The latest federal coronavirus relief plan is set to deliver Wisconsin billions of dollars in aid to state and local governments, just as officials are working to pull together the next two-year spending plan.
That $3.21 billion in federal dollars the state is expecting to receive could be used to cover one-time expenses and investments in areas like broadband expansion, Republican legislative leaders say.
Officials will need to review the stipulations tied to the funding before making those decisions. But the funds are just a portion of Wisconsin's anticipated share of the $1.9 trillion federal package. In all, an estimate published by WisPolitics.com Wednesday showed the state is set to receive $8.7 billion in total from the law, when factoring in expected dollars for schools, colleges and universities.
A new report from the nonpartisan Legislative Fiscal Bureau highlights preliminary details about how the expected $5.7 billion for state and local governments can be spent in Wisconsin. That's in addition to the $1.5 billion heading toward the state's public K-12 schools and $560 million for colleges and universities.
Direct payments to state, local governments
The state is set to receive up to $3.21 billion in fiscal recovery funds, money that can be put toward costs incurred before the start of 2025.
The law sets parameters over how the money can be used. Officials, for example, could use it to provide aid to hospitals, small businesses and the tourism industry, among others, per the LFB report. Or they could increase the pay of state workers who performed essential work during the pandemic.
The money can also go toward investments in water, sewer or broadband infrastructure.
It's the final option that Senate Majority Leader Devin LeMahieu emphasized in a virtual event with business lobby Wisconsin Manufacturers & Commerce Wednesday.
"Broadband is one of those things where we hopefully can use some of that federal money, one time money to expand broadband and make sure all areas of the state are serviced by high speed internet," the Oostburg Republican said.
In all, Gov. Tony Evers' budget is looking to invest more than $200 million to expand access in the state. The main driver of that in his budget is through a more than $100 million boost in the Public Service Commission's Broadband Expansion Grant Program over the next two years.
Assembly Speaker Robin Vos, R-Rochester, echoed LeMahieu's comments, saying he "100% agree(s) that we should use it for one-time expenses," like broadband expansion and fixing roads.
He added Republicans would be vigilant through the budget process to ensure "that we don't increase government spending with one-time money."
The federal dollars can't be used for deposits into pension funds, the LFB memo notes, or directly or indirectly offsetting a reduction in tax revenues tied to a change in law or regulation that reduces taxes or delays the imposition of a tax or tax increase.
That means, LeMahieu said, lawmakers "have to be somewhat careful on how we craft any type of tax cuts in the budget because the federal law that just passed says we can't use federal money to provide tax relief."
"We need to figure out what that looks like to make sure we're not in conflict with federal law," he said.
The state could also receive an estimated $188.7 million for capital projects. Republican lawmakers in rejecting every building project Evers proposed in his $2.4 billion plan during a meeting last week cited the potential for using federal dollars to finance some of those proposals.
LFB's memo notes the money through the capital projects fund can be used for efforts "meant to directly enable work, education, and health monitoring, including remote options, in response to the coronavirus pandemic.” Still, the state would have to apply for the money, and the process for doing so hasn't yet been established.
Republicans in the Legislature are seeking to give themselves oversight over how the state dollars from the federal relief plan are spent. They sent a bill to Evers' desk this week that would give the powerful Joint Finance Committee the ability to sign off on the governor's spending decisions. Evers has said he would veto the bill.
At the local level, Wisconsin is set to get an anticipated $2.14 billion in local fiscal recovery funds, according to the LFB report. Each of the state's 72 counties will get a payment from that bucket, totaling some $1.13 billion.
Meanwhile, 18 cities (including Madison, Milwaukee, Janesville and Kenosha) are eligible for an estimated $787.9 million, distributed through a formula that LFB wrote which takes into account factors including population growth, poverty and more.
The use of those funds aligns with the state requirements, while also giving localities the option to transfer the money to the state. But there's no restriction on using the money for offsetting taxes.
Dane County is projected to get $106 million through the fund, per LFB, while Madison is expected to receive $49.2 million. Madison is eligible for additional dollars outside of the local fiscal recovery funds, such as grant money for seniors and individuals with disabilities transit funding; urbanized area transit funding; and more.
The relief package extends a series of federal unemployment-related programs targeting those who are self-employed and freelancers and give supplemental federal dollars to those who are eligible for unemployment, among other things.
The law extends those benefits from mid-March to the beginning of September.
In addition, the federal government is covering all the costs associated with the first week of unemployment payments for states that don't have a one-week waiting period in place, enhancing the federal matching dollars it previously offered to states that waived or nixed their waiting period. Wisconsin's waiting period is once again in effect after lawmakers' latest suspension of it expired earlier this month.
LeMahieu told WisPolitics.com this week Senate Republicans won't agree to extend the waiver of the waiting period again, forgoing months of federal dollars. Vos told reporters Tuesday that Assembly Republicans were planning to discuss the matter in caucus Wednesday.
Separately, the law stipulates that the first $10,200 of unemployment payments received in 2020 aren't federally taxable.
Asked about exempting those payments from state taxes, Vos Wednesday during the WMC event said he's "open to the idea" but doesn't expect it'll be "rushing its way through the Legislature" in the coming weeks.
"I certainly am always open to reducing taxes for any purpose, so I certainly am not opposed to the idea but I will say if we have scarce dollars, I also want to make sure that we help to share those with the people who were working and the people who were not," he said.
Apart from aid for state and local governments and the unemployed, the law includes more money for businesses, environmental grants, housing and rental assistance, utility support, public transit and airports and more.