Wisconsin Republicans propose constitutional amendment to gain control of federal dollars

Another proposed resolution would require Wisconsin to adopt Generally Accepted Accounting Principles, or GAAP, for the state’s biennial budgeting process, rather than use current “cash accounting” practices.

As constitutional amendments, the measures would need to pass the Senate and Assembly in two successive sessions before being decided by voters in a general election. The governor cannot veto a constitutional amendment.

Currently, the governor has sole discretion over how federal funds are spent. Democratic Gov. Tony Evers’ office did not respond to a request for comment.

There has been a growing push among legislative Republicans seeking more control over how the executive office doles out federal funds — primarily in recent years as the federal government pumped billions in stimulus dollars into the state to help address the ongoing COVID-19 pandemic.

“This is not meant to pick on Gov. Evers at all. Obviously (former Republican Gov. Scott Walker) and previous governors also had federal funds and they also didn’t include consultation with the Legislature and we don’t know who the governor is going to be in 2022 and beyond,” said Sen. Dale Kooyenga, R-Brookfield, who has co-authored the resolutions. “So this is not a personal attack on Gov. Evers ... it’s just good governance reform.”

The Legislature passed statutes in the 1930s to hand over control of federal funds to the governor’s office as federal dollars flowed into the state near the end of the Great Depression, according to a report provided to Kooyenga last month from the nonpartisan Legislative Reference Bureau.

The proposal would prohibit any executive branch official or department from allocating any federal dollars without first securing approval from a legislative committee, which Kooyenga said would likely be the GOP-led budget committee.

“It doesn’t slap down the governor, it slaps down the Legislature,” Kooyenga said. “It says, ‘All right, Legislature, you need to do your job and you need to be involved in the process alongside the governor to help direct where this federal money should go.’”

Evers vetoed legislation last February that would have provided the Legislature’s budget committee veto power over the use of federal COVID-19 funds. Two months later, the governor vetoed a similar measure that would have given the Legislature control over how federal coronavirus stimulus dollars are spent.

“It’s been unfortunate through this entire pandemic that the federal government has given so much spending power to one person in the state of Wisconsin and not those of us who are closest to our districts to try to find solutions on how to spend that money,” Senate Majority Leader Devin LeMahieu, R-Oostburg, said Wednesday.

Republicans have also introduced a number of failed bills seeking to direct the use of federal funds to matters ranging from broadband expansion to mental health programs in schools, while Evers has laid out his own plan for allocating those dollars. A new package proposed Tuesday, which also is likely to be vetoed by Evers, would allocate about $25 million in federal COVID-19 relief money to recruiting, training and retaining law enforcement officers.

Wisconsin received close to $2.5 billion in federal relief funds through the American Rescue Plan Act. All told, the state has been allocated more than $4.5 billion in federal coronavirus stimulus funds.

Of those funds, more than $2 billion has been spent on state emergency response efforts, public health measures and economic support programs, according to a breakdown provided by the governor’s office in August.

GAAP accounting

The Wisconsin Constitution requires state government to balance its budget. But it only must do so under so-called “cash accounting” practices — a less-expansive view of the state budget that doesn’t fully account for future expenses to which the state has committed.

The state started to also use the GAAP system in the 1989-90 period. It takes into account commitments made in one budgeting cycle that won’t be paid until a following cycle.

The difference is how expenditures are accounted for in the two approaches. Using GAAP, commitments are incurred when they are made, while cash accounting does not identify those as expenditures until they are actually paid.

Kooyenga said the proposed constitutional amendment would require GAAP practices to be “cemented into the constitution.”

Requiring the use of GAAP accounting to balance the state budget is an idea that has been toyed with in the past, with Walker vowing to shift to the practice before taking office in 2011.

While that never came to fruition, Evers, who is running for a second term this fall, said the idea of using GAAP accounting was “something to work towards” before taking office in early 2019.

Kooyenga, along with Sen. Howard Marklein, R-Spring Green, an accountant who has co-authored the latest proposal, broached a similar constitutional amendment back in 2012 that cleared the Assembly, but failed to advance in the Senate.

“It essentially takes the accounting tricks off the table and it requires you to use honest accounting,” Kooyenga said of the latest proposal.

Officials have said the state’s budget surplus would ease the transition from cash accounting to the formal use of GAAP.

“I think the only reason we can have this discussion right now is since we have made such great strides in Wisconsin over the last decade in responsible budgeting and not pushing off current obligations to make them future obligations,” LeMahieu said.

Kooyenga said if both proposals pass the Assembly and Senate in two sessions, they could come before voters by the 2024 presidential election.