Tony Evers to push ahead with Medicaid expansion but will keep WEDC in place for now

Jan. 16--Gov. Tony Evers vowed Tuesday to push ahead on expanding Medicaid in his budget while making an early concession to Republicans by dropping plans to eliminate the state's economic development agency.

Evers' comments come after a private meeting with Senate and Assembly Republicans, who said last week they would bypass Evers' budget and write their own if he included Medicaid expansion or any tax hikes.

But the new governor, who campaigned on taking federal dollars to expand Medicaid and insure thousands more Wisconsinites who earn close to the poverty level, said he won't back down and hoped some Republicans would eventually rally behind him.

"We're not going to burn the Capitol down," Evers said. "We're going to disagree. I believe our position at the end of the day is the correct one."

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He added he thinks some Republicans will come to understand the success of hospitals and clinics in small towns depends on increased Medicaid dollars, and that most in the health care industry back an expansion.

Getting Republican support would be a long shot. Assembly Speaker Robin Vos, R-Rochester, on Tuesday reiterated Republicans would block any move to expand Medicaid, calling such a proposal an attempt by Evers to score political points.

Vos said he would prefer to work from the governor's budget request, as is done typically, but said it would be "an awful lot harder" if revenue from the Medicaid expansion is built into it.

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Wisconsin is one of 17 states that haven't taken federal funding to expand Medicaid to people who make up to 133 percent of the poverty level, a move that would have saved the state $1.1 billion from 2014 through 2019, according to the Legislative Fiscal Bureau.

People who make more can get subsidies on the Affordable Care Act marketplace. The decision by former Gov. Scott Walker and Republicans to expand coverage to all people below the poverty line shifted about 63,000 adults off Medicaid while allowing about 130,000 childless adults onto the program.

Despite the potential savings, Vos said Republicans oppose expanding government-run health care and argued expanding Medicaid to people above the poverty level would only lead to a rate increase for those who have private insurance. He did, however, say he would look at expanding the rate at which the state reimburses medical providers under the Medicaid program.

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"The more people that we take from the private insurance market to put into the public markets, the higher the rates are going to go for those people who have private-sector insurance," Vos said.

Senate Majority Leader Scott Fitzgerald, R-Juneau, agreed Tuesday a Medicaid expansion would be a nonstarter for his caucus.

Evers' Medicaid expansion would likely add about $200 million in federal money to expand coverage for 80,000 Wisconsinites.

WEDC revisited

Evers also said he has no plans to eliminate the Wisconsin Economic Development Corp., the state's economic development agency created in 2011 under Gov. Scott Walker.

"We're not doing anything with WEDC in this budget," Evers said.

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The revelation represents a retreat for Evers, who campaigned on eliminating the agency and diverting its funding to local and regional economic development organizations. It's a win for legislative Republicans, who have called for the preservation of the agency and went so far as to eliminate for nine months Evers' ability to appoint its CEO in a December lame-duck session.

"I think that's a huge victory," Fitzgerald said. "You'd find there were a number of great successes where WEDC is concerned."

WEDC in 2017 had a critical role in approving a nearly $3 billion incentive package for Taiwanese technology manufacturer Foxconn, the largest economic development subsidy ever given to a foreign company in the U.S.

Transparency sought

Evers, who was critical of the incentive package on the campaign trail, said he told Republicans Tuesday he hopes for success and transparency for the project.

"For us to stay ahead of the curve on this we need to make sure we are good stewards of the money," Evers said.

The project, which Walker and Republicans championed, has faced continued scrutiny. A recent state audit found WEDC planned to give Foxconn tax credits for employees who did not perform work in Wisconsin, which would be a violation of its contract with the company and state law. WEDC CEO Mark Hogan said the agency would hold off on an immediate change to its plan.

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Earlier in 2018 national media reports suggested the company had considered hiring foreign workers for the project and undertaking a smaller initial investment, prompting criticism the project was a bad deal for taxpayers.

Under the contract, Foxconn will receive $1.5 billion total from the state if it creates 10,400 jobs by 2032 and another $1.35 billion if it makes at least $9 billion in capital investments.

'Every single dollar'

Vos said Republicans and Evers are united in wanting transparency on the Foxconn project and requiring the company to live up to its commitments.

"We want to make sure every single dollar that's given is earned," Vos said, adding WEDC has faced significant scrutiny from audits over the years.

Still, Republicans in their lame-duck session passed a measure that eases up scrutiny on companies seeking tax credits from the agency by eliminating the requirement in state law that WEDC annually verify information submitted by tax-credit recipients before the companies can obtain the tax credits.

Hogan at the time said he is confident WEDC can still accurately verify jobs numbers by examining a large enough sample of jobs data.

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