Gov. Scott Walker's budget includes tax cuts, halt to east-west I-94 plan

By Jason Stein, Patrick Marley, and Erin Richards

MADISON - Gov. Scott Walker readied for a rough re-election race with Wednesday's budget proposal, rolling ahead with $593 million in tax and fee cuts and more money for state workers, schools and the University of Wisconsin System.

In the two-year, $76.1 billion budget bill, the governor is keeping the brakes on road funding, abandoning Milwaukee's massive I-94 east-west project and bracing for a collision with his fellow Republicans over state highway funding. He also would overhaul state employee insurance, release some nonviolent inmates early and fully repeal special minimum pay rates for workers on public building projects.

But elsewhere, Walker made clear his intent to win a third term by driving just as far as he can on a modest state surplus and his own lagging poll numbers. The governor's budget would dole out $203 million in broad income tax cuts; $22 million for a sales tax holiday; and nearly $340 million in property tax cuts.

 

Overall, Walker is partly undoing many of the cuts he made in 2011 to close a state budget shortfall, including offering state workers 2% raises for each of the next two years.

"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," Walker said.

Walker's budget ramps up some new spending in its second year. That means once the 2018 elections are over, state officials would need to cover a two-year, $735 million shortfall in the following budget, according to one rough calculation.

Walker’s fellow Republicans were skeptical of some of Walker's budget, especially his delays to road projects and borrowing more money to avoid a gas tax increase.

“I think it’s definitely possible that we’re going to look at a gas tax, we’re going to look at registration fee increases, we’re going to look at tolling,” Assembly Speaker Robin Vos (R-Rochester) said. “It is not responsible for us just to continue to kick the can down the road and put more and more spending on the state’s credit card.”

Senate Republicans such as Majority Leader Scott Fitzgerald of Juneau and Sen. Alberta Darling of River Hills are much more skeptical of a gas tax increase. But Fitzgerald also said he was not enthused by Walker's income tax cuts, adding he wanted to look at other potential tax decreases.

Walker's two-year budget proposal would drop plans to work on the 3.5-mile east-west portion of I-94 in Milwaukee between the Marquette and Zoo interchanges. That would free $31 million over the next two years for long-delayed work on the section of I-94 south of Milwaukee — a top priority for Vos — and avoid for now at least the total costs that could run $852 million or more.

That raised concerns for Steve Baas, a lobbyist for the Metropolitan Milwaukee Association of Commerce. He questioned whether it made sense to make massive investments on upgrading the Marquette and Zoo interchanges and then leave a "choke point" of aging highway between them.

"We'll work with the Legislature to try and make that case and help them find funding for it," he said of I-94.

Patrick Curley, chief of staff to Milwaukee Mayor Tom Barrett, was less critical saying that if it means more funding for local road aid, then nixing the east-west project was "not necessarily a bad thing."

Peter Skopec, director of WISPIRG, a state public interest advocacy group that opposed the I-94 project as unneeded, praised the move for saving taxpayers money.

So far Walker's budget has largely drawn praise from education groups, and left Democrats focusing their attacks on the governor's past actions rather than his current proposals.

"He does not deserve praise for making a weak attempt to repair the damage that he himself caused," said Rep. Katrina Shankland of Stevens Point, a member of the Legislature's budget committee.

Over two years, the budget bill also would:

  • OK $500 million in new borrowing for roads and roughly $450 million more for other state building projects.

  • Put back on track two projects that were expected to be delayed — Highway 15 in Outagamie County and Highways 18/151 in Madison. Other projects that are planned but haven’t been started would face delays.
  • Lower the income tax rate by one-tenth of 1 percentage point in the bottom two income brackets and apply those two brackets to more of tax filers' income. This would decrease the taxes on a four-person family with a yearly income of $85,859 by about $70 in both 2017 and 2018, increasing the cumulative income tax cuts approved by Walker and GOP lawmakers to $1,542 between 2013 and 2018. 
  • Eliminate the state's portion of the property tax at a two-year savings of $180 million and give $159 million more in state aid to schools and local governments that they would have to pass through directly to property taxpayers. The state also would give a back-to-school sales tax holiday worth $11 million a year and restore more than $20 million to a tax credit program for the working poor that Walker and lawmakers cut in 2011. 
  • Put $20 million more into the state's rainy day fund, about enough to run state operations for half a day.
  • Roll back some but not all of past education cuts made under Walker by providing $649 million more for K-12 schools and $100 million more for the UW System.
  • Increase taxpayer money to charter and private voucher schools by $217 per pupil in each year of the budget, matching the increases given to public schools. Currently, K-8 voucher pupils bring their private schools $7,323 annually; high school voucher students bring their schools $7,969; and charter schools receive $8,188 per student.
  • Require that, before getting their state aid bumps, school districts implement Walker's signature Act 10 union law and have workers pay at least 12% of their health insurance premiums each year. It's unclear how many districts statewide do not currently meet the 12% threshold, but the Madison School District only requires teachers to pay 3% of their premiums.
  • Freeze technical college tuition for Wisconsin students for two years and also keep it flat in the first year for in-state students at UW schools. In the second year, Walker would use $35 million in state tax dollars to lower UW tuition by 5%, or $360 a year for the average student. He also would provide $10 million to technical colleges, $10.2 million for need-based grants for students and require each UW school to publish an online report card starting next year, with the measures on it determined by the Board of Regents.
  • Speed up the release of up to 250 nonviolent inmates. Walker campaigned against such an earned-release program in 2010 and scaled it back in 2011. The governor's bill also would provide $2 million to help fund police overtime costs in cities with high violent crime rates. 

 

 

 

The governor also put money into the state’s juvenile prison complex, Lincoln Hills School for Boys and Copper Lake School for Girls, which is under federal criminal investigation for alleged abuses of youth.

Walker would approve hiring 20 more workers there — three to provide mental health services to female inmates, eight to reduce the risk of sexual assaults and nine to distribute medication to inmates.