Finance Committee Overhauls State Budget, Removing Hundreds of Policies and Resetting Spending Levels

The Legislature has taken steps to overhaul Wisconsin’s 2021-23 state budget by removing hundreds of policy proposals and resetting spending levels to the 2019-21 baseline. On May 6, the Republican-led Joint Committee on Finance (JCF) met to vote on major aspects of the 2021-23 state budget put forward by Governor Tony Evers (D). Gov. Evers’ executive budget proposal included a two-year operating budget of more than $90 billion and a long list of changes to various state laws and programs. Immediately following the governor’s budget address in February, legislative leaders indicated they would make significant changes to the proposal.

Voting 12-4 along party lines, JCF approved an omnibus motion to strip more than 380 items from the budget, including many non-fiscal policies. The finance committee’s motion removed major priorities of the governor’s such as accepting federal dollars to expand Medicaid, legalizing recreational marijuana, and creating a state-based health insurance exchange. According to the Legislative Fiscal Bureau, these changes meant forgoing $2.4 billion in federal funds and $1 billion in projected tax revenue.

Following this action, JCF moved to adopt substitute amendments that reset the budget to the spending levels established in the previous budget. The committee then approved standard “cost-of-living” increases for state agencies to cover things such as the cost of employee salaries and benefits and agency leases. That motion also addressed the sum sufficient appropriations that cover principal and interest payments on state debt as well as some tax credits.

All told, these changes leave the committee with a projected $2.5 billion surplus in general purpose revenue. The co-chairs of JCF, Senator Howard Marklein (R-Spring Green) and Representative Mark Born (R-Beaver Dam) recently told a meeting of the state’s largest business lobby that they anticipated including a tax cut in the budget.