Cut Governor’s Control of Federal Funds
A Proposed Amendment to the Wisconsin Constitution giving the legislature broad control over the spending of federal funds sent to the state will come closer on Thursday with a vote in the Assembly committee.
Republican authors of the proposal argue that it would restore the Legislature’s rightful place to decide how the state spends money, now largely controlled by the governor.
At a public hearing this week, an additional impetus for the measure became clear, however: giving lawmakers the ability to redirect — or, perhaps, block — federal spending redirected to states.
“The intent is very clear is that the Legislative Assembly should be involved in overseeing how federal funds are spent,” said Sen. Dale Kooyenga (R-Brookfield), the lead author of the proposal to the Senate, during his testimony at Tuesday’s hearing before the Assembly’s Constitution and Ethics Committee.
A recurring drama in the 2021-22 legislative biennium has been attempts by the Republican majority to tell Governor Tony Evers how to spend Wisconsin’s $2.5 billion share of the American Rescue Plan Act (ARPA ).
GOP lawmakers passed several bills allocating ARPA funds for various purposes and introduced many more. The handful that made it all the way through the legislature mostly toed party lines, and the governor vetoed them all.
Evers was able to largely decide for himself how to spend ARPA money thanks to state law first enacted in the 1930s and expanded in subsequent decades. Highlighting how he has used not only ARPA funds but also other federal relief to the state since the pandemic began two years ago, Evers Wednesday published a summary of the $4.5 billion his administration has spent so far.
The proposed amendment will not give current GOP lawmakers a chance to override its ARPA spending. But it would rewrite the relationship of future governors and the legislature when faced with such decisions.
“This joint resolution would be the first in the process of restoring balance in the way we handle money coming from the federal government, and would take us back to the 1930s when we actually changed that because of the Great Depression.” said Rep. Robert Wittke (R-Root), the Assembly’s lead author.
Senate Republicans go first
The proposal has already passed the State Senate on a party-line vote, and the measure is expected to go to the Plenary in a few weeks. To pass, it will have to pass both houses of the Legislative Assembly again in the 2023-24 biennium and then win the approval of Wisconsin voters at the polls. Because it is not a bill, but rather a joint resolution — AJR-112 in the Assembly and SJR-84 in the Senate – it does not require the Governor’s approval.
During the Jan. 25 debate before the Senate vote, Democrats who spoke against the amendment described it as a partisan Republican maneuver targeting the Democratic governor, which Kooyenga denied. Critics also suggested that getting the Legislative Assembly involved would require a laborious process and slow the distribution of relief money.
Sen. Jon Erpenbach (D-West Point) described a future pandemic with federal relief funds coming into the state and the state Constitution requiring the legislature to weigh in on how it would be spent. “It’s going to take time,” Erpenbach said. “And for those of us who have spoken to our small businesses in our districts, which is all of us, they haven’t had time. Or if they did, they were quickly running out of time.
During Tuesday’s Assembly hearing, Kooyenga acknowledged this argument. He suggested that the amendment address the concern, however, in a manner similar to the role of the Joint Finance Committee in approving the follow-up of expenditure items in the budget after the budget is passed.
“You can sort of think of it as a process where the joint finance committee can do a passive review process,” Kooyenga said.
The proposed amendment consists of two sentences: “The Legislature cannot delegate its exclusive power to determine how federal moneys are to be spent. No officer or department of the executive may make an initial allocation of federal funds made available to that state without the approval of a joint committee of the legislature designated by statutory rule.
Targeting Federal Spending
Rep. Gary Hebl (D-Sun Prairie) asked Kooyenga about the scope of the amendment. The University of Wisconsin receives “more than $1 billion in research grants and competitive awards,” Hebl noted, adding that subjecting individual grants to the approval process would create a competitive disadvantage for the university in its research. . “Do you intend to include these billions of [dollars in] grants ? »
“That’s not our intention,” Kooyenga replied, adding that laws to “bypass” the amendment would be a way to “make that intention clearer” after the amendment is enacted. “The intent is not for the legislature to get involved in every individual grant.”
Hebl was not satisfied with this answer, nor with the amendment. “It’s very ambiguous. It’s a skeleton,” he said. “There is no meat on the bones, there is nothing to tell me what your intention is, other than what your testimony is today. I would like the actual constitutional amendment to contain your intent.
The intention, said Kooyenga, was to reinforce the “duty of the Legislative Assembly – and that duty is in the [state] Constitution. The duty is to monitor this money that is sent to us.
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“It’s not,” Hebl interjected.
“Yes, it is,” retorted Kooyenga.
And at that point, his argument pivoted — no longer centering on the roles of the legislature and the governor, but instead pitting the state legislature against the federal government.
“This money that our country is spending, both at the federal level and at the state level, is absolutely not sustainable,” Kooyenga said. “And that puts the republic in danger by being absolutely reckless financially. And all of this means that we as lawmakers should be ashamed of collecting a paycheck and getting benefits from the state, when we should actually be better defenders of taxpayers’ money which is spent.
Without giving details, he claimed that in pandemic relief spending there had been ‘billions of dollars of fraud’, that federal funds were responsible for inflation that ‘is breathtaking’ . Calling the expressions of caution regarding the amendment’s effect on the UW system “a kind of…decoy”, Kooyenga added: “You know what’s going to hurt the UW is if there’s insolvency. in the state or federal government.”
While the alarm expressed by Kooyenga over federal pandemic relief spending has become a stock in trade in conservative and Republican circles, it falls far short of the economic consensus.
Menzie Chinn, an economist at the Robert M. LaFollette School of Public Affairs at the University of Wisconsin-Madison, is skeptical of the idea that federal pandemic relief spending is the main cause of recent inflation.
“That’s certainly part of the explanation – but other economies (UK, Eurozone) have also seen accelerating inflation,” Chinn said, with higher oil prices, continued disruptions to supply and other factors being the main contributors. “One could argue that part of the inflation is due to too little spending, for example, on childcare support, which would allow parents to work.”
Mark Copelovitch, a La Follette political scientist whose work focuses on the intersection of economics and politics, says the ability of the United States to finance its debt at virtually no interest shows that the market – essentially lenders of the world – is not worried about the sustainability of the economy.
With regard to inflation, he considers shortages such as those of semiconductors, a key component of cars, or soaring energy prices, not pandemic relief aid, such as main contributors to the rise in prices. “Most of the causes of inflation are global supply chain issues during a pandemic,” Copelovitch says.
He credits pandemic relief, in the form of direct handouts to households as well as other forms of support as well as directly to the state, with preserving incomes, keeping businesses going during the pandemic and allowing for l economy to recover much faster than it otherwise could have.
“The reason we have this big surplus now in Wisconsin and elsewhere is because all the other things have basically kept people’s incomes from going down – which means tax revenue hasn’t cratered like we did. feared,” Copelovitch said.
The alternative could have been no money to support people or businesses, and likely prolonged and higher unemployment, he adds. “In this case, people’s incomes would be much lower. And we would have faced the big revenue hole at the state level that people were worried about.