In what is likely a failed attempt to secure support from Republicans in control of the Legislature, former educator and Democratic Gov. Tony Evers has called for investing about $250 million of the state’s extra tax revenue to increase education funding and lower property taxes.
On Thursday, Evers proposed a commitment to two-thirds funding in statewide K-12 and spending on school-based mental health and special education aid, which includes $10 million in sparsity aid. The spending also would include $130 million aimed at lowering property taxes through the equalization aid formula.
Surrounded by teachers and education advocates, Evers signed an executive order calling for the Legislature to take up the proposal in a special session Tuesday. Evers did not take questions after the announcement.
“I understand the Republicans in the Legislature have indicated that they want to spend some of the surplus on reducing property taxes and this may come as a surprise to you, I’d like to use some of that to invest in our kids,” Evers said. “Folks, the good news is even better than that, we can do both.”
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However, Republican leaders in the Assembly and Senate already have signaled they are not likely to support Evers’ proposal.
Asked about using the added tax revenue to increase state funding for education, Senate Majority Leader Scott Fitzgerald, R-Juneau, said, “I don’t see the caucuses going that direction.”
“Senate Republicans have been focused since late last year on using our surplus for a tax cut for hard-working families, and the governor knows that,” Fitzgerald tweeted after Evers’ announcement. “I don’t see us budging off that position.”
Assembly Speaker Robin Vos, R-Rochester, tweeted a similar sentiment, noting he met Wednesday with Evers and there was no mention of a special session.
“It shouldn’t come as a surprise that when there’s a surplus, Republicans look to return those dollars to the hardworking taxpayers of the state,” Vos tweeted. “Democrats are fixated on growing the size of government, which they know we won’t do.”
Speaking with reporters Thursday, Vos said two-thirds funding — which Republicans pledged to address in the 2019-21 budget, but ultimately did not include — will not be taken up outside budget discussions.
On Wednesday, Fitzgerald and Vos said there is likely support among Republican members of both chambers for some form of property or income tax cut, although specifics were not yet available. Vos also expressed interest in possibly using some of that revenue to pay down the state’s debt.
But Senate Minority Leader Jennifer Shilling, D-La Crosse, said in a statement that investing in education would help the state retain teachers, invest in modern facilities and meet education standards.
“We need to put our money where our mouth is if we want to re-establish Wisconsin’s reputation as a leader in K-12 education,” Shilling said.
Governor’s plan
Evers’ proposal includes a $79 million investment in special-education aid, $19 million in aid for school mental health services and about $10 million in sparsity aid, additional unrestricted aid to rural school districts with relatively small economies of scale.
The $130 million increase to equalization aid — the state’s formula for funding public schools based on property values and number of students — would force districts that tax the maximum amount under state-imposed revenue limits to lower taxes, while districts that don’t tax the maximum amount could lower taxes or increase spending.
Other items include investments in high-cost special-education aid, special-education transition grants, aid for school-based mental health collaborations, summer school programming and tribal language revitalization grants.
Assembly Minority Leader Gordon Hintz, D-Oshkosh, said in a statement that Evers’ proposal should receive bipartisan support, as GOP lawmakers supported school-based mental health care under former Republican Gov. Scott Walker.
“We’ll see whether this funding is truly a priority for Republicans, or just a talking point,” Hintz said. “With additional state revenue, we have the ability to get this done before the end of the legislative session.”
Stronger balance
Revenue projections by the nonpartisan Legislative Fiscal Bureau report the state is expected to close out the biennium with a general fund balance of about $620 million. That’s nearly $452 million more than originally projected when the 2019-21 biennial budget was enacted last summer.
The state has run a deficit with each of its budgets for at least the past 30 years under generally accepted accounting principles. By law the state budget must be balanced, and the state has achieved that for decades by using a different accounting system.
The state anticipates collecting $818 million more in tax revenue than expected, half of which must go into the state’s Budget Stabilization Fund, a rainy day fund to be tapped in times of recession or fiscal emergency. That would bring the fund to more than $1 billion by June 2021.
Any tax cut passed by the Legislature would have to be signed by Evers to go into effect.
Vos said any tax cut proposal would need to be crafted so that Evers cannot “screw around with” it using his line-item veto authority.
