Senate Democrats, who criticized the budget bill at a press conference Wednesday morning, all voted against the bill. (Baylor Spears | Wisconsin Examiner)
The Wisconsin Senate voted to pass a two-year budget plan Wednesday that drastically cuts the state’s income taxes, decreases funding for the University of Wisconsin System and excludes many priorities that were originally included in Gov. Tony Evers’ budget proposal including paid family and medical leave and state funding for the Child Care Counts program.
The bill passed 20-13 following eight hours of debate with Sen. Steve Nass (R- Whitewater) and Sen. Rob Hutton (R-Brookfield) joining all of the Senate Democrats in voting against the bill. Republican lawmakers passed the bill with no significant changes, despite continued calls in recent days to increase funding for several items including Child Care Counts, public schools and the office of School Safety.
Nass said in a statement that he voted against the budget bill because it spends too much money and lawmakers didn’t have enough time to review the bill before voting. The JFC wrapped its work on the budget on Thursday night last week and senators didn’t receive an analysis of the 600-page bill until Tuesday afternoon.
“I doubt very many senators actually know the broader details of what they are voting on today since we have had slightly more than 24 hours to consider the detailed summary,” Nass said.
Joint Finance Committee co-chair Sen. Howard Marklein (R-Spring Green) touted the budget bill saying lawmakers worked to create a budget that focused on making “strategic” investments. He pointed to the $1.5 billion transportation budget, $3.1 billion for health services, $2.4 billion for capital projects as well as $125 million the committee included to combat PFAS, $525 million to invest in workforce housing and the $500 million increase in shared revenue that flows from the state government to local communities.
The increase in local government funding was approved as part of a deal reached by Republican lawmakers and Democratic Gov. Tony Evers. Other parts of the deal centered on Wisconsin’s education system, including an increase of $1 billion in state aid to public K-12 schools, a $97 million increase in special education funding, $50 million to improve reading and literacy for K-12 students and $30 million for school-based mental health services.
Marklein also boasted about the more than $4.4 billion in tax cuts included in the bill. Around $3.5 billion comes from a drastic change to the state’s income tax structure.
The cuts would reduce Wisconsin’s current four-bracket progressive income tax down to three brackets. The tax rate for Wisconsin’s top bracket, which includes single filers making over $304,170 and joint filers making over $405,550, would fall to 6.5% from 7.65%, a 1.15-percentage-point drop.
“The reason that we had a surplus is because taxpayers gave us more money than what we needed to fund government services, so I think it’s very appropriate that we turn some of that money back to the taxpayer,” Marklein said.
Wisconsin’s two middle brackets would be compressed to one that includes earners whose incomes range from $13,810 and $304,170 for single filers and $18,420 to $405,550 for joint filers, all of whom would have a 4.4% tax rate.
The tax rate for the lowest tax bracket — which includes single filers making up to $13,810 and joint filers making up to $18,420 — would fall to 3.50% from 3.54%.
Sen. Devin LeMahieu (R-Oostburg), who introduced a proposal in January to move Wisconsin to a flat tax system, said the tax cuts were a step in the right direction.
“Why are we punishing successful people in the state of Wisconsin and incentivizing them to leave the state rather than invest here in Wisconsin?” LeMahieu said. “We also need to remember that this is a tax cut for every taxpayer in the state of Wisconsin.”
Democrats, who pushed for tax cuts that were targeted at the middle class, said the cuts included in the bill disproportionately favored Wisconsin’s wealthiest taxpayers, at the expense of important state functions.
Sen. Chris Larson (D-Milwaukee) said the tax cuts would exacerbate the state’s existing wealth gap.
“We are actually using the $7 billion dollar surplus or, you are, with this budget to widen the gap between the rich and poor, even wider than it already is in our state,” Larson said. He added that the change would serve to create “problems for generations to come by cutting the tax rate for the richest to the degree where they are going to be seeing a larger benefit than those who are struggling the most.”
Wisconsin’s 11 taxpayers making over $75 million would receive a total of almost $20 million in cuts — about $1.8 million a piece.
Sen. Mark Spreitzer (D-Beloit) said Republicans left too many priorities unfunded in exchange for the tax cuts. He added that Democrats laid out a path for responsible tax relief, while investing in programs to support Wisconsinites, but Republicans rejected all of that.
“You traded child care for a tax cut for the rich, you’ve continued the trend of refusing to support our UW System and not only that you cut funding. You had a $7 billion surplus and you cut child care and higher ed,” Spreitzer said. “What are we even doing here?”
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Democrats’ 11 amendments rejected
Every Senate Democrat voted against the budget bill, saying Republicans “missed the mark” and that the $3.5 billion in income tax cuts could cause “generational harm.”
Democrats introduced 11 different amendments to the budget bill focusing on adding items to the bill that weren’t approved by the JFC, including funding for the Child Care Counts program, which helped keep child care providers in business throughout the state, money for the Office of School Safety, increased funds for Wisconsin’s public schools, accepting a federally funded Medicaid expansion, money for paid family and medical leave, legalization of recreational marijuana and the repeal of Wisconsin’s 1849 abortion ban. The amendments were all rejected by Republicans.
“I have presented a number of amendments that would make this budget better for the hard-working, ordinary people in the state of Wisconsin,” Minority Leader Melissa Agard (D-Madison) said. “Instead, the majority party has chosen to reject every single one of these motions… How will you and your colleagues go back and explain these things to the voters in your district?”
Sen. Jeff Smith (D-Brunswick) said during floor debate that the vote to not fund Child Care Count is “the worst mistake you can be making today.”
Spreitzer said the decision not to fund the Child Care Counts program would exacerbate the current child care crisis and block the state’s economic development. The program, which was started by Evers using federal pandemic relief money, provides assistance to child care providers to help them increase pay for their employees and keep parents’ costs manageable.
“We need more people in the workforce. Our child care providers are facing a crisis and if we don’t continue the Child Care Counts program and if people can’t find affordable, quality child care out there, they can’t go to work,” Spreitzer said.
Spreitzer emphasized that the price of the program — $340 million — is a small fraction of the state’s $7 billion surplus.
Another amendment would have restored portions of the education budget including a 60% special education reimbursement for Wisconsin public schools and increased funding for the UW System.
JFC Republicans decided to reduce UW System funding by about $32 million in an effort to eliminate diversity, equity and inclusion efforts on campuses. The university would be able to recoup the money, but only by developing a plan for how the money would be spent and receiving approval from the JFC.
Sen. Bob Wirch (D-Somers) said when Republican former Gov. Tommy Thompson was in office, funding from the state of Wisconsin composed 50% of the UW System budget; now the state only covers 18% of the UW’s costs.
“That hasn’t stopped us from micromanaging the UW, even though we only give them 18%,” Wirch said. “Where does that leave us nationally? We’re 42nd in funding state schools. What we’re doing here is starving a great institution.”
The budget bill passed by Republicans also declined to fund the System’s top capital project, a new engineering hall for UW-Madison.
Some Republican lawmakers pushed back on the message that the budget doesn’t make enough investments, saying instead that the unfunded portions are an example of compromise.
“I wish we would not have cut the county conservation staff funding. I don’t know why we didn’t fund the Office of School Safety. I don’t know why we didn’t fund the engineering building,” Sen. Romaine Quinn (R- Cameron) said. “But the point is this is a compromise, none of us gets everything we want.”
Quinn voted against the Democrats’ amendments to include increased funding for the Office of School Safety and money to fund the engineering building.
An amendment introduced by JFC co-chair Sen. Howard Marklein (R-Spring Green) included a list of “technical” changes to the budget bill, which were meant to make the legislative intent of the bill clear. The changes are meant to limit Evers’ ability to change items using his broad partial veto power.
Assembly to consider the budget Thursday afternoon
The Wisconsin Assembly is scheduled to vote on the budget bill on Thursday afternoon.
Assembly Speaker Robin Vos (R-Rochester) said in an interview with the Associated Press on Tuesday that substantive changes were unlikely. If the Assembly were to adopt changes, the bill would need to be sent back to the Senate to be voted on again.
If the Assembly passes the bill that passed the Senate on Thursday, the budget would next go to Gov. Tony Evers, who will have the opportunity to sign or fully veto the bill,or to make changes using his partial veto power before signing.
If Evers were to veto the full budget, the state would continue to operate under the 2021-23 budget, and the Legislature would return in the fall to revisit it. Evers had previously threatened to veto the budget in its entirety if the UW System budget was cut.
Sen. Agard said the budget bill approved by the Senate is full of “squandered opportunities,” and she supports Evers using the partial veto power to change the bill.
“I’m hopeful that Gov. Evers will consider using his veto pen really thoroughly in order to make sure that we have the best opportunity possible for people in Wisconsin,” Agard said. “We’ve seen in Wisconsin that our governor does have a very unique ability with his veto pen, and I look forward to seeing what he chooses to do.”
Wisconsin governors have particularly broad partial veto power that allows them to remove or reduce appropriations, though the power has been limited in recent years by rulings of the state Supreme Court that have said the governor is not allowed to strike singular letters to create new words or cut sentences to create new ones.
Evers hasn’t specifically indicated how he might use the veto power once the budget reaches him, but he’ll have six days to take action after the Legislature sends him its final version of the budget.
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