STRONGER TOGETHER
Co-ops, Members Achieving Big Things
What’s October mean to you? We’ll concede your level of involvement with your cooperative must be extraordinary if your first answer is “Co-op Month.”
Yet, it could be the right answer and it’s certainly official. Orville Freeman, agriculture secretary under the Kennedy and Johnson administrations, signed a 1964 proclamation designating October as Co-op Month nationwide, recognizing the special contribution cooperative businesses make to their communities and the way cooperative member-owners have advanced the great American self-help tradition.
This year’s October Co-op Month theme is “Stronger Together,” and it’s well-chosen because cooperatives in Wisconsin and nationally have been busy, active, and emphatically together in defending the interests of their members.
Tanking a Gas Tax
When state government went hunting for revenue early this year, oil-company profits must have looked like a politically safe target for a brand new tax proposed in the budget bill introduced by Governor Doyle midway through February.
Just two problems: It wasn’t a tax on profits, and most voters believed that even if it had been, they would wind up paying it.
Beg your pardon, three problems: Cooperatives that sell motor fuels immediately understood that because the tax would be levied against gross receipts rather than profits, even a business that was losing money would have to pay it. Co-ops also recognized that as not-for-profit businesses they would have to pay the new expense right out of the earnings they share with their individual member-owners, based on patronage.
This was no small matter. Cooperative motor-fuel suppliers that are owned by and furnish product to local Wisconsin co-ops return large amounts of money to communities in this state. Last year, the biggest cooperative supplier of motor fuels in the United States returned more than $20 million to Wisconsin co-ops. That money in turn flows back into local economic development activities and the pockets of individual co-op members, whose consumer spending arguably represents the best possible kind of “economic stimulus.”
It wasn’t as if the state’s transportation fund couldn’t have used a revenue injection. But even if the proposal had actually been the advertised tax on “big oil,” and even if it miraculously weren’t passed on to consumers, there could be little confidence it would end up paying for the roads and bridges and transportation infrastructure for which the fund is supposedly reserved. Over the past three state budgets, the fund has been raided for more than $1 billion to bankroll state spending unrelated to transportation.
The situation was not unfamiliar. Wisconsin’s electric co-ops were veterans of the fight to protect utility energy-conservation fees against repeated raids to shore up other state spending. Indeed, three years after that battle was apparently won, the “public benefits” fees collected for the state by investor-owned utilities are increased and partially diverted under the current budget to pay district attorney salaries.
Reacting to the oil tax proposal, other interest groups began searching for ways to cut a deal and minimize their losses. Cooperative Network, the statewide trade association representing all forms of cooperative businesses, had a different response: “Why cut a deal? Why not just kill the thing?”
The Best Defense…
Television time in the small-market stations serving rural Wisconsin can be surprisingly affordable. As budget deliberations picked up in the Legislature, Cooperative Network appeared on TV and in the state’s agricultural newspapers with ads explaining that the so-called tax on big oil wasn’t what it seemed and in fact would siphon millions of dollars out of small communities already struggling with the battered economy.
In the unlikely event any lawmaker missed those ads, their constituents’ keen awareness of the issue would be demonstrated by thousands of Cooperative Network postcards arriving in Capitol offices. Ongoing, face-to-face contact between Cooperative Network staff and individual legislators clarified what was at stake.
To their credit, rural legislators paid attention. Several signed letters indicating they could not support the tax proposal because of the damage it would do to their constituencies. A difficult budget process became more so. By the time the budget bill passed the state Assembly, the tax had been heavily modified. By the time the bill passed the state Senate, the tax had disappeared.
Taking it National
Wisconsin’s oil tax battle was a combined effort of cooperatives of all kinds, with farm supply co-ops in the lead but others pitching in to defend the bedrock principle that their patronage-based dividends are best left to help grow the economy of rural communities.
The National Rural Electric Cooperative Association’s (NRECA) “Our Energy, Our Future” campaign focuses on one variety of co-op, but one with a broad presence in Heartland congressional districts and a vital interest in keeping electricity affordable.
There would be no electric cooperatives if rural America in the early decades of the 20th century hadn’t experienced life with electricity both unaffordable and unavailable. Many people in electric co-op governance even today are only one generation removed from the founders, and they aren’t sitting idly by while political decisions risk making electricity unaffordable all over again.
As Congress ponders legislation aimed at regulating Earth’s climate and many large utilities equivocate, the NRECA is prompting its members to ask hard questions. The central question is: Will government make reliable electricity an unaffordable luxury for Americans of modest means?
NRECA points out that even with no climate legislation, we’re going to pay more for electricity because of higher fuel costs and the rising expense of new infrastructure. The dilemma is many people can’t keep up even now. All over the country in recent years, bills in arrears have piled up at record levels. In the fall of 2007, NRECA notes, Xcel Energy, which serves parts of western Wisconsin and seven other states, had 72,000 customers facing power shutoffs for non-payment.
Proposals now before Congress will further raise the price of the electricity many already can’t afford. NRECA says the typical U.S. household spends about $1,400 annually for electricity, more than 2 percent of median annual income and more than 8 percent for lower income households.
Focusing on its expectation that climate legislation will have a heavier impact on co-op country—the Midwest, Great Plains, and the South—than on the East and West coasts, NRECA has energized its members to make more than 400,000 mail contacts to members of the House and Senate.
“Ultimately,” says NRECA, “consumers will be paying the bill for programs to reduce carbon emissions—they should therefore be considered equal stakeholders in policy debates that until now have included only environmental groups and industry.”
Healthy Choices
Alongside proposals to vastly increase the cost of producing and using energy, Congress is considering sweeping changes in U.S. health care insurance and delivery systems. Widespread apprehension over those initiatives moved some federal lawmakers this summer to suggest a national health care cooperative.
There are questions about whether such an entity would be a true cooperative—a creation of its members governed by directors elected from among the ranks of the membership—or a creature of government run by a federally appointed board.
But if the goal is real health cooperatives, they’re already here. Through joint purchasing by hospitals, cooperatives have been part of U.S. health care for a century. A more comprehensive approach is represented by Group Health Cooperative (GHC) of South-Central Wisconsin, which opened its doors in 1976. A not-for-profit managed health-care organization, GHC provides primary and specialty care and insurance.
Last fall, a survey by the National Committee for Quality Assurance ranked GHC best in Wisconsin and eighth in the nation for consumer satisfaction among 287 commercial health plans.
More than 88 percent of GHC members reported a high level of satisfaction with customer service. Eighty-seven percent were satisfied with quick access to care; 89 percent were happy with claim processing and more than 94 percent said they were satisfied with how well their doctors communicate with them.
The 61,000 members are served at five GHC clinics and the organization contracts for services at University of Wisconsin facilities and other area hospitals for specialty and inpatient care.
Newer to the scene is Farmers Health Cooperative of Wisconsin, formed in 2007 to use the group purchasing power of farmers and agribusinesses to obtain insurance coverage of a quality few farmers could afford individually. The cooperative’s 2,600 members choose from among a half-dozen health coverage options and a dental plan.
Can-Do Co-ops
All three issues discussed here are tied together by one thing: Co-op members who understand they are stronger together and grown-up enough to bury whatever differences they have on a particular issue and focus on the common good.
Co-ops of all varieties joined their farm-supply bretheren to defeat a gross receipts tax aimed straight at the patronage credits that bolster local economies. Electric co-ops with the backbone to raise hard questions are forcing proponents of climate legislation to confront economic issues many thought they could gloss over or brush aside. Members of Congress who imagined themselves remaking U.S. health care in six or eight months discovered cooperatives were in the game at least three decades ago, satisfying nine in 10 consumers through the efforts of locally employed caregivers and locally elected boards.
“Stronger Together” looks to be an appropriate theme for October 2009 Co-op Month. “We’ve got it Covered” might be good for 2010.—Dave Hoopman |
