Capitol Report
By State Representative, Leon D. Young
Leon D. Young
Without question, the state budget bill is the most important legislative proposal that the Legislature considers during any biennium. According to statutes, the state’s fiscal year begins on July 1. However, for this calendar year, that clearly has not been the case. With all three branches of state government firmly under its control, the GOP has been derelict in its duty and has failed to deliver a budget in a timely manner.
But, after a prolonged impasse, the Assembly and Senate will finally get an opportunity to deliberate the state budget starting this week. The Republican-controlled Joint Finance Committee passed the two-year spending plan last Wednesday night on a party line vote (12-4).
Here are some of the highlights, or low-lights – depending on your political perspective, of the state budget plan that emerged from the state finance committee:
• K-12 Schools: State spending on K-12 would increase by $639 million over the next two years. Per student aid would increase by $200 this year and $204 next year for all schools, at a cost of about $505 million. Democrats argued that the latest proposal doesn’t do enough to help public schools while spending millions more for private schools in the choice program.
• Higher Education: Tuition across the University of Wisconsin system would be frozen this year and next while increasing funding by $36 million. That comes after funding was cut by $250 million in the last budget. The committee denied Walker’s request to freeze tuition at technical colleges.
• Income Taxes: The committee rejected Walker’s proposal to cut income taxes by $100 million in each of the next two years, which would result in an average reduction of $44 per filer. Lawmakers instead cut taxes paid by businesses on certain property by about $74 million a year.
• Property Taxes: The budget eliminates the state portion of the property tax, which is about $90 million.
• Sales Taxes: Walker’s proposed “back-to school” sales tax holidays for two days in August 2017 and August 2018 for specified school supplies was rejected.
• Roads: The budget would not raise gas taxes, but registration fees for hybrid and electric vehicles would be at least doubled under the budget. The deal would borrow about $400 million over the next two years, which is less than the $500 million Walker called for but would also result in delays for some major road work, including around the Milwaukee area. Democrats decried the plan as irresponsible since there is no long-term solution for transportation funding.
• Prevailing Wage: All prevailing wage requirements would be eliminated under the budget. The law sets minimum salaries for construction workers on public projects. The Legislature in 2015 eliminated the prevailing was law for local government projects, but the budget would do away with it for state projects, as well.
• Low Income Tax Cuts: Republicans rejected Walker’s proposal to increase a tax credit more that $20 million for the working poor. Walker had proposed increasing the earned income tax credit for about 130,000 that he had cut in 2011, but the committee did not go along.
• Drug Tests: All able-bodied, childless adults applying for BadgerCare, health benefits would be screened for illegal drugs, including marijuana, which is not legal in Wisconsin even for medical purposes.
• High Income Tax cuts: The budget eliminates the state’s alternative minimum tax, which typically paid by people who earn between $200,000 and $500,000 a year but also benefits millionaires. It would end in the 2019 tax year, a $7 million cut.
• Self-Insurance: The committee rejected Walker’s proposal switching to a self-insurance system where the state would pay for benefits directly for about 250,000 state workers and family members instead of purchasing insurance from 17 HMOs.
In case you didn’t notice, Walker’s budget (as amended by the Joint Finance Committee) is basically more of the same. Tax cuts/tax breaks for businesses and the wealthy, while poor and middle class families are left in the wake. In truth, Walker’s 2017-19 budget is a prime example of trickle-down economics and promotes economic policies that are clearly rigged against working families.