A Tale of Two Budget Proposals

Republicans in the Wisconsin Legislature and Gov. Evers are at odds again, this time over the 2021-23 state budget. They’re trying to decide how best to spend your tax money from the past few years.

Long story short, Republicans mainly want to use the money to relieve taxes and Gov. Evers’ camp wants to spend it on programs. Not too surprising.

The budget is one of the few instances where the Governor and Legislature really do have to compromise despite their ideological differences. The spending affects every person in the state and is, therefore (supposed to be) a collective effort from each branch of government.

The Budget Process

Here’s how the process works:

  1. In the fall before the budget is passed, state agencies begin submitting requests to the Governor for how much money they need for the next two years.
  2. The Governor then compiles these requests into an early draft for the budget.
  3. That draft goes to the bipartisan Joint Finance Committee–a mix of people from the state Assembly and Senate–who make that draft more realistic.
  4. This bill makes its way to the Assembly, and if approved
  5. The bill is voted on in the other house, the Senate.
  6. Finally, the Governor has to sign the bill to make it a law. The Governor can make small changes and still sign it.

So where are we at right now?

Step 6. The Assembly approved a budget that includes $3.4 billion in tax cuts on June 29th and the Senate passed that same budget on June 30th. The cuts are mainly a Republican agenda item and only a few Democrats voted for the budget in both houses.

Now it’s up to Evers.

The Republicans’ Proposal

The budget that just passed the Senate mainly reduces taxes. The largest portion–$2.7 billion–decreases income taxes by bringing the third income tax bracket down from 6.27% to 5.3%. That applies to people earning between $23,930 and $263,480 per year.

But, a projection by the nonpartisan Legislative Fiscal Bureau shows that 74% of the tax decreases would apply to people making more than $100,000.

The tax cuts also include $647 million in property tax relief for schools and technical colleges and $202 million to offset the costs for the repeal of the state business property tax that recently passed the Assembly and Senate.

Beyond tax cuts, the Republican-proposed-budget also

  • Ends a 8-year freeze on UW System undergraduate tuition, meaning the schools can now increase costs for in-state students
  • Increases UW System funding by $8.25 million and K-12 schools by $128 million
  • Provides funding for expanding I-94 in Milwaukee
  • Increases funding for broadband access by borrowing $125 million
  • Sets aside $1 million for clean water and PFAs mitigation efforts

Among other, more specific and niche things you probably don’t want to read about.

Evers’ Proposal

Gov. Evers wants to spend a lot more on government programs than the republicans. In his budget draft from February (Step 2!), he includes expanding BadgerCare under the Affordable Care Act that would trigger $1 billion more in funds from the federal government for the program.

It also includes more progressive spending choices like legalizing marijuana, increasing the minimum wage, raising capital gains taxes, non-partisan redistricting and criminal justice reform.

In direct contrast to the Republican proposal, Evers wants to

  • Keep the UW System tuition freeze in place
  • Increase UW system funding by $192 million and K-12 schools by $1.6 billion
  • Increase spending on broadband access by $200 million
  • Set aside $10 million for clean water and PFAs mitigation efforts

Now it’s all up to Evers, who will fully sign or veto the bill or make minor adjustments as permitted under state law. If he does veto it, the state would lose out on $2.2 billion in federal K-12 aid, which is bad. Real bad.

Time to compromise fellas.

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