 2010-11 -- or if it does, its the fault of Walker and the Republicans in the Legislature.

Liberal MSNBC talk show host Rachel Maddow joined in Feb. 17, accusing Walker of manipulating the situation for political gain.

"Despite what you may have heard about Wisconsins finances, the state is on track to have a budget surplus this year," she said. "I am not kidding."

She added a kicker that is also making the rounds: Walker and fellow Republicans in the Legislature this year gave away $140 million in business tax breaks -- so if there is a deficit projected of $137 million, they created it.

Maddow and others making the claim all cite the same source for their information -- a Jan. 31, 2011 memo prepared by Robert Lang, the director of the nonpartisan Legislative Fiscal Bureau.

It includes this line: "Our analysis indicates a general fund gross balance of $121.4 million and a net balance of $56.4 million."

We were curious about claims of a surplus based on the fiscal bureau memo.

In writing it when it was released, reporters from the Journal Sentinel and Associated Press had put the shortfall at between $78 million and $340 million. Thats the projection for the end of the fiscal year, June 30, 2011.

Walker himself has settled on $137 million as the deficit figure, a number reporters have adopted as shorthand.

We re-read the fiscal bureau memo, talked to Lang, consulted reporter Jason Stein of the Journal Sentinels Madison Bureau, read various news accounts and examined the issue in detail.

Our conclusion: Maddow and the others are wrong.

There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it.

More on that second point in a bit.

The confusion, it appears, stems from a section in Langs memo that -- read on its own -- does project a $121 million surplus in the states general fund as of June 30, 2011.

But the remainder of the routine memo -- consider it the fine print -- outlines $258 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy ($174 million alone), the public defenders office and corrections. Additionally, the state owes Minnesota $58.7 million under a discontinued tax reciprocity deal.

The result, by our math and Langs, is the $137 million shortfall.

It would be closer to the $340 million figure if the figure included the $200 million owed to the states patient compensation fund, a debt courts have declared resulted from an illegal raid on the fund under former Gov. Jim Doyle.

A court ruling is pending in that matter, so the money might not have to be transferred until next budget year.

To be sure, the projected shortfall is a modest one by the standards of the last decade, which saw a $600 million repair bill one year as the economy and national tax collections slumped.

But ignoring it would have meant turning away eligible Medicaid clients, which was not an option, Lang said.

This same situation has happened in the past, including during the tenure of Doyle, a Democrat. In January 2005, a fiscal bureau memo showed a similar surplus, but lawmakers approved a major fix of a Medicaid shortfall that would have eaten up that projected surplus.

Reporters who cover the Capitol are used to doing the math to come up with the bottom-line surplus or deficit, but average readers are not. (The Journal Sentinels Stein addressed these and other budget questions in a follow-up story.)

So why does Lang write his biennial memo in a way that invites confusion?

Lang, a veteran and respected civil servant working in a nonpartisan job, told us he does not want to presume what legislative or other action will be taken to address the potential shortfalls he lists.

Admittedly, the approach this time created the opportunity for a snappy -- and powerful -- political attack.

But it is an inaccurate one.

Meanwhile, what about Maddows claim -- also repeated across the liberal blogosphere -- that Walkers tax-cut bills approved in January are responsible for the $137 million deficit?

Langs fiscal bureau report and news accounts addressed that issue as well.

The tax cuts will cost the state a projected $140 million in tax revenue -- but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.

Heres the bottom line:

There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion. Walkers tax cuts will boost the size of the projected deficit in the next budget, but theyre not part of this problem and did not create it.

We rate Maddows take False.