Wisconsin’s Budget
Wisconsin Gov. Tony Evers has released his proposed 2025-2027 budget. In what has become a legislative tradition, Assembly Speaker Robin Vos declared Evers’ proposal “dead on arrival.” The next step in the biennial battle is for the Republican controlled Joint Finance Committee to write their own budget ignoring most of Evers’ work.
Gov. Evers’ budget proposes a $119 billion plan for investments in education, healthcare, public health, cleaning up environmental problems and tax relief for the lower tax brackets. There are a number of improvements for social services and policy issues that will be good for most Wisconsinites.
Wisconsin approves a two year (biennial) budget every odd-numbered year. The state actually has two budgets. The executive budget controls all state spending and taxes. The capital budget funds infrastructure projects. The executive budget also can contain social policy issues not necessarily related to the budget. This article highlights Gov. Ever’s executive budget proposal.
Unlike at the federal level, the state budget must be “balanced’ and the state can’t engage in deficit spending. This does not prevent the state from borrowing money or running into financial problems. But, at least on paper, borrowing must be accounted for in the budget. Also unlike the federal process, if a budget isn’t agreed to by June 30, the prior budget spending levels are continued. This feature of Wisconsin law prevents the political circus of government shut downs.
Another unusual feature of Wisconsin budgeting process is that in the end the governor can use his extraordinary line item veto power to make significant changes. He can veto the entire budget or change wording and numbers. But he can not replace items the legislature has cut entirely.
There are a lot of good things for working families, students, farmers, and small business owners in Gov. Evers” budget. The official summary (entitled “State of Wisconsin Budget in Brief”) is 167 pages. In this article I discuss a few of the major items. Next week I will discuss more of the numerous details that will benefit most of us.
Gov Evers has declared 2025 the “Year of the Kid” and a significant amount of this year’s 20% budget increase is about funding things important for the well being of children.
Education: Coming from a teaching background, Evers has battled with the Republicans over inadequate K-12 funding long before becoming governor. This year he is proposing $3.1 billion in funding to make up for years of shortsighted disinvestment in the most important of all public goods. There is an old saying, “If you think education is expensive, think of the cost of ignorance.”
But schools, books and teachers are only part of the story. Children who are hungry don’t learn well. So Evers proposes universal free breakfast and lunch (as Minnesota has done). He is also asking for money to improve and expand metal health services in public schools. That child hunger or mental health are issues at all is deeply disturbing. Obviously our society has much bigger problems than school funding.
Affordable Childcare: Governor Evers is proposing to make Childcare Counts, the successful pandemic emergency program, permanent. Childcare is too expensive for many working parents. This state subsidy goes directly to childcare providers so that they can pay their employees a fair wage while keeping costs affordable. The Wisconsin Department of Children and Families says without this help 25% of childcare providers may go out business and others will have to raise fees. Given that lack of affordable childcare impacts worker shortages, many businesses and the entire economy, perhaps $480 million is a small price to pay. For these, and other reasons, (like caring about children) most modern nations have national free or affordable childcare. But we are a backward country.
Healthcare: Accepting Medicaid expansion would allow Wisconsin to cover more people with health insurance while gaining $1.9 billion in federal aid. But the Republicans in the legislature have blocked this numerous times in the past. Forty one states have accepted this sensible program. But Wisconsin is racing to the bottom with eight other, mostly deep south states. When your state is on par with Alabama and Mississippi you should know something is wrong.
Gov, Evers’ budget also includes measures to lower prescription drug costs, expand mental health services and creates an innovative program to audit insurance companies for excessive claim denials.
Environmental impacts: Clean, safe drinking water is essential for healthy children and everyone else. But Wisconsin has many problems with water contamination. Gov. Evers’ budget has funding to address PFAS (“forever”) chemicals that have been found in a number of municipal water supplies (Madison, Milwaukee, Wausau, Eau Clare and some smaller communities). According to the DNR, 71% of shallow private wells in rural Wisconsin have PFAS contamination. Also the decades old problem with lead pipes has still not been fixed and the budget includes funding to continue this effort.
These are just two of many environmental issues. Wisconsin used to lead the nation in environmental stewardship. But those days are long gone.
Tax “relief”: Taxes are the dues we pay for a civilized society. So we should not consider them a “burden” from which we need “relief.” But these are the terms used by politicians from both parties. So cutting taxes figures in every budget regardless of which party is in power.
This year the difference is Gov. Evers is attempting to add some fairness to the tax “burden.” He is calling for $2 billion in tax adjustments to lower property taxes, exempt some everyday items from the sales tax, and cut income taxes for middle and lower income workers.
The governor proposes a new individual tax bracket for incomes over $1 million. Single and married filing jointly would pay 9.8% on income over $1 million ($500,000 for married filing separately). The new tax bracket is estimated to raise $1.3 billion in the next two years. The current top income tax rate is 7.65% on income over $420,420 for married filing jointly or on income over $315,310 for single people.
The budget also proposes $1.3 billion in property tax relief, eliminating the tax on cash tips, enhancing the Earned Income Tax credit, and doubling the personal income tax exemption. This exemption increase would help many middle and lower income people and is estimated to reduce their taxes by $225 million over two years.
These budget improvements are unlikely to survive the Republican legislature. But they are the opening salvo of the budget battle.