MADISON, Wis. - In his first budget proposal, Democratic Gov. Tony Evers will increase Wisconsin’s minimum wage, raise the gas tax, provide new funding for schools and give income tax cuts to middle income families.
To pay for his priorities, Evers’ two-year spending plan which he calls the “People’s Budget,” would roll back part of a manufacturing and agriculture tax credit program, expand Medicaid, use much of the state surplus, raise fees in transportation and limit the long-term capital gains tax.
Evers introduced the budget proposal Thursday night in the state Assembly chambers, but many of the provisions are likely not to pass the Republican-controlled state Legislature.
"At the end of the day, the people of Wisconsin expect and deserve for us to get to work on these pressing issues," Evers said in his budget address. "Their plight must be our purpose, their crises our cause, and their desires our demands."
Republican Senate Majority Leader Scott Fitzgerald had previously hinted that Republican leaders may create their own base budget if Evers includes proposals they do not agree with. Assembly Speaker Robin Vos has called any plan that includes raising any income or sales taxes a “non-starter.”
Providing transportation funding
To fix Wisconsin roads and infrastructure, Evers plans to raise the gas tax by $0.08 a gallon. During the 2018 campaign for governor, former Republican Gov. Scott Walker said that Evers could raise the tax by up to $1 a gallon. Evers insisted during the campaign that “everything was on the table” when it came to transportation funding but called a $1 gas tax increase “ridiculous.”
In information included in a budget summary document, Evers administration estimates the average cost for Wisconsin drivers of the increase to be $3 monthly but said that cost will be lessened by repealing the state’s minimum markup law for fuel.
.@GovEvers now turns to his transportation plan-- where he'll raise the gas tax by $.08 a gallon, repeal min markup on fuel, raise fees for heavy trucks, titles and hybrid cars for a total of more than $600M in new revenues. #news3now #wibudget— Jessica Arp (@news3jessica) March 1, 2019
The minimum markup law prohibits retailers from selling items below wholesale cost. The governor’s office said getting rid of this “hidden tax” would save residents up to $0.14 cents per gallon on gas.
"Now, I want to be clear: Everyone is going to have to give a little to make this work. That’s compromise," Evers said.
The gas tax would also continue to increase under Evers' plan, as the tax would be indexed to the consumer price index starting in April of 2020.
The budget also increases fees on heavy trucks and vehicle titles, as well as collecting a hybrid vehicle fee.
Republicans have said they thought that increasing the gas tax would not generate enough funding to pay for highways and had instead pushed for creating toll roads in the state.
Increasing the minimum wage
Evers campaigned on his promise to increase the state’s minimum wage to $15 per hour, but said last week that he did not believe the state could do that immediately.
His budget proposal shows he plans to increase the state’s hourly minimum wage by a dollar by the start of 2019. Currently, Wisconsin workers are paid a mandatory $7.25, which would increase to up to $8.25 by the start of 2020 and $9 by the beginning of 2021.
For the two years after 2021, the rate would increase by $0.75, going up to $10.50 in 2023. After that, the minimum wage would be indexed using the Consumer Price Index.
Republicans have largely pushed back on any increase in the minimum wage, saying that it could be detrimental to business.
Repealing Republican laws and restoring powers taken away during lame-duck session
Evers’ budget also does away with many of the laws enacted by former Gov. Scott Walker, which will likely anger Republican legislative leaders.
Evers campaigned on his promise to do away with Act 10, Wisconsin’s collective bargaining law enacted by Walker in 2011, which Fitzgerald said he did not think his caucus would support.
While Evers’ budget proposal does not eliminate Act 10, it does do away with the right-to-work law and restores the prevailing wage law for state and local projects.
Prevailing wage laws generally require employers to pay workers the hourly wage and fringe benefits that are paid to the majority of workers in a particular county, according to the state Department of Workforce Development. The Republican-controlled state Legislature wiped out prevailing wage for local government projects in 2015, and Walker eliminated prevailing wage for state projects as part of his budget in 2017.
Right-to-work was created for private sector employees and employees in Wisconsin in 2015. The measure says that employers are prohibited from requiring union membership as a condition of employment. The law was upheld by the Wisconsin Court of Appeals in 2017.
In December 2018, Walker signed a series of Republican bills weakening the powers of Wisconsin’s governor and attorney general that were passed during a marathon extraordinary session. Evers' budget repeals most of those provisions.
Evers’ budget restores Democratic Attorney General Josh Kaul’s power to settle cases without approval from state lawmakers, removes lawmakers’ ability to intervene in lawsuits and would restore Evers’ power to make changes to Capitol security without approval from lawmakers.
Getting rid of the state’s job creation agency, the Wisconsin Economic Development Corp., was another one of Evers’ top priorities during his campaign. His budget keeps the agency in place, but makes several changes to it. Evers wants to change the composition of the WEDC board -- reversing a change made during the lame-duck session -- and restore the economic development liaison for the Foxconn project to the state’s Department of Administration.
As the former state superintendent for the Department of Public Instruction, Evers is seeking $1.4 billion for schools, which would increase state funding for schools to two-thirds of their total costs, increase special education aid, provide funding for mental health and increase the revenue ceiling for districts.
The budget proposal changes the formula by which schools across the state get money, by guaranteeing minimum amounts for each student, changing the amount districts could get for low-income students, as well as shifting where some tax credits go to pay for schools. This would be a fundamental overhaul to the way schools are paid for in the state, which could likely be a heavy lift in the legislature.
Evers' plan also aims to close achievement gaps for English language learners by providing $3.4 million to create a targeted aid program.
Evers, a longtime critic of voucher schools, is proposing capping enrollment in private school voucher programs. Republican legislative leaders and conservative law firm Wisconsin Institute for Law and Liberty came out against the proposal earlier this week.
Evers is proposing an income tax cut for individual filers making less than $100,000 a year and families with a combined income of less than $150,000. He’s planning to pay for it by capping the Manufacturing and Ag tax credit program for manufacturers but not for farmers.
Evers and Republican lawmakers both supported an income tax cut but disagreed on how to pay for it. The governor’s first veto in office came Feb. 20 when he vetoed the GOP tax cut bill, which would have been paid for using the one-time budget surplus.
The big questions: How much of this will Republicans @SpeakerVos and @SenFitzgerald agreed to? Which provisions will be non-starters?— Rose Schmidt (@RoseSchmidtTV) March 1, 2019
Vos has said he won’t raise income taxes or give more money to @PPAWI.
Fitzgerald has said he does not support medical marijuana legalization.
Vos called the plan to cap the manufacturing tax credit a “non-starter” because it would have raised taxes on some in order to lower taxes on others.
Spending plans for higher education
Evers is calling for a continuation on the tuition freeze at schools in the University of Wisconsin System and a boost in funding for the UW System by $150 million.
The proposal also provides $40.4 million for a 2 percent pay increase for UW System employees and $50,000 for a student loan refinancing authority study run by the state.
A controversial part of the plan would allow undocumented immigrants who are Wisconsin residents to pay in-state tuition rates at UW schools and technical colleges.
During the campaign, Walker criticized Evers for his promise to allow students who were children when their parents brought them into the United States. without legal permission to pay in-state tuition rates. The budget proposal takes that idea a step further.
When Evers’ plans for higher education were released earlier this week, Republican Rep. John Nygren, who chairs the state's budget committee, tweeted that Evers "continues to make a bipartisan budget nearly impossible."
Balancing the budget
State statutes require that Wisconsin have a balanced budget annually. Evers' budget increases spending by roughly $2 billion a year each year of the biennium from current spending, an increase of about 5 percent a year.
To pay for some of his priorities, Evers will spend down a surplus that is expected over the next two years. The state will enter the 2019 biennium with a $616 million surplus, and Evers budget would end the 2021 biennium with only $20 million.
Evers' administration said it will not spend any money from the state’s rainy day fund.
Health care and Medicaid expansion
Evers is proposing accepting federal Medicaid expansion money that Walker turned down. Evers’ office said Medicaid expansion would provide health care coverage to an additional 82,000 people in Wisconsin and save $320 million over two years.
Republicans rejected the Medicaid expansion in prior budgets, and Walker offered a different plan to have those above 100 percent of the poverty line to buy insurance on the federal health care marketplace. Current GOP legislative leaders have called the expansion a “non-starter” and have said it would not be included in any plan passed in either house.
Evers' budget also includes his “Healthy Women, Healthy Babies” initiative on women’s health, which would make Planned Parenthood eligible again for state and federal funding that was blocked by Walker.
Vos told reporters Planned Parenthood would not get “one more nickel” from the state Legislature.
The budget proposal would also boost postpartum coverage for mothers insured by Medicaid, address racial disparities in health care and try to reduce infant mortality rates among children of color.
Allowing undocumented immigrants to obtain a license
People who are in the United States illegally would be allowed to obtain a driver’s license or ID card under Evers’ budget.
“This makes our roads and our communities safer, and helps strengthen our economy and Wisconsin families,” Evers said during the budget address.
Evers made a promise to provide IDs to undocumented immigrants on the campaign trail, but the move is certain to face opposition from Republican lawmakers.
Evers’ budget would legalize marijuana for people who have medical conditions including cancer, post-traumatic stress disorder and chronic pain.
It would also decriminalize marijuana possession for 25 grams or less and allow people with previous convictions for possessing small amounts of marijuana to have their records expunged.
Fitzgerald has said he opposes medical marijuana and isn't sure such a law could pass the chamber.
Vos said he personally is open to medical marijuana but believes Evers’ proposal goes too far and could lead to legalization for recreational use, which Vos does not support.
Changes to state voting laws
All residents in Wisconsin would be automatically registered to vote when they interact with the a state Division of Motor Vehicles under Evers’ budget. The spending bill requires the Elections Commission to work with the state Department of Transportation to facilitate automatic voter registration as quickly as possible.
Evers also seeks to modify state law related to voter identification. UW schools and technical colleges would be required to make student ID cards eligible to be used for voting, and some provisions including extending the expiration date for a voter ID card to five years, and allowing receipts issued by the DMV to be valid for 180 days.
Watch the Evers' budget address and Republican response below
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