Here & Now

Here & Now for May 5, 2017

Frederica Freyberg:

I'm Frederica Freyberg. Tonight on “Here & Now” a first look at the new Republican transportation funding plan. Then Capitol Insight. The U.S House version of the new American Health Care Act and later, the potential impact of homeless bills that passed the State Assembly this week. It’s “Here & Now” for May 5th.

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Funding for “Here & Now” is provided in part by Friends of Wisconsin Public Television.

Frederica Freyberg:

A first look tonight at an Assembly Republican plan to fund Wisconsin roads. The majority-lead Joint Finance Committee rejected Governor Scott Walker’s budget plans for transportation to fashion its own. Tonight Joint Finance Committee member Republican Representative Dale Kooyenga walks us through his multi-pronged funding proposal. He joins us by phone. Thank you for doing so.

Dale Kooyenga:

Thank you for having me. Appreciate it.

Frederica Freyberg:

Take us through what your transportation package does?

Dale Kooyenga:

Well I think Wisconsin has some improvements to be made in both our transportation and income tax codes. It’s one of the few problems that we’ve not made significant progress on in the last couple years. And so what we’re proposing is Wisconsin is actually of the 50 states has the most generous law in place for gas stations called the minimum mark-up law. We’re only one of two states that actually specifically say this is what your gross margin has to be on the sale of gas and that adds up to 9.2% approximately. What we’re saying is, in a pragmatic fashion, is let’s lower that mark-up from 9.2% to 3%. This will save hundreds of millions of dollars for people at the pump. And I have gas station owners actually who have gas stations in Wisconsin and Michigan who testify that would be a penny for penny reduction in the price of gas. And then what we do is we apply the sales tax to gas. Sales tax applies to most things you purchase but for some reason it does not apply to gas. While we’re lowering the price pressure at the pump by doing some business reforms, what we’re doing is applying the sales tax and then what we do is we have enough money left over to actually do two things. What we’re going to do is lower Wisconsin's gas tax and we’re going to lower the amount of bonding we do for our roads. The amount of bonding for roads is reaching unhealthy levels which will put significant pressure on the transportation fund going forward. And the Assembly Republican position is that we’d rather have money spent for concrete and labor to improve our roads than paying in interest to bond holders. While we’re doing that we’re doing a lot of different reforms to make sure the state runs more efficiently. And also doing income tax reforms which are going to lower income tax to a single rate in Wisconsin of 3.95%. Everybody will see a reduction. But what we’re doing is we’re paying for that by one, simplifying the code and by two, taking a portion, a portion that’s less than inflation in future growth and using that to make sure that government does not grow at a rate faster than inflation and putting that towards relief for Wisconsin taxpayers.

Frederica Freyberg:

So on that flat tax that is part of this whole transportation plan, how is that related to road funding?

Dale Kooyenga:

What we’re looking at is the tax mix in Wisconsin. And what’s happening right now is the transportation fund is being supported by the general fund. This is the opposite of what used to happen. The transportation fund was being used to fund the general fund and now the general fund is being used to fund the transportation fund. And what that does is puts significant pressure going forward on our schools. It puts significant pressure going forward on more debt and other cost. On our income tax code. And so when we actually propose is a transportation solution, what that does in the general fund is it frees up money. And with that freed-up money what we’re doing is income tax cuts. We believe Wisconsin is a high-tax state. When we’re looking at the right revenue mix between transportation fund and our general fund needs, that’s the tax reform that comes in to take a comprehensive look at all the money going into the state and where that money should be directed.

Frederica Freyberg:

Tell me if I'm right on this when all is said and done with package, transportation and flat tax, you’d increase revenue by about $300 million over two years. How far does this go to fill that billion-dollar shortfall and find that long term, sustainable source for funding of Wisconsin highways?

Dale Kooyenga:

Yeah, I think you have to look at it over the long term and it’s $300 million in this biannual. And then you have to look going forward. And so if you’re looking at the one-time cost of infrastructure, you’re looking about billions of dollars over the next decade. And we have the billions come in and you’re also looking at actual revenue now that you can leverage. You’re still going to have to use some bonding. I think you’re looking at a position where you say, hey, we’re reaching a reasonable point where we could actually pay to make sure we have 21st century infrastructure.

Frederica Freyberg:

We'll be watching this as it goes forward. Thanks very much.

Dale Kooyenga:

Thank you.

Frederica Freyberg:

The transportation budget plan faces opposition from Democrats at the state capitol. A Democratic member of the Joint Finance Committee joins us now from Oshkosh. Representative Gordon Hintz. Thank you for being here.

Gordon Hintz:

Happy to be here.

Frederica Freyberg:

What is your reaction to Representative Kooyenga’s plan for transportation funding?

Gordon Hintz:

For the past six years the challenge on transportation funding has been pretty clear. Revenue has not kept up with inflation and project demand out there and the legislature needs to address this. There’s been studies. There’s been recommendations. It’s all pretty much known. What was a pretty clear-cut simple challenge has been met with incredibly complex plan that increases the gas tax effectively 23% but it’s the part that goes well beyond that. It seems like the biggest objective of this is to reduce the income taxes of some of the wealthiest earners in Wisconsin along with a lot of other things that have nothing to do addressing transportation.

Frederica Freyberg:

How will that be met on the Joint Finance Committee when it’s this really giant package that as you say includes not just uppers and downers on sales tax on gas and the gas tax but then this whole idea of introducing a flat tax? How will that be met?

Gordon Hintz:

Well, I can tell you it’s been met by the Democrats on the committee as a non-starter. We’ve been looking for an opportunity to try to work with Republicans on this. Two years ago in the budget we proposed at least re-instating indexing to make sure the problem wouldn’t get any worse and that funding would keep up with inflation. But this goes so far beyond the any of the recommendations to address transportation. And this idea you can significantly reduce the taxes again, a 50% tax cut for the wealthiest earners in Wisconsin as some sort of offset for a 23% sales tax increase–er, gas tax increase doesn’t make any sense. And it just shows you that budget after budget the biggest priority, bigger than K-12 education, bigger than the UW System has been these expansive tax cuts for the wealthy and this is just another example of that.

Frederica Freyberg:

Specific to his transportation financing plans though, are there some parts of that Democrats could support?

Gordon Hintz:

Well, I think if you were to just look at the transportation proposal and separate the other things I think there are some elements worth looking at. I think they give local government some options with a sales tax a lot of the counties have been asking for as their roads have increasingly declined. As state revenue support for those communities hasn’t been there. But it’s hard to get around the fact that their plan, their transportation plan, was called “The Road to A Flat Tax.” In other words, it seems to be more important for them to erode future money for public schools and UW System than it is to fund our transportation shortfalls. It should be broken up and separated. And we can evaluate those things but it’s a 23% increase in the gas tax and that’s a lot of. It’s a lot of the people who have the oldest, least fuel efficient cars are some of the lowest income earners in the state so the sales tax is regressive and unpredictable. But it is a starting point.

Frederica Freyberg:

What do you make of — so you talk about the increase in the sales tax on gasoline but he counters that with eliminating 4 to 5 cents in the gas tax. Would you like it better if the sales tax went up as well as the gas tax?

Gordon Hintz:

Well, I mean again, the net in the analysis by the Fiscal Bureau said it would ultimately lead to a 7.2 cent gas tax increase for $2.40 a gallon. That’s all the public is going to talk about. We can talk about upper, lower, moving things around but at the end of the day that’s what we’re talking about. I think the real thing that stood out to me was even with this increase in revenue there’s no new money for any of the road projects. And a lot of that is because they attempt to restore all the misguided policies from the last few years trying to reduce the amount of record borrowing they’ve done to try to replenish the money they’ve money from the general fund to pay for roads. There’s certainly cleaner, easier ways to do it. And the problem with the sales tax is when gas is more expensive you’re going to pay more with the sales tax. Whereas if you just increased the gas tax, it would stay standard on a per gallon basis.

Frederica Freyberg:

Representative Gordon Hintz, thanks very much.

Gordon Hintz:

Thank you.

Frederica Freyberg:

From Wisconsin to Washington, the House of Representatives narrowly passed its version of so-called American Health Care Act late this week. At a White House gathering after the vote, House Speaker Paul Ryan claimed that ObamaCare is no longer viable.

Paul Ryan:

And that is why we have to repeal this law and put in place a real vibrant marketplace with competition and lower premiums for families. That’s what the American Health Care Act is all about.

Frederica Freyberg:

Under the bill passed in the House, subsidies for people to help pay for plans are based on age instead of income. Expanded Medicaid would go away. Penalties for not having insurance are eliminated and states would be able to decide how to cover people with pre-existing conditions and which essential health benefits to offer. Tax increases on high-income earners that help pay for the Affordable Care Act are eliminated. Here’s what Wisconsin U.S. Senator Tammy Baldwin says about the bill, quote, President Trump promised insurance or everybody but the House Republicans broke that promise today by putting millions of people at risk of losing health care coverage and forcing millions to pay more for less care.

Frederica Freyberg:

High political drama played out over the Republicans’ House vote this week. In tonight’s Capitol Insight, we turn to Republican Bill McCoshen who is managing partner with Capitol Consultants and Democrat and executive director of One Wisconsin Now Scot Ross. Thanks to both of you for being here.

Bill McCoshen, Scot Ross:

Thanks for having us.

Frederica Freyberg:

I saw this quote from a Kentucky congressman this week saying the American Health Care Act is like a kidney stone. The House doesn’t care what happens to it as long as they can pass it. How real is that?

Bill McCoshen:

I think there’s some truth to that. I mean it’s obviously been a pretty high mountain to climb for Speaker Paul Ryan and the Republican conference. They tried in late March and failed to get this over the goal line. And it was critical to this forward but I think it’s important for your viewers to understand it’s just step o. It’s going to go to the United States Senate. They’ll make modifications to the bill. And then it’s likely to go to conference. So there’s a long way to go before it actually hits the president’s desk.

Frederica Freyberg:

Does this put politics over really important policy?

Scot Ross:

I think absolutely. When have you a bill that passes basically by two votes on something that’s one-sixth of the American economy where 24 million people are going to lose their health care. We’re going to lose protections for pre-existing conditions. What are going to be those essential services that are cut? I mean some of those essential benefits are things like maternity care, childhood immunization and even substance abuse programs. So there’s a real challenge out there. And it was a terrible vote. And I think it’s a vote that’s put things like Glenn Grothman’s district in play for 2018.

Bill McCoshen:

I’d say this. There was a lot of risk for Republicans. There was risk of doing something and there was risk of doing nothing. Truthfully as a Republican strategist, I’d say there was a far greater risk of doing nothing for the Republican house. If this is their number one promise they’ve had since 2010. It is the one thing that’s galvanized social conservatives and economic conservatives for the last seven years. And if they did not deliver on this, Republicans would have been wiped out in 2018.

Frederica Freyberg:

And yet is it really construed at this moment as a big, big win for Paul Ryan the way this went down?

Scot Ross:

I don’t think you can call it a big win for Paul Ryan because he looked so feckless for a month or so when they first tried this and then he had to pull it back. I think the challenge that Ryan has is there’s so much bad that’s going to come out of the bill. If they got this bill through the Senate and they’re not going to — essentially he would be at risk of losing his speakership because there are so many people who are going to lose their care. You may not remember who gave you your health care but you’re sure as heck going to blame who took it away from you.

Frederica Freyberg:

What about that? He says that Glenn Grothman’s district is in play because of this. Is that real?

Bill McCoshen:

Not a chance. He hasn’t had serious opposition in that seat. I mean the way that—I just don’t think any of our Wisconsin congressman are going to be at risk as a result of this vote because they’re going to get one more kick at the cat. Some like Congressman Mike Gallagher have said he had some concerns about this bill. He’s hopeful the senate will make modifications and I think probably folks like Duffy, Sean Duffy and Glenn Grothman feel the same way.

Scot Ross:

Wait, Mike Gallagher said something about this piece of legislation because for six weeks he didn’t say a word despite when the media would contact him. And then finally he put something out after the bill last night. I think that’s a huge, huge indication as to how challenging that vote he took as a freshman member of Congress is going to be in the upcoming 2018 election cycle.

Bill McCoshen:

Voters that follow this on both sides are very savvy. This, to use a baseball analogy, this was a double by the House of Representative to get the ball–to score a run, they gotta get the bill through the Senate and also through conference and ultimately to the president’s desk.

Frederica Freyberg:

You're saying voters are savvy on the issues?

Bill McCoshen:

I think they are. I think they understand. Clearly Republican voters have been motivated by this issue for six straight years, three election cycles. Now potentially Democratic voters will be motivated by this. And we don’t know how that’s going to play itself out yet.

Frederica Freyberg:

Do you feel like voters who might be recipients of some of the current coverage understand what some of this means?

Scot Ross:

I think they will if they lose their coverage or if for instance they lose their pre-existing conditions or for instance, the estimate by one esteemed economist says if you had cancer and then you try and get insurance your premiums are going to be $140,000 a year. That is an obscenity. And that is not coverage. If you cannot afford coverage, you’ve lost your coverage. And I’ll agree with Bill. You can defend action. You cannot defend inaction but this piece of legislation is going to trickle down into state races. Governor Walker came out Friday and said he would be willing to get a waiver to eliminate pre-existing conditions protections here in the state of Wisconsin. You’ve had Brad Schimel and John Nygren talking about opioid coverage for the last year and a half. And those things could be gone as a result of this.

Frederica Freyberg:

What about that point?

Bill McCoshen:

This bill attempted to do three things: to lower premiums, to lower deductibles and to provide states more flexibility. The jury’s out on the first two quite frankly but it certainly would provide state’s more flexibility on what type of coverage. The good news for Wisconsinites is we have some of the best health care here in the country and we have the lowest uninsured population in the country.

Scot Ross:

Yeah, but we also –just remember this, here in the state of Wisconsin we have people who have been denied access to care because of the actions Governor Walker has taken related to not taking the Medicaid money and things like that. You just have to think when push comes to shove if seniors are paying five times more for their coverage as a result of this, that is going to a huge impact especially in a 2018 election where it’s an older population.

Frederica Freyberg:

It may well be tough. Let me get both of you to respond to the transportation plan that came out of the state legislature this week, Bill?

Bill McCoshen:

Pretty creative. Representative Dale Kooyenga from the Milwaukee area got the support of his leadership and his caucus, the Republican Assembly Caucus to do what we would call a big, bold plan. It includes–they call it “The Road to the Flat Tax.” It includes a long-term comprehensive transportation plan, which by the way would have the first increase in revenues for transportation in the past decade. But it also has some pretty significant tax reduction. We’ll see. It’s step one. It’s a good starting point but it’s got a long way to go.

Scot Ross:

“The Road to the Flax Tax” is going to roll right over the middle class. We’re talking about double taxing your gasoline so that they can cut the top 1% income tax rate in half. So the richest man and woman in Wisconsin, John Menard and Diane Hendricks are going to have their tax rates cut in half essentially, the tax rate. And you’re going to pay twice on your gasoline to pay for that.

Frederica Freyberg:

We'll leave it there. Scot Ross, Bill McCoshen. Thank you.

Scot Ross, Bill McCoshen:

Thanks for having us.

Frederica Freyberg:

Now a look ahead to potential impact of bills having to do with the homeless population that passed this week in the Assembly. It’s estimated there are nearly 30,000 homeless people in Wisconsin and not just in the urban areas. According to the Wisconsin Coalition Against Homelessness, the state lags way behind neighboring states in its response to the problem. But this week the State Assembly passed four bills to fight homelessness. Among them creating a pilot program to get chronically homeless people on the waiting list for federal housing vouchers. Freeing up more money for transitional housing and making $75,000 available for one city for a pilot program to help the homeless get jobs. Homeless advocates say it’s the first time in 25 years there will be an initiative to provide more resources and policy enhancements. Also among the bills passed, one calling for the creation of an interagency council on homelessness with the secretaries of eight state agencies meeting to discuss services. Lieutenant Governor Rebecca Kleefisch will chair the council. She joined us earlier to discuss her role. Lieutenant Governor, thanks for joining us.

Rebecca Kleefisch:

Thank you for having me.

Frederica Freyberg:

Why is this issue getting the attention of Republican lawmakers and the administration now?

Rebecca Kleefisch:

I think one of the reasons it is a key piece of our workforce solution is because you have a lot of folks on the sidelines of the traditional Wisconsin economy who can be animated to get into the economy if only given the connections they need and I would argue they deserve as their right. Our Constitution says and our Declaration of Independence guarantees we have the right to pursue happiness here in the United States of America. You have a lot of folks who may be housing insecure who have not been exercising their right to happiness. And I believe this package of bills and the impetus, the budget from our executive branch allows those things to happen. Those connections to be made and folks who are right now on the sidelines of Wisconsin's economic recovery to get into our talent pipeline.

Frederica Freyberg:

How do you see the interagency council moving forward to help prevent and reduce the homeless population in the first place?

Rebecca Kleefisch:

Well, I've been working on this issue for about the last year and a half. You know as a former journalist I like to see both sides of a story and interview everyone involved before making a decision on best steps forward. So I have traveled the state and can assure you this is not a problem, an issue for just one area or just one demographic. Homelessness and housing insecurity in fact affects all corners, all facets in Wisconsin. I spent a lot of time not only with the advocates and those not-for-profit and social workers working with this population but also with the population asking them the questions that I think I need the answers to in order to provide the best solutions and resources so we can get them connected to opportunity. I imagine the interagency council will continue that work. The work determining how those on the front lines of this challenge can best use resources and which are the most necessary and the most immediately needed. But also as we see challenges change how we can be more responsive and more nimble in assuring we can get our homeless and house-insecure population attached to a safe place to sleep at night so they can get engaged in our workforce.

Frederica Freyberg:

According to the Wisconsin Coalition Against Homelessness, Wisconsin’s annual funding for homeless programs is $3.25 million compared to Minnesota's nearly $45 million. What is the commitment to put more money into programs?

Rebecca Kleefisch:

Well, after travelling this state for the last year and a half talking to the groups with whom I've talked and the folks with whom I’ve met, I can tell you honestly this is less about funding and more about our expectations of the use of the funds we’ve allocated. I’m not arguing we don’t need more funding. What I am arguing is we need to have high expectations and we also need to reimagine how we do this funding as it is spent in communities. I’ve seen really good models, Frederica. I’ve also seen models that are not accomplishing what I would consider to be success. It’s one thing to say somebody got a safe place to sleep for a night and they’re not on our rolls. They’re not counted anymore because they’ve just moved to another program. That to me isn’t success. What I see as success is a long-term solution where someone is well, mentally healthy, is well, free of addiction but also connected to the services and also perhaps even the private sector economy where they can succeed independently long-term.

Frederica Freyberg:

One type of program we’ve reported on is something called “Housing First” where homeless people get permanent housing first and then supportive services to go with it. Is this the kind of program you would support?

Rebecca Kleefisch:

“Housing First” works specifically and best I think in cases of what we call dual-diagnosis, which means mental illness coupled with addiction. Because oftentimes in cases like that you need intense wrap-around services, almost life coach style, in order to get someone well enough to have a dependable income to begin to live independently in the first place.

Frederica Freyberg:

We need to leave it there as you’re suggesting varied reasons for homelessness, varied approaches. We’ll be watching as this goes forward. Lieutenant Governor Rebecca Kleefisch. Thanks very much.

Rebecca Kleefisch:

Let's keep talking about this, thank you.

Frederica Freyberg:

Now for an update from the UW System. UW Madison Chancellor Rebecca Blank spoke this week about her hopes for funding increases in the state budget. The system lost $250 million dollars in state funding over the last two years. And Blank said funding has been cut in five of the last six biannual budgets or ten of the last twelve years.

Rebecca Blank:

That means we and the UW system’s goals haven’t been able to invest in the way we need and that’s really problematic because our competitors are investing. So Mark and I, the chancellors of the UW schools are really making the argument in this budget year that it’s time to reinvest in Wisconsin.

Frederica Freyberg:

Governor Walker has proposed an increase in funding for the UW System most of which will be tied to performance but Blank said in her speech she’s worried that could disappear if May revenue projections are low. Tonight is our last Friday with our student news intern of two years Nina Kravinsky. She’s graduating from UW Madison, congratulations and off to new opportunities. Good luck and thanks to Nina. Now our tradition is to ask to you sign off on tonight’s episode so go ahead.

Nina Kravinsky:

Next week an update on the growing opioid problem with our partners WisContext.org. I’m Nina Kravinsky for “Here & Now.” Have a great weekend.

Announcer:

Funding for “Here & Now” is provided in part by Friends of Wisconsin Public Television.