Gov. Tony Evers signs GOP state budget, using veto to authorize 400-year school spending increase

Under the budget Evers signed, schools would be allowed to raise revenue by $325 per student per year until 2425. Given current public school enrollment levels, that’s over a $260 million increase per year.

Evers said the move, which Republicans heavily criticized and are likely to seek to undo in future budgets, provides schools with “predictable long-term increases for the foreseeable future.”

To make the change, Evers used his partial veto to strike words and a hyphen in a section of the budget that referred to when the change in the revenue limit Republicans approved would apply. As a result, the phrase “for the 2023-24 school year and the 2024-25 school year” became “for 2023-2425.”

Unless the veto is overridden, which is unlikely since Republicans are short of a supermajority in the Assembly, the formula will remain in place for now but can be undone by future legislation.

Evers also threw out most of the GOP plan to move the state closer to a flat tax with a $3.5 billion income tax cut that catered mostly to the wealthiest Wisconsinites.

Before signing the 2023-25 spending plan into law at the state Capitol, Evers said the Republican budget “failed to meet this historic moment” but said vetoing the proposal would amount to scrapping investments in workforce housing, a $125 million plan to address “forever chemicals” in water and pay raises for criminal justice system employees.

Speaking to reporters, Evers said Republicans’ refusal to fund the University of Wisconsin System and technical colleges to the level Democrats requested was “shortsighted, misguided and wrong for the workforce.”

Legislative leaders and Evers were sharply divided on higher education spending and where to direct income tax cuts throughout the budget process. Evers previously threatened to veto the whole document, and many Democrats urged him to do so. In the end, he signed it but slashed some of Republicans’ top policy proposals.

“Legislative Republicans worked tirelessly over the last few months to block Governor Evers’ liberal tax and spending agenda,” Assembly Speaker Robin Vos, R-Rochester, said in a statement. “Unfortunately, because of his powerful veto authority, he reinstated some of it today.”

Vos said Evers’ use of the veto to boost K-12 funding will lead homeowners to “experience massive property tax increases in the coming years.”

Republicans also castigated Evers for vetoing proposed tax cuts to the state’s two highest income tax brackets.

“The Governor’s partial veto of the legislature’s tax cut hurts taxpayers, hinders Wisconsin’s ability to attract new talent, and stifles our potential for growth,” Sen. Patrick Testin, R-Stevens Point, said in a statement.

Assembly Minority Leader Greta Neubauer, D-Racine, who voted against the budget, said Evers’ partial vetoes “make a number of important improvements to this budget, including providing a middle class tax cut while protecting the long term fiscal viability of the state of Wisconsin.”

Senate Minority Leader Melissa Agard, D-Madison, also praised Evers, saying his budget action continues his “career long focus of helping our public schools and the middle class.”

In all, Evers made 51 partial vetoes to the 2023-25 budget proposal. That’s similar to the 50 cuts he made two years ago but fewer than the 78 vetoes in his first budget.

Tax cuts

Seeking to move the state toward a flat tax, Republicans sought to collapse the current four income tax brackets into three, with cuts largely benefiting the wealthiest Wisconsinites. Evers used his veto pen to maintain the four brackets and cut the proposed income tax cut to the top two income brackets.

The income tax cuts Evers signed will provide a $175 million total tax cut, far less than the $3.5 billion Republicans proposed.

Currently, the state has an income tax rate of 3.54% for individuals earning less than $13,810 per year or married filers earning less than about $18,400. Under the budget Evers signed, that rate will go down to 3.5%.

The 4.65% rate for individuals earning up to $27,630 and joint filers earning $36,840 will go down to 4.4%.

Evers vetoed Republicans’ plan to reduce the 5.3% rate for individuals earning up to $304,000 and married filers earning up to about $405,000 to 4.4%. He also rejected Republicans’ plan to reduce the 7.65% tax rate for individuals earning more than $304,000 or married filers earning more than about $405,500 to 6.5%.

Evers said Republicans’ plan would have been “fiscally irresponsible going forward” and would have required Wisconsin to cut funding for schools and health care.

Saying Evers’ actions means there will be “hardly any tax relief for truly middle-class families,” Vos said. “His decision also creates another economic disadvantage for Wisconsin, leaving our top bracket higher than most of our neighboring states, including Illinois.”

DEI cut vetoed

The budget proposal Republicans sent to Evers included a $32 million cut to the University of Wisconsin System in an effort to force the school officials to eliminate diversity, equity and inclusion offices and programming.

While Evers was unable to veto the $32 million cut, he vetoed the attached provision requiring the UW System to eliminate 188.8 positions related to diversity offices and programs.

Effectively, that means the UW System can retain its diversity offices and 188.8 positions but will have to choose where to put the $32 million cut.

“These positions function to improve the University of Wisconsin experience for all,” Evers said in his veto message.

Vos criticized Evers for vetoing the proposal, which he said was part of Republicans’ message that “well-balanced instruction and merit-based advancement should be the foundation of earning a degree.”

Republicans included a provision allowing the UW System to receive that $32 million for efforts addressing the state’s workforce shortages. But that funding can only be made available if the System requests it and the GOP-controlled finance committee signs off on it.

“I do believe that UW will come up with a plan to get that $32 million,” Evers said.

Education, pay boosts

The budget document approved Wednesday includes increasing K-12 education spending by $1 billion over the next two years through new funding and property tax increases.

That amount is $1.6 billion short of what Evers asked for. The boost came after Evers forged a deal with legislative leaders on a bill to increase state aid to local communities. The agreement includes spending $115 million to increase funding to the state’s private school voucher programs.

Under the budget, state employees will receive a 4% pay bump on July 1 and another 2% raise in 2024. Department of Corrections guards’ starting hourly wage will increase from $20.29 to $33 an hour.

Additionally, assistant district attorneys and public defenders will receive a $36 starting hourly wage, nearly a $9-per-hour pay bump.

“Funding to recruit and retain attorneys to provide constitutionally required representation not only benefits our clients by protecting their most critical rights such as due process and individual liberty, but ultimately public safety in communities across the state,” Kelli Thompson, the state public defender, said in a statement.

The budget also sets aside $125 million in the state’s two-year spending plan to address “forever chemical” contaminants in Wisconsin’s ground and drinking water.

Additionally, the budget sets aside $50 million to spend on reading initiatives in schools. That money could fund a Republican-proposed effort to spend $50 million to create a new literacy office, hire reading coaches and help cover the cost of new phonics-based reading curricula in Wisconsin schools.

The Department of Public Instruction supports that proposal, which the Legislature passed, but Evers has yet to take action on the measure.

Other vetoes

Among other vetoes, the governor cut a budget provision that would have blocked Medicaid payments for gender-affirming care, saying it “would only magnify the inequities in health outcomes already faced by the LGBTQ community.”

Evers also vetoed a measure to give Milwaukee’s tourism agency $10 million as it prepares to host the Republican National Convention in 2024. He instead is giving the city $1 million and setting aside the other $9 million for the Department of Tourism’s general marketing purposes.

Evers said he objects to setting aside the funds for Milwaukee when Republicans “failed to adequately fund so many important priorities for our state, from child care to higher education.”

It’s unclear whether Republican legislative leaders will try to override Evers’ vetoes. While they have enough votes in the Senate to do so, they would need three Democrats to join all Assembly Republicans for a supermajority to override the governor, which is unlikely.