Wisconsin Gov. Scott Walker's two-year budget would funnel money into education, transportation, tax relief and workforce development, funding areas his previous budgets aimed to cut.
"The common-sense reforms that helped build this healthy economy and strong management of our state resources created our positive budget outlook," Walker said Wednesday, delivering his budget address to the Legislature. "This is a solid budget built on a strong foundation."
The $76.1 billion budget includes $592 million in tax and fee cuts, including a proposed tuition cut for University of Wisconsin System students.
Democrats were skeptical of the proposal.
"After a failed bid for president, Gov. Walker is looking to keep his political career alive and is desperate to win re-election in 2018. But one budget address focused solely on doing enough to win votes next year won't fix the real problems facing our state," said Democratic Party of Wisconsin chairwoman Martha Laning. "After years of failure, Gov. Walker can't just talk the talk and expect to earn another term. He'll have to walk the walk and work with Democrats to pull our state out of the hole he put us in."
But Republican Party of Wisconsin chairman Brad Courtney was quick to praise it.
"Gov. Scott Walker is successfully leading the fight to provide for Wisconsin’s hard-working families," Courtney said in a statement. "As a result, Wisconsin is seeing the reform dividend in action: more money to classrooms, a historic cut to UW tuition and increased tax relief for taxpayers across the state. Our fiscal outlook is bright, and together under Gov. Walker we are working and winning."
The budget includes $648.9 million in per-pupil aid for K-12 education, a portion of which would be funded by projected savings from moving to a self-insurance model for state employees. Under that model, the state would contract with insurers and third-party administrators to pay for public employees' medical bills directly rather than pay premiums to insurance companies.
In order to receive aid, districts must show they are in compliance with Act 10, the governor's signature legislation passed in 2011 effectively eliminating collective bargaining for most public employees. Under Act 10, school districts are instructed to require their employees to contribute a portion of their earnings to cover pension costs.
A pool of $5.6 million in performance-based funding would also be available to public, charter and voucher schools under the proposal. The state would also put about $3 million toward reducing per-credit costs for high school students earning college credits.
"I want every student to succeed. And I trust parents to make the right decision for their children," Walker said.
Teachers and school administrators would no longer have to renew their licenses every five years, which the governor's office said would save faculty more than $750 over a 30-year career. School districts would still be required to perform background checks and teachers could still be fired for misconduct.
The budget would also create a "back to school" sales tax holiday for two days in August 2017 and August 2018 covering certain school supplies, clothing and computers.
In-state undergraduate students at University of Wisconsin System schools would see a tuition freeze in the first year of the budget, followed by a 5 percent tuition cut in the second year. The cut would be paid for with a $35 million bump in general purpose revenue. That would come on top of a $100 million increase to the UW budget, $42.5 million of which would be tied to performance metrics based on affordability, workforce success of graduates, administrative efficiency, service and other criteria.
The cut would follow a four-year tuition freeze, but also a $250 million cut to the system's funding delivered in the governor's 2015-17 budget. Before the freeze, implemented in Walker's second budget, tuition had gone up 5.5 percent annually since the 2007-08 academic year.
"Gov. Walker’s last three budgets have done such lasting damage to our university system it will take many more years to repair than what he’s proposing today," said Rep. Katrina Shankland, D-Stevens Point.
Technical college students would see a tuition freeze over the biennium, paid for with $5 million in the budget. The budget would also give more money to Wisconsin Fast Forward, a worker training grant program.
Property and income taxes
The state portion of the property tax levy, which increases corresponding to raises in property values, would be eliminated under the budget. The budget also increases the School Levy Tax Credit by $87 million and increases school equalization aids by $72.7 million. According to the governor's office, property taxes on median-value homes in December 2018 are projected to be $139 lower than in December 2010.
The budget also includes about $204 million in income tax reductions for all taxpayers.
"Now is not the time to raise taxes," Walker said. "We should not raise taxes on farmers and manufacturers. We should not raise the income tax. We should not raise the gas tax."
The budget allocates about $6.1 billion for transportation funding, including a $40 million increase in general transportation aids to counties and municipalities.
Active major highway projects previously expected to be delayed would remain on schedule, with $669.8 million set aside to keep them on track. Those projects include the Verona Road project on Madison’s southwest side (Highways 18 and 151), Highways 10/441 and 15 in the Fox Valley and Interstate 39/90 in south-central Wisconsin.
The core of Milwaukee's Zoo Interchange project would also remain on schedule.
The budget would authorize a permanent annual transfer of excess revenue from the state's petroleum inspection fee, which is expected to funnel about $431 million into the transportation fund over an eight-year period, according to the governor's office.
The proposal includes $500 million in borrowing. While it would be the state's lowest level of transportation bonding since the 2001-03 budget, lawmakers on both sides of the aisle have shown hesitance to authorize more bonding.
Sen. Jon Erpenbach, D-Madison, was critical of the governor's proposal, arguing it fails to provide a long-term solution to a projected $1 billion shortfall in the transportation fund.
"What I've seen out of the governor is a total lack of leadership when it comes to transportation," Erpenbach said.
Drug treatment and abuse prevention
Counties would receive $1.3 million in grants to expand drug courts, which allow nonviolent offenders to go through treatment as a means of reducing or avoiding a criminal conviction.
The state would also spend $9 million to expand its treatment alternatives and diversion (TAD) program, which offers alternatives to prison sentences for criminals with substance abuse problems. The programs are operated at the county level, assisted by funding from the state.
The Department of Justice would be given about $1 million to fund efforts to curb opioid and methamphetamine abuse. The Department of Safety and Professional Services would get about $1 million and five positions to help upgrade the state's Prescription Drug Monitoring Program, which doctors use to monitor prescription drug abuse.
Five new counties would receive funding to expand the state's Opening Avenues to Reentry Success program, which offers assistance to mentally ill inmates when they are released from corrections facilities.
The budget adds funding and positions to Columbia Correctional Institution, Oshkosh Correctional Institution and Taycheedah Correctional Institution, along with additional funds to treat inmates with mental health issues. It also adds staff and funding for Copper Lake School and Lincoln Hills School, the state's juvenile corrections facility.
Officers who work in restrictive housing units would be given body cameras at a cost of about $600,000. The budget would set aside about $25.2 million to cover staffing overtime costs and about $1.2 million to cover night and weekend staffing costs.
The Parole Commission would be eliminated, with its functions rolled into the Department of Corrections. The governor would appoint a director of parole to oversee the program.
Walker's proposal would direct about $20 million toward increasing the Earned Income Tax Credit for an estimated 130,000 families. The credit benefits low- to moderate-income working people. Read more about the EITC proposal here.
Seniors and disabled Wisconsinites would see the Homestead Credit indexed to inflation starting in tax year 2018. For those outside those groups, the credit would be tied to earned income.
State construction projects would no longer have to follow prevailing wage requirements, which set minimum pay standards for construction workers on most public projects. A partial repeal of the state's prevailing wage laws was included in the previous state budget.
The budget would also ban local governments from requiring project labor agreements, which set wage and conditions standards on certain construction projects.
State employee wages
State employees would get a 2 percent wage adjustment in September 2018 and in May 2019 at a cost of $30 million. The director of state courts could submit a pay plan under similar parameters.
Long-term care and child welfare
The budget would provide about $14 million in the first year and about $25 million in the second to eliminate the waiting list for long-term care supports for about 2,200 children with developmental disabilities, physical disabilities or severe emotional disturbances. Read more about related proposals here.
A Wisconsin municipality would receive $150,000 over the biennium to pilot a program modeled after one developed in Albuquerque. The "Better Way" program would give homeless people jobs cleaning up parks and public spaces with the goal of moving them into permanent employment. The city would be required to provide $50,000 to go along with the grant.
Ten homeless shelters would receive $50,000 grants to provide intensive case management services for homeless families.
A program that serves the homeless population would be transferred from the Department of Administration to the Department of Health Services to help connect homeless people with mental health services.
The budget would create a council to review and recommend changes to occupational licensing requirements that apply to professions ranging from bartenders to private security guards.