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KING transfers

A resident enjoys views of the lake at the King Veterans Home in July, 2017. The state has transferred millions of dollars from the home to fund administrative salaries over the last decade. 

Money the state has made by caring for sick and elderly military veterans has increasingly funded administrative positions at the Wisconsin Department of Veterans Affairs, according to a nonpartisan legislative memo. 

Over the last 15 years, the state has increased the number of positions funded by the homes, from 814 in 2003-05 to 1,1473 in 2017-19, according to an Oct. 30 memo prepared by the nonpartisan Legislative Fiscal Bureau for Assembly Minority Leader Gordon Hintz, an Oshkosh Democrat.  

Positions at the Wisconsin Department of Veterans Affairs are funded in several ways, including general tax dollars and money the state generates from programs it operates. One state program that funds salaries is the veterans nursing homes. The state owns three homes in King, Union Grove and Chippewa Falls that care for hundreds of elderly and sick veterans. Though owned by the state, Chippewa Falls is run by a private contractor.

Revenue from the state’s veterans nursing homes directly fund salaries and also fund the Veterans Trust Fund, an account housed within the agency, created to pay for veterans benefits. The Veterans Trust Fund was originally sustained largely through a mortgage, personal and home improvement loan program for veterans but has faced significant structural deficits since the state closed the program in 2011. Now, the nursing homes are the primary source of its funding, which has then been spent on salaries.

In 2017-18, $5.9 million from the Veterans Trust Fund was spent on salary and fringe benefits for 74 positions at the agency. The state has also spent Veterans Trust Fund money on technology, office expenses and $72,000 for travel and training, according to the Legislative Fiscal Bureau.

The majority of the positions funded with veterans nursing home money are in the Department of Veterans Affairs secretary's office, which includes several politically appointed positions and in the agency's budget and accounting office. There are 17.5 positions funded with nursing home revenue that work directly with veterans: 5.5 positions in the cemeteries and funerals office and 12 that work in veterans claims services, which help veterans claim their federal benefits. 

Tens of millions of dollars have been transferred from the veterans homes over the last decade and the state is set to transfer millions more through 2020-21.

A Legislative Fiscal Bureau memo released in September showed $12.5 million was transferred from the homes in 2017-18 and $14.5 million was projected to be transferred in 2018-19. The state plans to transfer $10.3 million in 2019-20 and $13.2 million in 2020-21, according to the memo.  

A 2017 legislative audit showed $55 million had been transferred out of the King home from 2003-04 through 2015-16.

The practice of using nursing home revenue to fund other state agency programs has been used by both Democrats and Republicans over the years though it has accelerated under Gov. Scott Walker's administration. Democrats have asked for more legislative oversight over money transfers, while Republicans and DVA officials have argued it needs the flexibility to transfer money when needed.

Carla Vigue, a spokeswoman for the Department of Veterans Affairs said the nursing homes help fund agency positions because those employees help run them.

"A major responsibility of our agency is the administration of our top-rated veterans homes. While not providing direct care nor working on-site at our campuses, staff at the central office have major responsibilities with regard to the homes, as the LFB report points out. The portion of salaries funded with program revenues reflects each position’s duties related to homes administration," she said in an email Friday. 

"For instance, my position is partially funded by the homes. That is a reflection of the time I spend planning events for the homes, marketing the homes, and gathering and providing information about our homes to reporters, among other homes related work," Vigue said.

Using money originally intended for veterans nursing homes to fund salaries has garnered critics who say that money, which largely comes from Medicare and Medicaid reimbursements from the federal government, should remain at the homes.  

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Winnebago County Executive Mark Harris, a Democrat, has been a longstanding critic of the transfer policy and says the practice will eventually hurt veterans.

“The administration’s decision to end the veteran loan programs cut off the interest income to the Veterans Trust Fund. The decision to raid the reserves at King to replace that revenue instead of using general purpose revenue has made the situation worse,” Harris said in an email Friday. “The end result of these policies is that eventually the Veterans Trust Fund and the reserves at King will be exhausted, threatening the well being of Wisconsin’s veterans.”

Proponents of the practice say that money is being well-spent on benefits to help other veterans statewide, but according to figures from the Legislative Fiscal Bureau, the state has decreased at least one key benefit: a grant to help needy veterans with dental, vision and hearing care.

Each year since 2011, the state has allocated $970,000 for the grant. Of that amount, only $256,800 was spent on grants in fiscal year 2016-17. That is down from $488,600 that was spent on the grant in fiscal year 2011-12.

Candidates on the ballot in next week’s midterm election have given relatively little attention to state veterans policy aside from Gov. Walker’s announcement last week of a “Veterans Coalition” that supports his re-election. The coalition is led by Don Weber, founder and CEO of a health care logistics company in La Crosse that employs former DVA Secretary John Scocos.

Walker has emphasized that Wisconsin has more veterans’ benefits than any other state and has promoted veterans entrepreneurship through a series of grants throughout his tenure.

 

Katelyn Ferral is The Cap Times' public affairs and investigative reporter. She joined the paper in 2015 and previously covered the energy industry for the Pittsburgh Tribune Review. She's also covered state politics and government in North Carolina.