In this video report, Senator Jeff Plale, co-Author of Wisconsin’s global warming bill, and Roy Thilly, co-Chair of Governor Doyle’s Global Warming Task Force, attempt to answer a tough question at an MMAC-sponsored panel on Wisconsin’s global warming legislation Thursday in Milwauke.

How does the growing debate over the legitimacy of the science behind the theory of global warming impact the need for and prospects of passage of the global warming bill?

As reported earlier, the Wisconsin Global Warming Bill, dubbed the Clean Energy Jobs Act by its supporters, assumes that the price of carbon-based energy will increase due to the establishment of a ‘cap and trade’ system for carbon emissions. Our February 5th report included warnings, however, that a federal ‘cap and trade’ system was not certain to come about.

The Washington Post reports this morning:

Three key senators are engaged in a radical behind-the-scenes overhaul of climate legislation, preparing to jettison the broad “cap-and-trade” approach that has defined the legislative debate for close to a decade.

The sharp change of direction demonstrates the extent to which the cap-and-trade strategy — allowing facilities to buy and sell pollution credits in order to meet a national limit on greenhouse gas emissions — has become political poison. In a private meeting with several environmental leaders on Wednesday, according to participants, Sen. Lindsey O. Graham (R-S.C.), declared, “Cap-and-trade is dead.”

Even if Cap and Trade were to die, however, the cost of carbon-based fuels could still increase due to other federal regulatory action. While the Wisconsin bill assumes a future cost at $20/ton and rises slowly with inflation, there are no firm numbers yet as Washington has not passed new federal regulations and the prospects for such action are unknown.

MacIver News Service will report on the impact Washington’s actions may have on the pending Wisconsin legislation in the days ahead.

The bill, SB484, was originally on Tuesday’s calendar, but when Senator Kathleen Vinehout (D-Alma) and some of her fellow Democratic Senators began to ready amendments to the legislation,  the Senate Majority Leader Russ Decker (D-Schofield) maneuvered the bill back to the Senate Organization Committee.

During the early afternoon debate Thursday, Republican Senator Ted Kanavas (R-Brookfield) was blunt in his assessment about what is wrong with the plan.

He argued the Wisconsin Commissioner of Insurance would never allow a company in the private sector to market a plan like BadgerCare Basic, which Kanavas said will not have enough reserves to cover the risk the State is assuming, “There are simply not enough funds to support the kind of claims you are going to see.”

An effort was made to once again send the bill back to the Senate Org Committee, this time put forward by Republican Leader Scott Fitzgerald (R-Juneau).

Before the vote, Senator John Erpenbach (D-Waunakee) warned his fellow Democrats, ” If you vote to send this back to committee, you vote to kill this.”

After a lengthy debate of more than 90 minutes, Senator Fitzgerald’s motion  failed 15-18, with all the Democrats voting no.  Debate then began on a series of amendments.

A Vinehout amendment (SA3) to require an audit of the program passed with a bipartisan vote of 23-10 (with Democrats Carpenter, Jauch, Kreitlow, Plale, Robson, Sullivan and Taylor joining Vinehout and all the Republicans in support).

Before the final vote, Senate Fitzgerald made one last stand, arguing the plan would prove to be an expensive burden on Wisconsin taxpayers.

“This is the public option that we are voting on, just so we are clear,”said Fitzgerald. “This is Obamacare light.”

Senator Erpenbach defended his bill.

“This isn’t going to cost the state any money,”  said Erpenbach. He argued it was not universal coverage and that eligible individuals could choose whether or not to enroll.

“Here is a choice, this is a choice they have, if they choose to do so,” he said. “Obamacare? No, not even close.”

Shortly after 3pm, the bill passed 17-16 with Vinehout the lone Democrat joining the Republicans in voting no.

The bill now awaits action in the State Assembly.

Under SB484, BadgerCare Plus Basic would accept customers with pre-existing conditions, would cost enrollees $130 per month and supporters argue it is designed to pay for itself without additional tax dollars. The plan covers low income, childless adults, the same population served by BadgerCare Plus Core. The Core Plan was only expected to serve about 40 thousand people during a two-year period, but that number was reached in only a few months.

The state had to cut off enrollment in October, leaving more than five thousand people on an initial waiting list. A list that quickly surged to more than 23,000.   The proposed Basic plan offers leaner benefits, higher co-pays and deductibles, but opponents say the proposal is undercapitalized and ultimately will result in either the State picking up cost overruns, or ending the program due to lack of funds.

As reported here earlier, Senator Kathleen Vinehout (D-Alma), expressed concerns about the new program in committee. 

In a blog posting, Vinehout later wrote: “The new plan puts the risk on the state and taxpayers – who already can’t afford the recent expansions in Medicaid. According to the Legislative Fiscal Bureau, the state cost overruns for the BadgerCare program are estimated at least $120 million. This is on top of the $600 million budget deficit for the overall Medicaid program.”

When Vinehout and some of her fellow Democratic Senators began to ready amendments to the legislation Tuesday, Russ Decker (D-Schofield), the Senate Majority Leader, maneuvered the bill back to the Senate Organization Committee.

The move delays, rather than derails, Senate action on the legislation.

Senate Republican Leader Scott Fitzgerald (R-Juneau) told the MacIver News Service the concept of BadgerCare Plus Basic, giving the State more flexibility than the private sector,  is fundamentally flawed.

“This plan is exempt from the government health care mandates that are forced on the private sector,” said Fitzgerald. “If there was a level playing field, the private market could do a better job providing the same benefits for less money. Instead, the Senate Democrats are set on a government health care plan that will rely upon taxpayer support.”

As proposed, BadgerCare Plus Basic would cost enrollees $130 per month and supporters argue it is designed to pay for itself without additional tax dollars. The plan covers low income, childless adults, the same population served by BadgerCare Plus Core. The Core Plan was only expected to serve about 40 thousand people during a two-year period, but that number was reached in only a few months.  

The state had to cut off enrollment in October, leaving more than five thousand people on an initial waiting list. A list that quickly surged to more than 23,000.

A $416,219.32 payment to WEA Trust for health insurance and $237,861.68 to utility companies from the New Holstein School District raises questions about how school districts across the country were allowed to spend federal stimulus money.

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The MacIver Institute has been reviewing how stimulus funds  have been spent in Wisconsin. The disbursement of American Recovery and Reinvestment Act (ARRA) funds to WEA Trust, the health insurance and financial services company operated by the state’s teachers’ union, piqued our interests and prompted us to do some further digging.

The only other school district to spend stimulus money for health insurance was Frederic, and that amount was $97,527.  Other districts, including Green Bay and Madison, told the MacIver Institute that stimulus money could not be spent on employee benefits or utility costs.

The general guidance districts followed was stimulus money should “supplement, not supplant”  funding for educational expenses.  In other words, it couldn’t be spent on anything previously paid with other funds.

The logic behind that guidance is that the stimulus money won’t be flowing in forever.  In April 2009, the U.S. Department of Education advised award recipients “The ARRA is expected to be a one-time infusion of substantial new resources.  These funds should be invested in ways that do not result in unsustainable continuing commitments after the funding expires.”

The department warned again in September 2009, “Invest the one-time ARRA funds thoughtfully to minimize the ‘funding cliff.’”

However, despite the Department of Education’s general guidance, districts received stimulus funds in the form of various grants, and not all the grants were held to the same requirements.

“Title 1, Part A” grants were strictly intended to “Improve teaching and learning for students most at risk of failing to meet State academic achievement standards,” according to www.recovery.gov.  Those grants were held to the “supplement, not supplant” standard.

However, New Holstein paid for its employee benefits and utilities out of the “State Stabilization Fund-Education Fund,” monies.  That grant was meant to fill the gap in aid school districts would ordinarily receive from their states.  The US Department of Education stated in June 2009, because school districts “may consider Education Stabilization funds to be available for any activity authorized under the Impact Aid program, the funds may be used to support both current expenditures and other expenses such as capital expenditures.”

In other words, school districts could spend it on practically anything, including benefits and utilities.  In reality, school districts had already spent that money before they even realized it would be coming from the stimulus.

The $416,219.32 New Holstein paid to WEA Trust was for cost incurred during the 2008-2009 school year.  As usual, the district was expecting an aid check from the state in June, reimbursing it for the expense.  However, this year the district’s aid from the state included $741,608 of stimulus money, which the state used to fill a gap in school aid funding.

It was up to the districts to go back and try to figure out what items that money could be attributed to and how it retroactively contributed to job creation/retention.  Rebecca Hansen, New Holstein’s business manager, decided to attribute it to benefits and utilities.

“I decided to go this route, because this money was money that was guaranteed to us by the State through Equalized Aid payments.” Hansen said. “It was not the School District’s choice that our aid payment was supplemented by ARRA funds.  Therefore, I could have put any expenditure that we would normally use state aid money for, which would be things like salaries, benefits, utilities, transportation, etc.  We use both state aid money and money levied by our local municipalities under the revenue limit to pay all of these expenses.  I just chose two of our larger expenses which are expenses that won’t go away to report as part of the survey that was sent.”

Under the requirements for all stimulus awards, recipients that spent more than $25 thousand in stimulus monies with one vendor had to file separate vendor reports.  That’s what made New Holstein’s expenditures with WEA Trust, New Holstein Utilities, and Wisconsin Public Service stand out.

No other school district in the state spent more than half its stimulus funds on benefits and utilities.  Although it was an unorthodox use of the funds, it was not illegal according to the patchwork of regulations governing the use of ARRA funds.

Senator Alberta Darling (R-River Hills) doesn’t blame New Holstein for how it spent its grants, but points out that was not what the stimulus was intended for.

“It appears we have here just the latest example of so-called ‘stimulus’ funds being spent on something other than creating jobs,” said Darling. “Democrats in Wisconsin used this one-time federal funding to bail out their budget and vastly expand government spending.”

Hansen recognizes using ARRA funds in this way puts the district in danger of facing that “funding cliff,” the US Department of Education warned about.

“It is a constant battle to make ends meet when we are looking at cuts in funding from all areas,” said Hansen. “Unfortunately, benefits and utilities are two constants the school district often does not completely control as far as the increases in costs through the years, and we will need to find other ways to make ends meet unfortunately possibly through cutting programs or laying off staff.  It will be an uphill battle in the years to come and the school district is working hard to cut costs without hurting the education of our children.”

That challenge will become all the more apparent after September 30, 2011, when school districts will no longer have stimulus funds to lean on.

“Their (Democrats’) irresponsibility has set up state and local governments, school districts and taxpayers for real disasters in the next budget,” said Darling.

By Bill Osmulski
MacIver News Service

Right now, Wisconsin lawmakers are considering increasing that mandate to 25 percent by the year 2025. Supporters of the proposal say the required increase would create 15,000 jobs over the next 15 years. But where?

MacIver’s Bill Osmulski reports:

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BadgerCare Plus Core, the state’s program for poor, childless adults, was only expected to serve about 40 thousand people during a two-year period, but that number was reached in only a few months.  The state had to cut off enrollment in October, leaving more than five thousand people on an initial waiting list.  Erbenbach says those five thousand people need something to help them right away. 

“We are totally up against the wall on this,”he said.  The legislative session ends April 22. 

Erbenbach is the author a bill to authorize Badger Care Plus Basic, intending for it to be a stopgap coverage solution for those eligible for, but shut out of the BadgerCare Plus Core Plan.

However, critics argue Erbenbach’s plan is impractical.  First of all, at $130 a month, it is cost prohibitive to low-income individuals, they say.  Also, since it may only serve five thousand people, the insurance pool is too small, bringing in only $7.8 million a year to cover medical costs. 

“If you get a couple of hits, boom, that sucker’s gone!  And that’s the life of being a government insurance company, and that’s the problem,” argued Sen. Ted Kanavas (R-Brookfield). 

Senator Kathleen Vinehout (D-Alma) also disagrees with Erpenbach’s plan.  “Badger Basic, continues everything that’s wrong with our current health care system,” she said bluntly. 

“Because the state doesn’t have any extra revenue, the plan is supposed to be paid for with premiums. But with 50% of the potential population without income, so it’s hard to set a premium low enough that covers costs,” Vinehout continued.  “Badger Basic puts the risk on the state and taxpayers.”

Vinehout then suggested a series of reforms to address these issues. After finishing her testimony, Erpenbach erupted. 

“So what do you suggest we do within the next five legislative minutes to fix this?” he demanded.  “We cannot leave this session and not do anything for these people on this waiting list.”

Erpenbach admits BadgerCare Plus Basic is far from ideal. 

“It’s not like we’re going out and saying ‘Hey, come on.  We’ve got this great plan.  People are showing up uninsured and they’re showing up in huge numbers,” he said. “We’re not doing anything new here.  We’re responding to a crisis.”

Although the discussion Thursday revolved around the intitial five thousand people on the waiting list, since October, the number has increased to over 23 thousand people.

**Update, despite the heated discussions, including those between the majority Democrats on the comittee, SB484 passed on a straight party line 4-3 vote today and  bill is on the Joint Finance Committee’s Tuesday calendar.

By Bill Osmulski

Plale informed his fellow Senators that the final bill, SB 450-dubbed by supporters as “The Clean Energy Jobs Act,” will undergo revisions as the legislative process continues. Plale told his colleagues and others in attendance “Now is the time to take the information we’ve gathered, start to put something together that is work that’s workable.”

Plale then stunned the audience with this admission about his position on the global warming debate: “I don’t know if the science is real or not.”

Yet, he argued, something needed to be done.

How sweeping that ‘something’ will be, is yet to be determined. 

Right now, according to the nonpartisan Legislative Reference Bureau, SB 450 relates to:

“goals for reductions in greenhouse gas emissions, for construction of zero net energy buildings and for energy conservation; information, analyses, reports, education, and training concerning greenhouse gas emissions and climate change; energy efficiency and renewable resource programs; renewable energy requirements of electric utilities and retail cooperatives; requiring electric utilities to purchase renewable energy from certain renewable facilities in their service territories; authority of the Public Service Commission over nuclear power plants; motor vehicle emission limitations; a low carbon standard for transportation fuels; the brownfield site assessment grant program, the main street program, the brownfields grant program, the forward innovation fund, grants to local governments for planning activities, the transportation facilities economic assistance and development program, a model parking ordinance; surface transportation planning by the Department of Transportation and metropolitan planning organizations to reduce greenhouse gas emissions; environmental evaluations for transportation projects; idling limits for certain vehicles; energy conservation codes for public buildings, places of employment, one- and two-family dwellings, and agricultural facilities; design standards for state buildings; energy efficiency standards for certain consumer audio and video devices, boiler inspection requirements; greenhouse gas emissions and energy use by certain state agencies and state assistance to school districts in achieving energy efficiencies; creating an exception to local levy limits for amounts spent on energy efficiency measures; creating an energy crop reserve program; identification of private forest land, promoting sequestration of carbon in forests, qualifying practices and cost-share requirements under the forest grant program established by the Department of Natural Resources; air pollution permits for certain stationary sources reducing greenhouse gas emissions; allocating a portion of existing tax-exempt industrial development revenue bonding to clean energy manufacturing facilities and renewable power generating facilities; requiring a report on certain programs to limit greenhouse gas emissions; granting rule-making authority; requiring the exercise of rule-making authority; and providing a penalty.”

As reported earlier, the Wisconsin Global Warming Bill, dubbed the Clean Energy Jobs Act by its supporters, assumes that the price of carbon-based energy will increase due to the establishment of a ‘cap and trade’ system for carbon emissions. Our February 5th report included warnings, however, that a federal ‘cap and trade’ system was not certain to come about.

The Washington Post reports this morning:

Three key senators are engaged in a radical behind-the-scenes overhaul of climate legislation, preparing to jettison the broad “cap-and-trade” approach that has defined the legislative debate for close to a decade.

The sharp change of direction demonstrates the extent to which the cap-and-trade strategy — allowing facilities to buy and sell pollution credits in order to meet a national limit on greenhouse gas emissions — has become political poison. In a private meeting with several environmental leaders on Wednesday, according to participants, Sen. Lindsey O. Graham (R-S.C.), declared, “Cap-and-trade is dead.”

Even if Cap and Trade were to die, however, the cost of carbon-based fuels could still increase due to other federal regulatory action. While the Wisconsin bill assumes a future cost at $20/ton and rises slowly with inflation, there are no firm numbers yet as Washington has not passed new federal regulations and the prospects for such action are unknown.

MacIver News Service will report on the impact Washington’s actions may have on the pending Wisconsin legislation in the days ahead.