Question No. 10: Gregg Underheim Response
The term structural deficit refers to the condition of the state budget in the next fiscal year. A structural deficit is the difference between the committed and expected spending and the expected revenues. Small structural deficits have been a common occurrence in Wisconsin.
Recently a much larger structural deficit has accumulated in Wisconsin. It was primarily a function of the downturn in the economy in the year 2000 and the terrorist attacks of September 11, 2001. However, it is also true that during the 1990’s when the economy was very good state government increase spending and provided tax cuts as well. When the economy slowed, those actions also contributed to the structural deficit. At the opening of the last fiscal year the state had a structural deficit of $3.2 Billion. That is a large sum. However, other states faced even larger problems.
In the last state budget the Governor and most of the legislators promised that they would address the problem through cuts rather than through tax increases. We kept that promise. We lowered the structural deficit to around $700 million. And in so doing we improved our tax ranking among the other states because other states addressed their deficit problems by increasing taxes.
When we eliminate the structural deficit this budget we must again do so through restrained spending rather than through tax increases.
Each state has its Big Five or Big Three or Big Six. Those are the major state programs that consume the bulk of the state spending. In Wisconsin the Big Five are K-12 education, Medicaid, Corrections, Shared Revenue, and the University. Those five areas constitute more than 80% of Wisconsin’s spending. To eliminate the $700 million deficit over the next biennium it will be necessary to restrain spending in those areas.
Let me make some suggestions as to how it will be possible to make long-term savings moves in some of those areas.
First, in corrections, it may be possible to save money through alternative programming for non-violent offenders. However, we must make certain that offenders placed in alternative programming are truly non-violent. Being convicted of a non-violent offense is not proof that one has not committed a violent offense. Criminals put into those programs must be carefully screened to make certain they are truly non-violent.
Second, we must begin the inevitable march toward the use of technology as a teaching tool. The computer has revolutionized the world. We make things faster, better, and cheaper than we have ever done before. The computer is the tool that has made that possible. It is beginning to creep into education. In some places students who were disruptive were moved to computer based education programs. They became high performing students. After that success the computer was piloted in traditional classes as a teaching tool. It was successful. Students liked it. Test scores improved. Universities across America have recently been involved in serious research about computer-based instruction in lower level classes, the 100 and maybe 200 level courses. The outcome was very promising. Costs were lowered. Students performed well. Students liked the approach.
In the Medicaid program a large percentage of the costs are due to people with long term chronic illnesses. We manage those patients poorly. All too often they end up going to hospital emergency wards. We can save money by managing their care more effectively. They will receive better care at a lower cost to the taxpayer.
Of course, most everyone who follows politics has read about abuses of the state’s car fleet. We need to sell some of those cars and better manage travel. It is likely that the state would save money by reimbursing state employees for state related travel rather than buying state cars. It is all too often the case that a state car sometimes becomes used for personal purposes. There have certainly been some high profile cases of that recently.
In closing, I’d like to thank the mangers of this blog for the work they have put into this project. Second, I want to ask the citizens of Oshkosh to vote for me on November 2. I have demonstrated that I have courage, that I am not a hard partisan, that I think and act reasonably and in the interest of the public, not special interests. It has been an honor to serve Oshkosh in the Assembly. I hope to be granted that honor again.
Recently a much larger structural deficit has accumulated in Wisconsin. It was primarily a function of the downturn in the economy in the year 2000 and the terrorist attacks of September 11, 2001. However, it is also true that during the 1990’s when the economy was very good state government increase spending and provided tax cuts as well. When the economy slowed, those actions also contributed to the structural deficit. At the opening of the last fiscal year the state had a structural deficit of $3.2 Billion. That is a large sum. However, other states faced even larger problems.
In the last state budget the Governor and most of the legislators promised that they would address the problem through cuts rather than through tax increases. We kept that promise. We lowered the structural deficit to around $700 million. And in so doing we improved our tax ranking among the other states because other states addressed their deficit problems by increasing taxes.
When we eliminate the structural deficit this budget we must again do so through restrained spending rather than through tax increases.
Each state has its Big Five or Big Three or Big Six. Those are the major state programs that consume the bulk of the state spending. In Wisconsin the Big Five are K-12 education, Medicaid, Corrections, Shared Revenue, and the University. Those five areas constitute more than 80% of Wisconsin’s spending. To eliminate the $700 million deficit over the next biennium it will be necessary to restrain spending in those areas.
Let me make some suggestions as to how it will be possible to make long-term savings moves in some of those areas.
First, in corrections, it may be possible to save money through alternative programming for non-violent offenders. However, we must make certain that offenders placed in alternative programming are truly non-violent. Being convicted of a non-violent offense is not proof that one has not committed a violent offense. Criminals put into those programs must be carefully screened to make certain they are truly non-violent.
Second, we must begin the inevitable march toward the use of technology as a teaching tool. The computer has revolutionized the world. We make things faster, better, and cheaper than we have ever done before. The computer is the tool that has made that possible. It is beginning to creep into education. In some places students who were disruptive were moved to computer based education programs. They became high performing students. After that success the computer was piloted in traditional classes as a teaching tool. It was successful. Students liked it. Test scores improved. Universities across America have recently been involved in serious research about computer-based instruction in lower level classes, the 100 and maybe 200 level courses. The outcome was very promising. Costs were lowered. Students performed well. Students liked the approach.
In the Medicaid program a large percentage of the costs are due to people with long term chronic illnesses. We manage those patients poorly. All too often they end up going to hospital emergency wards. We can save money by managing their care more effectively. They will receive better care at a lower cost to the taxpayer.
Of course, most everyone who follows politics has read about abuses of the state’s car fleet. We need to sell some of those cars and better manage travel. It is likely that the state would save money by reimbursing state employees for state related travel rather than buying state cars. It is all too often the case that a state car sometimes becomes used for personal purposes. There have certainly been some high profile cases of that recently.
In closing, I’d like to thank the mangers of this blog for the work they have put into this project. Second, I want to ask the citizens of Oshkosh to vote for me on November 2. I have demonstrated that I have courage, that I am not a hard partisan, that I think and act reasonably and in the interest of the public, not special interests. It has been an honor to serve Oshkosh in the Assembly. I hope to be granted that honor again.
posted by Miles Maguire at 10:49 AM
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