2023-25 State Budget: Signed Into Law With 51 Partial Vetoes

Date Thu, Jul. 6, 2023 - 12:17pm By Hamilton

On July 5, Gov. Tony Evers (D) announced his signing of 2023 Act 19, the Wisconsin state budget for the 2023-25 fiscal biennium, which began July 1. The two-year budget, assembled by the Republican-led Joint Committee on Finance, appropriates $97.4 billion. For comparison, the 2021-23 budget allocated $87.5 billion.

The final version of the budget bill passed the Senate on June 28 by a vote of 20-13. Two Republicans, Sens. Hutton (R-Brookfield) and Nass (R-Whitewater), joined all 11 Democrats in voting against the bill. The Assembly approved the bill along party lines (63-34) on June 29, and it was presented to Gov. Evers the following day.

Notable Provisions

Shared revenue: Increases the shared revenue formula, providing a 20 percent base increase in state support to counties and municipalities, in part by dedicating one-fifth of the state’s sales tax revenue for local aid.
Milwaukee sales tax: Allows the City of Milwaukee and Milwaukee County to raise the local sales tax by two percent and 0.4 percent, respectively, with the revenue used to satisfy outstanding public employee pension debt. Allows the city council and county board to institute these tax increases by a two-thirds vote, not by referendum, as originally proposed.
Personal property tax: Repeals the remnants of the personal property tax, a longtime priority of many state business associations.
PFAS: Creates a trust fund for remediation of PFAS contamination with $125 million in initial funding. This program will require separate legislation to be implemented.
Transportation: Provides $1.5 billion in new transportation funding; increases the electric vehicle annual registration fee from $100 to $175; funds the production and issuance of new license plates and expands the Bureau of Correctional Enterprise’s metal stamping operations.
State building projects: Provides $24 million for bridge projects; provides $9.7 million for trail maintenance projects; approves the Department of Natural Resources’ $6.6 million request to repair the Stewart Tunnel. Funds a variety of building projects at University of Wisconsin System campuses but does not provide the requested $347 million to build a new engineering building at the UW-Madison campus.
K-12 education: Provides $534 million above the base level funding for general school aids, increases the special education funding rate to 33.3 percent and the high-cost special education rate to 50 percent, and increases funding for the school choice, independent charter school, and special needs scholarship programs. Also reserves $50 million for an early literacy assessment and intervention program; this program will require separate legislation to be implemented.
Attorney pay raises: Provides an hourly increase of $8.76 for assistant district attorneys, raising the starting wage to $36 an hour. Increases the hourly rate for public defender contracts from $70 to $100. Many district attorneys in Wisconsin have reported persistent vacancies in their offices, contributing to delays for the courts and law enforcement.

Partial Vetoes

Wisconsin’s governor has the power to issue partial vetoes of appropriations bills such as the state budget and any other legislation that allocates state funds. This includes the power to remove or reduce numbers and to alter policy language by striking words and sentences. Gov. Evers issued 51 partial vetoes of the 2023-25 budget, including the following items:

Per pupil revenue limit adjustment: The budget provides an annual per pupil revenue limit adjustment of $325, raising the property tax ceiling for school districts. The partial veto changed the end date of the annual adjustment to 2425, adding several hundred years of annual revenue limit increases.
Individual income tax rate reduction: The partial veto eliminated reductions in the individual income tax rates for the third and fourth (top two) tax brackets. The budget would have reduced the fourth bracket rate from 7.65 to 6.5 percent and the third bracket rate from 5.3 to 4.4 percent. The state’s third tax bracket covers incomes from $34,030 to $374,600 for married couplies filing jointly, including a large majority of Wisconsin families. The veto left in place reductions for the lower two tax brackets, which cover annual income under $34,030 for married couples filing jointly.
UW System DEI positions: The partial veto removed a provision to delete 188.80 full-time positions from the UW System budget for employees performing functions related to diversity, equity, and inclusion.
Talent attraction and retention: The partial veto eliminated requirements that the Wisconsin Economic Development Corporation (WEDC) expend at least $4 million from its existing appropriations on workforce attraction and retention initiatives, including at least $2 million to attract and retain veterans. According to Gov. Evers’ veto message, “I am vetoing this section because I object to the Legislature restricting WEDC in program areas where it already makes such investments and has full authority to collaborate with state agencies, including the Department of Veterans Affairs.”
Child care fund: The budget reserves $15 million in supplemental funding (subject to the finance committee’s future approval) and creates a new $0 appropriation to establish a revolving loan fund for child care providers. According to Gov. Evers’ veto message, his partial veto “remove[d] references to revolving loans” so that “any funding made available under this appropriation could be distributed as grants to child care providers instead of loans.” Such a program would require separate legislation to implement and finance committee approval to release the funding.

Gov. Evers said in his veto message that he was “giving the Legislature a second chance … using my broad, constitutional veto authority to ensure ample state resources are readily available for the Legislature to complete their work on this budget.” In particular, the governor called on the Legislature to “make the substantial investments necessary to stabilize our state’s child care industry.” The total amount of funding retained by Gov. Evers’ partial vetoes is not yet available. Notably, the partial veto of income tax reductions will result in an estimated $2.7 billion in additional revenue over the biennium.

Assembly Speaker Robin Vos (R-Rochester) released a statement criticizing several of the partial vetoes:

“Vetoing tax cuts on the top two brackets provides hardly any tax relief for truly middle-class families. His decision also creates another economic disadvantage for Wisconsin, leaving our top bracket higher than most of our neighboring states, including Illinois.”
“Wisconsin property taxpayers will also bear the burden of Gov. Evers veto regarding per-pupil school funding. By allowing this level into the future, homeowners will experience massive property tax increases in the coming years.”
“I am disappointed with his decision to reinstate diversity, equity, and inclusion positions on our college campuses … well-balanced instruction and merit-based advancement should be the foundation of earning a degree.”

More Information

See the following articles for more information about the 2023 state budget process:

Categories Economic & Workforce Development / Education / Governor / State Budget / Transportation / Wisconsin Legislature