MacIver News Service | June 28, 2019
MADISON – It’s been quite the month for Wisconsin! The 2019-2021 biennial budget passed the Legislature, so keep an eye out for MacIver’s full analysis, coming soon. Gov. Tony Evers has called for the budget, giving him until July 4th to act on it if the document is enrolled today. It’s tough to keep up with everything that has been going on, so we’ve put together a rundown of what happened in key policy areas to keep you informed. Make sure to follow us on Twitter for all the updates.
Road funding once again emerged as a major friction point in the budget debate. Republicans agreed on historic spending increases, with promises of reforms and efficiencies that have yet to become law.
The Republican-controlled Joint Finance Committee (JFC) put together a hefty transportation funding package to fix the roads totaling upwards of $484 million dollars that alarmed some fiscal hawks. They argue this revenue boost for the Department of Transportation is too expensive for an agency without enough accountability and in need of reform. To ease this concern, Rep. Joe Sanfelippo (R-New Berlin) led the way on the desired reform with the “Road to Sustainability Package.” This six-bill package would increase competition by raising the number of bidders, create better accountability, and make the DOT more efficient, however one of the bills was pulled from the Senate due to concerns about an amendment passed in the Assembly.
Republicans provided the largest amount of funding to K-12 education in state history, just like State Superintendent Tony Evers asked for. Unfortunately for them, Governor Tony Evers wanted even more.
JFC increased K-12 spending by $500 million in their budget package, but Democrats continued to push the funding as “crumbs” through the Assembly and Senate floor debates. The nonpartisan Fiscal Bureau analysis puts the spending increase at the Department of Public Instruction even higher, at a staggering $655 million. Years of fiscal discipline and higher-than-expected revenue forecasts make this increase possible without the need for Gov. Evers’ proposed $1.3 billion in tax hikes. This package marks a historic increase in spending for K-12 education despite Democratic rhetoric pushing it as a massive cut. This rhetoric prompted a misguided march in protest of the “cuts.” In addition, the GOP continued its education funding push via a $58 million spending increase for the UW System, but Democrats pushed a false narrative again and cried poverty.
Gov. Evers’ entire budget depended on the state accepting a deal from the Feds to expand Medicaid coverage to adults living above the federal poverty line, even though he knew Republicans would never agree to it. Instead, they found other ways to increase the DHS budget by $1.63 billion – at times doubling what Evers requested. Instead of Medicaid expansion, JFC voted to boost overall Department of Health Services (DHS) spending by $1.63 billion (all-funds) over the next two years, and to increase the Department of Children and Families biennial budget by north of $125 million. Yet, Democrats continued to fume over the refusal to expand Medicaid, using moral rhetoric to justify the expansion. This GOP proposal could doom the budget since Evers has threatened to veto any budget that does not include Medicaid expansion.
Missing Fiscally Conservative Principles
The budget debate began with Republicans condemning Gov. Evers’ proposal that created a structural deficit of $1.96 billion, while the GOP passed a budget with a $1.4 billion deficit. Republicans cut taxes, but also increased spending by an alarming amount, doing so enough to garner praise from Democrats who thanked the GOP for following Evers’ lead. The budget did include a tax cut totalling $536 million in relief, but increased spending throughout. This plan set a record $1.9 billion capital budget for state wide projects, even Madison liberal Rep. Chris Taylor said she liked “a lot of the things that are funded”. Many aspects of the bill were not ideal, and MacIver took a look at possible ways make the budget more friendly to taxpayers, which you can read here.
Is this the endorsement fiscal conservatives are going for? Rep. Chris Taylor (D-Madison) tells JFC Republicans she likes "a lot of the things that are funded" in GOP's $1.9 billion building project borrowing plan. #wiright #wipolitics #wibudget
— MacIver Institute (@MacIverWisc) June 11, 2019
Behind the Scenes
Concerns over GOP spending caused two Republican Senators to vote against the budget. Uncertainty ensued whether the package could make it through the Senate since another vote could not be lost. Despite two Republican votes against, the document passed 17-16. Before it got to the floor, sources close to MacIver warned that there would be controversial pieces of legislation included in the 999 motion. Sources said the Public Finance Authority would be expanded, the Wedding Barn industry would be limited. At the same time this was going on sources told MacIver former Democratic senator Chuck Chvala was making the rounds throughout the Capitol talking about PFA. Despite multiple sources verifying the 999 plan, Joint Finance co-chair Rep. Nygren denied this, leading to the following Twitter exchange.
Joint Finance Co-chair John Nygren says stories on Republicans trying to push through measures on PFA and wedding barns is "fake news." Multiple Capitol sources tell us that Assembly leadership backed off on proposals after MacIver's reports #wiright #wipolitics @rep89 #wibudget
— MacIver Institute (@MacIverWisc) June 13, 2019
Our sources say it was discussed in both caucuses. They further say you pushed it.
— MacIver Institute (@MacIverWisc) June 13, 2019
PLA and Union Drama
Wisconsin law forbids discrimination against non-union firms, but try telling that to Madison’s city council. The city of Madison continues to ignore state law on Project Labor Agreements, where the government will only give public construction projects to unionized firms. Since 2017, PLAs have been illegal in Wisconsin. However the city of Madison continues to award contracts to unionized firms. PLAs drive up costs by reducing competition, and harms firms that value merit.