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April 25, 2019

4/11/2019 7:29:00 AM
Brennan talks up governor's budget in the Northwoods
Evers focuses on education, transportation, health care

Richard Moore
Investigative Reporter

First of two articles

The new secretary of the state Department of Administration came calling in the Northwoods last week, touting a state budget he says will help both urban and rural areas across the state and especially the Northwoods in several critical areas.

Joel Brennan, Gov. Tony Evers's pick to run the DOA and the former CEO of Discovery World in Milwaukee, said budget proposals in the key areas of transportation, education, and health care will boost the region's and the state's economies, both in the short term and the long run.

In his budget, Evers has proposed boosting education spending by nearly $1.6 billion over the biennium. The governor would increase special education spending by about $600 million, raising the reimbursement rate from 25 percent to 60 percent by 2020-21, and would increase student mental-health funding by nearly $64 million over its 2019 level.

The UW System would receive about $150 million more in funding; the state's technical schools would get $18 million in additional revenues.

"The governor, both when he was running and as he's introduced his budget, he's focused on a couple of very important things," Brennan told The Lakeland Times in an exclusive interview last week. "Having been the state superintendent of Public Instruction, education is kind of the hallmark. So the work that he's done on K-12 has really informed what he's done with the budget and then the other two planks really are transportation and health care."

Those areas are the focus, Brennan said, because those are the policy components that can most help workforce and economic development.

"The things in those areas specifically that are important to the entire state are things like the pretty dramatic increases that the governor has proposed in K-12 education and certainly in things like special education," he said.

But the budget measures will benefit the Northwoods specifically, too, Brennan said, both in terms of general school aids and special education.

"Some of the districts up here, some of the rural districts, are some of the big winners potentially when you're putting more resources in," he said. "The genesis of economic development and workforce development starts with K-12 and then the investments he's made in higher education, but also about $18 million dollars in technical education. Those are people who are getting immediately ready for the workforce."

Brennan acknowledged that Evers's budget would curb the growth of choice and charter schools - capping the number of students in the choice program and capping the number of schools that can be chartered outside of public schools - but he said most of Evers's proposals apply to all schools.

"There are increases in school aids in a number of different ways," he said. "There were specific things that were done, policy suggestions that were made and also have some budget ramifications having to do with choice and charter programs. But most of the aid that's been proposed goes across all of those things. So, you know, [things like] all-day kindergarten that's been proposed to help with early childhood education, those are things that all disciplines, not just the public schools but every type of school, is going to benefit from."

Brennan said that some of the challenges in the "school system writ large" are resource challenges.

"In the last decade or more, there's been no additional investment in special education," he said. "No focus on mental health when there's a recognition that fully 20 percent of the kids who are in the school system have some mental health challenges and we're not doing enough to deal with those."

However, Brennan said a bipartisan group of experts and lawmakers serving on an education blue ribbon task force have made encouraging proposals, some of which go even beyond what Evers has proposed.

"And so I hope that that's one area where there might be some kind of bipartisan interest in finding ways for us to work together," he said.

Workforce development

Brennan says spending on education is vital but so is investing in specifically targeted areas where there are immediate workforce development needs and labor shortages.

"No matter where you are on the ideological spectrum, everybody agrees that that's the top priority, but everybody also agrees that we're not doing everything we need, and that's on a bipartisan basis," Brennan said. "So in the last administration a lot of people would say they weren't doing enough to get things done the right way. In the current administration we still have a lot of room that we can work together with business."

Still, Brennan said, Evers's budget is striving to take specific strides forward.

"In the governor's budget, there's a huge nursing shortage, so there's a big focus on nursing school," he said. "So there was an investment in nurses and in the UW System campuses. There is a big focus on technical education. So the increase of about $18 million, after over the last several years either the technical schools having been cut or having very modest increases."

In his work as CEO of Discovery World, Brennan said his team worked with young kids, getting them engaged in science, technology, engineering, and math, but he said that was at the very front end of the talent pipeline.

"That's not going to respond to the challenge of whoever's down the street here today, and we have to do some immediate things for them," he said. "But in the longer-term view, we've got to make sure that we're getting young people exposed to the types of careers that are going to be available for them 10 or 15 years down the road because often they're kind of closing themselves off to even the idea of those [jobs] by the time they get to junior high school."

Brennan said they begin to question why they would need to know certain subject areas.

"So math becomes less important to them in school or [they ask], 'Why do I have to take chemistry or all these things? What is it about a manufacturing job - why would I want to do that because that's just a dirty job.' Well, there's an awful lot of technology that goes into those now and so that's what the future workforce is going to look like."

The bottom line is, Brennan said, the investments the state makes in K-12, moving all the way up into what is done in the technical schools, in addition to workforce development and worker training programs on site at businesses, are all part of the overall workforce development package.

"People may have disagreements about the level of investment in some specific areas within the budget, and that's kind of what the budget process is all about, but there's a whole array of things that go into that workforce development area," he said.

As for northern Wisconsin's overall role in the state's economy - both the James Doyle and Scott Walker administrations consigned the Northwoods to tourism only - Brennan said the Evers' administration intends to spend its first few months on idea- and information-gathering.

"I think the thing that we can do ..... over the next several months is to get to the point of thoughtfully getting input from stakeholders," he said. "I think there needs to be a strategy that the governor talked about during the campaign, about a 72-county economic development strategy, and I think we need to have time and need some input from stakeholders to make sure that we're doing that."

That might yet be, and both before and after his election Evers has repeatedly said he would pursue that 72-county strategy, but when the governor appointed a Next Generation Workforce and Economic Development Policy Advisory Council after the election, 25 of 30 members were from Milwaukee and Madison compared to five members from the rest of the state, and to just one north of Hwy. 8 and Rhinelander.

Brennan also addressed another economic-related issue, the state's Stewardship Fund, which is slated to end in 2020. The program's opponents say it removes lands from the tax rolls and constricts the available supply of land for private economic development, and hurts northern Wisconsin most of all. What's more, they say, an increasing portion of the state budget must be allocated to pay off the loans used to finance Stewardship land purchases.

Supporters of the program contend it not only preserves the state's vital natural resources but directly boosts Wisconsin's $18 billion outdoor recreation industry through public land purchases and conservation easements that help meet the growing demand for outdoor recreation.

Evers has taken a middle ground, proposing to extend the program for two years while a blue-ribbon panel studies its long-term future. Brennan said the task force will give citizens of the Northwoods an important voice.

"I think a lot of people believe that the program is still a very valuable important resource for the state," he said. "The level of bonding and the amount of resources in it have been of some discussion, and I think lots of those stakeholders who are in this part of the state would like to be heard on that. What the governor has said is, 'Here's a way where you can have direct impact.' It should be well represented from people all around the state, including people from here."

Brennan said Evers's approach is a balanced one that will take a look at the program's fiscal impact, as well as its impact on tourism, economic development, and tax rolls.

"The governor's predecessor was prepared to just renew this for another 10 years," he said. "That was where Gov. Walker was headed with this. Where Gov. Evers is headed is, let's make sure we get a chance to take a look at it."

Brennan said there was still bonding authority that's unused for the next couple of years.

"Let's look at that and then let's look at how this tool can be used in the right way with input from stakeholders," he said. "I think that's hopefully a thoughtful way of continuing to look at this. It's been a very useful tool, and whether you're talking pure economic development and things being on the tax rolls or things like tourism - important things that are part of the lifeblood of this part of the state as well - I think there's a balance to be found in those things and the stewardship fund has been an important asset in doing some of those things."

The gas tax

Brennan addressed another key issue for the governor - his transportation goals. More specifically, he said the governor's proposed gas tax increase of 8 cents per gallon would help the state in a number of ways.

"Let me start with what it has to do with overall state borrowing," he said. "When it comes to transportation, the governor has proposed in his budget the least amount of borrowing for transportation in about the last 20 years."

During the Walker administration, Brennan said, the state went from spending about 10 or 11 cents of every transportation dollar to more than 20 cents of every transportation dollar on debt service.

"So that gas tax is going toward paying off debt service right now," he said. "By raising the gas tax, the governor is able to take the amount of money that we're spending on debt service, bring it way down, which is good for everybody around the state, but more importantly what's better for drivers is that the resources that the governor is able to generate from that allow us to spend it on things like the state highway rehabilitation program."

Brennan dismissed any notion that gas tax dollars disproportionately flow to southern Wisconsin.

"Virtually every bridge and roadway in the state is eligible based on the dramatic increases he's making here, and those will not all be spent in southeastern Wisconsin," he said.

But Brennan would or could not say when asked if all the gas tax collected in northern Wisconsin comes back to northern Wisconsin.

"I'm not the secretary of transportation," he said. "I'm suggesting the way that the governor has allocated aid in the transportation budget allows eligibility for most projects around the state and for most communities around the state."

Health care

The third key focus in Evers's proposed budget is health care.

This past week, Evers announced the state's official withdrawal from lawsuits challenging the Affordable Care Act, and Brennan said there was evidence that Obamacare had made a positive difference, despite people cutting back work hours to remain eligible for Obamacare subsidies, or having to repay those subsidies if they earn too much, and despite small businesses cutting back work hours to avoid Obamacare requirements - all factors of greater import in the Northwoods, which has a disproportionate population of self-employed workers and small business owners.

"I think that's an area where there's some area for divergence of opinion because the number of people who have health insurance here [the state] is significantly greater, and nationally it's greater, than it was prior to Obamacare," he said. "But that's a federal issue."

More important as far as the state and the governor's budget is concerned is the proposed expansion of Medicaid, Brennan said.

"One of the issues I think is really important in the governor's budget - as we talk about what are the things that have impact statewide and what have impact in this part of the state - is the potential expansion of Medicaid," he said.

Brennan said it wasn't a partisan claim to say that the state has lost about $1.2 billion over the last several years by not expanding the health-insurance program for the poor.

"In the current budget and in the budget the governor has proposed, we would save about $325 million by expanding Medicaid, cover another 82,000 people, but also use that to leverage another $1.6 or $1.5 billion of federal money that goes into health care for all of us around this table and everybody around the state."

Whether it's rural health or telemedicine or care for people with dementia or mental health - Brennan said all of those are health issues that Wisconsin can't deal with because the state is constrained by its resources.

"And if we can pull down resources from the federal government to add to those things or to attack some of those things, I think there is great benefit for that, no matter where you live around the state," he said.

Brennan said 37 states have expanded Medicaid, the latest being Montana, Utah, Nebraska, and Idaho.

"You're not talking about bastions of liberal thinking," he said. "But you are talking about places that needed and wanted to get some of those federal resources to attack today's problems. There are arguments that that money may not be there all the time, but there's an opioid crisis here in the state of Wisconsin and other states have used some of those resources."

And some of those resources could be directly connected to an expansion of Medicaid, Brennan said.

"So when you talk about ways that we can have an impact around the state, there's one," he said.

Brennan said that, while Obamacare remains a contentious issue, he believes that, on the overall national debate on health care, the landscape has changed just in the last couple of weeks.

"The president had said he was going to do all kinds of changes in health care," he said. "Now within a few days it's been pushed off until after the 2020 election. So they're bound to continue to be changing dynamics at the federal level, but what we're trying to do at the state level is to do everything that we can within the current system to try to get resources to make sure that we're addressing some of the health-care challenges that are across the state of Wisconsin, and the ability to expand Medicaid is one vehicle for doing that."

Next: Transparency, county tax levies, the impact of the Supreme Court race, and more.

Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at

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