Tax cuts and University of Wisconsin funding up for state Senate vote

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MADISON, Wis. (AP) — Taxes would be cut across all income levels, with the wealthiest benefiting the most, and the University of Wisconsin would get nearly half a billion dollars less than it asked for under a two-year spending plan up for approval Wednesday in the state Senate.

The Republican-authored plan also includes parts of a bipartisan compromise reached with Democratic Gov. Tony Evers to increase funding for K-12 schools by $1 billion. Evers struck that deal with Republican legislative leaders as part of a larger package to boost funding for local governments by $1 billion, including giving Milwaukee county and city the option to raise local sales taxes to avoid bankruptcy.

Evers, Democratic lawmakers and others have pushed Republicans who control the Legislature to increase funding for UW, a K-12 school safety office, environmental protections and a pandemic-era child care program. But GOP leaders said on Tuesday they will not make any substantive changes to the budget.

The Senate was taking it up on Wednesday, to be followed by the Assembly on Thursday. From there it would go to Evers, who can make changes through his line-item veto power, but he can’t use that to add funding. Evers also has the option to veto the entire budget, which would require the Legislature to start over, a move he’s threatened to make if UW’s funding for diversity, equity and inclusion, or DEI, programs is cut.

“I’m hopeful that Governor Evers will consider using his veto pen really thoroughly,” Senate Minority Leader Melissa Agard said.

The budget currently cuts UW by $32 million, the amount GOP leaders identified goes toward DEI staff salaries and programming. But the university could get that funding back later if it shows it would go toward workforce development efforts. Republicans also refused to fund UW’s top building project priority, a new engineering facility on the Madison campus.

There have been pushes to make other changes to the budget.

Democratic Attorney General Josh Kaul, along with school and law enforcement leaders, have been urging Republicans to increase funding for the state’s school safety office. Federal funding runs out at the end of this year and Republicans refused to replace it with state money, a decision Kaul said will force a reduction in services unless other funding can be found to replace it.

Democrats and child care providers have also been lobbying to restore funding for a pandemic-era child care subsidy program that Republicans cut. Advocates have argued that the move would be devastating for needy families and the state’s economy.

Those calling for additional funding have argued that it could be done given that the state has a projected budget surplus of nearly $7 billion. Republicans have instead focused on cutting taxes.

The state budget includes a $3.5 billion income tax cut for all taxpayers, a plan Democrats have derided because wealthy people will get a bigger reduction than lower earners.

“This tax scheme is the most irresponsible, fiscally reckless thing that Republicans could do with our one-time surplus,” Democratic Sen. Kelda Roys said at a news conference before the vote Wednesday.

Under the GOP plan, those who earn between $60,000 and $70,000 per year would get a tax cut on average of around $250. But those earning between $25,000 and $30,000 would get just $15 on average. Those who earn between $250,000 and $300,000 per year would get the biggest percentage drop in taxes, at over 17%, which amounts to an average savings of $2,157.

The 11 wealthiest taxpayers in Wisconsin, who earn more than $75 million a year, would each receive a $1.8 million tax cut.

Evers might be able to scale back the tax cut with his partial veto.

The budget would also:

—Give all state employees a 4% pay raise this year and 2% next year, while prison guards would get a $13-an-hour starting pay raise to $33 in an effort to address staffing shortfalls.

—Dedicate $125 million to fighting water pollution called by “forever chemicals” known as PFAS.

—Increase electric vehicle registration fees from $100 a year to $175 a year.