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Breaking down Gov. Evers’ $90B two-year budget

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MADISON (WKOW) -- With a plan to spend aggressively in his proposed two-year budget, and the immediate rebuke Tuesday from Republicans, it became immediately clear, Governor Tony Evers and GOP legislators are far apart on an appropriate budget total for the 2021-23 biennium.

Evers proposed spending $90 billion over the two-year budget cycle. It's a proposal funded largely through a $1 billion tax increase.

"There are a lot of spending cuts being made to what was budgeted this year because of COVID," said Jason Stein, Research Director for the nonpartisan Wisconsin Policy Forum. "A lot of one-time measures that were being made because of the pandemic so there is that to take into account but it's a large spending increase compared to the past."

Before joining the policy forum, Stein reported out of the state Capitol for the Milwaukee Journal-Sentinel.

One item that bears watching in any biennial budget is the long-term financial projections. While Evers' proposed budget has the state operating at a net negative by the fiscal years 2024 and 2025, Stein pointed out the Evers administration relies on the state's current billion-dollar surplus to stay in the black in 2022.

"The second year of the budget proposal, as it's been put forward, it would be spending more than it's taking in," Stein said.

Indeed, in fiscal year 2021, the Evers budget provides for $18.6 billion in revenue while spending $17.9 billion. The following year, Evers proposes spending $20.5 billion while taking in $19.4 billion.

In his budget address Tuesday, Evers said he would not apologize for a big-spending agenda coming out of a pandemic that caused strain for so many Wisconsin residents.

"After all we've been through, we aren't going to apologize for wanting more for each other," Evers said. "For our neighbors, for our kids, our parents, grandparents, and the state's future."

Evers' budget buttresses its spending agenda by bringing in an additional $1 billion in tax collections. Stein said most of that new tax revenue is derived from three buckets:

  • Capping the manufacturing tax credit at $300,000/year
  • Raising the Capital Gains tax on individual filers making more than $400,000/year and married couple filing jointly with more than $533,000/year
  • Realigning the state tax rules to make them more comparable to the federal code

"That's where the revenue uppers come from," Stein said. "In addition to that, the governor does have some tax relief measures but those are quite a bit smaller than what he's doing on the revenue increase side."

Republicans already indicated they intend on tossing out much of Evers' proposed new spending. They've also expressed dismay at some of the policy proposals he's included, such as largely repealing Act 10 and restoring collective bargaining powers to public worker unions and legalizing recreational marijuana.

Should Evers and GOP leaders remain far enough apart that the governor outright rejects the budget bill lawmakers send back, Stein said it could drag the budget debate past its early summer deadline.

Two years ago, Evers signed the lawmaker-amended budget bill but then added dozens of partial vetoes, a power Wisconsin governors enjoy when it comes to the budget.

If the debate were to carry on past the budget deadline, Stein noted the state would just continue spending at its current budget levels, something he described as a "ying-yang."

"The good news is there's no drop-dead deadline where it's absolutely gotta happen," Stein said. "The bad news is there's no drop-dead deadline where it's absolutely gotta happen."

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A. J. Bayatpour

Capitol Bureau Chief

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