Tuesday, May 22, 2007

Restoring Wisconsin Shares as a State Priority

The Joint Finance Committee is scheduled to take up funding for the Wisconsin Shares child care subsidy program today.

It's not difficult to see how Wisconsin Shares is a deal breaker for welfare reform. If there isn't anyone to watch the kids, there isn't any way to go to work, especially for single parent households. And out of the 34,000 families that benefit from the Wisconsin Shares program today, over 90 percent are single parent.

The fiscal problem facing Wisconsin Shares is a result of two related factors: 1) stagnate federal TANF funds, and 2) decreasing state GPR funding for the program.

I cover all of the details in this post, but, to make a long story short, the state had a surplus of TANF funding at the end of the 1990s. Rather than maintain state GPR funding levels for the Wisconsin Shares program, the state decided to increase reliance on federal TANF dollars and divert the GPR funding to help cover the cost of tax cuts in the '99-'01 budget.

This wasn't so much of a problem in '99-'01, '01-'03, or '03-'05. But in this latest budget, '05-'07, the Wisconsin Share costs caught up and actually surpassed funding levels for the program, resulting in a $46 million shortfall in the current fiscal year. And if this funding level is continued into the '07-'09 budget, the program will face another shortfall.

Putting greater reliance on TANF funding back in 1999 was a big mistake. Yes, there was a surplus, but TANF funding has been stagnate since its inception in 1997. The total federal funding for TANF was $16.5 billion in FY 1997, and it's $16.5 billion in FY 2007. It doesn't take too much foresight to realize that putting greater reliance on TANF funding would eventually result in a fiscal shortfall.

But dwelling on past missteps will only get us so far. The fact is the JFC has the opportunity today to step up and restore Wisconsin Shares as a state priority. There's nothing the state legislature can do about TANF funding, but there is something it can do about GPR funding.

Governor Doyle has increased state funding for Wisconsin Shares by $3.3 million over the biennium in his budget proposal, but to cover the shortfall that increase comes along with freezing provider payments at 2006 levels, increasing copays by 10 percent, reducing income eligibility to 175 percent of the federal poverty level to enroll (from 185 percent of the FPL) and 190 percent of the FPL to continue (from 200 percent of the FPL), and authorizing waiting lists.

Even replacing a few of these administrative changes with additional funding can go a long way toward keeping the Wisconsin Shares program not only viable, but also successful.

The changes to copays, FPL eligibility, and waiting lists pertain mostly to access, while freezing payment levels is more of a quality issue (although it could impact access, too, if some providers decide to drop Wisconsin Shares participants as a result of non-competitive payment rates). The JFC needs to give Wisconsin Shares as a whole a higher priority in the state budget and determine what internal facets of the program -- related to both access and quality -- deserve a higher funding priority.

According to September 2006 numbers, the bulk of participants (roughly 90 percent) appear to be under 175 percent of the poverty level, which means most would stay eligible with the FPL change. However, that certainly doesn't mean the roughly 2,000 families that would lose access under the change are unimportant.

But if you raise the FPL back to 185 percent, what will that cost or do to the ability to reduce copays, increase payment levels, or eliminate waiting lists? How much will the copay increase impact access for the lowest income participants? Is some sort of copay scaling possible so that those who are 175 percent of the FPL or above can stay in the program by paying more?

These are the type of questions our JFC should be considering today. I've criticized the JFC in a couple of posts (here and here) for too often privileging style over substance in this year's budget process; today is one opportunity for it to put the horse and pony show aside to hammer out a better deal for 34,000 Wisconsin families.

UPDATE: In a 14-2 vote, the JFC approved $70 million in extra funding for the Wisconsin Shares program over the course of the biennium, thereby eliminating the need for the drop in income eligibility and the authorization of waiting lists. Also, copays will only increase by 2.8 percent rather than the 10 percent proposed in the governor's budget. I didn't see anything on the proposal to freeze payment levels at 2006 rates, so I imagine that was kept.

On the whole, this is good news for the 34,000 families in the Wisconsin Shares program, but unfortunately the funds are coming out of other programming for lower income families. This press release from the Wisconsin Council on Children and Families has the details.

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