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Capital City Sunday: Federal vs. state funding debate, addressing labor shortage

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MADISON (WKOW) -- As the state budget process moves along, a recurring theme has been disagreement over whether the state should fund projects through the upcoming budget or with federal COVID-19 relief money.

The incoming $2.5 billion in relief was at the center of Republicans' relatively small boost to schools in the education budget they passed a week ago. The small funding increase might jeopardize the state's eligibility for all possible relief, something Republican leaders on the Joint Finance Committee have said they would addresss.

The use of federal funding came up again Wednesday as Republicans declined to include Gov. Tony Evers' proposed $15 million bump for operations at the Department of Workforce Development.

JFC Co-Chair Rep. Mark Born (R-Beaver Dam) said Evers should use the federal dollars he's overseeing to cover that increase.

"They've already captured some federal money to start working on that and there's a lot of federal money available for these type of UI projects," Born said. "So we certainly assume they'll continue to use this massive amount of federal money."

Sen. LaTonya Johnson (D-Milwaukee) said the Republican approach continued a trend of neglecting to adequately fund state agencies. Johnson said GOP leaders were now using the federal relief as cover for their inaction.

"This is just another opportunity for them to kick the can down the road and not do what they should be accountable for," Johnson said. "Which is to fund the state budget using state dollars."

Regarding education, Johnson defended Democrats' push for more school funding, citing the need for greater special education reimbursement rates.

While some of the state's largest districts are in line to get gargantuan sums of relief money - $800 million for Milwaukee Public Schools alone - Johnson said it was desperately needed funding for a district with high poverty rates.

"Out of those 70,000 students [in MPS], 86 percent of those students qualify for free and reduced so lunch," Johnson said. "So that tells you poverty is rampant in a district that cares for 70,000 students."

Associated Press Capitol Correspondent Scott Bauer said he expected the federal vs. state funding debate to play out in the coming weeks as Joint Finance ramps up its scheduled to finish the budget by the end of June.

"I think any time there's federal money at play, we will see Republicans arguing that ought to be tapped instead of state money," Bauer said.

This week, the committee will take up the budgets of the Departments of Transportation and Corrections. Bauer said he expected Republicans to continue passing budgets that barely increase funding, if at all, from the current baselines.

That would set the stage for Evers to decide whether to veto the entire budget or to move forward with a number of partial vetoes, as governors are empowered to do in Wisconsin.

"Governors historically have put the threat out there of vetoing the entire budget but don't follow through with such a dramatic veto," Bauer said.

Evers issued 78 partial vetoes before signing the 2019-21 state budget.

Wisconsin's Workforce Shortage

Top Republicans, including Speaker Robin Vos (R-Rochester) and the state's biggest business lobbying group, Wisconsin Manufacturers & Commerce, called for the Department of Workforce Development to take a more aggressive approach to auditing unemployment claims from people who've turned down job offers or failed to show up for interviews.

WMC CEO Kurt Bauer said he believed the lack of enforcement, combined with the ongoing $300 per week bump in unemployment pay from the federal government, were keeping people who would otherwise be working at home.

"There's proof all around the state. If you drive around any business or industrial park, you're gonna see 'help wanted' signs or 'now hiring' signs," Bauer said.

While Bauer acknowledged the workforce shortage has been a problem in Wisconsin since before the COVID-19 pandemic, he said the enhanced unemployment pay was only making matters worse as businesses try to reopen.

"This was our biggest economic challenge pre-pandemic and it's now been compounded by the $300/week supplemental offered by the federal government," Bauer said.

Bauer said issues like a lagging birthrate were long-term concerns that would take decades to address. As for other cited causes, like child care costs, Bauer said a shortage in child care options was at least partially an offshoot of federal and state policies that discouraged people from returning to the workforce.

"A lot of the child care providers are in the same boat as everybody else," Bauer said. "When people are being subsidized to stay at home and not go back to work, that affects them as well."

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A. J. Bayatpour

Capitol Bureau Chief

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