Frederica Freyberg:

Mordecai Lee joined me at the Capitol after Governor Walker's Budget Address. As we discussed, a centerpiece of the governor's budget plan is his income tax cut. Under the plan, a typical family will see income tax savings of about $212 over the next two-year cycle. That amounts to $106 per year for 2013 and 2014. This example is based on a family of four with two working adults making about $80,000 per year. The tax liability under current law would be $3500. In a moment, senate minority leader, Chris Larson, will join us to weigh in on that tax cut, but first, here’s how Governor Walker described it Wednesday night.

Scott Walker:

One of the best ways to grow our economy is to put more money back into the hands of the people and small businesses of this state. With this in mind, I am pleased to announce an income tax cut of $343 million.

The hard-working taxpayers of this state helped to create the budget surplus, so it’s only right that we put more money back into your hands. Over the next decade, this will lower income taxes by some $1.7 billion. We reversed the trend in Wisconsin in the last budget. We lowered the overall tax burden. Now we’re lowering taxes on middle class taxpayers by specifically reducing the rates for the middle and bottom three tax brackets. This will ensure a tax cut for everyone, with the focus on making sure Wisconsin is more competitive for middle class taxpayers and small businesses. This will truly stimulate the economy.

Frederica Freyberg:

Joining us now for some Democratic response to the income tax proposal as well as other budget items, senate minority leader, Chris Larson. He’s in Milwaukee tonight, and, Senator, thanks very much for joining us.

Chris Larson:

Thanks for having me.

Frederica Freyberg:

Well, so who could argue with an income tax cut?

Chris Larson:

Well, I mean, it sounds pretty good, right? But when you break it down in the way that you did, for the average family of four, they’re going to save about money for– that actually doesn’t even cover an outing to Taco Bell once a month. And for that, we’re going to have to sacrifice something. This money isn’t just coming from nowhere. This is coming on the back of the historic cuts to education, the largest cut in education history last budget, which the governor’s doubling down on this time. So instead of having quality education for every student in the state of Wisconsin, we’re getting just enough money to barely cover a Taco Bell outing for a family. And this skews towards people at the upper income tax level. So those people are going to get a much bigger break. They’re going to get a huge break, but the average Joe doesn’t even get enough to cover a cup of joe. So I think for that we should be examining where our values are and what we should be doing overall for our state. And this is not just for me. This is what we’ve been hearing by going around the state listening to people. I’ve held nine listening sessions over the last seven weeks, and people are wondering when we’re going to start reinvesting in education and start listening to them.

Frederica Freyberg:

Now, on this idea of this, kind of, income tax spurring the economy, why wouldn’t this– this is kind of a devil’s advocate question, but why wouldn’t $2 a week in a middle income person's pocket drive, as the governor says, greater demand for goods and services?

Chris Larson:

Well, I mean, if you look at the overall way that this governor has tackled the budget and has done things in our state, it’s only caused more political division and it has really set us back from achieving new jobs in our state. There’s a lot of ways to be able to do that. I think funding education, funding tech colleges and funding our universities is the best way to do it. I think, you know, we don’t have a huge opposition to try to lower taxes. The problem is is who it’s lowering taxes for. And to be clear, under his tax plan of who he’s interpreting as the middle class, it’s again, it's going to this class warfare. It's shifting it for people at the top who are doing very well. The people who receive the biggest tax break are people who are making $200,000 and up. As we’ve gone around the state listening to people in the middle class, I’ve asked every audience, who all here is making $200,000 or more? We’ve yet to see a hand go up. So this budget does not do what he’s saying it's going to do. It's not going to help a great deal to the people who really need it. What they need is quality education for their kids and to be able to have access to family-supporting jobs, and those things continue to be missing from this governor’s budget.

Frederica Freyberg:

Speaking of education, let’s take a listen now to what the governor said about his education plan.

Scott Walker:

Overall, I put $475 million in new state funds into our schools and higher education system in this budget. For the first time, a significant portion of that is based on performance.

In addition to rewarding high-performing and rapid-growth schools, I also put new resources into helping turn around schools that are failing to meet expectations. These schools will receive additional funds once they prove they have a plan to fundamentally improve their schools. In communities where some schools fail to meet expectations, we include an expansion of the Parental Choice program in this budget.

Since wealthy families have a choice, because they can pay to send their children to a private school, we give low income and middle class families an opportunity to also choose a viable alternative for their sons and daughters.

Frederica Freyberg:

I want to talk about with you, school choice, in just a second, but I want to start by talking about the governor saying that he is investing $475 million in new state funds for public education. Now that sounds good to the average person, does it not?

Chris Larson:

Right, but you have to remember we’re still in a ditch in term of education. We saw a $1.6 billion cut to education across the board in the last budget, the largest cut to education in our state’s history. And so he’s dug us into a pretty deep ditch. And so I think the fact that we’ve started to take a couple of steps up, we’re still down. And for K-12 specifically, if a student started in kindergarten under Governor– the same time Governor Walker took office, and we’re expecting these levels of increase, that child will walk across the stage graduating high school before the levels get back to where it was when he started kindergarten before Governor Walker took office. So, you know, while he’s starting to increase it, it’s not at a pace that matches inflation for K-12. It’s not at a pace that is actually going to do– restore the balance that we need to education in our state. So it doesn’t go near to what we need to do in restoring it. We’re still $600 million in K-12 alone from the day that Governor Walker took office.

Frederica Freyberg:

Let me ask you about the school choice. He wants to expand school choice, basically statewide. Why doesn’t school choice and the competition there make the public schools better?

Chris Larson:

Well, I think it’s interesting that you played the clip from the speech saying he doesn’t want to fund failed schools anymore, but that’s exactly what he’s doing with the publicly-financed voucher program. This is a program where it’s taxpayer money going into private education, and the promise has always been that we’re going to get better education outcomes. But time and time again it’s shown that that’s not the case. That’s not what’s happening. What we end up seeing is two systems, two school systems, and it’s already pretty expensive to run one school system in our state. And it’s shown that it hasn’t worked. It’s a failed experiment on our kids. It’s like saying it's like tackling a problem of potholes, and instead of saying instead of tackling the potholes we’re going to build a bigger sidewalk for some cars to drive around. It doesn’t solve the fundamental problem. It just starts to spend more money. We’ve seen that in Milwaukee. Yeah?

Frederica Freyberg:

Senator, I’m sorry, I need to jump ahead and listen to what the governor said about Medicaid because we’re running short on time.

Scott Walker:

Our budget is built on a plan to reform a broken system and transition people from government dependence to true independence.

A major part of the plan is what we do with Medicaid and how it relates to the federal health care mandate. Specifically, our actions allow us to reduce the number of uninsured in our state by 224,580. We also reduced the net number of people who are on government-run Medicaid. Some 87,000 people living above poverty will transition into the private or exchange market, where they can get a premium for as low as $19 per month. At the same time, we’re able to add 82,000 people currently living in poverty. Many of these individuals were not covered by Medicaid in the past because of a cap put on the program by the previous governor. Going forward, everyone living in poverty will be covered by Medicaid.

Frederica Freyberg:

Senator, on the governor’s plans for Medicaid, it seems to me that we’re right back to his decision, now formally addressed here, to reject the federal funding, for it is part of the Affordable Care Act. How would, in your mind, Wisconsin’s Medicaid program look different if the administration had accepted that money?

Chris Larson:

Well, it would be a world of difference. And I think that’s one that’s truly sad for all Wisconsinites. For the governor to stand in front of poor Wisconsinites, working Wisconsinites, who are trying to get access to affordable health care, he’s saying aren’t you glad you get to be independent now that you’re not going to rely on Affordable Health Care. And as a result we, taxpayers, are going to have to end up paying more for less coverage for our neighbors, for our friends and for people who are on Badgercare. And on top of that, we’re turning away federal money again, and turning away that money so it’s going to go toward other states and fund jobs there. This money, had it been accepted, would have created 10,500 net new jobs for the state of Wisconsin, more than any proposal this governor has put forward. So looking at that alternate reality that we could have gone down, like other Republican governors had, it’s sad that he’s turned that away just for the sake of a very far Right, Tea Party ideology. It’s another sacrifice our state has to make because he’s at the helm.

Frederica Freyberg:

We need to leave it there. Senator Chris Larson, thanks very much for your time.

Chris Larson:

Thank you.