Republican lawmakers rewriting Gov. Scott Walker’s $68 billion biennial budget proposal will have no additional revenue as they make changes, the state’s nonpartisan budget office announced Wednesday.
Still, they pledged to prevent education cuts that Walker had proposed for next year.
Walker and the Republican legislative leaders were hoping there would be more tax revenue to spend on schools, the University of Wisconsin System or transportation.
“We had hoped for better news,” Assembly Speaker Robin Vos acknowledged.
Vos and Senate Majority Leader Scott Fitzgerald said Wednesday lawmakers still would restore the $127 million Walker proposed cutting from K-12 education for the first year of the 2015-17 budget. And Walker endorsed restoring the K-12 funding.
Fitzgerald said Wednesday’s news doesn’t slam the door on reducing Walker’s proposed $300 million cut to the UW System. But “it becomes more and more difficult, obviously,” he said.
Fitzgerald also said that an increase in the state’s $75 vehicle registration fee is likely to help reduce the record $1.3 billion in borrowing for road projects that Walker proposed.
Rep. John Nygren, who co-chairs the budget-writing Joint Finance Committee, said he expects Republicans to redirect more than $100 million from a property tax reduction program to help restore some funding to K-12.
“Education is still our priority,” said Nygren, R-Marinette.
The state spent $747.4 million on the property tax relief program this year. Walker had proposed increasing that amount by $105.6 million next year, which translates to a roughly $5 property tax cut on an average home. Republicans want to shift that amount into the second year of the biennium, still maintaining the property tax reduction but pushing the cost onto future budgets.
Assembly Minority Leader Peter Barca, D-Kenosha, decried the move as an “accounting trick.”
“It is clear and a shame that Republicans’ last priority is our public schools,” Barca said. “Instead of getting serious about undoing their three budgets of damage that took $1.5 billion out of education, our schools are forced to fight for crumbs.”
Vos said it’s unlikely Assembly Republicans will go along with Walker’s plan to expand the state’s private school voucher program. Walker had proposed lifting the program’s statewide enrollment cap of 1,000 students.
But Vos said Republicans want to guarantee students already receiving vouchers don’t get a funding cut.
Walker, a likely 2016 presidential contender, unveiled his budget plan in February. Now it’s in the hands of the budget committee, which can make changes.
Budget work in progress
When the committee of 12 Republicans and four Democrats completes its review, the full Senate and Assembly will separately take up the measure, and each could make further changes. The budget typically wraps up by July 1, when the state’s new fiscal year begins.
Walker spokeswoman Laurel Patrick said Wednesday the governor “will continue to work with legislative leaders to protect public school funding and ensure it remains whole.” Walker later tweeted a similar statement saying “we will fully fund K-12 schools in this budget.”
She did not elaborate on how the state would make up the $127 million K-12 cut for next year. The budget cuts $127 million in per-pupil categorical aid to schools in the first year but adds $142 million in the second year of the budget. It also increases general school aid in the second year by $108.1 million.
Legislative Fiscal Bureau director Bob Lang said in a memo to the co-chairs of the budget committee that the U.S. economic forecast for the next two years has declined since January projections Walker used to craft his budget proposal.
Also, tax collections for the current fiscal year are running 3.3 percent higher than the previous year, below than the 3.7 percent projection that was used in January. Lang said tax collections could catch up to projections by the end of the fiscal year on June 30, but because of the economic forecast from IHS Global Insight, it’s prudent not to expect additional revenue in the next biennium.
Democratic lawmakers called the anemic revenue projection an indictment of the job-creation efforts of Walker and GOP lawmakers. They said Walker is more focused on his possible presidential bid than on shoring up the state’s budget.
They said Walker and Republicans have options, even in light of Tuesday’s developments. They could pursue a federal Medicaid expansion, saving as much as $345 million in the next two years, and delay a planned phase-in of business tax credits, which cost $226 million.
“Gov. Walker and legislative Republicans are more focused on his presidential campaign than doing what is right for the people of this state,” said Rep. Chris Taylor, D-Madison.
Every budget cycle, the Fiscal Bureau projects state tax revenues and the governor’s office uses them to propose a budget. When the Legislature takes up the budget, the bureau updates the estimated revenues.
Numbers a contrast
The static revenue numbers unveiled Wednesday contrast with updated estimates from previous budget cycles, noted Todd Berry, president of the Wisconsin Taxpayers Alliance.
In 2009, as the recession hit under Gov. Jim Doyle, revenues were adjusted down by $1.5 billion, growing the state budget deficit that year to $6.6 billion. Democrats used federal stimulus money, $2 billion in tax and fee increases, employee furloughs and pay cuts, and state agency spending reductions to balance the budget.
In 2011, as the state was facing Walker’s proposed changes to public sector collective bargaining and historic cuts to K-12 education, the May projections were $636 million higher, which Republicans used to pay bills and reduce the K-12 cut.
In 2013, with a $575 million increase in the May projections, Republicans were able to enact larger cuts to the state income tax than Walker had initially proposed.
“This doesn’t give them any extra tools to work with,” Berry said. “They’ve got to work within the original bounds defined in January, and that means making hard, difficult choices.”