Category Archives: Politics
The conversation around workforce has been shifting from just building up the state’s current labor pool to now also attracting new talent to the state. Tricia Braun, chief operating officer of the Wisconsin Economic Development Corp., said there’s been growing demand in the economic development community to address talent attraction at a state level.
Department of Workforce Development secretary Ray Allen put it a little differently.
“Workforce is the new economic development,” he said.
Buckley Brinkman, executive director and CEO of the Wisconsin Center for Manufacturing and Productivity, said the optimistic forecast is for the state workforce to be flat over the next 15 years, while the pessimistic version shows it could be down by 40 percent. Either way, there are examples of companies turning away work because they don’t have the workforce they need, Brinkman said.
“That might be fine for an individual company, but when you start adding those companies together, you have an economy that’s not growing,” he said.
Wisconsin has consistently lost more people than it has gained for years. Part of that is retirees moving to warmer weather, but part of it is that Wisconsin is not attractive. As one of the few immigrants into Wisconsin, I have a different perspective than people who grew up here. Wisconsin has a great culture and great people, but you don’t really know that until you live here for a while. If you are looking in from the outside, it looks like a state with crappy weather, oppressive taxes, and a rust-belt economy. Unless there is a really compelling job or a family reason to move here, most people don’t. The fact that more and more jobs allow virtual offices helps Wisconsin companies fill some knowledge worker jobs, but it also means that Wisconsinites have less of a reason to stay in the state.
Wisconsin can’t do anything about the weather, so it needs to work on what it can to make it more attractive for a smart, mobile, young worker to move to Wisconsin.
Hmmmm… there are some interesting nuggets in the results. Here are the primary results for West Bend as conveniently posted by the Washington County Insider.
First off, turnout was extremely low. It is not unusual for West Bend to have over 80% turnout and usually outperforms the state in turnout even in these kinds of elections. All of the state results are not in yet, but it looks like West Bend will underperform this time. This is because the school board primary wasn’t really a primary since Tina Hochstaetter dropped out and the only other thing on the ballot was the DPI race. Some school referendums and more contentious school board primaries on other parts of the state drove turnout much higher – particularly in Madison.
Second, the West Bend school board results are telling. Three candidates, Schmidt, Justman, and Ongert are running as a block. They are using almost identical campaign messaging; signs for the three of them are appearing together in the same yards; and there is a large sign for the three of them together to be seen from Highway 45 as one goes south out of town. These three also received the most votes.
The question is, why? Although every school board candidate in West Bend is running as a conservative (because conservatives stand a better chance of winning in a city that is 70% conservative), these three candidates are being strongly supported by the local lefty and pro teachers union groups. Given that it is these groups that are more passionate about changing the makeup of the school board, they are more likely to have had turned out in this micro-turnout election.
The DPI results seem to support this conclusion. This is a county that voted 66% for Don Pridemore when he ran against Evers in 2013 and Pridemore’s campaign was drastically underfunded. It is a county that typically votes 70%-80% Republican. Yet in the DPI race, the conservative candidate only received 50% of the vote. This indicates a disproportionate turnout by the left side of the electorate in West Bend. Of course, there are no other races on the ballot that exactly match the geography of the school district, so rough comparisons are what we have to go on.
I would not read too much into this election. The April turnout is typically 25%-40% and a heated DPI race will drive higher turnout. That’s 2.5 to 4 times more voters than this election and 7 of 10 Benders are conservative. The makeup of the electorate in April will look very different. I am thankful that we appear to have six decent, earnest, honorable people from which to choose.
State Superintendent Tony Evers will face off against Lowell Holtz in a general re-election bid for his post, according to the Associated Press.
Eliminated in today’s primary was John Humphries, former Dodgeville administrator who also worked at DPI.
Evers gathered 69 percent of the vote, while Holtz has 23 percent and Humphries has 7 percent, according to unofficial election results from AP.
With turnout so low in the state, the reliable union voters were likely over-represented a tad. This presents a good, clear choice for the April election.
Oh how different the tone is compared to when the Senate Republicans might threaten a government shutdown. Now it’s all about the need for Trump and Senate Republicans need to cave to the minority party.
WASHINGTON (AP) — Add a potential government shutdown to President Donald Trump’s growing roster of headaches.
Beneath the capital’s radar looms a vexing problem — a catchall spending package that’s likely to top $1 trillion and could get embroiled in the politics of building Trump’s wall at the U.S.-Mexico border and a budget-busting Pentagon request.
While a shutdown deadline has a few weeks to go, the huge measure looms as an unpleasant reality check for Trump and Republicans controlling Congress.
Despite the big power shift in Washington, the path to success — and averting a shuttering of the government — goes directly through Senate Democrats, whose votes are required to pass the measure. And any measure that satisfies Democrats and their new leader, Sen. Chuck Schumer of New York, is sure to alienate tea party Republicans. Trump’s determination to build his wall on the U.S.-Mexico border faces a fight with Democrats, too.
Of course, the big farce is that a government shutdown doesn’t really shut down. Most spending is automatic and/or mandatory and just keeps trucking along irrespective of whether or not Congress acts. I vote to shut it down for a month and then permanently kill any program that a majority of Americans didn’t miss.
The Trump administration has issued tough guidelines to widen the net for deporting illegal immigrants from the US, and speed up their removal.
Undocumented immigrants arrested for traffic violations or shop-lifting will be targeted along with those convicted of more serious crimes.
All 11 million or so undocumented foreigners in the US could be affected.
I don’t think we need to commit a ton of resources to find and deport illegal aliens, but when law enforcement runs across them in the normal course of business, they should be deported. They do not have a legal right to be in America.
My column for the West Bend Daily News is online. Here you go:
In this most recent era of heated factional discord, there is one issue about which virtually everyone can agree. College is too expensive and is driving too many students into debt for degrees that are decreasing in value in the economy.
For decades, the price of college has increased far faster than inflation, personal income or any other economic metric.
The very simple reason that college costs so much is because many colleges spend way too much. Fueled by easy money from the taxpayers and a culture that puts an almost mythical value on a college education, many colleges — particularly public ones — spend an inordinate amount of money on things that have little to do with educating young adults.
Gov. Scott Walker has made controlling the cost of college a major initiative in his proposed budget. One small proposal in Walker’s budget is creating a fierce backlash. Both the proposal and backlash brilliantly illustrate the scope of overspending in the University of Wisconsin System.
In an effort to give students the choice to lower the cost of attending the University of Wisconsin, Walker has proposed to allow students to opt out of paying about 15 percent of their student fees called allocable segregated fees. These fees are mandatory for all students and go to pay for organizations and services as designated by student-led committees at each campus. Walker’s proposal does not touch the other 85 percent of student fees, called non-allocable fees, which go to pay for things like the student unions and campus healthcare services.
The list of organizations receiving allocable student fees is long and varies from campus to campus.
Most of the recipient organizations are not controversial and are just student special interest clubs, student service organizations, or student government.
For example, the Greater University Tutorial Service, Student Leadership Program, Wisconsin Black Student Union, Student Judiciary, Oshkosh Gaming Society, Chess Club, Student Radio and student bus passes are all funded in part with allocable fees.
Some organizations are quite controversial. For example, at UW-Madison, a group called Sex Out Loud, which offers programs like “Advanced Pleasure 369” and “Kink 401” received more than $100,000 this year.
Movimiento Estudiantil Chicano de Aztlán (MEChA) received more than $87,000 in student fees. MEChA is a radical activist anti-American organization that promotes separatism and non-assimilation of what they call “Our Chicano Nation.” They openly state that, “we are a nationalist movement of Indigenous Gente that lay claim to the land that is ours by birthright. As a nationalist movement we seek to free our people from the exploitation of an oppressive society that occupies our land.”
Whether the organizations being funded by allocable fees are controversial or not, Walker’s principle is a simple one. Students should be able to choose whether or not to fund these organizations.
Opponents to the proposal argue that the diverse range of organizations funded by mandatory allocable fees enrich the experience of all students and provide some vital student services (tutoring and bus service). Proponents argue that students should not be forced to pay for organizations with which they disagree and/or in which they do not participate.
Both sides are correct. While these organizations provide some services and marginally add to a diverse college experience, students should not be forced to fund them. If students value these organizations and services, Walker’s proposal leaves open the option for students to pay the allocable fees. Even if a student chooses not to pay the fee, they can still pay for organizations and services on an individual basis. Walker’s proposal neither mandates nor forbids students from paying for these organizations. All it does is give them a choice that they do not currently have.
For the average Wisconsin resident, it costs about $25,655 per year to attend UW-Madison. Walker’s proposal would allow students the option to reduce that cost by a scant $178.
If we cannot abide even this exceptionally modest attempt at reducing the cost of college, then we are not even remotely serious about making college more affordable and accessible for all.
There’s a primary election tomorrow in Wisconsin. It’s mostly school boards and such. The only statewide race is for the State Superintendent of the Department of Public Instruction. There are three candidate on the ballot. The top two will move on to the general election. Here are the candidates:
Tony Evers (inc.) is an anti-choice teachers union toadie seeking a third term. He has attempted to stymie or stall virtually every educational reform coming out of the legislature while educational outcomes in Wisconsin have remained stagnant or declined. He has not earned reelection.
John Humphries is a liberal trying to run as a conservative. He opposed Act 10, signed the recall petition for Governor Walker, voted against Walker, voted for Hillary Clinton, and has generally been a lefty his whole life. He claims that his education reform plan has garnered conservative support, so now he likes conservatives… or something like that. Whether he is still a liberal or he has seen the light and converted to conservatism is immaterial given his shady and misleading campaign tactics. He should not be trusted with the job.
Lowell Holtz is a former superintendent in Beloit (urban) and Whitnall (rural). He is a conservative who supports Act 10, school choice, and supports many of the reform efforts being championed in the legislature. Holtz is the clear choice for conservatives.
There is technically a primary for the West Bend School Board too. There are three seats on the ballot and seven candidates. The top six will move on to the general election. But one of the candidates has withdrawn even though her name remains on the ballot. Make sure you get out and vote for the three candidates of your choice. I will be attempting to interview and evaluate the candidates before the general election.
John Torinus does a bit of math for us and demonstrates how the legislature can free up a LOT of money.
For the Republican legislators looking for $300 million in the 2017-2019 state budget for road building, there’s a ready solution.
Gov. Walker, who repeatedly gets elected by holding the line on taxes, steadfastly refuses to raise gasoline taxes, and many GOP legislators agree. They are wary of toll roads and probably don’t want to raise car license fees either.
New bonding is already pegged in the budget at $500 million, which would lift state debt to more than $42 billion. It now sits at $7195 per Wisconsin citizen. Fiscal conservatives don’t want to see that number go higher.
So where to find the $300 million, or $150 million per year?
Savings of that much or more are staring them right in the face. The state spends $1.5 billion per year to provide a fat, under-managed health plan for 65,000 state employees. That comes to $23,000 per head.
That bloated number is about $10,000 per employee higher than what best practice private companies and school districts are paying for very full benefit plans. Those payers, all self-insured, deliver generous care – actually better care – for $12,000 to $14,000 per employee.
You can do the math. If ETF were as well managed as the sharpest payers, it could save $650 million per year ($10,000 times 65,000 employees). That is far more than needed for roads.
Just step back and think about that number for a moment… $23,000 per employee for health insurance… even companies who do not self-insure don’t spend that much. There is soooooooo much fat in government.
They have every right to protest to make a point, but they do not have a right to do so free of consequences.
LEXINGTON COUNTY, South Carolina — Twenty-one people were fired from a South Carolina company after taking part in the Day Without Immigrants protest.
The movement closed restaurants and shops across the country to show the contributions immigrants have on the American workforce.
Juvenito Quintana and 20 others all missed work on February 16. The next day, they got a letter from Encore Boat Builders LLC in Lexington.
The letter said they were being terminated for no-show/ no-call-in. Their last day listed was February 16, the day of the protest.
Quintana says some employees got calls from management the day before telling them not to miss or else they’d lose their job. That’s why he said a lot didn’t call in, for fear.
Most of the employees had been working there for years and have small children. Quintana is a permanent resident and feels like the termination was unfair.
It looks like the employer acted in good faith and even warned the employees. On a side note, we should have a Day Without Pasty White Guys and watch every IT department in the nation grind to a halt.
There has been a 30-point drop in the probability that the individual mandate will be repealed by April 30. The current estimate is a 35 percent chance. As I noted a month ago, the 65 percent figure was about equal to Chris Webber’s free-throw percentage in the NBA. The new estimate is a little lower than the worst free-throw percentage in NBA history, that of Andre Drummond.
Of course, to advocates of the ACA, even a 1-in-3 chance may be “too high,” which is why continued efforts to be “up in grills” are planned for the coming congressional recess.
Nevertheless, the shift in the forecast is a large one, reflecting the challenges of agreeing on an alternative to the ACA and moving it through the labyrinthine legislative process while simultaneously having to spend substantial time confirming Trump’s Cabinet nominees. As Rep. Mark Sanford (R-S.C.) put it: “There seems to be a coalescing around principles; I don’t think it’s gotten deep in the weeds about what it will actually include yet.”
Republicans have been running on the repeal of Obamacare for six years. They have had ample time to have a road map ready to get this done. If they fail to keep their promise, I guarantee that Trump will have a Democratic Senate in 2019 – and probably a Democratic House too.
John Humphries charged fellow state schools superintendent challenger Lowell Holtz promised him a six-figure job at DPI if he dropped out of the primary and Holtz beat incumbent Tony Evers in the April general election.
But Holtz on Wednesday said the offer was a “rough draft” of ideas and that the deal wasn’t aimed at getting one of them to drop out of the race. Rather, he said, the job offer was part of a possible deal to ensure the primary loser backed the other challenger in the general election against Evers.
The document, which Humphries’ campaign provided to WisPolitics.com, called for one of them to get a three-year contract with annual pay of $150,000, full benefits and a driver.
Holtz brought the document to a Dec. 22 breakfast meeting at a Milton family restaurant.
Here’s the thing that bugs me about this… if this really did occur, Humphries sat on it for almost two months for the express reason of dropping it into the news cycle the week before the election. I got the long, detailed accusation in my email from Humphries’ campaign manager a few days ago like everyone else. That was after I saw both of these candidates at the CSCWC meeting a couple of weeks ago and Humphries didn’t mention a thing about this. If this was so outrageous, then why would Humphries sit on it for so long? Obviously it was to time it to enact maximum political damage, but that just belies a lack of sincerity.
Humphries has struck me as a slimy character and this move just enhances my gut feeling about him.
Cheers and a sense of relief could be seen in the faces of the opponents of the Hartford reliever route after they realized progress for a proposed road in Washington County had stalled before their very eyes.
Members of the County Board of Supervisors, by a vote of 13-11, decided against including the proposed reliever route in the 2050 regional transportation plan. Had the measure passed, the proposed path would have replaced another route directed toward the city of Hartford via Arthur Road.
WASHINGTON — Phone records and intercepted calls show that members of Donald J. Trump’s 2016 presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the election, according to four current and former American officials.
American law enforcement and intelligence agencies intercepted the communications around the same time they were discovering evidence that Russia was trying to disrupt the presidential election by hacking into the Democratic National Committee, three of the officials said. The intelligence agencies then sought to learn whether the Trump campaign was colluding with the Russians on the hacking or other efforts to influence the election.
The officials interviewed in recent weeks said that, so far, they had seen no evidence of such cooperation.
Frankly, I’m far less concerned with the fact than people from an incoming administration may have been running their mouths with Russians than I am about the fact that “four current and former American officials” are leaking intelligence to the media for purely political purposes. Is it too much to ask that our intelligence agencies to be able to keep a secret?
A bill has been proposed in the Tennessee State Legislature that says people who happen to hit a protester blocking traffic will be immune from civil suits brought against them by said protester.
Sen. Bill Ketron (R-Murfreesboro) introduced the bill that protects motorists from civil lawsuits should they accidentally hit someone protesting in the middle of a street or highway. However, the bill does say that the protester may still file a civil suit against the driver should the accident be deemed intentional.
I’d also like to see a bill protecting motorists who hit protesters if they feel they are in danger. For example, when a group of protesters surround a car and are threatening, shouldn’t the driver just be able to floor it and get out of there without worrying about getting sued later?
My column for the Daily News is online. Here you go:
Gov. Scott Walker has taken the first step in Wisconsin’s biennial budget process by introducing his executive budget. Walker calls it a “reform dividend” budget that is able to boost spending thanks to the reforms enacted in earlier budgets. There is a lot to like about Walker’s budget, but it suffers from a fundamental flaw: it spends way too much.
The governor’s executive budget is the first step in what will be a lengthy legislative process before Wisconsin gets to a final budget. The Legislature’s Joint Finance Committee will begin working through the governor’s budget to add and remove their own priorities. The budget that comes out of the JFC will then be debated and passed by both houses of the legislature; the versions that pass each legislative house will be reconciled and sent to the governor; the governor will issue vetoes; the legislature will consider overriding vetoes; and then we will have a final budget. There is a long way to go.
Despite the fact that the governor and both houses of the Legislature hail from the same political party, there are some sharp differences of opinion regarding Wisconsin’s budget priorities. There have already been fierce intraparty clashes over transportation funding, debt load, potential tax increases, and other issues. The final budget will look substantially different than the governor’s budget proposal, but Walker has begun the conversation by making his priorities clear.
Signaling that Walker intends to run for reelection next year, his budget includes a lot of tax cuts and spending increases targeted at various interest groups. Most of the nearly $600 million in tax cuts comes from changes to the income tax and eliminating a portion of the state property tax, but the budget also includes several smaller targeted tax cuts.
The governor’s budget increases spending in a number of areas including an additional $649 million for K-12 schools and $105.2 million more for the University of Wisconsin System. There are also spending increases for tech schools, welfare, work force development, prisons, historical society, health services, transportation, the building commission, shared revenue and more.
Walker’s budget also includes some terrific reforms and accountability measures. The budget finally eliminates prevailing wage statewide, which will save taxpayers millions of dollars on needed work. It contains reforms to welfare and work force development designed to help people break the cycle of poverty and become successful in the work force. Under this budget, Wisconsin will self-insure its employees for health coverage. This is something that many large companies already do and will save taxpayers millions of dollars.
In what is garnering the most pushback, Walker’s budget increases spending for K-12 education and the University of Wisconsin, but does so with some added accountability. K-12 schools that have not already taken advantage of the tools given them in Act 10 to make reforms may not be eligible for the increased state funding. Much of the increased spending on UW will only come after UW makes reforms like offering a 3-year degree option.
But for all of the good it contains, one cannot escape the fact that Walker’s budget still spends too much. Indeed, despite the myth of “cuts” and “austerity” perpetuated by both political parties, Wisconsin has increased spending in every budget Walker has signed. This is despite the fact that Wisconsinites’ ability to pay has still not recovered from the Great Recession.
Let us look at the numbers. Gov. Jim Doyle’s last biennial budget for 2009-11 spent $61.9 billion. The first Walker budget spent $64.1 billion. Since then, Wisconsin’s biennial budgets have increased spending every time to $68 billion to $72.6 billion and now $76.1 billion. The budget that Walker just proposed spends a full 23 percent more than Gov. Doyle’s final budget. “Austerity,” my foot.
Meanwhile, over the same time period, Wisconsinites’ income has struggled. In 2008, the year before Gov. Doyle passed his last budget, the real median household income in Wisconsin was $57,348. It took a beating in 2009 after the Great Recession and dropped to $55,227. Since then, real median household income has dropped more before finally inching up last year. It still has not recovered to the 2008 level. The real median household income since 2009 has moved to $53,269, $53,110, $52,709, $52,370, $52,683, and finally in 2015, to $55,638. As you can see, the median Wisconsin household is earning $1,710 less per year since 2008, but being asked to pay for a state budget that spends 23 percent more.
If Wisconsin’s state spending largesse cannot be justified by an increase in Wisconsinites’ ability to pay, then perhaps the increased spending is being offset by an increase in population and new taxpayers? No. Since 2010, Wisconsin’s population has only increased 1.6 percent. And according to IRS migration data, the aggregate adjusted gross income for people leaving Wisconsin is greater than those coming in. Essentially, Wisconsin is losing higher-earners and retirees to low-tax states and replacing them with lower earners.
Gov. Walker and the Republicans deserve tremendous credit for the immensely beneficial and consequential budgetary reforms they have enacted and for managing the state’s finances in a responsible manner. Long gone are the Doyle budgets of massive deficits and illegal fund raids thanks to mature management of the state’s finances.
But Wisconsin remains a tax hell precisely because it remains a spending hell. For all of the good that Walker and the Republicans have done, they have not addressed this fundamental problem and it drags down everything from economic growth to work force availability to the everyday lives of Wisconsinites just trying to keep enough of their money to build a better life for themselves.
A Syrian man who fled the war-torn city of Aleppo in 2014 after suffering torture and imprisonment is suing President Donald Trump and other U.S. officials over an executive order issued by Trump last month that still effectively bars the man’s wife and daughter from joining him in the U.S., where he was granted asylum.
The man filed the lawsuit anonymously, to protect the identities of his wife and daughter, who still live in hiding in Aleppo. It was filed Monday afternoon in the U.S. District Court for the Western District of Wisconsin, located in Madison. The case was assigned to U.S. District Judge William Conley.
The lawsuit doesn’t state where the man lives, only that he’s a resident of the Western District of Wisconsin.
The proposed companion budget bill elaborates, stating among other things, that:
- The UW Board of Regents and each college campus “shall guarantee all members of the system’s community the broadest possible latitude to speak, write, listen, challenge and learn.”
- “It is not the proper role of the board or any institution or college campus to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even deeply offensive.”
- Members of the system’s community are free to criticize and contest views expressed on campus and “speakers who are invited to express their views, (but) they may not obstruct or otherwise interfere with the freedom of others to express views they reject or even loathe.”
- “The board and each institution and college campus has a responsibility not only to promote a lively and fearless freedom of debate and deliberation, but also to protect that freedom when others attempt to restrict it.”
Walker’s proposal is raising concern among some members of the UW-Madison campus community that it might, in fact, stifle speech.
Perhaps if UW officials actually respected and protected free speech on campus today, such requirements would not be necessary.
I doubt it, but here’s why they might.
Like the late Justice Antonin Scalia, whose seat he will take if confirmed, Gorsuch has often ruled in favor of criminal defendants over the government – rulings not uncommon for strict “textualists” and their razor-close readings of the statutory texts.
And unlike many other federal judges, Gorsuch has been a fierce critic of the so-called Chevron doctrine, which holds that judges should generally defer to the executive branch and its agencies when they have any reasonable interpretation of federal statutes.
“That basically gives people comfort that didn’t have comfort,” said Sen. Joe Manchin, the conservative Democrat from West Virginia after meeting Gorsuch. “That has helped him” in his quest for confirmation, he said.
My, my… by the cries and wails of the Left, one would think that this is a big deal.
(Reuters) – U.S. federal immigration agents arrested hundreds of undocumented immigrants in at least four states this week in what officials on Friday called routine enforcement actions.
Reports of immigration sweeps this week sparked concern among immigration advocates and families, coming on the heels of President Donald Trump’s executive order barring refugees and immigrants from seven majority-Muslim nations. That order is currently on hold.
“The fear coursing through immigrant homes and the native-born Americans who love immigrants as friends and family is palpable,” Ali Noorani, executive director of the National Immigration Forum, said in a statement. “Reports of raids in immigrant communities are a grave concern.”
The enforcement actions took place in Atlanta, New York, Chicago, Los Angeles and surrounding areas, said David Marin, director of enforcement and removal for the Los Angeles field office of U.S. Immigration and Customs Enforcement.
First, advocates of immigration, of which I am one, are not concerned. Advocates of illegal immigration are concerned, and should be. But even then, this provides a little window into what’s going on:
Only five of 161 people arrested in Southern California would not have been enforcement priorities under the Obama administration, he said.
He said that of the people arrested in Southern California, only 10 did not have criminal records. Of those, five had prior deportation orders.
So a scant minority of those being picked up might not have been under Obama. And the vast majority of them are criminals, which even Democrats used to agree should be deported.
Why am I supposed to be outraged that ICE is doing its job? Don’t we pay them to find and deport illegal aliens? Don’t we tell them to prioritize ones with criminal records first? Yes, yes we do. And I thank them for their efforts.
It’s a valid point, but…
On self-insurance, Fitzgerald said lawmakers have always been curious about whether the change would save money. Walker’s proposal would have the state work with several third-party administrators to pay employees’ health claims directly, rather than paying monthly premiums to health insurance companies.
Walker’s office says the move would save $60 million in the next biennium, but Fitzgerald said that was “far less than what most people anticipated.”
The proposal, Fitzgerald noted, would cause some health insurers to lose a major chunk of their current enrollees, raising a possibility that those companies “could falter.”
“Now that you’re not seeing those types of numbers, people are worried about the job loss it could create across the state,” Fitzgerald said.
Self-insurance is a relatively simple concept. When an organization – in this case a government – wants to provide health insurance to their employees, there are a variety of ways to do that. The fundamental issue is the assumption of risk. That’s what insurance is all about. The risk is that the employees being covered will suffer catastrophic health care issues, thus forcing the provider to pay a lot more than the sum of the premiums.
In order to hedge against the risk, most organizations contract with a health insurance company. In that scenario, in exchange for contracted and stable premiums, the health insurance assumes the risk. The organization gets a predictable outflow of cash while the health insurance company gets profit. The profit is the monetization of the risk that the health insurance company assumed.
All self-insurance means is that instead of contracting with a health insurance company, the organization assumes the risk themselves. The organization takes ownership of accepting the premiums and paying out any claims. A few organizations manage all of that themselves, but most still contract with a health care provider for the administrative functions. In the case of self-insurance then, the organization assumes the risk and, as a consequence, saves the profit that they would have otherwise paid to a health insurance company.
Self-insurance is an option for any organization, but it usually only makes sense for large organizations that can spread out the risk. For example, a 10-person shop could self insure, but the costs can vary wildly if one person is pregnant or has a major disease. In contrast, in a 10,000 person shop, the statistical averages come into force and costs become relatively predictable and stable.
Well, there is no larger organization in Wisconsin than state government. The State of Wisconsin can spread the risk among tens of thousands of employees. While it is not a slam dunk decision for the state to self-insure, it is close. The benefits of self-insurance have been proven time and time again, which is why many of Wisconsin’s largest employers like Briggs & Stratton, GM, Kimberly-Clark, Schneider Corp., WE Energies, Rockwell Automation, Kwik Trip, John Deere, Kohler, Washington County, Milwaukee County, Dane County, City of Milwaukee, City of Madison, Madison School District, Kenosha School District, and many more already do it.
The money saved compared to using a health insurance company varies from year to year depending on the expenses, but over the years it will benefit the state to self-insure. After all, if the profit that health insurance companies earn is a function of the risk they assume and they remain extraordinarily profitable most years, it is safe to conclude that the state would benefit from assuming that risk instead of paying the health insurance company to assume it.
Fitzgerald’s point is certainly valid. The state is a massive customer for its health insurance provider(s). If the state self-insured, then those companies would lose a huge customer and the profit that went with it. The consequences of that will almost certainly be some loss of revenue and downsizing. But it is not the role of the taxpayers to prop up private companies. What the taxpayers deserve is the best possible deal that will provide the services required. If legislators do any less, it is a dereliction of their duty to their constituents.
So the JFC should take a good look at self-insurance. But the decision criterion should not be the impact on the companies currently making their profits off of the taxpayers. The decision criterion should be finding the most economical way for the state to provide quality health insurance to its employees.