As Wisconsin’s economy shows signs of recovery, many of the state’s agencies have seen distinct decreases in federal funding over the past four years.
According to a report released last week by the state Legislative Audit Bureau, federal financial assistance administered through the American Recovery and Reinvestment Act to state agencies reduced by roughly $3 billion since the 2009-2010 fiscal year from $3.5 billion to $155.1 million in the 2012-2013 period. Total federal funding to Wisconsin during the 2012-2013 period sat at $12.5 billion, the report said.
The report showed federal funding from the ARRA peaked in Wisconsin during the 2009-2010 fiscal year, the year following the nationwide economic crash. Since then, the numbers showed ARRA funding in Wisconsin has slowly decreased each year.
According to the report, some of the biggest recipients of federal funding include the Department of Health Services, the University of Wisconsin System and the Department of Administration.
Federal funding is divided among state agencies, and from there it is given to various state projects and initiatives. The largest expenditure of federal money is for Wisconsin’s Medicare system, which receives $4.4 billion in federal funds, according to the report.
According to the ARRA website, the act allows federal funds to be distributed in several key ways including tax benefits, contracts, grants and loans, as well as entitlements. Since the ARRA was enacted in 2009, it has given out $816.3 billion to states.
Mary Burke, candidate for governor in November’s race, has said if elected to the governor’s office, she would push to increase federal funding of infrastructure projects in Wisconsin.
“We must insist on our state getting its fair share of our hard-earned income, and do more to win all the federal funding available for grants and procurement, advanced research and economic development projects, reduce our federal funding gap and bring our fair share of federal tax dollars back to our state – beginning with acceptance of the federal expansion of Medicaid,” Burke wrote in her jobs plan.
Regarding the Medicaid example, Gov. Scott Walker has said accepting the federal funds for Medicaid could lead to the federal government going back on its pledge, leaving the state to pick up the tab.
The DOA receives federal funding and then allocates it throughout the state but, with fewer funds, the DOA is forced to scrunch funding for projects across the state, DOA spokesperson Stephanie Marquis said.
The DOA also uses federal funding to help when communities have an emergency, such as flooding and tornado damage, Marquis said.
“Our job at the DOA is to give funds to communities throughout the state to encourage community development and build infrastructures,” Marquis said.
The reduction in federal funding has affected UW, as well. The UW System is the second largest recipient of federal financial assistance in the state, according to the report.
UW public affairs and applied economics professor Andrew Reschovsky, an expert in government funding, said the research program at UW is largely funded by federal grants. He said Pell grants, which are given to low-income students at the undergraduate level, are federally funded as well.
Reschovsky said it is nearly impossible to determine a better process for the state to efficiently manage federal funding.
“The spending of this money is a reflection of the political process as a whole. This money is spread all around the state to various agencies, and it becomes so complex that it is difficult to figure out how it could be done a better way,” Reschovsky said.