In budget deal, long-overdue help for Madison and other towns that can't tax state buildings

In an update on an issue I discussed at some length last September, the recently-signed Wisconsin state budget includes a long-overdue boost in state payments to local communities for providing services to state facilities.

State buildings are exempt from property taxes, but Wisconsin does compensate the cities, villages and townships where those facilities are located. The increased funding will affect hundreds of communities that house state facilities ranging from prisons to universities to office buildings.

The payouts partially cover the cost of providing garbage pickup, police response and fire and ambulance services. Under the preexisting budget, those payments were enough to offset roughly 37 percent of those estimated costs to local communities.

Wisconsin’s recently-enacted two-year budget allocates about $25 million [annually] for the Municipal Services Payment Program, which amounts to a statewide increase of about $7 million per fiscal year.

It’s the first time the state has increased its allocation for those municipal service payments in more than two decades. Under the changes, communities will be reimbursed for about half of their police, fire and garbage costs at state facilities.

Those payments should get coverage up to somewhere around 55-60% of costs, and don’t count toward state levy limits for local governments, which gets us back toward a percentage of coverage that we had around 15 years ago.

This a particularly big help to cities like Madison, where state-owned buildings would add a whole lot of property value to their communities if they counted, and who have been shortchanged on the amount of extra services their community has to take on because these facilities pay no property tax.

As part of that deal, it also looks like communities are getting an additional $3.34 million that helps pay for services to state facilities that don't use general tax dollars, such as Camp Randall Stadium and UW-System dorms. So it’s really a boost of a little over $10 million compared to where we were.

Now, one can argue that having state government services in a community allows for a larger pool of job opportunities than other places, and results in a bigger private sector tax base than would otherwise exist, as state employees like me own houses and spend money at private sector establishments like anyone else. But state employees like me pay taxes just like everyone else does, and it’s nice to see at least some of those funds going back to lessen my community’s need to rely on property taxes.

I also note that the local government fund that gives shared revenues is projected to give out an additional 4% over the next 2 years (a total increase of just over $83 million). So while the increases in shared revenues 2025-27 still doesn’t come close to making up for well over a decade of flat payments from the state as inflation led to costs going up, it’s at least a start in filling the gap, and hopefully it’ll limit the amount of cost cuts and tax-hiking referenda that we have seen in recent years across Wisconsin.

I just wish this City of Madison had held off for a year before putting a $22 million referendum on the ballot last November, because they now stand to have a few million more dollars coming in to prevent the need for such a tax increase (the hope that this would happen was a big reason why I voted no on the question).

But now that I think about it, maybe I'll drop my alder a line to let him know that maybe we don't need to tax to the max this year because the state finally gave some assistance to Madtown for having the city pick up the trash and help to provide safety services for the many state and university-owned buildings.

Consumers spent more at stores in June, but homebuilding sector is in trouble

After a couple of rough months of consumer spending, it looks like retail sales rebounded in June.

Retail sales rose 0.6% in June from the prior month, the Commerce Department said Thursday, rebounding from the steep 0.9% decline in May.

June’s number was much stronger than the 0.2% gain economists projected in a FactSet poll. Spending climbed across categories last month, including at car dealerships, which saw one of the biggest monthly increases. Those sales were up a robust 1.2% in June.

However, the figures aren’t adjusted for inflation, and some goods already began to get more expensive because of tariffs last month. After factoring in June’s 0.3% increase in consumer prices, retail sales were up a more modest 0.3%. Retail sales are adjusted for seasonal swings.

It’s a solid number, and should at least temporarily put off talk of a recession in consumer spending, which seemed possible after the decline in May. But I’ll add that we were still below March's level of spending, and that's before we account for any inflation that's happened over those 3 months.

And as Summer began, Americans did seem willing to still go out and spend, with strong gains in one discretionary area in particular.

…Sales at restaurants and bars — often seen as a barometer of discretionary spending — rose a solid 0.6% in June. Whenever consumers cut back, spending on eating out and alcoholic drinks is usually first on the chopping block.

A measure of retail spending that strips out sales at gas stations, car dealerships and of building materials — known as the “control group,” which provides a clearer picture of spending — was up 0.5% in June, also beating economists’ expectations.

So on the retail side, it seems like the economy resumed solid if not spectacular growth.

But the home construction sector seemed to remain in trouble as the 2nd Quarter of 2025 ended.

Building Permits
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,397,000. This is 0.2 percent above the revised May rate of 1,394,000, but is 4.4 percent below the June 2024 rate of 1,461,000. Single-family authorizations in June were at a rate of 866,000; this is 3.7 percent below the revised May figure of 899,000. Authorizations of units in buildings with five units or more were at a rate of 478,000 in June.

Housing Starts
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,321,000. This is 4.6 percent (±10.6 percent)* above the revised May estimate of 1,263,000, but is 0.5 percent (±9.9 percent)* below the June 2024 rate of 1,327,000. Single-family housing starts in June were at a rate of 883,000; this is 4.6 percent (±11.4 percent)* below the revised May figure of 926,000. The June rate for units in buildings with five units or more was 414,000.

Housing Completions
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,314,000. This is 14.7 percent (±12.8 percent) below the revised May estimate of 1,540,000 and is 24.1 percent (±10.9 percent) below the June 2024 rate of 1,731,000. Single-family housing completions in June were at a rate of 908,000; this is 12.5 percent (±11.3 percent) below the revised May rate of 1,038,000. The June rate for units in buildings with five units or more was 383,000.

Even with the slight increase in permits and housing starts from May, the overall trend for 2025 is bad. Permits and starts are at the lowest non-COVID levels since 2019, and the number of houses being worked on and completed is at their lowest levels since 2021-2022.

Put all this together, and I don’t see where additional jobs for homebuilding will be coming from for the rest of 2025. And that’s before we account for higher prices to build homes because of tariffs on Canadian lumber and similar products, and the fact that tariff uncertainty should keep interest rates elevated for at least the next few months.

The retail sales report is another one from June that indicates “OK growth” over “recession”, but home construction continues to be on the decline, which isn’t a good sign for now or the future. It feels like there’s a sputtering momentum with consumer spending that’s still slightly going up vs down, but I keep trying to figure out why it keeps going up, and when things will stall out for good, leading to a more obvious economic downturn.

Inflation watch is...sort of back? But billions in tariffs still aren't affecting prices much

After Tuesday's release of the CPI for June, can we say that inflation watch is back?

The consumer price index, a broad-based measure of goods and services costs, increased 0.3% on the month, putting the 12-month inflation rate at 2.7%, the Bureau of Labor Statistics reported Tuesday. The numbers were right in line with the Dow Jones consensus, though the annual rate is the highest since February and still above the Federal Reserve’s 2% target.

Excluding volatile food and energy prices, core inflation picked up 0.2% on the month and an annual rate of 2.9%, with the annual rate in line with estimates. The monthly level was slightly below the outlook for a 0.3% gain.

Before June, inflation had been on a generally downward slope for the year, with the headline CPI at a 3% annual rate back in January and progressing gradually slower in the subsequent months despite fears that Trump’s trade war would drive prices higher.

As you can see, the year-over-year increase in overall consumer prices has been consistently between 2.4% and 3.0% for the last year, and the 12-month change in "core" prices has been just under 3.0% for most of 2025 after being slightly over 3% for the last half of 2024.

The higher inflation reading led to a 400+ point loss in the DOW Jones, and the 30-year bond yield to rise past 5%, as higher inflation can result in fewer interest rate cuts from the Fed. Some of the conjecture was that the cost of tariffs were starting to see their way onto store shelves, but June's larger increases in the CPI came from fruits and vegetables, gasoline, and hospital services, which aren't as susceptible to tariffs as other products.

I wanted to look into the next day's Producer Price Index report to see if tariffs were pushing up costs for businesses that might be importing products to be manufactured here, as that could tell us if we could expect those increased costs to be passed onto consumers in the months to follow. But at least for June, that wasn't happening.

A measure of wholesale prices showed no change in June, providing a conflicting sign over whether tariffs threaten to boost inflation in the coming months.

The producer price index was flat, according to seasonally adjusted numbers from the Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for an increase of 0.2%.

Though the numbers for headline and core wholesale inflation were subdued, final demand goods prices rose 0.3%, but were offset by a 0.1% fall in services. Within the goods category, tariff-sensitive communication equipment posted a gain of 0.8%. Core goods prices also rose 0.3%.

At the same time, the PPI level for May, initially reported as a 0.1% increase, saw an upward revision to a 0.3% gain. A 0.3% gain for goods is the biggest gain since February, the BLS reported.

So that's an interesting cross-pressure, and a sign of some weakness in the transport side of the economy, since the price of transportation and warehousing services for businesses saw a drop of 0.9% in June.

The part that makes me confused about the inflation numbers is that the US government has seen a significant increase in tariff revenue since Trump took office, including in June.

So the amount of tariffs paid in the US is 3-4 times what it was at the start of the year, but we have yet to see much of a significant increase in prices for products at the producer or consumer level - it's basically what it was before the tariffs hit. So are businesses eating a bunch of profits, or is worker productivity through the roof and allowing for unit labor costs to be less, which would make up for the cost of tariffs?

There's a disconnect going on here. Figuring out what the story is that puts these conflicting pieces together will tell us if our economy is heading toward inflation or stagflation. Or if we end up in some kind of positive situation that would fly in the face of almost all economic history that has happened when sizable levies are put onto an imported product in a country that has such a large amount of imports be part of its supply chain.

Maybe tomorrow's import price index report starts to fill in the blanks. Something should soon.

Evers wanted to stop property tax hikes for schools, seniors. WisGOPs chose to let it happen

Wanted to go a bit deeper on the state budget and what's coming for property taxes. The biggest chunk of your property tax bill in Wisconsin likely comes from K-12 schools, as their main sources of funding come from the state and local property taxes.

On K-12, the final budget did get a long-overdue boost to special education funding, but it didn't give any additional general funding to districts over the next 2 years. And that's likely to mean property taxes will going up more for next year.

That includes $500 million to special education by increasing the reimbursement rate from 32 percent to 42 percent in the first year and 45 percent in the second year.

But when the budget was signed on July 3, without an increase in general school aid, education leaders were surprised. They say while the increase in state support for special education will free up money for districts, it is not enough to solve budget problems caused by the strains of inflation.

“The state of Wisconsin currently has a $4.2 billion surplus, but no new general state aid has been provided to help schools meet rising costs,” said Madison Metropolitan School District Superintendent Joe Gothard.

MMSD is expecting to see a decrease of nearly $12 million in general aid compared to last year, which will result in a $12 million increase in property taxes, Gothard said.

As a homeowner in the Madison School District, that's not something I'm looking forward to (although at least I'll be able to maybe write off some of those higher taxes due to the higher SALT Cap...maybe).

Also, this is where Gov Evers' creative veto from 2 years ago to lock in a $325-per-student increase in districts' revenue limits plays a role. The good news from this is that the schools will be able to get more resources (even if it likely won't keep up with inflation). But because of a $0 General Aid increase from the state, that means the increased resources would be paid for overwhelmingly with property taxes.

Higher property taxes for schools wasn't something Gov Evers wanted when he submitted his budget back in February, as the Legislative Fiscal Bureau noted.

Based on reports filed with DOR, gross property tax levies are estimated to total $13,638.1 million on a statewide basis for 2024(25). This represents a 4.2% increase relative to the 2023(24) statewide total of $13,086.7 million. After applying state property tax credits, net property tax levies in 2024(25) are estimated to be $11,899.5 million, an increase of 4.5% compared to 2023(24) total of $11,382.1 million. Under [the Governor's Budget Bill], gross property levies would increase on a statewide basis by an estimated 2.0% in 2025(26) and by an estimated 2.9% in 2026(27), while net property taxes would increase on a statewide bases by an estimated 1.3% in 2025(26) and by an estimated 2.4% in 2026(27). The following table reports estimated statewide gross and net property tax amounts.

Under current law, for 2025(26) and 2026(27), gross levies are estimated to increase by 8.2% and 6.7% for school districts, by 2.6% in each year for technical college districts, by 3.7% in each year for municipalities, and by 2.3% in each year for counties. Under [the Governor's Budget Bill], as shown in the following table, statewide 2025(26) and 2026(27) levies would increase by an estimated 1.6% and 3.7% for school districts, by 1.6% and 2.6% for technical college districts, by 3.0% and 2.7% for municipalities, and by 1.4% and 1.6% for counties. The lower estimated levies under the bills compared to current law are primarily due to the increase in general school aids provided to school districts.

Since the GOP-led Legislature refused to give Evers most of these initatives to lower property taxes, we will be operating under the "Current Law" scenario for the tax bills we'll be getting in 5 months. Which means your property taxes are going up.

As the budget talks entered their final days, I got this mailing.

And who is the "Wisconsin Homeowners Alliance"? They're basically a front group for the Wisconsin Realtors Association, a group that is usually backing regressive GOP politicians. But this mailing from the Realtors clearly seemed to back Gov Evers' plans to use more state tax dollars to pay for schools, and lessen the burden of property taxes. Let's see if those Realtors put their money in 2026 where their mouths are in 2025.

I'll also note that there was no increase in the Homestead Credit for either the maximum write-off, or in the maximum income level to receive that credit. That leaves the income limit at $24,680 - the same as it has been for 12 years, with no adjustments to inflation (thanks Scott Walker and Robbin' Vos!). The LFB notes that the lack of adjustment to the higher costs and prices of the 2020s means that a lot of Wisconisnites now are getting a smaller Homestead Credit or no Homestead write-off at all, which makes for a double hit with higher amounts of property taxes.

Increased claims in tax year 2009 (over $121 million) were most likely a result of the Great Recession and associated economic slowdown, which caused more individuals to be eligible for the credit. Since the tax year 2000 increase in the maximum income factor, the only formula change occurred in tax year 2010, when the income threshold, maximum income, and maximum property tax factors were indexed for inflation, and the dependent adjustment was increased from $250 (which had been in place since 1989) to $500. In response, the credit's cost increased from $121.1 million in tax year 2009 to $125.2 million for tax years 2010 and 2011. The indexing provision was in effect for only one year, and was sunset beginning in 2011. Without subsequent changes in the formula factors, the credit's cost has decreased since 2011. Had the formula factors been adjusted annually for inflation since 2011, the maximum credit for tax year 2024 would have been $1,650 instead of $1,168 (41% higher).

The continued decline in total claimants, and credits claimed, in 2021 and 2022 could be partially attributable to the significant cost-of-living adjustments applied to Social Security payments in those years. These adjustments were the result of high inflation during 2021 and 2022, mainly driven by pandemic-related economic factors. The adjustment for 2022 (8.7%) represented the largest inflation adjustment to Social Security payments since 1981. Under the homestead credit, household income increases as Social Security payments increase. To the extent household income increases above the income threshold of $8,060, claimants receive lower credit amounts or are disqualified altogether.

This is where I will remind you that Gov Evers asked to increase the income limit and amounts for the Homestead Credit for the 4th straight budget - this time asking for full credit to $19,000 of income, and allowing Wisconsinites who make up to $37,500 to receive at least a partial write-off. And for the 4th straight budget, the GOP Legislature said "No."

It's remarkable to me that after decades of hitting the Dems for "higher property taxes", the Wisconsin GOP were the ones that have chosen to allow a large property tax hike in the Winter of 2025. Maybe they were too rushed by the idiocy coming from DC that caused them and Gov Evers to have to play "beat the clock" on the budget earlier this month to lock in more Medcaid funding, and both the WisGOP Legislature and the Governor will try to improve some budget issues that might need to be cleaned up.

But there isn't much breathing room left in the budget as it stands, with a cushion barely above $700 million projected for the end of biennium. So how would either Evers or the WisGOP Legislature find the funds to stop this property tax increase from happening? And Evers was the only one of those 2 that actually wanted to stop the tax hike from happening, which means that most if not all the blame has to go to the WisGOPs that shrugged their shoulders and sent the bill to Wisconsin property taxpayers.

Headline says US jobs stay strong in June. But underneath the headline, not so much?

Wanted to catch up to the most recent US jobs report, as that's been an area which is still holding up as other parts of the economy are sputtering.

Job growth proved better than expected in June, boosted by government hiring, as the labor market showed surprising resilience and likely took a July interest rate cut off the table.

Nonfarm payrolls increased a seasonally adjusted 147,000 for the month, higher than the estimate for 110,000 and just above the upwardly revised 144,000 in May, the Bureau of Labor Statistics reported Thursday. April’s tally also saw a small upward revision, now at 158,000 following an 11,000 increase.

The unemployment rate fell to 4.1%, the lowest since February and against a forecast for a slight increase to 4.3%. A more encompassing rate that includes discouraged workers and those holding part-time positions for economic reasons edged down to 7.7%, the lowest since January.

But note the "boosted by government hiring" part of that story. When you take a look inside the numbers, I'm not so sure job growth was that good at all last month.

Government employment rose by 73,000 in June. Employment in state government increased by 47,000, largely in education (+40,000). Employment in local government education continued to trend up (+23,000). Job losses continued in federal government (-7,000), where employment is down by 69,000 since reaching a recent peak in January.

Health care added 39,000 jobs in June, similar to the average monthly gain of 43,000 over the prior 12 months. In June, job gains occurred in hospitals (+16,000) and in nursing and residential care facilities (+14,000).

In June, social assistance employment continued to trend up (+19,000), reflecting continued growth in individual and family services (+16,000).

So nearly half of the job growth last month was in government jobs, mostly state colleges that weren't having as many seasonal layoffs (so a seasonally-adjusted gain), and local teaching jobs that may also not be reflecting the end of the school year. Let's see if that has a reflexive decline next month.

If you look at it a different way, private sector job growth was only 74,000, the lowest in 8 months, and all but 16,000 of that was in health care and social assistance. That's not an overall good payrolls report to me, and it continues a trend of moderation in growth for that part of the jobs market.

The decline in the unemployment rate to 4.1% had less to do with more Americans finding jobs (+93,000 employed) and more to do with the labor force going down by 130,000. As UW-Madison professor Menzie Chinn notes, the ADP payrolls report was negative for June, and the small increase in the household survery still leaves the total amount of Americans listed as "employed" in that survey more than 500,000 below where it was at the start of 2025.

And yes, the household survey is smaller and often has more noise and fluctuation to it. And while the continued downward drift is concerning in that number, Professor Chinn says that we usually see payrolls also start to fall when a real recession begins.

In real time, the household series turns one month earlier than the establishment in two cases (2001, 2007), and twice the turning points are the same time (1990 and 2020). In the revisions, the civilian series peaks are moved earlier once (1990), and later by two months (2001). The NFP peak is moved later once (2001 recession).

Payrolls aren't falling yet in the BLS reports. And I don't think the Trump Administration is juicing the numbers in these repors because Trump keeps rambling about how interest rates should be lowered, and decent jobs reports are an argument against that.

We have yet to see a notable jump in jobless claims for July, and total unemployment claims have yet to reach 2 million. So based on that, we're still in a slow growth scenario for jobs, even if most spending data seems to indicate things are not going well, and that's before tariff-affected price increases become more widespread as those products hit the shelves.

Hospital assessment stuff - and how it led to Derrick Van Orden's latest idiocy

A mundane funding mechanism that involves taxing Wisconsin hospitals has led to quite a lot of crazy stuff in our state's politics over the last week. This includes our Legislature and Governor having to race through the night of July 2-3 to beat Congress in passing a budget bill, and in one of the state's members of Congress getting caught playing both sides of this issue, and then melting down when he got called out on it.

First, let's review what the state's hospital assessment is, and how it works. Fortunately, Wisconsin's Legislative Fiscal Bureau has a good explainer, and how it relates to services for state residents on Medicaid and other Medical Assistance.

For the purposes of reimbursement under the Medical Assistance [MA] program, hospitals are grouped in one of several categories. By far the largest category, by patient revenue, is the acute care hospital (ACH), which is a general medical-surgical hospital that does not meet the criteria for being designated as a critical access hospital (CAH). A CAH is also a general hospital, but has a distinct designation based on smaller size (no more than 25 inpatient beds), and being in a rural or isolated location. Outside of these two classes of general hospital, there are three types of specialty hospitals: psychiatric hospitals, rehabilitation hospitals, and long term acute care hospitals....

In addition to the standard base reimbursement payments, hospitals receive supplemental payments for providing services to MA patients, some of which are distributed broadly to all or most hospitals in a particular classification, and some of which are more narrowly targeted to specific hospitals or related to specific services. The largest hospital supplement expenditure is for hospital access payments. Access payments are fixed dollar amounts paid for each MA inpatient (upon discharge) and for each outpatient service. The program spends $654 million annually for access payments to the group of hospitals that includes acute care hospitals, long term acute care hospitals, and rehabilitation hospitals (psychiatric hospitals do not receive access payments). The program has a separate payment pool for critical access hospitals, which varies in accordance with a formula, but for 2024-25 is $8.7 million.

There’s also the matter of how much to kick back to the Critical Access and Acute Care hospitals from those funds. Under current law, around 63.67% of the state funding goes back to the hospitals, and the Feds pay more than 150% of that state amount to the hospitals for coverage. Most of the rest goes to the state’s Medical Assistance Trust Fund (MATF) for other health care needs.

The total raised by the hospital tax for ACH services to has been set at $414,507,300 since 2011. Then that money is used to pay providers for MA services, which gets federal matching funds, and it allows for extra funds generated by the tax to be used for other Medicaid services.

So Gov Evers wanted to raise the hospital assessment from 1.8% of net patient revenues to 5.7% in his budget bill. And with that higher tax would come another $346.6 million to be used for MA services, another $551.4 million to ACHs, and another $31.1 million to Critical Access Hospitals.

Everyone's a winner in this scenario, unless you don't want to see the Feds spend more money on health care. Which is where Congress and Trump/GOP come in to this debate.

The practice of using state directed payments through HMOs to increase payments up to the ACR has recently drawn scrutiny, as it can allow states to make total payments that exceed the federal payment limits that would otherwise apply, including payments that exceed the hospitals' costs attributable to Medicaid patients. On May 22, 2025, the U.S. House of Representatives passed the Budget Reconciliation Bill, which includes a provision that would prohibit state directed payments that result in total payments that exceed 100% of the payments under Medicare, or 110% of Medicare for states that have not adopted Medicaid expansion (to account for higher rate of uncompensated care in those states). However, the provision would allow state directed payments that were already in place, or that had already been submitted for approval, by the date of the passage of the federal law. If this provision were to pass prior to Wisconsin making any changes to access payments, the state would likely not be able to implement the proposed access payment increases, since they would result in payments exceeding the Medicare limits. Milliman estimates that total payments under the [Evers] Administration's proposal would be 152% of the Medicare rate for inpatient services and 137% of Medicare rate for outpatient services.

So if the Evers Administration and the Legislature didn't work out a deal to raise the hospital assessment before the Big Bunch of Bollocks got signed by Donald Trump, they'd be prevented from doing so, and wouldn't be able to pay for these added services or would have further budget crunches from paying full cost for them.

So as final passage of the bill in Congress got closer, it led to the odd scene of Joint Finance passing the budget on Tuesday of last week, both houses of the Legislature debating it all day on Wednesday before passing it late at night. Then Governor Evers signed the bill with few vetoes just after 1:30 Thursday morning.

In the budget, the state's hospital assessment ended up being raised up to around 6%, which is slated to result in over $2 billion more a year in access payments, pay for nearly $300 million in Medicaid services, and hospitals get a larger share returned to them.

As the budget was being pushed through in Madison, they were getting encouragement to speed things through from a strange place.

And here's the letter from Van Orden, sent on Wednesday, the day before the House was set to pass their bill to prevent states from increasing hospital assessments.

I cannot emphasize enough the importance of signing the proposed state budget into law without delay. As you are aware, timely enactment is especially critical this year due to the proposed increase in the state provider tax, which must be effectuated before the anticipated signing of the One, Big, Beautiful Bill on or around July 4, 2025.

This is a once in a lifetime opportunity and I implore you to put politics aside, and our neighbors first.

The One Big Beautiful Bill will have a profoundly beneficial impact on Wisconsinites from all socioeconomic backgrounds by ensuring that Badger Care, in its current form and scope, remains solvent into the future and bolstering our rural healthcare systems.

Wisconsin will immediately receive a $500,000,000 plus up for rural healthcare infrastructure, and an additional billion dollars annually for healthcare in our great state...

Delaying the state budget enactment beyond July 3rd risks losing vital opportunities for the state’s healthcare system and the Wisconsinites who rely on it. Healthcare and rural healthcare, in particular, is vital to us in Wisconsin. We cannot leave anything on the table. Please act swiftly to sign the budget and secure the provider tax increase in time to meet this critical federal deadline.

Well, Small-D, if you really think it's important to have this extra coverage for hospitals in rural Wisconsin so more don't close and BadgerCare "remains solvent into the future", maybe you should have "put politics aside" AND NOT VOTED FOR THE BILL THAT PUTS IT IN DANGER. And nice try in implying that somehow the bill you're passing in DC is the one that's funding the extra money for health care, when that bill you voted for would have taken that funding away.

Fortunately, my Congressman isn't one to let BS like this go, and set the record straight.

“It’s clear that Derrick doesn’t understand the bill or legislative procedure when he claimed that he also helped secure an additional $500 million for rural hospitals. This provision came from a Senate amendment he had nothing to do with and was only included because Republicans felt pressure to put a band-aid over the bullet wound they are inflicting on rural hospitals by this bill. Moreover, there is no guarantee that Wisconsin will receive any or all of these funds, as award amounts have yet to be determined.”

“You can’t create a problem and then claim credit for someone else's help in making it slightly less horrific. He and his Republican colleagues are the reason this legislative fix was so necessary in the first place. The legislature's actions will help lessen some of the impact, but certainly not all of the bill.”

And if you click Pocan's press release, you'll see Van Orden have a typical multi-tweet meltdown in response to Pocan's fact-giving. What a dipshit.

Bottom line is that it was Wisconsin's elected officials at the state level who kicked into action to get a state budget passed that would allow for more Federal dollars to head to the state with a higher hospital tax. I still am not sure why we couldn't have just done the hospital assessment as standalone legislation vs having it be part of the budget, and allow the budget to get the fuller debate it likely deserved.

But we got another $2 billion coming into the state to help hospitals and provide Medicaid services, and it'll help Wisconsin be in a better position to weather the damage that is sure to come from the garbage bill that Derrick Van Orden and all other GOP Wisconsin Congressmen voted for.

Tax Scam 2.0 by the numbers

There's a lot of individual items I could go over with GOP Tax Scam 2.0 coming out of DC, and I can discuss those in other individual posts. But I wanted to take a step back, and much like I did with the state budget that became law on the morning July 3, I wanted to go over the Federal totals that are in the bill that Trump signed on July 4 (I'm going off of the CBO totals from the Senate bill, which I think is the final version, barring some last-minute giveaway that isn't recorded in these numbers).

First of all, let's note how the budget deficit blows up immediately in the first 2 years of Tax Scam 2.0. The Congressional Budget Office says the bill itself increases the deficit by more than $479 billion in the next fiscal year, and by more than $588 billion in Fiscal Year 2027. And even if you take out the tax cuts from Scam 1.0 that were continued in this bill, the deficit is still slated to go up by another $270 billion next year due to what was added in and changed in Scam 2.0.

And even more remarkable to me is that the US government is slated to INCREASE its spending under the bill for Fiscal Year 2026 and 2027, because of the big boost in money that's slated for ICE and the military. And because the larger cuts in Medicaid don't generally kick in until the later years.

But what's with that huge decrease in expenses that's in Fiscal Year 2025, which means it'll happen over the next 3 months? It's because this Trump/GOP bill is going to make it harder for students to pay for college in 2025, and makes it harder to pay back their loans if they've gotten out of college.

The bill places a new cap on the amount students can borrow in federal student loans for graduate school and how much parents can borrow to help pay students’ tuition.

There would be fewer opportunities for deferments or forbearance and new limits on lending for part-time students.

The bill also has much more limited set of repayment options, ending loan forgiveness programs that have been in place for years, as well as a Biden-era program that tailored payment requirements to the person's income. It would be replaced with a new fixed-rate program, which would disadvantage lower-income families.

Now, the huge cuts in 2025 are more of an accounting measure that shows the government won't have to write off as much student debt as we had under Biden-era policies (this swing in govt accounting also happened in 2022 and 2023 when Biden's student loan deferrals were first announced, and then reversed by the courts). But even though it improves the budget numbers for 2025, you can bet it'll be a burden for the real economy as college students and graduates try to adjust to having to pay more for their loans and likely will spend less on other items as a result.

What also will be a burden is the fact that this bill adds on to what was already slated to be sizable budget deficits over the next 10 years. When you add the bill's red ink to what the Congressional Budget Office had as its baseline assumptions back in January, our deficit reaches $2.2 trillion next year, and nears $2.5 trillion by 2028.

Now maybe that huge deficit number doesn't cause major real-world economic issues, and maybe we continue to entice investors and foreign governments to take up our debts and keep our interest rates lower. With the dollar at its lowest levels in more than 3 years, American assets are now cheaper for foreign governments to buy, while American investors have benefitted from foreign stocks becoming higher in value.

But this deficit boosting and cheaper dollars both are inflationary items, and if we don't get a recession in the wake of Tax Scam 2.0, I don't see how prices don't jump from both increased demand and higher incentives for speculation. And after an election cycle when we were told that inflation was so horrible for people to deal with, I can't think voters would take kindly to prices going up at a faster rate from a higher amount. In addition, that inflation should stop any cycle of interest rate cuts from the Federal Reserve before it even gets going, and President Trump is openly saying that rate cuts are a requirement for any of his Fed nominees.

Conversely, since there aren't a lot of new tax cuts for people with jobs, we could well end up in the recession we seemed to be heading toward before the bill passed. And if investors aren't willing to pay for all this new debt, we could well see interest rates go up, which would keep the economy on a slowing/recessionary track. Combine that with supports for health insurance and food assistance being diminished by Trump/GOP, and you have a setup for either a long recession or serious stagflation.

But hey, as long as the Trump/GOP donors and their puppet politicians get a cut, they don't care! Too bad that many of us will be forced to take on the costs for those slugs, and the crumbs of tax breaks we will get in return (if we get any at all) won't be worth it.