Boots & Sabers

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Tag: Budget

Assembly Passes Budget

Moves on to the Senate.

MADISON – Assembly Republicans approved a state budget late Tuesday that would cut taxes by more than $3 billion over two years, clear the way for an expansion of I-94 in Milwaukee and end the 8-year-old freeze on in-state tuition at University of Wisconsin schools.

 

Their $87.5 billion plan passed 64-34, with four Democrats joining all Republicans in support. The Republican-run Senate is to take it up Wednesday.

 

The Legislature’s version of the budget would increase spending by 5.4% over current levels. Democratic Gov. Tony Evers sought to spend about $3.7 billion more than lawmakers.

 

The Republican version of the budget has at its heart a series of tax cuts.

 

It would reduce income taxes by $2.75 billion over two years, primarily by lowering one tax bracket from 6.27% to 5.3%.

The Legislature takes up the budget

My column for the Washington County Daily News is online and in print. Here’s a part:

This columnist has been following Wisconsin’s budget- making for over two decades and two things really stood out this time. First, there is no real spending restraint in Madison, but there is a marked difference between the parties.

 

The current Republican version of the state budget spends $87.5 billion over the biennium. That is a $6.05 billion, or 7.4%, spending increase over the previous budget of $81.5 billion. The previous budget was a 7.8% spending increase over the budget before that. Throughout that period, the Republicans had strong majorities in the Legislature.

 

By contrast, Governor Evers’ budget proposal would have spent $92.2 billion, or 12% more than the previous budget. It is safe to say that while both parties eschew the frugal mores of most Wisconsinites, the Republicans are slightly less extravagant.

 

On the other hand, Republicans do support real tax cuts while Democrats do not. In the current fiscal environment, the increase in spending in the state budget is bolstered by borrowing and the fact that tax collections are at record highs. To write that another way, the state government is taxing Wisconsinites more than ever. The Republican budget gives most, but not all, of those record tax collections back to the people who pay them. The Democrats just want to spend or redistribute the money.

 

The other aspect of this budget cycle that drew attention is how little actual negotiation took place between the Legislature and the executive. The fact that Governor Evers and Republican leaders do not have a working relationship has been evident for some time. In the previous budget cycle, there was at least some attempt at real discussion. This time, it was evident that Evers was unwilling to even pretend to negotiate. His method of negotiation is to wage rhetorical war through the media without ever picking up the phone.

Republicans add massive tax cut to budget

Here is my full column that ran in the Washington County Daily News last week:

Bolstered by new financial projections that show a massive influx of taxes, the Republicans on the Wisconsin’s legislative Joint Finance Committee voted to do the right thing – give the money back. More precisely, they voted to never collect the excess taxes in the first place by lowering tax rates for the people paying the bills. Especially after a very tough year for so many Wisconsinites, the Republicans’ respect for taxpayers is laudable.

 

The largest proposed tax cut is a very simple cut in the state income tax for most taxpayers. Wisconsin is one of 41 states that continues to impose an income tax. Wisconsin’s income tax is progressive in that it is divided into four brackets and taxes at progressively higher rates as people’s income increases. The Republicans focused their income tax cut at the largest bracket.

 

Under the Republican tax cut proposal, individuals earning between $23,930 and $263,480 and married couples earning between $31,910 and $351,310 would see their tax rate reduced from 6.27% to 5.3%. That bracket covers the majority of Wisconsin’s income taxpayers and directly impacts the middle class by letting them keep more of their hard-earned money. The proposed income tax cut would allow a large percentage of taxpayers to keep a total of $2.75 billion of their money instead of sending it to Madison for politicians to spend. That is $2.75 billion that will be put into Wisconsin’s economy and directly benefit families and businesses throughout the state. The second tax cut that Republicans put into the budget is a reduction in property taxes by $650 million over the biennial budget. This tax cut proposal is more of a shift than a real tax cut. The budget would push more state taxpayer spending to technical colleges and local schools through the state equalization aid formula but would require those government units to reduce their property taxes by a total of $650 million. The budgetary maneuvering would not reduce aggregate state and local government spending, but it does secure federal COVID relief money for schools while also extending a property tax decrease for taxpayers.

 

All told, the two tax cuts inserted into the budget add up to $3.4 billion is tax relief for a wide swath of taxpayers. According to lawmakers, the average Wisconsin taxpayer would see $1,200 in tax savings over two years. That is $900 in income tax savings and $300 in property tax savings. That is real money left in the pockets of real Wisconsinites.

 

The Republican tax cuts were added to the proposed state budget after all of the state government’s government programs had been funded and spending increased. The Republicans voted to increase spending on schools; on higher education; on law enforcement; on shared revenue; on almost everything. The Republicans are advancing a budget that increases spending throughout state government and spends more overall than any other budget in the history of the state of Wisconsin. All of the taxpayers’ commitments have been met – and then some.

 

Yet, despite unprecedented spending, the state is still projected to collect record high taxes. The state government is already going to collect all of the taxes it needs to pay for the record spending. All the Republicans are doing is what any honest cashier would do when a customer accidentally hands them a $20 instead of a $10. They are giving the taxpayers their change back.

 

The Democrats, on the other hand, want to take those record taxes and spend them or redistribute them. In their world view, every dollar spent by a politician in Madison is better spent than if it were spent by a farmer in Allenton or a teacher in Brillion. It is a philosophy rooted in arrogance and avarice.

 

For this reason, Governor Tony Evers is likely to use his powerful line-item veto to veto part or all of the tax cuts. If he does veto the tax cuts, the money will still not be appropriated to spend on anything. It will merely be collected by the government to create a surplus for a future legislature and governor to spend or return. Evers would be taxing excess tax money from taxpayers for no other reason than because he could.

 

Wisconsinites can do far more good for their families, businesses, and churches with $3.4 billion and any politician in Madison ever could. Let us hope that Governor Evers cares more about Wisconsinites than some of his fellow Democrats in the Legislature who voted against the tax cuts.

 

What to do with a surplus?

My column for the Washington County Daily News is online and in print. Here’s the gist:

As Democrats salivate over spending a projected tax surplus, the families paying for that surplus will also be having their budgets squeezed by raging inflation. It is a budgetary pincer that will squeeze the middle class at a time when the middle class is just recovering from a pandemic.

 

The decisions for the Legislature should be a very simple one. If the state collects more taxes than it planned to, then give it back to the people who paid it. They should not redistribute it to people who did not pay the taxes and they should not spend it on things that make politicians feel good about themselves.

 

Just give it back. It’s not yours.

Lawmakers have unique opportunity with state budget

As the JFC goes to vote today, here’s my full column that ran in the Washington County Daily News earlier this week.

After months of public hearings and discussion, the Legislature’s Joint Finance Committee is set to take their first votes on the state’s biennial budget this week. The budget is the single most important piece of legislation that state politicians pass. This is also the state budget that precedes the next election for governor and will set the tone for that race.

 

The budget process is always fraught with emotion and heated rhetoric. It should be. Wisconsinites work hard for their money and politicians should not be cavalier about seizing and spending it. It is going to be a raucous couple of months in state politics.

 

Wisconsin’s budget process typically begins with the governor soliciting proposals from state agencies and submitting a budget. From there, the JFC, composed of members from both parties from both houses of the Legislature, whittles down the budget to a version that is sent to each house of the Legislature. Once the Assembly and the Senate debate, amend, and pass an identical version, the budget is sent to the governor for signature. Wisconsin’s governors have the most powerful veto power in the nation and often carve up the budget with selective vetoes. Finally, the Legislature will vote to override, or not, selective vetoes and the budget becomes law. When Governor Tony Evers gave the Legislature his proposed budget in February, it was riddled with hundreds of policy items from legalizing marijuana to expanding Medicaid. Democrats and Republicans like to add policy items to the budget because the budget is the only piece of legislation that must be passed. By adding in pet policy goals, politicians can use the budget as a bargaining chip to get their pet policies into law.

 

The first vote by the JFC will be to strip the budget of nonbudgetary policy items. This is an important first step and the Republicans must be thorough in purging policy items from the budget. While it might be tempting to add Republican policy ideas as bargaining chips, Republicans must keep the budget language to the bare minimum necessary to fund state government. Evers has proven untrustworthy in negotiations and any unnecessary words in the budget bill could turned against them with his veto pen. The Republicans must minimize that risk.

 

As the JFC moves to the next step of setting budget priorities, they should wait until the governor decides where to spend the windfall from the federal government. Governor Evers is deciding where to spend billions of dollars from the COVID-19 federal spending spree on top of the billions that local and state governments have already received. Once all of the federal taxpayer money is allocated, state lawmakers will have a better idea of where to allocate state taxpayer money.

 

This is a unique opportunity for the legislature to offset state spending with federal dollars. For example, the most recent federal spending bill sends over $25 million to Wauwatosa, $405 million to Milwaukee, and $25 million to Green Bay.

Despite being closed for most of the year, Milwaukee Public Schools received almost $800 million from federal taxpayers. The state government has received $210 million in infrastructure grants. Since all of these government bodies are flush with federal taxpayer cash, state lawmakers should reduce the amount that state taxpayers fund them by comparable amounts.

 

With so much federal tax money flowing into local and state governments, state lawmakers could save state taxpayers billions of dollars and send them money back to them in the form of substantial tax relief. In effect, state lawmakers could leverage the federal windfall for economic stimulus through meaningful tax cuts. Meanwhile, all state and local government priorities are completely funded.

 

Republicans have an opportunity to pass a budget that will make a meaningful difference in the bank accounts of taxpayers and business owners throughout the state. Meanwhile, they will define Republican priorities as voters begin to think about who will lead the state in 2023 and beyond. The incredible increase in federal spending is foolish and destructive to our nation, but at least state lawmakers can salvage something good out of it.

Lawmakers have unique opportunity with state budget

My column for the Washington County Daily News is online and in print. It’s budget season! Here’s a part:

This is a unique opportunity for the legislature to offset state spending with federal dollars. For example, the most recent federal spending bill sends over $25 million to Wauwatosa, $405 million to Milwaukee, and $25 million to Green Bay. Despite being closed for most of the year, Milwaukee Public Schools received almost $800 million from federal taxpayers. The state government has received $210 million in infrastructure grants. Since all of these government bodies are flush with federal taxpayer cash, state lawmakers should reduce the amount that state taxpayers fund them by comparable amounts.

 

With so much federal tax money flowing into local and state governments, state lawmakers could save state taxpayers billions of dollars and send them money back to them in the form of substantial tax relief. In effect, state lawmakers could leverage the federal windfall for economic stimulus through meaningful tax cuts. Meanwhile, all state and local government priorities are completely funded.

Budget Process Continues as Evers Pouts

Evers doesn’t play nice with others.

MADISON (WKOW) — Gov. Tony Evers said Thursday he has not been in talks with Republican leaders in charge of the legislature while GOP leaders on the committee that writes the budget said they could start taking votes on removing items from Evers’ budget as soon as next week.

 

[…]

 

“If the question is specifically ‘is there room to negotiate on tax increases, the answer to that would be ‘no,'” Born said. “There’s a lot of stuff in this budget that are areas of agreement, things we can work on, agree with, and negotiate if that’s what people want to do in the governor’s office but tax increases is absolutely not one of them.”

Evers Budget Includes Over $1.1 Billion in Tax and Fee Increases

Nothing says, “I care about Wisconsinites who lost their livelihoods in a pandemic” like jacking up taxes.

In summary, the changes included in the Governor’s budget would increase net taxes by $1,020,728,000 ($464,824,000 in 2021-22 and $555,904,000 in 2022-23) and would increase net fees by $17,162,700 ($7,172,900 in 2021-22 and $9,989,800 in 2022-23). In addition, it is estimated that measures included in AB 68/SB 111 to enhance the collection of current taxes would generate an additional $78,031,700 ($38,745,800 in 2021-22 and $39,285,900 in 2022-23).

Evers Spends Projected Surplus, and Then Some

Jinkees

Gov. Tony Evers’ biennial budget proposal fulfills many Democratic priorities with big spending increases, but Republicans have raised concern that the $91 billion proposal would almost entirely drain the state’s coffers — by close to $2 billion — and leave Wisconsin in a more precarious financial position down the road.

 

The state is projected to have a nearly $2 billion surplus in its general fund by the end of the year, but Evers’ projected budget, which includes $1.6 billion in new tax revenue from marijuana, big manufacturers and the wealthy, still reduces that to around $143 million by mid-2023.

Remember that the surplus is just projected. It may be more. It may be less. But either way, Evers wants to spend it all and raise taxes to boot.

And this is possibly the dumbest statement I’ve read today:

“It’s not necessarily inappropriate to draw down a big chunk of your reserves when you’re facing a once-in-100-years pandemic,” Wisconsin Policy Forum research director Jason Stein said. “You don’t have the reserves just to put them on a wall and admire them, but at the same time … you have to think about what’s going to be sustainable for the state budget because some of these challenges are not just going to evaporate either.”

A projected surplus is not “reserves.” Stein suggests that the surplus is some sort of rainy day fund. It is not. It is projected surplus revenue because tax collections were higher than expected and/or spending was less than expected. That money could be rolled into the next budget, used to pay off debt early, or it could also be given back to the people because we didn’t need to spend it. Evers just wants to spend it.
Then Stein goes on to suggest that it might make sense to spend it because of the pandemic. But the mere fact that we have a project surplus tells us that the government has sufficient money for expenses without drawing from any rainy day fund. While the pandemic impacted thousands of people and businesses, the government did just fine. The fact that we had a pandemic should not be used as a lazy excuse for more government spending.

Make Wisconsin a destination state

My column for the Washington County Daily News is online and in print. I continue to charge the windmill of Wisconsin government’s spending problem. Here’s a part:

Wisconsin cannot reduce the cost of government and, subsequently, the cost of living if it does not reduce government spending.

One wonders where all of that spending is going. Both states have world-class public universities, but Texas state taxpayers spend less than 50% per capita on them. Both states have a good transportation infrastructure, but Wisconsin state taxpayers spend 13.8% more per capita. Wisconsin is spending almost 28% more on K-12 education for marginally better results, but the student demographics are drastically different.

Generally, as one goes through the state budget, Wisconsin spends much more on almost everything than other states. It is difficult to see any additional value for all of that additional spending. “Value” should be the word that dominates the upcoming state budget debate. If taxpayers are going to spend 10%, 25%, or 50% more on something than other states, then state politicians should be able to articulate how taxpayers are getting 10%, 25%, or 50% more value for the dollars spent. If they can’t, then the spending is just being wasted.

The upcoming budget session is another opportunity for Wisconsin policy-makers to make the choices that will determine if Wisconsin will ever be a destination state for businesses and workers. If they choose to keep increasing spending because it is the path of least resistance, then businesses and people will continue to relocate into other states and Wisconsin will miss this historic opportunity when businesses are going to be moving more than ever.

State of Wisconsin Projects Surplus Despite COVID

Well, this is surprising.

The Legislative Fiscal Bureau on Monday reported state tax collections totaled more than $17.5 billion in the 2019-20 fiscal year, a 1.1% increase from the previous year. That’s about $112.6 million, or only 0.6%, less than projected in January, according to the state Department of Revenue.

[…]

A final report released in October will include expenditures and revenues, but Lang said he doesn’t anticipate any major changes and the state will likely end the fiscal year with “a relatively large balance.”

This is good news, but it is not the whole story. The budget impacts will be felt for some time.

“I would say that while all this is good news, it doesn’t mean that there aren’t tough days ahead,” Nygren said. “If you don’t do additional reductions between now and the end of this second year of the budget, all the negative impacts will fall into the next budget. … My opinion is it’s better to make those tough decisions now.”

The full impact of COVID-19 remains to be seen in Wisconsin, including on businesses and individuals drawing unemployment. Last week, the Department of Workforce Development reported nearly 500,000 claimants have been paid more than $3.5 billion in unemployment benefits since March 15.

More State Budget Cuts Are Necessary

More, MUCH more, will be necessary.

MADISON, Wis. (CBS 58) – About $70 million in budgetary spending cuts have taken effect across several agencies as the state tries to manage the likely long-term economic effects of the COVID-19 pandemic.

The largest cut is with the UW System which saw a $40.8 million budget reduction. The next largest cut was for the Department of Health Services which saw a cut of $7.5 million.

The Evers administration’s planned actions were initially praised by Republicans, but have since drawn some criticism.

“After claiming that he would cut state operations spending by 5%, the plan released by Governor Tony Evers […] shows actual cuts to operations spending of less than 2.5%,” Rep. John Nygren (R – Marinette) said in a statement released this week. “Making matters worse, nearly two-thirds of the cuts are being shouldered by the UW System. While Gov. Evers’ initial announcement was promising, this additional information leaves more questions than answers.”

Tax Cut Heads to Evers’ Desk

Remember that we do not have a tax surplus… yet. We have a projection that says that we will have a surplus at the end of the budget next summer. Bearing that in mind, this is a good bill. It takes a projection that says that the state is collecting more taxes than it needs and reduces the taxes accordingly. If the projection is wrong and we head into deficit, then they can adjust taxes the other direction. To my point in a column a few weeks ago, however, this is not spending money we don’t have. It isn’t spending anything at all. It is simply having the government collect LESS so that it does not run as much of a surplus over the term of the current budget.

The tax cut bill would would deliver an average reduction of $106 for most qualifying filers. Married couples who file jointly would see an average cut of $145; all other filers would see an average reduction of $81. The bill also would reduce taxes for manufacturers by nearly $45 million by exempting their machinery and tools from property taxes and trim state debt by $100 million.

This is a good bill. It is unfortunate that Governor Evers will likely veto is so that the government can overcharge for their services and spend more.

Taxes Up. Spending Up More.

Despite record taxing, the state will still not have enough to cover it’s projected spending. It’s the spending, stupid.

Wisconsin had the highest budget reserves in 40 years this June largely due to a spike in corporate tax revenues, according to a report from the nonpartisan Wisconsin Policy Forum. However, the report says the state’s reserves are still slightly below the national average and the current state budget will spend $800 million more than the state is projected to take in by 2021.

The analysis looked at Wisconsin’s Annual Fiscal Report that provides data on state taxes, spending and reserves. It shows the state had $1.7 billion in budget reserves after taking in more than $17 billion in tax revenues during the prior fiscal year, which ended June 30. That was a year-over-year increase of 7.4 percent and the largest annual percentage increase since 2000, according to the report.

Jason Stein, a researcher for Wisconsin Policy Forum, said the overall increase in the state’s tax revenues was driven largely by a spike in the amount of Wisconsin corporate tax revenues. He said the state collected more than $442 million in corporate taxes.

“Corporate taxes, especially, rose almost 50 percent,” said Stein. “So, that was the most they have risen, the fastest rate since 1964. So, that’s really an exceptional change. And it was due to a couple things and one of them was due to that federal tax law.”

Give. It. Back.

There are only three acceptable uses for a government surplus. 1) return it to the taxpayers; 2) pay down debt; & 3) put it in the rainy day fund. In this case, the rainy day fund is already well funded. In this case, they should just give it back.

Wisconsin collected $76 million more in taxes than anticipated last fiscal year, prompting lawmakers from both parties to claim credit for a sign of positive economic growth in the state.

The nonpartisan Legislative Fiscal Bureau on Monday announced general fund tax collections for the 2018-19 fiscal year, which ended June 30, were up 7.4% from the previous year.

The $17.3 billion collected in taxes was $75.5 million, or 0.4%, more than anticipated in May when the state was finalizing its 2019-21 budget.

Oh, and tax cuts work… just sayin’.

Evers Signs Budget

The MacIver Institute has a good rundown of the budget after Evers’ 78 line item vetoes. Here’s the short version: Evers got 80% of what he wanted, so he signed it with a few tweaks. Big-spending Republicans got 80% of what they wanted. Conservatives got nothing.

Politically speaking, this was a disaster for Republicans. They managed to piss off conservatives in their base with a big-spending budget without appeasing or winning a single vote from the other side. Meanwhile, Evers walks away with a 80% win and can continue to demonize Republicans for not giving him everything.

Governor Evers Considers Budget

Frankly, I hope Evers vetoes the entire thing.

Evers received the budget on Friday. He has until July 5 to decide what to do.

The Journal Times asked Evers’ office about specific provisions in the budget regarding transportation and education, along with several Racine County-centered provisions. Evers’ office did not specifically respond.

Evers’ office stated that the governor’s “team is reviewing the Legislature’s changes to the budget, and the governor looks forward to receiving the biennial budget bill as soon possible.”

The worst case scenario is that Evers vetoes out the few good things in this budget, like the tax cut, and leave the rest of the crap (massive spending increases, fee increases, etc.) in place. Wisconsin would be better off if Evers vetoes the whole thing and we revert to the previous budget. And then, perhaps, the Republicans will realize that their duty is to their constituents and not Evers and the Madison swamp.

—————————

One more thing… this is a big part of the problem:

“The reality is he’s the governor for four years, so you can either choose to argue 24/7, or set aside things that would cause arguments and focus on the things where you can hopefully find that middle ground,” Vos said.

What an incorrect vision of the job of the opposition leader. If Speaker Vos is just going to lead the Republicans to “set aside things that would cause arguments,” then what is the point? The entire point of having more than one party is that they DISAGREE and ARGUE about it. If Vos is just going to do his job with the goal of avoiding arguments, then he is the wrong person for the job.

 

Assembly Passes Crap Budget

What a disgrace.

On a largely party-line vote, the Republican-controlled state Assembly on Tuesday approved an $81 billion, two-year spending plan with last-minute changes to increase funding for district attorneys and allow carmaker Tesla to sell directly to consumers.

The changes could appease a handful of skeptical conservatives in the Senate, which is also controlled by Republicans and where one more “no” vote could sink the budget in that chamber.

Senators take up the plan Wednesday. If passed, it would then go to Democratic Gov. Tony Evers, who has broad authority to make changes.

Here is the vote.

Huzzah, huzzah for local representatives Gundrum, Brandtjen, and Ramthun. Apparently, they are the only conservatives left in the Assembly. How quickly this caucus snapped back to the Left without Governor Walker as a guardrail.

What’s wrong with you, Knodl? Jagler? Sanfelippo? Is this what you think your constituents want, or have you gone native? This vote is disgraceful.

And Robin Vos? You will never be governor of this state. You peaked and you blew your chance to be anything more than yet another Madison swamp creature.

Now we head to the State Senate. Hopefully my senator, Duey Stroebel, has a change in heart from his ill-advised JFC vote, joins the other conservatives in the caucus, and spiked this budget until they can come up with something better.

Assembly to Vote on Budget Tomorrow

Just vote NO.

MADISON (CBS 58) — The state assembly is set to vote on Wisconsin’s next budget this Tuesday. However, lawmakers on both sides will have to compromise before it’s passed.

University of Milwaukee political science professor Mordecai Lee said that’s the challenging part. “The Republican Legislature and the Democratic Governor are barely talking to each other.”

Two GOP lawmakers have threatened to vote against the $81-billion proposal drafted by their party. If one more Republican senator vows to vote against it, the budget won’t pass.

Those senators say there’s too much spending. “Overall the spending has just taken over. It is less than Tony Evers’ budget, however, Tony Evers’ budget was astronomically expensive,” said Sen. Stephen Nass.

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