MADISON, Wis. (AP) — Wisconsin’s state budget is projected to see “unprecedented” revenue growth of $4.4 billion above previous estimates by the middle of 2023, news delivered Tuesday that led Democratic Gov. Tony Evers to call for more spending on education while Republicans urged caution and promised tax cuts.
Republican legislative leaders said the massive influx of cash, which couldn’t have been imagined a year ago early in the pandemic, provides a once-in-a-generation chance to reform the state’s tax code. Republicans previously said they wanted to include a tax cut in the budget but haven’t revealed details.
“If we recklessly spend this new money and grow taxpayer obligations in an unsustainable way, we risk future fiscal stability, a stability Republicans have spent a decade cultivating,” said Republican budget committee co-chair Sen. Howard Marklein.
Evers called on Republicans to use the surplus to spend more on K-12 education and other areas. The budget as it stands currently spends less than 10% of what Evers proposed, a level that puts $1.5 billion in federal coronavirus relief funding for schools in jeopardy.
“There’s no excuse for choosing not to fully invest in our kids and our schools, broadband, venture capital and support for Main Street businesses, among other critical priorities, that will ensure we’re bouncing back and better than we were before this pandemic hit,” Evers said in a statement.
Evers also announced that he was rescinding $300 million in budget cuts across state government ordered earlier in the pandemic, including $50 million to the University of Wisconsin System and the state’s technical colleges.
Republican Senate Majority Leader Devin LeMahieu said taxpayers gave the state the massive surplus, so they deserve to have some of it back.
“We will take this moment to consider ways to significantly reduce the tax burden on workers and main street businesses and pay off state debt to save taxpayers long into the future,” LeMahieu said.
Republican budget committee member Sen. Dale Kooyenga called for eliminating entire income tax brackets and categories.
“The scale of this surplus means now is the time to build upon bipartisan proposals to reduce the tax burden for the middle class,” he said.
The rosier budget projection delivered Tuesday is based on the strength of current tax collections and “vastly improved economic forecasts for the remainder of this year and the next two years,” Legislative Fiscal Bureau Director Bob Lang wrote to the co-chairs of the Legislature’s budget committee.
“The increase in general fund tax collections in 2021, particularly in the months of April and May, is unprecedented,” Lang wrote.
The estimate does not even include the $2.5 billion in federal coronavirus relief money coming to the state for infrastructure and other uses.
Many other states are seeing similar budget windfalls as the pandemic fades and the economy ramps up.
Wisconsin’s budget committee was expected to complete its work next week and send the two-year spending plan to the Republican-controlled Legislature for votes likely by the end of this month. The budget would then head to Evers, who has broad veto powers. It wasn’t immediately clear whether news of the massive surplus would delay completion of the budget, which begins July 1 and runs through June 30, 2023.