JOINT FINANCE COMMITTEE UPDATE

We are now in the stage of the budget process after the introduction of the Governor's budget recommendations and the middle of agency briefings. This time allows the Legislative Fiscal Bureau to analyze the budget bill and write its summary. This analysis is absolutely critical and invaluable as we move through the budget process.

Note: You can find the following documents online: Budget in Brief, the 2021-2023 State Executive Budget, and the Fiscal Bureau's Summary of Governor's Budget Recommendations.

This week, the Joint Finance Committee (JFC) held two days of agency briefs, including testimony and input from the Department of Public Instruction (DPI), Department of Workforce Development (DWD), Department of Natural Resources (DNR), and Public Service Commission (PSC).

The agency briefing on Tuesday focused on DPI and DWD. Co-Chairs Representative Mark Born and Senator Howard Marklein started the hearing by providing an overview of Governor Evers’ budget proposal. Senator Marklein noted that this hearing was the unofficial start of the Legislature’s work on the state budget and Rep. Born highlighted the missed opportunity Governor Evers had with his budget proposal.

Rep. Born then went on to explain that prior to the Governor introducing his budget, the Co-Chairs sent a letter asking him to avoid a budget proposal like his first, which included divisive non-fiscal policy, tax increases, and massive spending. Unfortunately, the Governor didn’t seem to get the message.

Department of Public Instruction (DPI)

The Governor has proposed increasing funding for DPI by over $1.6 billion in General Purpose Revenue (GPR) over the next two years. The Governor’s budget imposes 2/3rds funding requirements, increases the special adjustment aid from 85% to 90%, and increases revenue limits by $200 in year one and $204 in year two and indexes them thereafter.

Under the Governor’s proposal, per pupil aid would add in a $75 payment for economically disadvantaged students and his budget would also incorporate climate change into model academic standards across multiple subject areas. The Governor also included a provision which caps the available seats in the Milwaukee Parental Choice Program, Racine Parental Choice Program, and statewide choice program, which impacts the ability of parents to choose the school they feel is best for their children.

Outcome of DPI Agency Briefing:

• Governor Evers' budget threatens school choice programs, especially for low-income families.
• DPI acknowledged that students are better off when in-person, but the department failed to provide a concrete plan on how that would happen.
• DPI provided few answers on the massive amount of federal funding for schools coming into Wisconsin and how they’d recommend fixing the disparities between school districts.

Department of Workforce Development (DWD)

The Governor’s DWD budget proposal included $79.5 million in GPR for the Unemployment Insurance System IT modernization as well as $15 million GPR for Unemployment Insurance administration. The budget also includes $8 million GPR for pandemic recovery grants for local workforce boards and $1 million GPR for green job training.

Significantly, the Governor’s proposal includes the repeal of right-to-work, and the reinstitution of prevailing wage law and project labor agreements. His budget also eliminates work search requirements in state law, drug testing requirements, and substantial fault (an act or omission of an employee exercising reasonable control and which violate reasonable requirements of the employer). All of these are common-sense conservative reforms and are also non-fiscal items. Lastly, the Governor included a provision which would increase the minimum wage incrementally to $10.15 by January 2024 and require a study to recommend ways to increase it to $15 per hour with the report due in 2022.

Outcome of DWD Agency Briefing:

• The Governor has used his budget to continue to deflect blame for the UI IT system and the unemployment crisis within DWD.
• The budget proposal guts a number of successful, common-sense conservative reforms that have been enacted by Republicans over the last decade.
• DWD continues to ignore reality as employers around Wisconsin struggle to find workers to fill thousands of vacant positions.

Department of Natural Resources (DNR)

The Governor has proposed an increase in funding for DNR of $32.8 million over the biennium. His DNR budget includes a number of additional provisions, including:

• Law Enforcement Equipment - $457k annually to purchase body-worn cameras, electroshock stun guns, opioid-blocking naloxone, and other supplies
• Eminent Domain - Allow DNR to use condemnation to acquire land for state trails.
• Deer Carcass Disposal Grants - $1 million one-time for receptacles for the disposal of deer carcasses. $50k annually for educational programing related to CWD.
• Urban Forestry Grants - Funding would include: (a) $345k annually for grants to address emerging risks to urban forests; and (b) $150k in 2021-22 and $500k beginning in 2022-23 for additional urban forestation and tree planting. Authorize DNR to use emergency rules, without a finding of emergency, to create a new categories and priorities of urban forestry grants that would fund tree planting, and to increase the minimum grant amount that may be awarded.
• Waterfowl Stamp Increase - Increase the price of the stamp by $5 dollars.
• Well Compensation Grants - $1 million annually in a new appropriation for well compensation and abandonment grants.
• Dam Safety Bonding - $6 million in GPR-supported general obligation bonding.
• Rural Nonpoint Source Bonding - $6.5 million in segregated-supported general obligation bonding. Bond proceeds support the targeted runoff management program and provide the required 70% state cost share for the install of structures in rural settings to improve water quality by preventing soil erosion and animal waste runoff.

Outcome of DNR Agency Briefing:

• Around 75% of the agencies staff continue to work remotely.
• The department continues to support the extension of the Stewardship Program.

Public Service Commission (PSC)

The Governor’s PSC budget proposal includes $150 million in additional state funding for broadband expansion grants. The budget also subsidizes landowners with long service lines to their properties with $5.4 million GPR and creates consumer protections for broadband users. Finally, the Governor’s budget proposal includes the doubling of the Focus on Energy electricity tax (could increase the tax by about $100 million a year) and includes the social costs of carbon in providing utility projects.

Outcome of PSC Agency Briefing:

• Despite a massive amount of money coming into Wisconsin that can be used for broadband expansion, the PSC is continuing to push for GPR funding in the budget.
• The PSC continues to support the doubling of the Focus on Energy Tax which will have an impact on businesses and families across the state.
• The department only has about 10% of its workforce in the office.