The 2023-2025 budget process begins with a bang.
May 2, 2023
The MacIver Staff
Welcome everyone to another season of the MacIver Budget Blog. We hope you are as excited as we are to be back for eight full weeks (maybe more?) of pure budgetary bliss.
Today marks the true start of the Legislature’s review of Governor Evers’ proposed 2023-2025 state budget.
In their first executive session on the budget bill today, JFC started off big.
The Joint Committee on Finance voted on a motion to remove all of Governor Evers’ non-fiscal policy suggestions and billions of his new proposed spending. State Sen. Howard Marklein (R-Spring Green) and State Rep. Mark Born (R-Beaver Dam), the co-chairs of the budget committee, signaled days ago that the committee would work from base – meaning the starting point for each item will be the current $89 billion biennial budget. Their plan will build on the current (base) budget, rather than use the governor’s massive proposal as a starting point.
The Republicans on the committee introduced a substitute amendment to the governor’s $103 billion plan that took out hundreds of items, eliminated non-fiscal policy, removed more than 500 proposed new positions, and cut over $4.7 billion in spending.
Even though the Governor will attempt to portray this as a huge cut in funding for government, remember that the 2019-2021 state budget increased spending by $7 billion and the 2021-2023 state budget increased spending by $5.7 billion.
With an unprecedented $7 billion surplus at center stage, the big question heading into this budget is whether the legislature will spend it, growing government even more, or will they give it back to taxpayers in the form of tax cuts. Just today, the Tax Foundation put out their ranking of state individual income tax climates showing that – in spite of a $1 billion income tax cut in 2021 – Wisconsin’s rank fell from a bad 37th to a worse 38th.
While we have continued to make progress on reducing our tax burden, other states are doing more, and we’re again losing ground. The governor prefers to single out some groups for tax relief, while raising taxes on others. In today’s action, the finance committee eliminated the governor’s proposed tax increases, as well as new tax exemptions and credits, giving them a blank state to – hopefully – include substantive, across-the-board tax relief.
Another big question as we start the budget is if the “historic deal” on shared revenue is actually a deal. Charles Benson of WTMJ 4 TV interviewed Governor Evers recently and when asked about the deal, the Governor said “I haven’t signed off on anything.”
If the Governor hasn’t signed off on the deal, do you really have a deal? Who exactly have Republicans negotiated with if Governor Evers hasn’t signed off on the deal and why would you negotiate with any Democrat other than Gov. Evers?
It is also interesting to note that the Governor might now be against the referendum vote (maybe at the behest of MKE Democrats?) requirement to approve the higher sales tax even though his own proposal included that same requirement. Why would the Governor suddenly change his mind about letting the citizens of Milwaukee decide if they want higher taxes?
See the video here.
We will have more analysis of the shared revenue agreement and the questions that every taxpayer should ask about the package later this week.
Next up for the committee on Thursday:
- Secretary of State
- Board on Aging and Long-Term Care
- Child Abuse and Neglect Prevention Board
- Board of Commissioners of Public Lands
- Employment Relations Commission
- Ethics Commission
- Financial Institutions
- State Treasurer
- Educational Communications Board
- Historical Society
- Medical College of Wisconsin