Wisconsin, like other states, spends a lot of money and resources to lure businesses to the state, or, as recent history shows, keeping businesses who found that they can attract goodies by threatening to move their operations elsewhere.
A case in point is Mercury Marine, owned by the Brunswick Corporation. In 2009 the firm said it was moving operations to Stillwater, Oklahoma causing the Doyle administration and local officials to go ape shit.
Even though this was more of a union-busting move on Mercury's part, they managed to bludgeon state and local governments out of $123 million in financial incentives to say nothing of the concessions union employees had to swallow to make the deal come together and keep Mercury in Wisconsin.
Business incentives have a way of getting "baked into the cake" because of their cumulative effect over time. Wisconsin spends just over $1.5 billion a year on these business tax breaks. By stacking tax breaks Mercury Marine, although profitable, has managed to avoid state corporate taxes since 2009.
So what if I said there was a business willing to come to Wisconsin, bringing with it
$1.1 billion a year in spending and directly employing 10,500 people? And it doesn't require a nickel in incentives?
That is what the Medicaid expansion would do for Wisconsin but the Walker administration, along with 19 other states has said no to the fully-funded expansion that would bring health care to 274,000 people with incomes up to 138 percent of the poverty level.
The chief objection of the refusenik governors is the funding formula that would have the states pick up 10 percent of the tab starting in 2020. What exactly would that cost be?
I am glad you asked that question. Someone has already crunched those numbers.
Academics Sherry Glied and Stephanie Ma drilled into the numbers in a study for the Commonwealth Fund, a health care policy think tank.
The concluded it would cost Wisconsin more to opt out, even in 2020, because Wisconsin taxpayers will have to pick up the tab for unreimbursed care to hospitals and clinics through taxes and insurance premiums while paying federal Medicaid taxes that will flow to other states.
That doesn't count the $60 million a year Wisconsin will spend to reimburse hospitals between now and 2020.
Glied and Ma calculated in 2020 Wisconsin will pay $56 million a year in taxes for the Medicaid expansion to other states. Taken together Wisconsin will lose $1.8 billion in 2020.
When weighed against the $1.5 billion the state throws at businesses to stay or move here it rises to the level of a counterintuitive paradox. For some reason our political establishment fails to see health care as a business.
In fairness, other governors, even some hardcore Republican governors, have examined these same numbers and reached the conclusion that it is a winner for their states. Also, I subscribe to the notion that eventually every state will see the light and sign on to the expansion. That was the case when Medicaid first came into existence. It took 17 years for the last holdouts to opt in.
So try on this idea. Let's contact the Wisconsin Economic Development Corporation and ask them if they would support a plan to bring 10,500 jobs to the state and $1.1 billion in new money. How could they say no?