MADISON, Wis. – Buoyed by better-than-expected revenue that he describes as the “Reform Dividend,” Gov. Scott Walker rolled out a biennial budget plan Wednesday that calls for significant increases in education spending, state-sponsored college tuition reductions, welfare reform and continued tax cuts.
While some fiscal conservatives expressed concerns about some of the governor’s spending initiatives, Republicans in the main warmly endorsed their party standard-bearer’s proposals.
YOUR MONEY: Gov. Scott Walker laid out his $76.1 billion biennial budget plan Wednesday before a joint session of the Legislature. The proposal calls for significant increases in k-12 education spending, a 5 percent tuition cut, and no gasoline tax increases.
Democrats, to no one’s surprise, railed against the budget blueprint, complaining that Walker’s plan to boost K-12 funding by nearly $649 million – state aid increases Dems have long clamored for – is nothing more than a political stunt as the governor eyes a third term in 2018.
“This budget includes historic investments in our priorities,” Walker said to a joint session of the Legislature. “We’re putting more money into public education than ever before, making college even more affordable, caring for the truly needy, building a stronger infrastructure, rewarding work, and cutting taxes to the lowest point in decades.”
The governor said such “historic investments” are possible because of “common sense,” and often hard-fought, government reforms led by Walker and the Republican majority since they swept into power in 2010.
According to the state Department of Revenue, Wisconsin ended the most recent fiscal year with a surplus of $331 million. That balance is estimated to grow to $427.2 million by the close of fiscal year 2016-17, a budget summary states.
“A lower than estimated increase in Medicaid enrollment due to a growing economy and higher than previously estimated revenue growth contribute to the higher estimated ending balances,” the budget document asserts.
The $76.098 billion biennial budget plan works out to about a 1 percent increase in 2016-17, and 3.2 percent in 2017-18, on an annualized basis, according to the Department of Administration.
But it’s enough of an increase, in particular targeted areas, to raise the eyebrows of some fiscal hawks and education reformers, and not nearly enough to placate Walker’s critics who have charged the Republican has gutted state spending in recent years.
Cutting tuition
COLLEGE COMMITMENT: The University of Wisconsin System would receive $100 million in additional funding Walker’s budget plan.
Among the proposal’s key provisions, a 5 percent reduction in tuition for undergraduates from Wisconsin at all University of Wisconsin campuses. That’s on top of recent tuition freezes called for by the governor and approved by the Legislature.
“During the decade before our freeze, tuition went up 118 percent,” Walker said. “If that trend had continued, a typical UW student would be paying $6,300 more over the past four years.”
To pay for the tuition cut, the governor puts $35 million more into the UW System budget, on top of the $100 million-plus in new state funding he is pitching. This comes a few years after accountant-lawmakers discovered the system was carrying hundreds of millions of dollars in surpluses, even while asking for more state funding.
Critics, stage left
Even before Walker fully rolled out the spending plan, Democrats chastised the budget proposal and their political Public Enemy No. 1.
State Sen. Lena Taylor, D-Milwaukee, in a joint political statement issued Wednesday morning, said Walker again is placing politics above good governance.
“I’ve been watching Scott Walker bungle budgets since he was Milwaukee County Executive,” said Taylor said. “He’s making the same irresponsible mistakes with the state that he made with the county. Budgets are about priorities and Governor Walker’s priority is politics over solving Wisconsin’s long-term problems.”
State Rep. Katrina Shankland, who has become one of the Dems most strident political mouthpieces, took the left-wing party line that Walker’s latest budget was all about his expected run for a third term.
“After Governor Walker’s disastrous budgets, he is finally backtracking on some of his deep education cuts to preserve his poll numbers,” the Stevens Point Democrat said in the joint statement.
Still, $649 million in new education spending isn’t enough for Shankland and the Democratic Party of Wisconsin, which would very much like to see a Dem in the governor’s office come 2019.
Predicting the usual liberal spin cycle attacks, the Wisconsin Institute for Law & Liberty sent out a policy brief Tuesday countering what WILL assumed would be “predicable criticism” from opponents of education reform.
The Milwaukee-based free-market, public interest law firm and advocate of parental choice, billed its brief as “Back to the Future,” underscoring what it sees as the public education machine’s tired and often erroneous narrative about alternative education options.
WILL first had to counter the left’s PR agent, the Wisconsin mainstream media. The Wisconsin State Journal this week led its coverage of Walker’s education spending proposal with this assertion:
“Six years after engineering massive cuts to public schools, Gov. Scott Walker will propose a record level of K-12 education funding in his upcoming budget proposal.”
Strange bedfellows
As WILL points out, the Obama stimulus plan “temporarily inflated the amount of money Wisconsin spent on public schools. Once federal funding declined, Wisconsin faced cuts to K-12 spending.”
The Badger State in 2011 faced a massive budget shortfall, caused by declining state revenue, the drying up of federal stimulus money, and the expensive policies of Walker’s predecessor, Gov. Jim Doyle, and a Democrat-controlled Legislature.
Since 2012, Wisconsin has increased spending on K-12 public schools every year.
Still, as WILL notes, there is little evidence that increased spending on K-12 public schools leads to improved student outcomes. Case in point, Milwaukee Public Schools.
EVERS LIKES: Tony Evers, state superintendent of Public Instruction, has praised Walker’s budget proposal, which exceeds Evers recent funding request.
As Wisconsin Watchdog reported in November, of the 75,766 students in the district, more than half – 42,421 –are in schools rated as “fails to meet expectations” or “meets few expectations.” Forty-two schools serving 24,447 students are ranked as “fails to meet expectations.”
MPS boasts a $1.1 billion budget this school year. State aid increased by $7.8 million in the 2016–17 budget. The district’s revenue limit is $10,122 per student.
Walker’s ed-spending boost has earned him some unusual friends.
Superintendent of Public Instruction Tony Evers praised the Republican governor for a budget plan that includes nearly $227 million more in state aid than the liberal education chief had requested. Evers, according to the Wisconsin State Journal, called Walker’s plan a “pro-kid budget” and “an important step forward.”
“Ironically, I don’t remember critics saying the budget request from the Department of Public Instruction wasn’t enough last fall – which is probably why school leaders are saying good things about our budget proposal,” Walker said, with a touch more lift in his voice, during his address.
Spending and cutting
The budget proposal calls for nearly $6.1 billion in transportation spending. Taking on critics from the left and in his own party, Walker said, “Now is not the time to raise taxes.”
“We should not raise taxes on farmers and manufacturers. We should not raise the income tax. We should not raise the gas tax,” the governor said, in a direct challenge to Republican leaders in particular who have called for hiking the state’s gasoline tax, one of the most costly in the nation.
Assembly Speaker Robin Vos told the Milwaukee Journal Sentinel that the Assembly still wasn’t ruling out gas tax increases, vehicular registration hikes, and toll roads. In a statement, the Rochester Republican said the budget proposal is good, but it’s a “work in progress.”
“But it’s disappointing Governor Walker has forgotten that a long-term solution for transportation is a priority, too,” Vos said.
Walker’s budget plan would cut individual income taxes by a combined $200 million-plus over the biennium. The median-income family of four would save $1,542 in taxes by tax year 2018, including previous tax cuts in recent years, according to DOA.
State Sen. David Craig said he is encouraged by the nearly $600 million in tax and fee reductions contained in Walker’s plan, as well as the “substantive welfare reforms, the repeal of prevailing wage requirements for state projects, and regulatory relief like the REINS Act.”
“However, I am deeply concerned by the dramatic spending increases within the Governor’s budget which further expand government and increase the fiscal commitment of taxpayers going forward,” the Town of Vernon Republican said in a statement.
But Walker said after years of reforming government – through cost-saving laws like Act 10 – it is time to use the “Reform Dividend” to invest in the state’s priorities.
“Overall, our common sense reforms brought us here – to the point where we have a significantly better budget outlook,” the governor said. “Instead, now that we have higher than expected revenues from the Reform Dividend, we need to use those dollars to fund our priorities. That’s exactly what this budget does for the people of Wisconsin.”