How to use bloated state surplus in 2024?

Citizens of Wisconsin received a big bonus under their collective Christmas tree. The state surplus grew by $2 billion during 2023 to $6.7 billion. That enlarged surplus will enable our political leaders to invest in a good number of strategic initiatives in 2024.

Everyone has a wish list for the state. I will start with mine to get the thinking going on what investments would give Wisconsin the biggest boost toward well-being and prosperity in the new year. I welcome other ideas on this web site in response. Here goes:

  • A Nice Tax Cut – The two parties were unable to get a tax reduction done in 2023 because of differences on which segment of our society should get the most help. The cut can’t be so deep that it puts the state budget back in deficit territory in future years. That’s what has happened at the federal level. Spending kept rising faster than revenues grew after the tax cuts under Presidents George W. Bush and Donald Trump. To keep it simple and fair, cut all four Wisconsin income tax brackets by the same percentage. Say 10% off the progressive brackets that range from 3.5% for low earners to 7.65% on the high end.
  • Land and Water Preservation — Pay off the $700 million in debt built up under the Knowles-Nelson Stewardship Fund and, instead of debt financing, create an endowment for that program of $500 million. Going forward, spend part of the endowment earnings as matching funds for private dollars raised for preservation projects by the state’s beautiful network of 40-plus local land trusts. This financial engineering will help to end the annual wrangling over funding of this very effective, generally bipartisan Stewardship program.
  • Merge Two-Year Colleges — Instead of closing the failing two-year UW colleges one or two at a time, fund the merger of the remaining 12 satellite campuses into the Wisconsin Technical College System (WTCS). That would add a liberal arts capability to the technology education that is the main WTCS offering. Such a merger, where appropriate in regions of the state, would create a network of “community colleges” that could get high school graduates and returning adults on track for either technical occupations or for professional careers requiring a baccalaureate or more. The five existing dual mission two-year colleges in Wisconsin are doing well and serve as a precedent. Some transition money will ease the mergers.
  • Engineering Expansion – A deal has already been cut to build a new engineering building at UW – Madison, but engineering education also needs a boost at UW – Milwaukee, UW – Platteville and the new engineering program at UW – Green Bay. The renovation of the first three floors of the UWM engineering facility are a prime candidate for the larger surplus. Engineers drive innovation, which in turn drives the economy. The Wisconsin Idea was not intended to be Madison-centric.
  • Reverse Declines in Public Health – In the face of scary drop-offs in metrics, such as low levels of immunizations of school children and unacceptable black birth mortality rates, invest surplus dollars and the earnings from the $400 million Blue Cross UW endowment in public health improvements. In the Americas Health Ranking report, Wisconsin has fallen from 6th two decades ago to 39th. The new investment could include full funding of the under-funded UWM School of Public Health. It would also include a ramp-up of nursing education across the state. The shortage was called out by UW President Jay Rothman. Scholarship dollars are especially needed for advanced degrees for future nursing educators.
  • Health Costs/Prices Out of Control – The Milliman Medical Index put cost of care for a family of four on an employer health plan in 2023 at $31,065, a completely unacceptable level. With rapidly rising health care wages and new higher priced drugs, it will continue to get worse in 2024. Prices are projected to rise 7% in the new year. That’s major hurt for employers and employees. What to about it? For openers, Attorney General Josh Kaul could do what some other AGs are doing: Use antitrust law to unwind the stampede of Wisconsin health corporation mergers that serve primarily to enable higher pricing. Second, use some of the surplus to incentivize providers to adopt lean disciplines, like manufacturers have been doing for several decades. Prices can’t moderate until costs come down, and lean systems reduce waste, streamline operations, and eliminate defects and costly re-do procedures.

That’s my list. Please add your ideas for other uses of the idle surplus, preferably ones that both parties can agree to. Think big.

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