State budget increases spending 12 percent

The state of Wisconsin has a new budget, thanks to a bipartisan compromise negotiated by Governor Tony Evers and the GOP legislative leadership, but that leadership needed Democratic votes to muscle the package through the legislature, leaving a lot of stalwarts on the left and right unhappy with the outcome.

In the end, 14 Republicans and five Democrats pushed the bill through the state Senate, with four Republicans voting no: Senators Chris Kapenga (R-Delafield), Rob Hutton (R-Brookfield), Steve Nass (R-Whitewater), and Mary Felzkowski (R-Tomahawk). The budget passed the Assembly 59-39, with one Republican, Rep. Scott Allen of Waukesha, voting no.

After signing the bill into law, Evers still proceeded to issue 23 partial vetoes, among them a $750,000 funding provision for the Lakeland STAR School and Academy, which serves students with autism and special needs across the Northwoods.

That didn’t stop Evers from proclaiming the budget “pro-kid,” with what he said was nearly $1.4 billion in spendable revenue for K-12 schools and the largest increase to the special education reimbursement rate in state history.

The UW System will receive the largest increase in nearly two decades, and the budget includes more than $360 million to help fund the child care industry, a third of which will be provided as direct payments to providers.

The budget also eliminates the sales tax on household energy bills, continues funding for BadgerCare, and includes 3-percent increases in each year for General Transportation Aids and $150 million to repair rural roads and bridges.

Evers said the budget was also a reflection of bipartisan compromise, meaning everyone got something they wanted, and no one got everything they wanted. 

“I spent months working together with Republican leaders to reach common ground and find consensus,” Evers said. “… While this budget looks drastically different than the budget I proposed and does not include everything I asked for and hoped it would, frankly, I believe most Wisconsinites would say that compromise is a good thing because that is how government is supposed to work.”

Wisconsin is a purple state, Evers said. 

“At the end of the day, it is my job as governor to get things done, and it is my job to be a governor for the whole state,” he said. “I made a promise to always work to do the right thing for Wisconsin. And I believe working together to find common ground so we can pass a bipartisan budget that reflects the will of the people of this state is part of keeping that promise.”

Over in the Legislature, Senate majority leader Devin LeMahieu (R-Oostburg) pointed out that the enacted budget includes $1.3 billion in income tax relief.

“This budget is a monumental win for the state of Wisconsin,” LeMahieu said. “Today’s workforce is more mobile than ever. We’ve all seen the boom that low- and no- income tax states have experienced. Creating and maintaining a competitive tax structure in Wisconsin is the most important economic development tool that we have. This budget will accomplish what Senate Republicans have committed to do since January: fund core priorities and cut taxes without creating an unsustainable deficit.”

Northwoods objections

There was plenty of criticism leveled at the budget, especially from Northwoods lawmakers.

State Rep. Rob Swearingen (R-Rhinelander) voted for the budget but was incensed by Evers’s partial vetoes as he signed the package, among them the funding for Lakeland STAR School and Academy and for the Deer River restoration, both of which Swearingen called critical Northwoods priorities.

Swearingen observed that Evers vetoed the Lakeland Star and Academy funding for the fourth budget in a row.

“Gov. Evers calls this the ‘Year of the Kid’ — unless you’re a child with special needs from the Northwoods,” Swearingen said. “This is about giving kids in our communities with special needs the opportunity to learn, grow, and thrive. Every time he vetoes this funding, it’s Northwoods families who pay the price.”

Lakeland STAR offers personalized, skills-based education to help students reach their fullest potential, live independently, and find employment after graduation, Swearingen said.

The Northwoods lawmaker also blasted Evers’s veto of $1.75 million for the Deerskin River restoration, with the governor saying he could not approve the funding because the legislature declined to reauthorize the Knowles-Nelson Stewardship Program.

That program will continue for another year and will be considered in separate legislation this fall.

“Let’s call it what it is — a lame excuse,” Swearingen said. “This project is about fixing problems caused by state agency decisions and protecting our local lakes and fish habitat. Blaming the Knowles-Nelson program is just political cover. Local governments and residents have been asking for this help for years. The only thing standing in their way is the governor’s pen.”

Northwoods families, students, and outdoor enthusiasts deserve better than another round of vetoes and political games, Swearingen said.

The vetoes aside, Swearingen voted for the overall bill, saying there was a lot to like in it.

“This budget puts the needs of the Northwoods first — with tax relief for working families, investments in long-term care, EMS services, and strong support for our tourism economy,” he said after voting for the bill. “I’m proud to support a plan that reflects the priorities of the communities I represent.”

Swearingen pointed to the aforementioned income tax relief, which cuts the middle two tax brackets to 4.4 percent, and he cited $22.4 billion in funding for long-term care programs and nursing homes, a $30-million investment in tourism marketing to boost local economies, and a significant expansion of EMS funding to strengthen emergency response in rural areas.

Swearingen’s Northwoods colleague, Senator Mary Felzkowski (R-Tomahawk), could not bring herself to vote for the budget bill at all, the first time on record a Senate president opposed a final budget bill, she said. Specifically, in a statement, Felzkowski’s office said the budget was balanced on the back of a federal government that is $36 trillion in debt, and did so using what she called a little-known gimmick: the Hospital Assessment and Access Payments provision. 

“Governor [James] Doyle was the first to use this provision in Wisconsin to help balance the budget due to the financial stress of the Great Recession,” Felzkowski’s statement said. “Now, the federal government has realized that this gimmick is unsustainable and is cracking down on states abusing this program. This is why Governor Evers and Republican legislative leaders are rushing to complete the state budget before President Trump signs his ‘One Big Beautiful Bill’ into law.”

The statement then explained how the provision works.

“Hospitals pay in just over $419 million per year (per statutes), and these funds are then used to leverage additional federal dollars,” the release stated. “Those additional dollars go back to the hospitals. Hospitals receive $679.9 million (netting $260.5 million), and the state receives $150.4 million.”

To help cover a $12-billion spending increase in this budget, the release stated, Republican legislative leaders and Evers maxed out the gimmick. 

“The budget increases the amount hospitals pay in to $1.5 billion per year, meaning they get almost $2.7 billion back (netting over $1.1 billion annually),” the release stated. “Additionally, the state receives $448 million.”

But where does the $1.5 billion hospitals pay in come from, Felzkowski asked: “The cost is passed on to patients.”

“The federal government has realized it can no longer afford this scheme, which is why the ‘One Big Beautiful Bill’ is changing it,” the release stated. “Taxpayers, patients, and employers receive nothing in exchange for a multi-billion-dollar package to hospitals.”

Health-care affordability is the number one concern for Wisconsin businesses, and Wisconsin has the fifth highest hospital costs in the country, Felzkowski said. 

“This budget rewards hospitals with almost a billion dollars of new revenue every year and taxpayers do not get a single substantive health-care reform in return,” she said. “Health-care costs are the largest financial concern for most Wisconsin families and businesses. Instead of addressing these costs, Gov. Evers sold out to hospital lobbyists and willingly turned down a golden opportunity to enact bipartisan health-care reforms that would have lowered costs for our constituents.”

From the right: An onslaught of criticism

Conservative lawmakers and influencers heaped criticism on the GOP for crafting and passing the budget bill.

Among those lawmakers voting no, state Senator Steve Nass (R-Whitewater) was perhaps the most vehement in his opposition, saying the bill lacked conservative principles.

“The [Assembly speaker Robin] Vos-Evers budget deal can only be described as an orgy of spending designed by two leaders that probably won’t be here to deal with the financial mess it will create in the 2027-29 biennium,” Nass said. “Speaker Vos and Gov. Evers agreed to a 15-percent increase in spending over the biennium. The proposed All-Funds spending will be $114.3 billion.”

Nass asked voters to remember the $4.3 billion one-time surplus that many legislators promised to return to taxpayers.  

“Oops, those same legislators spent nearly all of that one-time money on earmarks in their districts and funding for special interests,” he said. “K-12 education funding will increase by about 8 percent on top of the nearly $750 million in property tax increases authorized by the governor’s 400-years veto. Missing from this budget are any reforms aimed at improving the academic performance of students.”

Nass said Evers wasn’t content just to spend the cash the state had on hand. 

“The Vos-Evers budget will dramatically increase bonding by borrowing $3.2 billion, the highest levels in a decade for the state,” he said. “The UW System will receive the largest injection of taxpayers’ dollars in nearly two decades. This decision comes only one week after state auditors pointed out the significant decrease in UW System enrollment and the massive increase in administrative positions since 2014.”

Nass said he would spend the next few weeks updating taxpayers with even more outrages found in the Vos-Evers orgy of spending.

State Senator Rob Hutton (R-Brookfield), who also voted no, was likewise critical of the spending in the budget.

“During my time as an elected official, I have been honored to champion many tax cuts that have sought to return every tax dollar possible to the hard-working taxpayers of Wisconsin,” Hutton said. “Most recently the Republican-led legislature on at least three separate occasions presented proposals that would have provided important income tax relief to the citizens of this great state. Unfortunately, these proposals were vetoed by Gov. Evers.”

Now, Hutton continued, this budget seeks to leverage those vetoes to hide a 12-percent increase in spending that the governor required in the budget. That increase, Hutton said, will create a $1.2 billion structural deficit, putting Wisconsin families in a worse spot for the future.

“In a time of economic uncertainty, when our spending decisions warrant further restraint and discernment, we need a budget that creates proper spending priorities and puts taxpayers first,” Hutton said. “I continue to stand ready to work to reduce the tax burden on Wisconsin citizens and small businesses. We can never lose sight of the fact the more money taxpayers keep, the more prosperous our state is.”

Outside of the legislature, the president and CEO of the conservative John K. MacIver Institute for Public Policy, Annette Olson, accused Republicans of selling out their constituents.

“We are far from impressed with the budget agreement Governor Evers announced today,” Olson said. “Apparently Republican leaders’ biggest concern was how to secure Democrat votes when principled conservatives said no. While there is plenty of spending in this budget, there is no mention of accountability.”

As a result of the deal, Olson said, UW bureaucrats get raises while student enrollment declines.

“The state’s K-12 public schools get an enormous increase plus higher property taxes, and after years of spending more our kids get less actual education,” she said. “In Gov. Evers’ Year of the Kid, this budget expands his cradle-to-grave vision with an expansion of government-run childcare programs, as the Wisconsin Shares program lowers their quality standards.”

And all that comes on top of the $750-million property tax increase that resulted from the last budget deal with the governor, Olson said.

“The bottom line is this: Republican leadership sold out their constituents for a $180 tax cut,” she said.

Et tu, Democrats? 

A multitude of Democratic progressive lawmakers were also unhappy with the budget deal, albeit for different reasons, though they were not able to stop its passage.

State Senator Tim Carpenter (D-Milwaukee) said the legislature passed a state budget that did not address the fundamental needs of the state. 

“Many issues remain unsolved, that we could have fixed through the budget process,” Carpenter said. “During the public hearings, we heard directly from the people of Wisconsin what the solutions are to the problems they are facing on a day-to-day basis.”

Unfortunately, Carpenter said, Republican leadership dragged their feet and waited to come to the negotiating table until the last minute. 

“While we were able to make marginal progress on some areas, the budget that passed today leaves us with the same problems we started with at the beginning,” he said. “We have received a clear message from the people that the needs of our state’s children should be the highest priority in the state budget. Without adequate childcare many parents have had to compromise in their professions, sometimes not being able to work full time as they would like in order to ensure their kids are cared for.”

State Representative Lee Snodgrass (D-Appleton) said the compromise budget compromised kids and families.

“While I appreciate the nominal gains that Senate Democrats and Governor Evers worked to improve this Republican authored budget, it falls far short of what my district needs,” Snodgrass said. “The passage of this budget will raise property taxes for my community, while simultaneously lowering the ability for school districts to effectively educate our students.”

Snodgrass said the state had an opportunity to use its projected revenue and $4-billion surplus to invest in what she said people in her district and throughout Wisconsin have pleaded for — adequate funding for public schools, affordable child care, affordable housing, stewardship, and mental health services. 

“Republicans have opted, as they have again and again, to starve public schools, underfund higher-ed, kick new moms off of health care, and grossly underfund the needs multiple agencies have stressed are necessary to continue to serve the people of this state,” she said. “Any budget that abandons or harms kids, schools, communities and constituents does not get my support.”

State Representative Amaad Rivera-Wagner (D–Green Bay) also voted against the final bill, citing what he called serious omissions that leave working families and local taxpayers behind.

“I want to thank Governor Evers and his team for doing everything they could to make a flawed budget better,” Rivera-Wagner said. “Because of their efforts, we stopped cuts to the UW System, invested over a billion dollars in K-12 education, increased special education aid, and secured critical funding for child care. That’s progress — and it matters. But better isn’t always enough.”

Rivera-Wagner pointed to what he called two glaring issues in the budget: the continued disparity in special education funding and the refusal to expand BadgerCare — both policies that he said enjoy broad bipartisan support across Wisconsin.

“Our state continues to mandate that every child be taught, but this budget doesn’t fully fund what it takes to make that happen,” he said. “In this budget, private voucher schools will be reimbursed at 90 percent for special education costs, while public schools — the schools that serve the vast majority of our children — are stuck at 45 percent. When the state underfunds education, our local communities get stuck filling the gap — and that means higher property taxes for homeowners.”

The budget also fails to expand BadgerCare, Rivera-Wagner said, despite clear evidence that doing so would bring health care coverage to nearly 100,000 more Wisconsinites and save the state an estimated $1.7 billion. 

“Expanding health care access and saving taxpayers money shouldn’t be controversial,” he said. “These are common-sense solutions supported by folks from all corners of the state — Republican and Democrat alike.”

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.