Manufacturing program wins legislative support
But state lawmakers deal a blow to small business insurance pool
One beneficiary of legislative activity in the powerful committee is the Wisconsin Manufacturing Extension Partnership (WMEP). The Madison-based technical support organization had been zeroed out of the Department of Commerce (DOC) budget by Gov. Jim Doyle.
However, Sen. Bob Welch (R-Redgranite), was behind a measure that pulled $100,000 from the Department of Commerce’s Main Street program and restored it to the WMEP.
"I am a big fan of WMEP," Welch said. "WMEP was zeroed out by the governor. … The Governor has since sent us a letter that said he would like to restore his cut to WMEP."
Because of the program’s popularity, Welch said the committee would likely comply with the governor’s wishes.
"It is likely that we would restore even more now that the governor has backed off his early cut," Welch said.
According to Sen. Ted Kanavas (R-Brookfield), the governor requested $500,000 be returned to the WMEP.
"At that point, I would like to take the $100,000 we allocated and put it back in the Main Street program," Kanavas said.
The WMEP provides subsidized consulting services and training to small manufacturers interested in implementing lean manufacturing processes. The organization received about $1 million in funding from the state in 2002.
State funding and additional revenue from fees charged to manufacturing clients for consulting and training are matched by the federal government.
According to WMEP executive director Mike Klonsinski, the disappearance of state dollars would mean a reduction in federal funding, which is allocated in proportion to revenue from the state and fee revenue.
"We have looked at things and determined we could still keep up with our mission with half-funding," Klonsinski said. "But a full cut gets to the very core of WMEP. To get at it, we would have to increase revenue by seeking larger contracts with larger manufacturers."
According to Klonsinski, the average size of a consulting contract WMEP executes with manufacturers is worth about $5,000 to $6,000.
Meanwhile, Welch and other members of the Joint Finance Committee pulled the plug on a program strongly supported by the governor – the Private Employer Health Care Purchasing Alliance.
The idea of an insurance pool similar to those implemented in other states originated as part of former Gov. Tommy Thompson’s final biennial budget bill. The proposal was hobbled due to technical problems, which were resolved in the version delivered to former Gov. Scott McCallum as part of his budget proposal.
While the pool was to be a self-funded private industry initiative, the biennial budget proposal included an $850,000 loan from the State Life Insurance Fund, which McCallum characterized as unconstitutional.
McCallum vetoed provisions for the loan, as well as other portions of the program, including restrictions on the degree small business health insurance premiums could fluctuate above or below a midpoint.
Earlier this year, the Wisconsin Private Employer Health Care Coverage Board, the agency responsible for overseeing the pool if it is implemented, commissioned a study from the Institute for Health Policy Solutions in Washington, D.C., to identify steps necessary to implement the pool.
However, the Joint Finance Committee shot down Doyle’s budget provision for the pool on a 12-4 vote, instead earmarking over $300,000 to fund a task force hand-picked by the Republican legislature to analyze the potential for a pool.
Kanavas said he was not aware that a study had been commissioned or recommendations regarding the pool had been tendered.
Welch said the state has spent about $1.4 million on the program, even though previous funding was vetoed.
"My understanding is that perhaps some of it is not spent, but to a legislator’s understanding, once it is given to a state agency, it is gone," Welch said.
However, Welch said he supports the pool in principle.
"I like the idea," Welch said. "It is universally popular to have some type of pooling opportunity available to small employers. But to do that, you have to cross a few boundaries that nobody wants to cross. It starts looking more like socialized medicine."
A Doyle spokesman was critical of the committee’s stance on the pool.
"The governor is strongly committed to the program," Doyle press secretary Dan Leistikow said. "He was disappointed that the first thing the legislature did when they took up the budget was to cut a health care program that is designed to make health insurance affordable for small businesses."
According to the state representative of the National Federation of Independent Business, the committee’s move is a setback.
"I certainly would have preferred that they let it pass through," said NFIB Wisconsin state director Bill Smith.
May 16. 2003 Small Business Times, Milwaukee