Wisconsin's $76 billion state budget, which sends more money to K-12 schools but does not come up with a long-term funding solution for dilapidated roads, cleared a legislative committee more than two months late Wednesday night, setting the stage for swift passage in the Republican-controlled Legislature.
The Joint Finance Committee made a host of significant changes in the final push to get the budget over its biggest hurdle. The process of dissecting Gov. Scott Walker's two-year spending plan, introduced in February and due to be passed by the end of June, was the most torturous for any plan the Republican has introduced. His three previous budgets were all signed into law before or within days of the deadline.
But even with their largest legislative majorities in decades, Republicans found it difficult to reach agreement on several key areas -- most significantly how to plug a $1 billion roads shortfall. Unable to reach a long-term funding solution, Republicans opted instead to borrow about $400 million, impose a new fee on electric and hybrid vehicles and delay construction projects to get by for another two years.
"The missed opportunities in this budget are really frustrating," said Democratic Sen. Jon Erpenbach of Middleton.
But Republican Rep. John Nygren, co-chair of the committee, said the plan moved the state forward by prioritizing education funding and targeted tax cuts.
"The citizens of Wisconsin are going to say this is a pretty darn good budget," he said.
The budget passed on a 12-4 party line vote, with all Republicans in support and Democrats against.
The budget would increase funding for public schools and higher education, and freeze tuition at the University of Wisconsin for two years, positives that Walker and legislative Republicans are certain to tout on the campaign trail next year. It also holds the line on property tax increases and imposes new work and drug testing requirements on public aid recipients, but lawmakers rejected income and sales tax cuts Walker wanted.
The budget now heads to the Assembly, which is expected to vote on it next week, followed by the Senate. They are expected to make few changes to what the committee approved Wednesday. Walker also has broad veto powers to shape the proposal that was due July 1.
In some of its final votes Wednesday, the budget committee voted to reject Walker's call to increase the earned income tax credit, which benefits the working poor, by $20 million. At the same time, the committee voted to eliminate in 2019 the state's alternative minimum tax, which is typically paid by people who earn between $200,000 and $500,000 a year. It also affects about 50 millionaires. Eliminating the tax saves taxpayers about $7 million per year.
Republican Rep. Dale Kooyenga defended the moves, saying they were "common sense" changes to help simplify the tax code that would affect very few taxpayers. Wisconsin is one of only six states that impose the alternative minimum tax, which only applies to about 1,800 taxpayers including 135 with less than $5,000 in income.
Other late changes to the budget on Wednesday included:
-- Reducing a tax on property paid by businesses other than manufacturers by more than $74 million a year, a move championed by the state's business community.
-- Rejecting Walker's call to reduce personal income taxes on average of $44 per filer, as well as his proposal to institute a sales tax holiday for some back to school purchases.
-- Making it easier for students with disabilities to receive a taxpayer-funded voucher to attend private school. The move is estimated to cost public schools $3.1 million a year and double enrollment in the special needs voucher program, adding 250 students.
Supporters of the program say the vouchers help provide more options for disabled students and their families. But opponents, including Democrats and disability rights advocates, say the program diverts money to private voucher schools and students there won't receive the same legal protections they are guaranteed in public schools.
There were just over 200 students in the program during the last school year, which cost their home public school districts $2.4 million. Students in the program this year, its second, have not yet been counted.
Under changes before the committee, various program requirements would be softened to result in an estimated 250 additional students qualifying at a cost of $3.1 million more per year to public schools. But Democrats worried that because there's no cap on what students could receive, based on their needs, the true cost is not known.
"We think it's an investment that's worth it," Nygren said. "If you're the parent of that child, there's no price you can put on getting the education that they deserve."
