On Wednesday, the Wisconsin Senate took up debate over a two-year budget package that gives hundreds of millions of dollars in tax breaks to the state’s wealthiest families while refusing to fund programs aimed at supporting the state’s working class.
The final budget legislation, passed after nearly eight hours of debate, contained no significant changes from the version of the legislation drafted by the state’s powerful Joint Finance Committee. Perhaps most importantly, along partisan lines, the Senate rejected 11 amendments introduced by Democrats aimed at restoring funding for programs included in Governor Tony Evers’ budget proposal.
The proposals rejected by Republicans included funding the Child Care Counts program, paid family and medical leave, accepting a federally funded expansion of Medicaid, and increasing support for public education. Republicans also rejected funding for several major public health measures, including a safety-net insulin support program. Finally, Senate Republicans also shot down the addition of policy proposals, including the repeal of Wisconsin’s 174-year-old abortion ban as well as the legalization of recreational marijuana, a measure expected to bring hundreds of millions of dollars in revenue to the state.
For the first five hours of the debate, Senate Democrats argued in favor of each of these amendments while Republicans sat silent, offering no counterarguments. Only when the final measure came up for adoption did Republicans voice their support for their unamended version of the bill. Sen. Duey Stroebel (R-Saukville) argued that the Republicans’ version would put the state on a “continued trajectory for economic success, putting our families number one.”
That statement does not square with the actual content of the legislation.
“We started out with a $7 billion surplus and a decade of neglected needs—from healthcare and childcare to water quality and K12 schools,” Sen. LaTonya Johnson (D-Milwaukee) said in a tweet on Wednesday. “But instead of making smart investments that will yield benefits for years to come, the GOP’s bright idea is a $30,000 tax cut for millionaires.”
Wisconsin has been “missing opportunities to grow for years because Republicans, despite their constant culture war bullshit, only care about one thing—rigging the tax code in favor of wealthy donors and special interests,” Johnson said.
The centerpiece of Republicans’ budget, which the Senate passed after only a day after receiving a 600-page analysis of the legislation by the Legislative Fiscal Bureau, was arguably not spending itself, but a tax cut worth $3.6 billion, roughly half the size of the state’s $7 billion surplus. While Republican leaders argued that “all” Wisconsinites would see a tax cut under their proposal, the vast majority of the cut would target the state’s top tax brackets. Beginning in tax year 2023, the legislation would reduce the top marginal individual income tax rate from 7.65% to 6.50%. It would then collapse the third tax bracket into the second bracket and reduce both rates. This means that Wisconsinites with annual incomes of over $1 million would see an average tax cut of $30,000, a net decrease in their tax liability of nearly 17%. By contrast, filers with incomes between $30,000 and $40,000 would see an average tax cut of $32, representing a 4.6% net decrease in tax liability.
With a price tag of $3.6 billion, the vast majority of which will be given to Wisconsin’s top filers, the tax cut also deprives funding from key state departments and programs. To put this in context, consider the following example. Filers with annual incomes of over $500,000 will collectively see their taxes cut by an estimated $661 million over a two-year period. Over the same period, Republicans’ budget removes an equivalent amount of funding from Evers’ proposed budget for 7 agencies, including the Board on Aging and Long-Term Care, the Department of Children and Families, the Child Abuse and Neglect Prevention Board, the Wisconsin Elections Commission, the Higher Educational Aids Board, the Medical College of Wisconsin, and the Department of Natural Resources.
Practically speaking, this means that a tax cut for Wisconsin’s wealthiest families is denying funding for programs that would, among other things, reduce the costs associated with child care, prescriptions, and replacing lead service lines. The further down one goes, the more grotesque Republicans’ deletions of budget lines becomes. Proposals zeroed out by the Joint Finance Committee included numerous items aimed at addressing the state’s ongoing mental health crisis, including $5.8 million in enhanced reimbursement rates for behavioral health providers and a $3 million investment in suicide and crisis lifeline grants.
The Senate passed the legislation Wednesday night on a vote of 20-13. Two Republicans—who argued that the bill contained too much spending—joined 11 Democrats in opposing the measure. Today, the bill heads for floor debate in the Assembly, which means that it will soon arrive, likely with no modifications, at Tony Evers’ desk.
Evers will then have six days to decide how to respond. He can, as he often does, use his “partial veto” to strike provisions in the legislation that he finds objectionable. But this only grants Evers the power to sign a budget littered with strikethroughs. The partial veto does not allow the Governor to demand the restoration of programs Republicans refused to fund. Alternatively, Evers could veto the budget in full. In recent weeks, he has threatened to do as much, citing his opposition to Republicans’ proposed $32 million cut in the University of Wisconsin System’s budget.
Should Evers veto the budget in full, state agencies would continue to operate at appropriations levels from the 2021–23 fiscal year.
Does Evers have the leverage to drive a hard bargain with Republicans? According to the latest Marquette Law School Poll, 57% of Wisconsin voters approve of the job Evers is doing as governor. Moreover, poll numbers indicate that the proposals Republicans rejected—from paid family leave to marijuana legalization—are overwhelmingly popular with voters.
The question now is whether Evers is willing to spend the political capital he’s amassed.
This is a guest column by Phil Rocco, a political scientist and the author of Obamacare Wars: Federalism, State Politics and the Affordable Care Act. He regularly writes about Wisconsin politics at The Recombobulation Area.
