Tuesday, June 29, 2021

In today's edition of "Bad idea budget theatre"

I'd seen Dem types such as Citizen Action and State Sen. Chris Larson say they wanted Governor Evers to veto the entire state budget if it got to his desk in its current WisGOP-modified form. We found out today why this would be a very bad idea.

Those packages — one signed by President Biden this spring, one by former President Trump in December — include a requirement that states maintain their current spending commitments to K-12 and higher education to qualify for the money.

The Cares Act, which Trump signed, requires that maintenance of effort extend into the 2021-22 fiscal year. Under the American Rescue Plan Act, which Biden signed, the commitment must be met in both 2021-22 and 2022-23.

If the budget is vetoed and no new one is approved, the state would continue with the appropriation levels in place for the 2020-21 fiscal year, which ends tomorrow.

In a memo requested by Sen. Jon Erpenbach, LFB estimated the state wouldn’t meet the maintenance of effort requirements under either package if that happened.
I know I said a month ago that Evers should consider tossing the whole budget out, but that was before the WisGOPs ended up adding enough state money to K-12 to guarantee the stimulus funds (yes, it's a gimmick to reduce property taxes vs investing in schools, but it still gets us the $2.3 billion from the Feds).

As it stands today, Evers can veto or rewrite bad parts out of the budget while accepting some other parts, and then if those big revenues do appear in the coming months, turn around and demand WisGOP to use those funds in 2022.

I also have no doubt that if Evers did veto the whole budget, WisGOP would laugh, do nothing (a skill they are very good at), and then cynically blame Evers for not allowing districts to get the stimulus funds. No sense playing that game.

Speaking of games, it looks like a giveaway WisGOP is planning on giving to certain business owners is hitting some snags.

That legislation, Assembly Bill 191, is focused on eliminating the personal property tax paid by businesses. It would save the businesses about $200 million a year.

But the legislation would also expand an income tax break for manufacturers and agricultural operations.

That tax break is now available on income generated by manufacturers, as well as warehouses and office structures "when located at the site of the (manufacturing) activity."...

The tax legislation coming up Tuesday would eliminate the phrase "when located at the site of the activity." According to the Department of Revenue, a manufacturer based in China, Mexico or anywhere else would now be able to claim the tax break for its warehouses and offices in Wisconsin....

The issue came to light just days after lawmakers learned that their plans to end the personal property tax would likely also lead to a tax break of $45 million a year for railroad companies.
See what happens when you allow WMC to write bills for you?

So the budget is being held up for a bit as WisGOP tries to remedy the hash that they've made of their tax cut giveaway, and it will likely cost taxpayers more money to fill in the holes caused by the extra giveaways that this language is causing. Or given that this is a standalone, Evers could veto this and tell WisGOP to put it back into the oven to get it right.

Wouldn't it be nice to stop the games and posing for interest groups, and actually do something that's smart and workable? Evers likely will, but I'm not so sure about a lot of others these days.


  1. Sure enough, the GOPs added $66 million in general tax dollars to the Transportation Fund to make up for the railroad giveaway. Just hope it doesn't mess up the K-12 requirements, now that we're spending more money that's not going to schools.

    I also see 4 Dems signed off on the budget with the idea that Evers will improve it with line-item vetoes (while not vetoing the whole thing). I get that, but I don't think moderate GOP voters will give them credit in November 2022 for being "bipartisan". You can be reasonable without having to compromise what you believe in.

  2. So I will get a property tax break but then my school district will have to pass a referendum and my property taxes will go back up. The referendum will take a lot of effort and expense to pass and cause division in the district whether it passes or not. Thanks for nothing WI GOP.

    1. That’s the intelligence of the design, Katrina!

      Then add in the extra property taxes you have to pay due to the voucher scam.