Mike Nichols 2022 Federal Spending Testimony

The following is testimony submitted by Badger Institute President Mike Nichols in favor of AJR 112, a constitutional amendment that would restore legislative oversight of some federal spending in the state.

The testimony was submitted to members of the Assembly Committee on Constitution and Ethics on Feb. 1, 2022.

Dear Chairman Wichgers and Members of the Assembly Committee on Constitution and Ethics,

The Badger Institute submits this testimony today in support of AJR 112 and a constitutional amendment assuring legislative approval of the spending of federal money in Wisconsin.

As you well know, Wisconsin every year becomes more dependent on federal funding. The current biennial budget includes over $26 billion in federal revenue – almost 30% of total appropriations and authorizations. While most of that money comes with federal requirements and mandates, the legislature does at least exercise some general, pro forma review through the budget process.

That fundamental oversight role does not apply to other federal funds and results in even less accountability, state or local control, and transparency. Our initial investigation of how federal CARES Act funding is being used in the state has already uncovered some absurd examples of waste.

In April of 2021, the Badger Institute made the first of several requests of 20 local governments in Wisconsin for detailed information about how it spent its shares of the more than $2 billion the state received in CARES Act funding. We were concerned that while the bill required every government entity to keep and share records of its spending with the state Department of Administration, there would be little oversight of the spending by the agency and little interest in accountability on the part of the state’s major media outlets.

Our concerns were well founded. Of the 20 county and local governments the Badger Institute originally contacted, half did not fulfill their legal obligation to provide detailed spending records. Officials for the other half who provided the records were either unwilling or unable to discuss how or why their communities spent the federal money the way they did.

The records we were able to obtain offer numerous examples of questionable spending. Last month, for example, we reported that many of the state’s county jail administrators had spent $2.2 million - $40,000 apiece - for “disinfection robots.” The robots, outfitted with ultraviolet lights to kill germs, did not replace but augmented the hand-sanitizing of jail cells and intake areas.

We also determined that after nearly two years, 14 of these communities hadn’t been able to spend more than $100 million of their CARES Act allotment.

The documents we’ve obtained provide proof that even in the early stages of the pandemic, state and local governments were using federal “emergency” funds to supplement their budgets, particularly in the area of transit. The Badger Institute has several more stories to write on the subject.

It is clear the federal government made no reasonable calculation for how much state and local governments actually needed to weather COVID. And it appears the governor of Wisconsin, who has sole authority to dispense this funding, has done minimal assessment of the need for much of it.

On Nov. 19, the Connecticut legislature launched an audit of $60 million of CARES Act funding to all of the state’s 169 cities and towns, but only after an undercover sting and arrest of two city employees for allegedly stealing $636,000 in pandemic relief funds. As far as we can tell, it’s the only audit of its kind in the country. With trillions in circulation, it’s difficult to believe this was the only instance of misuse of funds in the country.

We believe both an audit of past spending and legislative approval of all future federal spending would provide taxpayers with the oversight and accountability they deserve.