There could be more than one way to skin the budget

As Others See It
Matt Pommer • Wisconsin Newspaper Association

It is crunch time for the state budget and an alternative plan released in mid April should add to the public debate on key issues.

The plan, developed by the Wisconsin Council on Children and Families, challenges key ideas in Gov. Scott Walker’s twoyear spending proposal. It came just as a new Marquette University public opinion poll showed Walker had only a 41 percent favorable rating.

The key elements of the alternative plan are accepting $345 million in federal money to expand Medicaid and halting the expansion of an agriculture and manufacturing tax-credit program passed as part of Walker’s first budget in 2011.

The tax-credit program will cost $285 million a year when it is fully implemented in 2017. That’s $156 million more than was projected in 2011. The alternative plan notes the credit plan already on the books will eliminate state taxation for many manufacturing firms and cut state taxes by 95 percent on others.

The numbers have been used before. Walker himself used them in a trade-mission speech in Germany. The credits will just about eliminate Wisconsin taxes on manufacturing operations, the governor said.

The council’s paper said the Walker budget plan focuses on a shrinking manufacturing economic sector. Another downside of the manufacturing tax break is that it has no provision tying the help to either job retention or job growth, the council noted. The document emphasizes the goal is not to eliminate the manufacturing credit but to slow its growth.

Walker’s budget proposal calls for a $127 million reduction in state aid to public schools and a $300 million cut in state support for the University of Wisconsin System. Both ideas are very unpopular with Wisconsin citizens, according to the new poll conducted by the Marquette University Law School. The council’s plan would eliminate both of those cuts and make other changes.

The local school aid reduction is opposed by 78 percent of those polled. Poll director Charles Franklin said that is an “eye-catching level of opinion.” It raises questions about the Republican push to expand support to private schools.

The governor blamed his low ratings on the media coverage of his budget ideas, saying the press has not been accentuating the positive.

That’s a familiar response from politicians when things aren’t going well. But his popularity might be saved when new tax-revenue estimates are released. Revenue Secretary Richard Chandler said he expects the estimates will be higher.

Accepting federal Medicaid money as part of Obamacare is not a new idea. Democrats have suggested it could dramatically ease the state’s budget crunch. Walker, who wants to be the next president of the United States, said he doesn’t think the federal government can afford to continue the expanded Medicaid.

As the state budget drama unfolded in the Capitol, another tax-break idea for business was being floated: it would end the property tax on business equipment. Republican sponsors of the bill said it would save business firms about $270 million. The costs would be shifted to residential property, with the largest impact being felt in cities and villages, according to municipal officials.

Even with a 2020 start date, the new tax-break idea for business may seem strange given the current budget crunch. But it has a lot better chance of passing the Republican-controlled Legislature than the budget ideas of the Council on Children and Families.

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