This morning’s Journal Sentinel contains several stories that highlight the way the issue of public revenue is driving the politics of our state.

First, the newspaper reported on a new state revenue projection from the Legislative Fiscal Bureau showing decreased tax collections will create a $143 million deficit by the end of the current budget.  Directly related, the Attorney General, after consultation with the Governor, is planning to use $25.6 million of the state’s share of funds from the recent national foreclosure lawsuit settlement to offset a portion of this deficit.  Walker justified this use of the money, saying:

Just like communities and individuals have been affected, the foreclosure crisis has had an effect on the state of Wisconsin, in terms of unemployment. . . . This will offset that damage done to the state of Wisconsin

While there is some validity to that statement, the use of the settlement money to plug a portion of our budget shortfall is an unfortunate step back towards the gimmicks and fund transfers routinely used by previous administrations.  Milwaukee Mayor Tom Barrett, sounding much like a candidate for Governor, criticized the move saying: “not one dime should be used to fund the unbalanced state budget.”  Though I am curious to hear how Barrett, whose execution problems I have documented in the past, would handle the shortfall, I agree with his position.

The problem is that the policy options Walker (or any other Governor) has are limited.   The 2011-13 budget already cut K-12 school aids, shared revenue to local governments, and funding for higher education.  The cuts to higher education were the subject of another Journal Sentinel story this morning. Administrators across the UW system say they are struggling to maintain quality in the face of revenue losses, UWM Chancellor Michael Lovell cites the loss of over 40 faculty members to other institutions as exhibit A in demonstrating the challenge he faces.

The perils of another strategy, finding lower-cost ways to deliver state services, shows up in another Journal Sentinel story this morning on the notable absence of a common school accountability system for all schools receiving public revenue in a new piece of education legislation.   Erin Richards writes of the bill:

[I]t did not propose creating a statewide school accountability system that would hold all public schools and publicly funded private voucher schools to the same standards.

What is not mentioned in the story is that an identical public, private, and charter school accountability system is functionally impossible, and undesirable.  The presence of religion in private choice schools for example requires that the schools spend (and document the purpose of) every dollar they receive annually through the choice program so as not to have a surplus that could be seen as aiding religion.  In comparison, having and carrying over a surplus in a public school district may actually be a sign of responsible budgeting.   And the heart of the charter school concept is a third party authorizer that serves as the accountability agent.  A common accountability system undermines the very idea of a charter school.

More important, if choice and charter face identical public school rules and regulations, there is every reason to expect them to be nothing more than poorly funded public schools that may save the state money, but not increase educational quality.  What is needed is a way to ensure all of our schools are accountable and transparent, not identical regulation.

The straightforward short-term answer to a revenue shortfall is to simply raise taxes.  This is a political non-starter and a bad idea for the long-term competiveness of our state.  The easier said than executed long-term solution to Wisconsin’s revenue problem is a combination of policies conducive to economic growth, new approaches to local service delivery, and responsible state budgeting.  And of course, Wisconsin’s toxic state of political discourse must be addressed.

Easy right?

Today’s Milwaukee Journal Sentinel features a blaring headline warning that some group has given Wisconsin an “F” in helping students with college financial aid.  Sounds pretty serious  – we must really be falling behind other states in offering financial aid, huh?

Well, actually, no.  Forty-nine of the fifty states got grades of “F” for affordability, which might make one think this bogus “study” might just be a crass ploy by the National Center for Public Policy and Higher Education to push for more taxpayer money.  And one would be right.  Couldn’t the Journal Sentinel just as easily have written the headline “Wisconsin Keeping Up With College Affordability?”

You may notice that college “affordability” to university bureaucrats always means “more taxpayer money,” never “keeping tuition down.”  Universities never like to keep college affordable by charging less for their services – they only consider college attainable when they can jack up tuition, then get the state to pump more taxpayer money in to subsidize the college educations of the poor.  This allows them to continue paying their armies of administrators their lavish salaries.  They get you coming and going.

In fact, in terms of “affordability” in the sense normal people would define the word, Wisconsin is doing extremely well.  Wisconsin ranks second to last in the Big Ten in tuition, even after Governor Jim Doyle proposed significant increases in the 2004 and 2005 school years.  Here’s the list of resident undergraduate tuition at Midwestern Big Ten schools, courtesy of the Legislative Fiscal Bureau:

Michigan $9,798
Illinois 8,634
Michigan State 8,262
Minnesota 8,599
Ohio State 8,082
Indiana 7,652
Purdue 6,458
UW-Madison 6,280
Iowa 5,612

Ah, but you see, Wisconsin is not “affordable,” since we’re not spending enough taxpayer money on financial aid.  Or are we?

In the 1998-99 fiscal year, the state spent $17.5 million on the Wisconsin Higher Education Grant (WHEG) for UW students.  By 2006-07, that number had more than doubled, to $39.2 million.  (Although, admittedly, it dipped slightly in 06-07 after an immense 22% one-year increase in 2005-06.)  Much of that WHEG increase was implemented to make up for the aforementioned tuition increases meant to offset a general purpose revenue cut to the UW in the 03-05 biennium.

The Measuring Up “study” on which the Journal Sentinel breathlessly reports takes none of this into account.  Nor does it take into account the quality of a university.  Let’s say, for argument’s sake, the University of Mississippi funds a slightly higher percentage of pell grant recipients than Wisconsin.  Does that mean Mississippi is a more desirable school to attend?  Does the fact that (to their credit) the UW-Madison offers a world class education so cheaply factor in at all?

If Wisconsin is serious about keeping school “affordable,” it should look at holding down tuition – not raising tuition, then turning to the taxpayers for even more money to allow lower income students access.  In fact, some studies suggest that increased financial aid has the effect of increasing tuition – if universities know so many government loans and grants are available, they can raise tuition to take advantage of the inflation.

UPDATE:  John Hood at the National Review adds some worthwhile observations.