Tag Archives: Budget

Walker Issues Budget Vetoes

You can read the full list of vetoes here.

I’m still reading through them, but they look good! It looks like he stuck to his promise to the conservative senators who held out and he took a few further steps to make this budget a little better.

Wisconsin Senate Passes Budget After Veto Promises

It’s still not a good enough budget, but it will be better is/when Walker makes his promised vetoes. Now that the budget and Foxconn bills are done, let’s get to work on the rest of the agenda.

The state Senate put the final touches Friday on a nearly $76 billion state budget that would pump an additional $649 million into K-12 education over the next two years after a handful of holdout GOP senators received assurances from the guv’s office on a package of vetoes.

The budget, delayed by more than two months, came down to the wire Friday as Majority Leader Scott Fitzgerald, R-Juneau, tried to persuade three of his Senate colleagues to support the two-year spending plan.

GOP Sens. Chris Kapenga, of Delafield; Steve Nass, of Whitewater; and Duey Stroebel, of Saukville, ended up joining most of their Republican colleagues as the budget cleared the Senate 19-14 without any amendments to the plan the Assembly approved earlier this week. Sen. Dave Craig, R-Big Bend, was the only Republican to join all Dems in voting against the bill.

That clears the way for the budget to head to Gov. Scott Walker, who the three Republicans said promised to a series of vetoes to win their support.

Assembly Passes Budget. Senate Conservatives Hold Out.

Heh.

The Assembly tonight passed the state budget 57-39, with five Republicans joining all Dems in opposing it.

It now heads to the Senate, where it faces an uncertain future as Senate Majority Leader Scott Fitzgerald says he doesn’t have the 17 votes he needs to pass it and three Senate Republicans circulate a list of demanded changes.

The Assembly vote came after nearly 11 hours of debate, the rejection of 19 Dem amendments and the adoption of a GOP amendment that makes what the authors call “technical” changes, including deleting a provision requiring DOT to install a railroad gate crossing in Winnebago County.

But in the end, Reps. Scott Allen, R-Waukesha; Janel Brandtjen, R-Menomonee Falls; Bob Gannon, R-West Bend; Adam Jarchow, R-Balsam Lake; and Joe Sanfelippo, R-New Berlin, all voted against the budget.

Good for my rep, Bob Gannon, for voting against this. This is not the kind of budget we expect from a Republican government. We don’t just want “well, it’s better than the Democrats would do.” We want a budget that actually moves the needle toward a better Wisconsin.

And good for my Senator, Duey Stroebel, for being one of the senators holding out for a more conservative budget. It’s almost frustrating because I can’t call and yell at my elected officials. They are already doing the right thing!

Three Senate Republicans are demanding a series of changes to the budget to win over their votes, including raising the income limit for the statewide school choice program and banning UW from spending money on diversity, sensitivity and cultural fluency training.

The three — Sens. Chris Kapenga, of Delafield; Steve Nass, of Whitewater; and Duey Stroebel, of Saukville — also want to move up the planned repeal of the prevailing wage on state projects to Jan. 1 rather than Sept. 1, 2018, and to delete language the Joint Finance Committee added to the budget that would pre-empt local regulations of quarries that produce material for road and construction work.

Vos Makes Empty Threat

Heh.

“We’re not going to be held hostage to individuals who have some kind of a wish list,” Vos said.

The state Assembly began debating the budget shortly after noon Wednesday. A vote is expected by the late-night hours.

Senate Republicans, who have yet to take up the budget, are expected to meet Wednesday to discuss it. Fitzgerald said Tuesday that he hopes the meeting will produce agreement among his members on changes to the budget that can be sent to the Assembly, in the form of an amendment, before it votes on it. That would prevent the Assembly from having to approve the budget a second time after a Senate vote, which has not yet been scheduled.

Vos laid down the gauntlet at Wednesday’s press conference, saying he won’t revisit the budget after Wednesday.

“Once we vote for the budget today, we are done with the budget process,” Vos said.

Ummm… if the Senate votes for a different version of the budget, it goes to conference and then both houses have to vote on it again. It’s not really up to Vos unless he is saying that the Assembly is willing to not ever pass a budget.

 

State Senate Works on Budget

Thank goodness that it looks like there is a valiant cohort of senators, including my own, who are trying to make this budget more conservative.

Spokespersons for Sens. Stephen Nass, R-Whitewater, and Duey Stroebel, R-Saukville, also confirmed they are not yet “yes” votes.

Nass spokesman Mike Mikalsen said the senator wants to see a full repeal of the state’s prevailing wage requirement take effect Jan. 1. Under the Joint Finance Committee budget, that repeal would take effect in September 2018.

Fitzgerald said he hopes to marshal the Senate votes to pass the budget this Friday.

Wisconsin’s conservative reformation draws to a close

My column for the Washington County Daily News is online. Here you go:

After weeks of delay and intra-party wrangling, the Wisconsin legislature’s Joint Finance Committee has passed the state’s biennial budget. It now heads to the Assembly, and then to the Senate, for final debate and passage. Assuming that it passes largely as currently written, which is expected, this budget is the muffled whimper that marks the end of Wisconsin’s conservative reformation.

When Wisconsinites elected Scott Walker as governor in 2010, they ushered in a new era in Wisconsin governance. Walker brought to Madison a governing philosophy steeped in the modern conservative movement. 2011 marked the beginning of a Wisconsin conservative reformation that was unprecedented in the state’s history.

In 2011, Walker and the legislative Republicans were aggressive and ambitious in advancing a conservative agenda. They touched the third rails of state politics and slew dragons. In a short span, Walker and the Republicans enacted transformational changes in Wisconsin including welfare reform, massive regulatory reform — especially in the DNR, expanding Second Amendment rights, expanding educational choice, freezing tuition at the University of Wisconsin and, of course, enacting Act 10. The hundreds of reforms made since 2011 have truly made Wisconsin better for citizens and businesses.

Voters have rewarded Republicans with electoral success. The voters defended Walker’s conservative agenda by reelecting him during the recall election and again in 2014. Republicans have maintained their majorities in both houses of the legislature for most of this decade as the conservative wing of both caucuses has grown. Even the Wisconsin Supreme Court has moved to be more conservative. Wisconsinites have shown their support for the conservative reformation time and time again at the ballot box.

But along the way, Wisconsin could not escape from its tradition of big, expensive government. While Republicans have been making tremendous progress in many areas, they have continued to spend more every budget. The current 2017-2019 proposed budget that the JFC just passed spends $76.02 billion. That is a 4.8 percent increase in spending over the previous budged.

The proposed 2017-2019 budget spends a full 23 percent more than the last budget signed by Gov. Jim Doyle. On a per capita basis, Doyle’s last budget spent about $10,868 per Wisconsinite while the new budget spends $13,131 per person — a 21 percent increase in per capita spending by state government in seven years. All of the Democrats’rhetoric about “austerity” and “cuts” are pure myth. The truth is that Wisconsin’s Republicans have increasedspending every single budget. To be fair, Doyle increased state spending 28 percent during his tenure. The Republicans did not increase spending as much as Democrats, but they were certainly not shy about increasing spending.

There are a few items in the new budget that conservatives will like. For example, UW tuition will continue to be frozen, but the budget spends more on UW to offset that. The state property tax will be eliminated. This saves taxpayers about $90 million per year. Able-bodies childless adults will be required to work or train and be subject to drug tests in order to receive Badgercare benefits. The prevailing wage law will be rescinded for state projects. The alternative minimum tax will be rescinded.

Those are very small potatoes in a stew full of massive hunks of new spending meat and bitter debt increases. The Republicans have seemingly lost the nerve to make the big, necessary reforms that Wisconsin still needs. The Republicans still control the entire law-making apparatus of government, but are about to pass a budget that is reminiscent of something from 2005. It spends more and tinkers around the edges, but is primarily designed to not offend anyone before the next election.

Where are the big ideas? Where is the cut or elimination of the state income tax? Where is the reformation of how Wisconsin builds and maintains its transportation infrastructure? Where is the fundamental reform of education? Where is an actual reduction in the size and scope of state government? Even the marginally more aggressive items that Walker suggested in his budget, like a “backto- school” sales tax holiday or a broad cut in income taxes, were rejected by legislative Republicans. Many of them went to Madison with a passion for Conservative reform, but now only have passion for getting reelected.

Rep. Bob Gannon (R-West Bend), who has said that he will not vote for this budget, was correct when he commented, “this budget is much better than a democrat governor or legislature would have proposed, but it is also not a conservative piece of work. Your government is in a growth mode.”

Indeed. And that growth is smothering the conservative reformation in its sleep.

JFC Passes State Budget

On to the Assembly.

The Legislature’s budget committee on Wednesday approved the package of tax provisions on Wednesday during its last day of work writing the $76 billion 2017-19 state budget, which was due on Walker’s desk more than two months ago.

The Joint Finance Committee rejected Walker’s proposal to reduce the lowest income tax rate that would save 70 percent of tax filers an average of $44 this year and rejected Walker’s proposal to include a $20 million boost to the earned income tax credit for the working poor, which would apply to 130,000 families.

The committee also approved a $74 million cut to the tax businesses pay for machinery and tools but won’t include Gov. Scott Walker’s proposals to cut income taxes or to increase a tax credit for the working poor.

The state’s alternative minimum tax, which applies to individuals making between $200,000 and $500,000 annually, also would be eliminated starting in 2019 under the committee’s action — amounting to a $7 million tax cut for those individuals. The tax is meant to ensure filers with large amounts of tax deductions or exclusions pay a minimum amount of income tax.

The package also eliminates the state’s Working Families Credit, which has given a modest tax credit to about 725 individuals making about $9,000 a year. And the committee rejected Walker’s proposal to exempt school supply shoppers from sales taxes during one weekend before the next school year starts.

I think this budget marks the end of the Conservative Revolution in Wisconsin. It is just another budget that nudges here and pinches there. It spends more than the last budget and gives targeted tax breaks to the politically favored. It lacks any significant reforms and fails to transform the state’s government. It is a caretaker budget that’s only purpose appears to be to not anger anyone before the next election.

The Republicans who run Wisconsin have lost their will to lead.

State Legislators Near Budget Deal

Meh.

Leaders of the state Legislature’s budget-writing committee said Tuesday they have a plan to resolve the most contentious area of the state’s overdue budget: how to fund Wisconsin’s roads and bridges.

The plan slightly trims Gov. Scott Walker’s road-borrowing blueprint, imposes a new fee on electric and hybrid vehicles and moves the state closer to collecting highway tolls, according to the committee’s co-chairpersons, Rep. John Nygren and Sen. Alberta Darling.

The great missed opportunity of this budget was to make dramatic reforms in the size and scope of government. The problem with the transportation budget is that Wisconsin still spends way too much – much more per mile than comparable states – and legislators refuse to make serious reforms in the way the state goes about building and maintaining our transportation infrastructure. Instead of tackling the fundamental problems while Republicans control the entire law-making apparatus of state government, they have chosen to nibble around the edges and kick the can a little further down the road.

As for the framework of a deal itself, the biggest item, symbolically if not fiscally, is the imposition of a new tax on electric and hybrid vehicles. While I abhor the notion of a new tax to just prop up bloated spending, this tax is conceptually palpable.

As I said, the big issue is the spending, but a secondary issue is that the funding mechanisms for transportation isn’t as applicable as it once was. Wisconsin funds transportation by the vehicle registration fees and by the tax on gas. The gas tax was intended as a proxy for usage. In general, the more gas one buys, the more they are driving, the more they are using the roads, the more they are paying for the roads. But electric cars (and hybrids to a lesser extent) subvert that proxy.

If we want to stick to the notion that people who use the roads more should pay more for them, and we don’t want toll roads, then we need to find a way to impose more taxes on those who use the roads but don’t buy gas.

I was struck by a quote in a biography of Robert Morris that I’m finishing up. In countering David Howell’s opposition to the Impost Law in his native Rhode Island, Morris said:

“As all taxes are unpleasant, some state will be found to oppose any which can be devised, on quite as good ground as the present opposition. What then is the Consequence?”

The same is true here. The drivers of electric cars and hybrids will protest a new tax on them, but opposition and clams of unfairness can be found in any tax. At some point, if we have decided that we collectively want to spend this money, we have to tax people to get the money somehow. It seems that spreading the burden out on as many users of the system as possible is the fairest way to do it.

Budget Deal?

Perhaps.

Gov. Scott Walker offered a change to his budget plan this week to Republican leaders feuding over how to pay for road projects in an effort to break a 20-day impasse, but it’s unclear if it’s enough to get both houses back to the negotiating table.

“There’s no deal yet. That’s for sure,” Senate Majority Leader Scott Fitzgerald, R-Juneau, said Thursday after he relayed to his members the governor’s offer to use $200 million slated for tax cuts for road projects instead, drawing down bonding levels.

But Walker’s offer did win support from Assembly Speaker Robin Vos, R-Rochester, and Assembly Republicans, who in letters to Walker and Senate Republicans on Thursday said they accepted the governor’s proposal and want to resume work on the 2017-19 state budget as early as next week.

[…]

Walker’s offer eliminates a $203 million tax cut that would instead be used to reduce or completely wipe out all new transportation bonding in the 2017-19 state budget, the governor told reporters.

Illinois Budget Hits Wisconsin

Heh.

A set of tax hikes recently approved in the Illinois state budget will reduce Wisconsin’s general fund by $51 million in the next state budget, according to a memo released Tuesday by the nonpartisan Legislative Fiscal Bureau.

The Illinois budget, enacted last week after a two-year stalemate by a legislative override of Gov. Bruce Rauner’s veto, includes a 32 percent tax increase that will bring in an additional $5 billion for the state. Because of an income tax reciprocity agreement between the two states, that means Wisconsin’s budget will take a hit.

The agreement has been in place between the two states since 1973. It allows people who live in one state and work in the other to pay income taxes only in the state in which they live. Because Wisconsin has more residents working in Illinois than Illinois does in Wisconsin, Wisconsin makes a payment to Illinois each year. In addition, Wisconsin residents who earn income in Illinois other than personal service income pay taxes on that income in Illinois, then claim a credit in Wisconsin.

Those two factors together will result in a $51 million reduction to Wisconsin’s general fund in 2017-19, according to the memo.

While unpleasant, some perspective is necessary. This $51 million represents about 0.07% of the state budget. It’s a rounding error, sadly. That’s how much our state government spends.

It’s About the Spending

My column for the Daily News is online. Here you go:

Gov. Scott Walker has taken the first step in Wisconsin’s biennial budget process by introducing his executive budget. Walker calls it a “reform dividend” budget that is able to boost spending thanks to the reforms enacted in earlier budgets. There is a lot to like about Walker’s budget, but it suffers from a fundamental flaw: it spends way too much.

The governor’s executive budget is the first step in what will be a lengthy legislative process before Wisconsin gets to a final budget. The Legislature’s Joint Finance Committee will begin working through the governor’s budget to add and remove their own priorities. The budget that comes out of the JFC will then be debated and passed by both houses of the legislature; the versions that pass each legislative house will be reconciled and sent to the governor; the governor will issue vetoes; the legislature will consider overriding vetoes; and then we will have a final budget. There is a long way to go.

Despite the fact that the governor and both houses of the Legislature hail from the same political party, there are some sharp differences of opinion regarding Wisconsin’s budget priorities. There have already been fierce intraparty clashes over transportation funding, debt load, potential tax increases, and other issues. The final budget will look substantially different than the governor’s budget proposal, but Walker has begun the conversation by making his priorities clear.

Signaling that Walker intends to run for reelection next year, his budget includes a lot of tax cuts and spending increases targeted at various interest groups. Most of the nearly $600 million in tax cuts comes from changes to the income tax and eliminating a portion of the state property tax, but the budget also includes several smaller targeted tax cuts.

The governor’s budget increases spending in a number of areas including an additional $649 million for K-12 schools and $105.2 million more for the University of Wisconsin System. There are also spending increases for tech schools, welfare, work force development, prisons, historical society, health services, transportation, the building commission, shared revenue and more.

Walker’s budget also includes some terrific reforms and accountability measures. The budget finally eliminates prevailing wage statewide, which will save taxpayers millions of dollars on needed work. It contains reforms to welfare and work force development designed to help people break the cycle of poverty and become successful in the work force. Under this budget, Wisconsin will self-insure its employees for health coverage. This is something that many large companies already do and will save taxpayers millions of dollars.

In what is garnering the most pushback, Walker’s budget increases spending for K-12 education and the University of Wisconsin, but does so with some added accountability. K-12 schools that have not already taken advantage of the tools given them in Act 10 to make reforms may not be eligible for the increased state funding. Much of the increased spending on UW will only come after UW makes reforms like offering a 3-year degree option.

But for all of the good it contains, one cannot escape the fact that Walker’s budget still spends too much. Indeed, despite the myth of “cuts” and “austerity” perpetuated by both political parties, Wisconsin has increased spending in every budget Walker has signed. This is despite the fact that Wisconsinites’ ability to pay has still not recovered from the Great Recession.

Let us look at the numbers. Gov. Jim Doyle’s last biennial budget for 2009-11 spent $61.9 billion. The first Walker budget spent $64.1 billion. Since then, Wisconsin’s biennial budgets have increased spending every time to $68 billion to $72.6 billion and now $76.1 billion. The budget that Walker just proposed spends a full 23 percent more than Gov. Doyle’s final budget. “Austerity,” my foot.

Meanwhile, over the same time period, Wisconsinites’ income has struggled. In 2008, the year before Gov. Doyle passed his last budget, the real median household income in Wisconsin was $57,348. It took a beating in 2009 after the Great Recession and dropped to $55,227. Since then, real median household income has dropped more before finally inching up last year. It still has not recovered to the 2008 level. The real median household income since 2009 has moved to $53,269, $53,110, $52,709, $52,370, $52,683, and finally in 2015, to $55,638. As you can see, the median Wisconsin household is earning $1,710 less per year since 2008, but being asked to pay for a state budget that spends 23 percent more.

If Wisconsin’s state spending largesse cannot be justified by an increase in Wisconsinites’ ability to pay, then perhaps the increased spending is being offset by an increase in population and new taxpayers? No. Since 2010, Wisconsin’s population has only increased 1.6 percent. And according to IRS migration data, the aggregate adjusted gross income for people leaving Wisconsin is greater than those coming in. Essentially, Wisconsin is losing higher-earners and retirees to low-tax states and replacing them with lower earners.

Gov. Walker and the Republicans deserve tremendous credit for the immensely beneficial and consequential budgetary reforms they have enacted and for managing the state’s finances in a responsible manner. Long gone are the Doyle budgets of massive deficits and illegal fund raids thanks to mature management of the state’s finances.

But Wisconsin remains a tax hell precisely because it remains a spending hell. For all of the good that Walker and the Republicans have done, they have not addressed this fundamental problem and it drags down everything from economic growth to work force availability to the everyday lives of Wisconsinites just trying to keep enough of their money to build a better life for themselves.

Walker Introduces Budget Proposal

Eh.

Gov. Scott Walker on Wednesday called for nearly $600 million in reduced taxes and fees along with significant new spending in areas where he made sizable cuts in the past as part of his $76.1 billion two-year budget proposal.

Total spending under the plan would grow by nearly $2 billion, or 4.2 percent over the previous two-year budget. Taxpayer-supported spending would increase nearly $600 million. The total number of state employees, who would receive two 2 percent raises and have their health care managed and paid for by the state, would increase by about 262 positions, including about 20 taxpayer-supported positions.

The budget includes several changes to state government, including proposals to self-insure all employees, centralize more agency administrative functions under the Department of Administration and eliminate printing and mailing requirements in several areas.

There’s a lot to unwrap in this proposal. There’s some good stuff in it, but my overall reaction is that it is a budget that still spends too much. Wisconsin is a high tax state because it spends too dang much. Not a single one of the budgets under Walker actually cut spending. They held back on the rate of growth, but every budget spent more than the last. Now this budget is increasing spending even more and “paying” for it with hopeful economic projections.

When does Walker actually cut spending and justify the hatred of his opponents? I’d like to actually see a real cut, but I fear that the only way I will ever live in a state that actually controls spending will be to move to one that does. It isn’t in the Wisconsin DNA.

Wisconsin Projects Surplus

It’s still just a projection, but it’s positive news as the legislature considers the next budget. Since there’s “extra” money, the taxpayers can expect a refund, right?

Wisconsin’s biennial budget picture got $714 million brighter Wednesday, with a projected deficit turning into a small surplus, according to the nonpartisan Legislative Fiscal Bureau.

Fiscal bureau director Bob Lang reported tax revenues are expected to be $455 million higher than what the Department of Administration projected in November. Also, spending in the current fiscal year that ends June 30 is expected to be $226 million lower — largely due to lower-than-expected Medicaid enrollment — and other revenues are expected to be $33 million higher.

That turns what was thought to be a $693 million deficit for the upcoming budget into a $21 million surplus, including all departmental budget requests.

It also adds more cushion to the state’s bottom line as it closes out the 2015-2017 budget cycle. Previously the net balance was about $40 million. The latest estimate has the state closing out the year with a $362.2 million ending balance.

Another Crisis Budget Averted

Brett Healy at the MacIver Institute provides a good reminder of just how much the budget situation in Wisconsin has improved.

As Wisconsin prepares to begin the next budget cycle, the state’s finances are in solid shape. While taxes have been cut repeatedly, state revenues grew 4 percent from fiscal year 2015 to FY16, a jump from $9.49 billion to $9.87 billion. Overall revenues are projected to continue growing by about 3 percent annually over the next biennium with a modest economic growth projection of 2.2 percent per year.

Wisconsin closed the books on the 2015-16 fiscal year with a positive balance of $331 million. “The State of Wisconsin completed fiscal year 2015-16 with a positive general fund balance of $331.0 million. With this total, we entered fiscal year 2016-17 with the fourth-largest opening balance in 16 years, all four coming after fiscal year 2010-11,” stated Department of Administration Secretary Scott Neitzel.

Total projected revenue in the next biennium is expected to increase by about $1.4 billion over the 2016-17 base. A healthy revenue stream means that Wisconsin is well-positioned for a deliberative, non-feverish budget debate in the coming months.

That’s a stark difference from just a few short budget cycles ago. Back in the Doyle years, Wisconsin lurched from one budget calamity to the next. In response to massive shortfalls between budgets, Doyle and his allies raised taxes, raided funds like the transportation fund, and used every budget gimmick they could to meet the state’s balanced budget mandate.

In the era of Walker, it seems those days are over.

Go read the rest of the piece. It’s long, but gives a great rundown of the landscape for the upcoming budget debate.

Budget Requests For Wisconsin State Agencies Don’t Add Up

The stage is set.

Wisconsin state revenues are projected to fall $693 million short of what state agencies have requested for the 2017-19 budget, Gov. Scott Walker’s administration said Monday.

The report from the Department of Administration is the first document to take into account budget requests submitted in September. Those requests will be scaled back when the governor releases his budget early next year, and further refined by the Legislature in the months that follow.

First, remember that the entire “shortfall” is because of the Department of Public Instruction’s request for a $707 million increase over the last budget. The DPI is an independent agency that does not report to the Governor.

Second, remember when the media and the Democrats, but I repeat myself, start screaming about Governor Walker “cutting” the budget, he is only cutting the increases. Much to my frustration, Governor Walker and the Republican legislature have not yet actually passed a budget decrease. Every budget has spent more than the previous one.

Wisconsin Finishes Biennial Budget Cycle with Surplus

Outstanding.

MADISON, Wis. (AP) — A new report shows the state finished the last fiscal year in the black.

Gov. Scott Walker’s Department of Administration released a report Monday showing the state finished the year that ended June 30 with $313.8 million left over.

The report says the state collected $15.1 billion in general-purpose revenue taxes, which include individual and corporate income taxes, sales tax and excise taxes. That’s up 3.8 percent from the previous year.

Expenditures total $15.3 billion, $103 million less than the $15.4 billion allocated for spending in the state budget.

State aid to municipalities and school districts accounted for 51 percent of spending. Aid to individuals and organizations represented 25.8 percent.

Walker Signs Budget with 104 Vetoes

As expected, Walker signed the budget before his announcement for president today. While he had a lot of vetoes, none of the major things – like school choice expansion, partial repeal of prevailing wage, etc. – were touched.

WAUKESHA — Gov. Scott Walker signed the state’s 2015-17 budget Sunday, including more than 100 line-item changes to the version the Legislature adopted swiftly last week after several weeks of Republican gridlock.

“The difference between Wisconsin and Washington is we actually get things done,” Walker said Sunday evening to a crowd just before he signed the next Wisconsin state budget, and about 24 hours before he announces his bid for the White House.

Before signing the $72.7 billion spending plan, Walker used his powerful veto pen to alter 104 items — nearly twice as many as he has previously.

Wisconsin Budget Heads to Walker’s Desk

Good.

The Assembly signed off on a $73.3 billion budget that repeals the prevailing wage for local projects and re-works significant pieces of the proposal Gov. Scott Walker sent the Legislature in February.

From one perspective, this budget is another strikingly conservative budget when compared to budgets of the past 50 years in Wisconsin. From another perspective, it still follows the Wisconsin “tradition” of spending too much, borrowing too much, and taxing too much.

Undoubtedly, Walker will want to sign this before he announces for president on Monday. We’ll see how much he uses his veto pen.

Wisconsin Republicans Come to Agreement on Budget

Well, sort of. There are three major issues of contention that have been holding up the budget and the Republican legislative leaders have come to enough agreement to move ahead. Let’s take a look.

Issue #1: Prevailing Wage

Under the agreement leadership reached, the Assembly will bring to the floor next week a bill introduced in that chamber to fully repeal the prevailing wage. Assembly Republicans will then offer an amendment to the bill that reflects a package Sen. Frank Lasee, R-De Pere, has put together. It would repeal the prevailing wage statutes for local governments and federalize it for state work. State thresholds currently on the books would remain in effect.

The jury is out on whether this is good or not. I’m worried that the repeal of prevailing wage has been separated from the budget. Several conservatives, including my own Senator, have said that they won’t vote for a budget without a repeal of prevailing wage. This removes it from the budget, but it is being taken up in tandem with the budget. That makes it more difficult, but not impossible, for those conservatives to stick to their guns.

As for the proposal itself, it is better than what Vos floated yesterday, but it still isn’t a full repeal. Eliminating prevailing wage for local governments would be huge and using federal standards for wage calculations would help make compliance easier and more sensible. This proposal admits how much money repealing prevailing wage would save, but doesn’t extend those savings into state projects. I’d take the deal if we can’t get to full repeal, but it leaves a lot of work left to be done.

Issue #2: Transportation

The transportation package includes $500 million in bonding with another $350 million the committee can issue as the Department of Transportation submits requests for work. That would still be a significant reduction from the $1.3 billion in borrowing Gov. Scott Walker proposed.

Speaker Robin Vos, R-Rochester, said the reduction would be felt fairly evenly between out-state projects and the Zoo Interchange. Still, work on the core of the Zoo would not be impacted. Rather work on the north leg would be delayed.

It’s an improvement over Walker’s budget, but it still borrows too much and spends too much.

Issue #3: Bucks Arena

The deal for taxpayer support of a new arena for the Bucks will be removed from the budget and taken up as a separate bill. This is fantastic. Yes, it makes it more difficult to pass a deal because now the Republicans have to get some of the Democrats to agree, but that’s a good thing. Any funding deal will be controversial and should be passed with bipartisan support. This allows the deal to be fully debated and vetted with everyone’s cards on the table.

 

 

The Transportation Test

My column for the West Bend Daily News is online. Readers of this blog will find some of it familiar. Here it is:

A gap in the budget cycle will try the Legislature


The Republicans in the Legislature were hoping for a reprieve. Gov. Scott Walker’s budget proposal had some big cuts in it along with some big borrowing that they were hoping to avoid. There were also some big new expenditures that they wanted to make, like $150 million or so in an arena for the Milwaukee Bucks. The projected tax revenues for the next couple of years were not going to be enough to cover everything they wanted to do and they were hoping beyond hope that the May projection would be higher to make their jobs easier.

The projection came in and it was not what they had hoped. They stayed the same as they were in January. The projection from the Legislative Fiscal Bureau is that tax collections will increase over the next three years, but not enough to cover the proposed spending.

This means the Republican legislators have some tough choices to make. Nowhere is this more evident than in the transportation budget.

There is a gap in the next budget cycle of $1.3 billion between what the Department of Transportation wants to spend and the tax revenue that is projected to be available. There are only three ways to deal with this gap.

The first way is to increase revenue. This means raising taxes. Transportation is funded with a segregated fund filled primarily with the gas tax and registration fees. Walker has said that he does not support an increase in registration fees and there does not appear to be any appetite for a gas tax increase in the Republican caucus. There has been some talk of some new taxes like a mileage fee or toll roads, but there is not any serious effort behind those either. In short, a tax increase seems to be off the table, which is a good and expected thing from this legislature.

The second way to fill the gap is with borrowing. This is what Walker has proposed with $1.3 billion in additional borrowing to fully fund transportation spending. Republicans in the legislature are pushing back on so much borrowing — especially in the face of an improving economy — and floating the idea of “only” borrowing a billion dollars instead. That is still far too much additional debt, but even at that it leaves a $300 million gap.

The third way to address the spending gap is to reduce the spending, which is where the real problem lies. Wisconsin needs a high-quality transportation system, but we simply spend more than we have to on it. To their credit, the last two Republican state budgets have improved the state’s transportation spending. According to Reason’s Annual Report on the Performance of State Highway Systems, which measures how much bang each state gets for their transportation buck, Wisconsin has jumped 10 spots to 15th place in the country since 2011, but it ranks 36th in spending per state-controlled mile. Wisconsin spends a whopping $226,901 per mile — way more than every other Midwestern state except Illinois. Iowa and Minnesota manage to spend less than $134,000 per mile.

Consider that if Wisconsin could reduce its spending per mile to just the same level as our neighboring states, there would be a surplus of transportation funding. To do this, the Republican legislators are going to have to take a hard look at the reasons for that bloated spending, but so far they are not showing much appetite for that. One of the most obvious causes of bloated spending are the prevailing wage laws that studies show inflate labor prices by as much as 45 percent, but the repeal of those laws died in committee last week thanks to the vote of newly elected Republicans and all of the Democrats.

The debate over the transportation budget is a microcosm of the entire budget debate. The Republican legislature does not want to raise taxes; is willing to add some debt as long as it is not too much; and except for a feisty minority of valiant conservatives, they lack the political will to enact real spending reform.

The next few weeks are going to be test of leadership for Republicans and a measure of how conservative they really are.

(Owen Robinson is a West Bend resident.)