Governor Evers’ 2021-23 Executive Budget Highlights

On Tuesday, February 16, Governor Tony Evers gave his second biennial budget address and released his 2021-23 executive budget. All told, the governor proposes an operating budget of $45.4 billion in fiscal year (FY) 2021-22 and $45.6 billion in FY 2022-23. The proposed state budget adds 308.74 FTE positions by FY 2022-23 compared to FY 2020-21. The complete budget, budget in brief, and other executive budget documents are available here.

Gov. Evers’ budget recommendations will be reviewed by the Legislature’s Joint Committee on Finance over the next few months. Based on past experience, we expect the following to happen:

  • The Legislative Fiscal Bureau will release a plain-language summary of the budget recommendations in about a month, that is, by the middle of March.
  • The Joint Committee on Finance will then hold agency briefings and conduct public hearings on the budget recommendations.
  • The co-chairs of the Joint Committee on Finance will work with the Legislative Fiscal Bureau to identify non-fiscal policy items and to slate them for removal from the budget bill, which should occur roughly by the middle of April.
  • The Joint Committee on Finance will then begin to vote – agency by agency – on changes to the budget.
  • In June, the full budget should be available for debate and passage by both houses of the Legislature.

In the governor’s proposal, the largest increases in all funds appropriations in go to the Department of Health Services (DHS), Department of Public Instruction (DPI), Wisconsin Economic Development Corporation (WEDC), Department of Workforce Development (DWD), and the University of Wisconsin (UW) System.

Below is an overview of the provisions in Gov. Evers’ budget, separated by issue area. For more information as the budget process progresses, follow our 2021-23 State Budget Issue Update page.

Health

Health Insurance

  • Requires health insurers to guarantee the issuance of health insurance to individuals that apply for coverage regardless of preexisting conditions, sexual orientation, gender identity, health status, or medical history, among other characteristics; prohibits health insurance providers from charging greater premiums or out-of-pocket costs based on those factors; prohibits health insurance providers from establishing annual or lifetime limits on health insurance plan benefits; requires all health insurance plans to provide coverage for the ten essential health benefits categories covered under the federal Affordable Care Act; and requires all health insurance plans provide coverage for certain preventive services at no cost to the plan holder.
  • Eliminates balance billing for emergency and ambulatory services given by out-of-network providers as well as services provided at an in-network facility by an out-of-network provider. Requires a good-faith cost estimate be provided before services are delivered.
  • Bars insurers from denying coverage for a telehealth service if an in-person version of that service is covered by an individual’s health plan.
  • Establishes a state-based health insurance marketplace (i.e., a “state exchange”) by plan year 2024.
  • Requires the development of a state-administered public option health plan to be offered no later than 2025, or 2022 if the federal Affordable Care Act is no longer enforceable.
  • Funds the Wisconsin Healthcare Stability Plan by providing $200 million in each fiscal year to reinsure high-cost individuals across all health insurance exchanges.
  • Requires a study of whether potential cost savings exist for school districts related to health insurance if all school districts were required to participate in the Group Health Insurance Program as of 2024.
  • Directs the Office of the Commissioner of Insurance (OCI) to develop a plan to offer premium assistance by plan year 2024 for those between 138 percent and 250 percent of the federal poverty level.
  • Shortens the initial term for short-term, limited duration plans to no longer than 3 months and the aggregate duration to no more than 6 months. Prohibits short-term, limited duration plans from imposing any pre-existing condition exclusions, requires such plans to accept any person who applies for coverage, and prohibits such plans from establishing limits on coverage.

Prescription Drug Prices

  • Provides 7.5 FTE positions, $692,600 PR in FY 2021-22, and $617,800 PR in FY 2022-23 to license and regulate entities involved in the prescription drug supply chain, including pharmacy benefit management brokers and consultants, pharmacy benefit managers, pharmacy services administration organizations, and pharmaceutical sales representatives.
  • Provides 16.0 FTE PR positions, $1.7 million PR in FY 2021-22, and $1.5 million PR in FY 2022-23 to establish the Office of Prescription Drug Affordability to oversee regulatory provisions enacted under the budget and analyze and develop policy initiatives. Establishes a Prescription Drug Affordability Review Board to oversee the pharmaceutical industry and drug market, analyze other state and national drug policies and practices, establish spending targets for public sector entities, and set price ceilings on price-gouging prescription drugs.
  • Creates a $500,000 GPR grant in FY 2022-23 to develop a patient pharmacy benefits tool, which would provide physicians and other prescribers the ability to conveniently view a patient’s pharmacy benefits to take out-of-pocket costs into consideration when prescribing medications.
  • Prohibits unfair drug pricing practices, defined as a “drug pricing practice that causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.” Allows DATCP and district attorneys to seek injunctions and allows awarding of damages for consumers suffering monetary losses as a result of the violation.
  • Requires insurers in some circumstances to apply discounts and coupons to deductibles and annual out-of-pocket maximums; this is often referred to as a “co-pay accumulator” provision.
  • Requires hospitals participating in the federal 340B drug discount program to report on their savings under the program and how they utilize those savings.
  • Sets the maximum copay for a month’s supply of insulin at $50. Establishes an Insulin Safety Net Program for people with an urgent need for insulin as well as those with lower incomes and limited to no insurance coverage.
  • Directs OCI to study the creation of a state prescription drug purchasing entity to leverage state and local purchasing power for lower prescription drug costs.
  • Allows pharmacists to meet up to one-third of their continuing education requirements through volunteer work.

Medicaid

  • Expands Medicaid to 138 percent of the federal poverty level under the federal Affordable Care Act, which is estimated to provide coverage for 90,900 people (approximately 45,100 of which are uninsured). By accepting additional federal dollars, the budget assumes $634 million GPR in savings.
  • Directs almost $1 billion GPR to Medicaid providers through Medicaid expansion, including $321 million to hospitals that accept individual on Medicaid via: (a) disproportionate share hospital payments; (b) acute care hospital access payments; (c) critical access hospital access payments; and (d) pediatric supplemental payments. The governor’s budget recommends that funding increases are contingent on the state expanding Medicaid.
  • Provides $646.3 million for Medicaid cost to continue.
  • Establishes a $25 million ($10.5 million GPR) Medicaid community health/social determinants of health benefit for nonmedical services such as housing referrals, nutritional counseling, and stress management.
  • Includes $20.9 million in FY 2022-23 to extend the postpartum Medicaid eligibility for women from 60 days to 12 months.
  • Provides $3.9 million GPR for a temporary emergency physician rate increase for Medicaid services.
  • Includes $1 million in FY 2022-23 for doula coverage under Medicaid.
  • Creates and funds additional Medicaid benefits including psychosocial rehabilitation, certified acupuncturist services, and group physician therapy.
  • Increases Medicaid provider rates for speech-language pathology, audiology, autism treatment, MAT, outpatient mental health and substance abuse services, and child-adolescent day treatment.
  • Eliminates Medicaid prescription drug copayments.
  • Repeals legislative review of DHS federal waivers and state plan amendments.
  • Repeals the childless adults Medicaid waiver, which would eliminate work requirements, premium payments, health risk assessment and copayments for nonemergency use of an ER.
  • Expands Medicaid coverage for the Residential SUD room and board costs.

Mental Health and Crisis Intervention Services

  • Appropriates $40 million to increase Medicaid reimbursement rates for outpatient mental health and substance abuse services.
  • Includes $12.3 million in FY 2022-23 for two regional crisis centers that provide crisis urgent care, an observation center, a crisis stabilization facility, and inpatient psychiatric beds.
  • Allocates $5 million GPR in FY 2022-23 for five statewide crisis stabilization facilities.
  • Provides $1.2 million for county crisis staffing and peer-run respite centers.
  • Creates a $1.25 million GPR grant program for municipalities and counties that build behavioral health and law enforcement collaboration programs and $375,000 GPR for crisis intervention training.

Long-Term Care

  • Draws on recommendations from the Task Force on Caregiving, providing $600 million for programs related to long-term care and caregiving, including $240 million to increase nursing home reimbursement rates and $200 million to fund a tax credit for family caregivers.

Dental Care

  • Increases access to dental services by beginning to allow dental therapists, a mid-level dental provider, to practice in Wisconsin.
  • Incentivizes dentists to accept Medicaid patients by increasing reimbursement rates by $11.9 million in FY 2021-22 and $23.8 million in FY 2022-23.

 

Transportation

  • Provides a total of $565.6 million in federal and state funds for the major highway program over the biennium to continue work on projects throughout the state.
  • Provides $75 million for local multimodal transportation projects.
  • Increases funding for the State Highway Rehabilitation program by $66.6 million, a 3 percent increase over the prior biennium.
  • Increases General Transportation Aids for both counties and municipalities by 2 percent in calendar year 2022 and by another 2 percent in calendar year 2023.
  • Provides $3.5 million for a 2.5 percent annual increase in general transit operation aids for transit systems across the state.
  • Provides $40 million in bonding to start the I-94 East/West expansion project in Milwaukee County.

 

Tax

  • Allows counties to impose an additional 0.5 percent sales tax, in addition to the 0.5 percent allowed under current law. County sales taxes must be approved by referendum. Currently, 68 of Wisconsin’s 72 counties have enacted the 0.5 percent tax.
  • Allows municipalities with more than 30,000 residents to impose, by referendum, a 0.5 percent sales tax.
  • Increases the refundable percentage of the research credit from 10 percent to 20 percent beginning in tax year 2021 to provide greater incentive for research and development expenditures in Wisconsin.
  • Limits the amount of qualified production activities income that may be claimed by manufacturing firms under the manufacturing and agriculture credit to $300,000 per tax year. Leaves the agricultural portion of the credit unchanged. This change would result in an estimated increase in tax revenue of $258.9 million in FY 2021-22 and $228.5 million in FY 2022-23.
  • Preserves the 30 percent long-term capital gains exclusion under current law for single filers with federal adjusted gross income below $400,000 and below $533,000 for married-joint filers while eliminating it for taxpayers above those income levels. Taxpayers with noncapital gains income below those thresholds could claim capital gains income that, when combined with other sources, would stay within those limits for purposes of the exclusion, but not those amounts above the income limits. These modifications do not affect the 60 percent capital gains exclusion for farm assets. These changes would result in an estimated increase in tax revenue of $202.1 million in FY 2021-22 and $148.4 million in FY 2022-23.
  • Creates state tax-preferred savings accounts that would allow first-time homebuyers to subtract from their adjusted gross income up to $5,000 in contributions for single filers and up to $10,000 in contributions for married-joint filers.

 

Environment

  • Reauthorizes the Knowles-Nelson Stewardship Program for 10 years at $70 million per year and provides $700 million in bonding authority. Includes additional changes to program allocations and modifies the approval process for certain program expenditures.
  • Allocates $43 million to various programs and grants to support the agricultural industry.
  • Includes $40 million GPR for lead service line replacement under the Safe Drinking Water Loan Program.
  • Authorizes $12 million in ETF GO bonding, including $8 million for the municipal flood control program.
  • Provides an additional $1 million GPR for financial assistance under the well compensation program.
  • Creates a water utility assistance program at the Department of Administration and allocates $10 million GPR in the first year of the biennium and $13.5 million GPR in the second year.
  • Provides the PSC with $2.4 million for a water loss control training program for water utilities serving populations of 3,300 or more residents.
  • Allocates funds to the PSC to modernize the water utility reporting database and to support an enhanced water utility data reporting compliance review program.

PFAS

  • Allocates $1.6 million SEG for 11 positions at the Department of Natural Resources to develop and implement a PFAS action plan.
  • Includes $2.1 million for statewide PFAS monitoring and testing.
  • Provides $20 million GPR for a municipal grant program for PFAS testing and remediation.
  • Adds $1 million SEG in FY 2021-22 for the collection and disposal of firefighting foam that contains PFAS.
  • Requires various PFAS environmental standards.

 

Energy

  • Requires municipalities to develop a comprehensive plan to address climate change, requires that local hazard mitigation plans include climate change, and requires communities to include climate change in their community health improvement assessment and plans.
  • Requires the Public Service Commission (PSC) to evaluate the social cost of carbon every two years. Requires the commission to consider the social cost of carbon when determining whether to issue construction certifications for new power plants and transmission lines.
  • Allows the PSC to double the funds available to the Focus on Energy program from 1.2 percent to 2.4 percent of each utility’s annual operating revenues, which would result in an estimated $100 million increase in the program.
  • Directs the PSC to establish an Innovative Technologies Pilot Program, which would set a voluntary goal for utilities to collectively spend $100 million over five years on a pilot for a range of innovative technologies, including storage and microgrids.
  • Transfers from DOA to the PSC the administration of annual impact and onetime environmental impact fees associated with high-voltage transmission lines.
  • Expands the types of retiring power plant costs that can be securitized using environmental trust bonds, which can result in cost-savings for customers.
  • Establishes the existing Office of Sustainability and Clean Energy by statute within the Department of Administration. The office promotes the development and use of clean and renewable energy across the state.
  • Creates a $4 million renewable and clean energy research grant in FY 2021-22 administered by the Office of Sustainability and Clean Energy and funded by the environmental fund.
  • Creates the Office of Environmental Justice within DOA to, among other duties, develop statewide, local government, and tribal climate risk assessment and resiliency plans.
  • Provides $10 million GPR in each fiscal year to support a new energy efficiency grant program for schools.
  • Creates a planning grant program at $250,000 per year for regional biodigesters, to be administered by DATCP.

Electric Vehicles

  • Authorizes $5 million in bonding for electric vehicle charging infrastructure.
  • Allocates $10 million of the remaining Volkswagen emissions settlement funds for an electric vehicle charging station grant program; allocates any remaining funds for the replacement of state vehicles.
  • Exempts a nonutility that supplies electricity through an electric vehicle charging station from the definition of a public utility.

 

Workforce

  • Provides WEDC with $200 million to assist small businesses in recovering from the COVID-19 pandemic, including assistance for the retention of current employees and the rehiring of former employees.
  • Increases WEDC’s total block grant funding by $10 million from $41,550,700 to $51,550,700 in each year of the biennium to assist with Wisconsin’s economic recovery efforts.
  • Includes $10 million GPR over the biennium for Wisconsin Fast Forward grants to fund training for individuals, businesses, and organizations, and an additional $1 million GPR in Fast Forward grants for jobs in conservation and sustainability.
  • Provides $9.7 million GPR and 48.0 FTE project positions to create a Career Coaches pilot program at the Department of Workforce Development to assist individuals in overcoming barriers to employment.
  • Provides $8 million GPR for pandemic recovery grants to local workforce development boards.
  • Provides $250,000 GPR annually to expand youth apprenticeship opportunities.
  • Provides $200,000 GPR for local workforce development boards to hold hiring events for health care-related careers and host health care career exploration courses.
  • Allows local governments to enact regulations related to wage claims, employee hours and overtime, employee work scheduling, employee benefits, and occupational licensing requirements more stringent than state requirements.

 

Economic Development

  • Creates a venture capital fund directed by WEDC with $100 million in one-time GPR funding in a continuing appropriation in FY 2021-22. The program will use a “fund of funds” model that invests in other venture capital funds to match with private sources and invest specifically in Wisconsin.
  • Modifies the existing fund of funds investment program to remove the current law requirements related to the repayment of the state’s initial investment to instead allow the fund of funds to reinvest its investment earnings.
  • Creates a one-time $8 million pandemic recovery program for local and regional economic development organizations, administered by WEDC.
  • Provides $5 million GPR in FY 2021-22 to promote entrepreneurship in underserved communities. Also provides $5 million in SEG revenues beginning in FY 2022-23 from marijuana tax revenues through the community reinvestment fund to promote entrepreneurship in underserved communities.
  • Allows individuals to use leave guaranteed under the Family and Medical Leave Act (FMLA) to take off work when their childcare provider is closed.

 

Tourism

  • Provides ongoing funding to continue the promotion of Wisconsin as a business, cultural, and recreational destination.
  • Provides $781,800 GPR of ongoing marketing funds that will allow the Department of Tourism to launch tourism marketing campaigns as the COVID-19 pandemic subsides. In addition, converts 3.0 FTE GPR project positions and associated funding to permanent positions to allow the department to continue operating the Office of Outdoor Recreation.
  • Funds grants to businesses, local governments, and business development organizations to provide products or services that: (a) have an origin in artistic, cultural or aesthetic content; (b) promote job creation; (c) enhance economic development; (d) promote arts education; and (e) incorporate workforce training and development.
  • Increases funding for grants to support individuals or organizations engaged in the arts and arts incubators. The increase will permit the Wisconsin Arts Board to draw down all available federal funds that require a state match.

 

Civil Justice

  • Creates a new cause of action allowing a person to bring an action alleging that an employer has violated employment discrimination, unfair honesty testing, or unfair genetic testing laws (currently, a person may file a complaint with DWD). Such actions could not be filed against an employer that employs fewer than 15 individuals. Back pay, attorney fees, and compensatory & punitive damages may be awarded.
  • Creates a new cause of action allowing any person to bring an action against a broadband service provider alleging the provider has denied access to broadband service to any group of potential residential customers because of the race or income of the residents in the area in which the group resides. Costs and attorney fees may be awarded. DATCP also may enforce this provision.
  • Creates a new civil cause of action against a person who unnecessarily summons a law enforcement officer and causes the officer to arrive at a location to contact another person.
  • Recreates a false claims with qui tam provision for private parties to sue on behalf of the state where fraud against state-funded programs, such as Medicaid, is alleged.
  • Establishes that requesting a potential employee to supply information regarding his or her conviction record or otherwise considering the record prior to selection for an interview constitutes employment discrimination.
  • Does not include funding or staff positions for the Wisconsin Judicial Council that the council had requested.

 

Criminal Justice

  • Legalizes recreational marijuana. Creates a Community Reinvestment Fund allocating $30 million of the expected tax revenue for “equity grants” and $34 million for sparsity aid for rural school districts, with remaining revenue going to the state’s general fund.
  • Creates a Sentencing Review Council for a full-scale review of the state’s criminal code.
  • Requires specific use of force standards for law enforcement and annual training on use of force and de-escalation tactics and reporting. Also includes additional positions at the Department of Justice for law enforcement training.
  • Provides $15 million GPR in additional funds for treatment alternatives and diversion programs.
  • Adds $4 million GPR to reimburse counties for crime victim and witnesses’ services.
  • Requires, with certain exceptions, that any firearm transfers be done through federally licensed firearm dealers with background checks conducted on recipients.
  • Creates an extreme risk protection injunction procedure where a court, after a hearing, may order an individual to refrain from possessing a firearm if it finds by clear and convincing evidence that they are substantially likely to injure himself or herself or another by possessing a firearm.
  • Requires District Attorneys to offer a diversion and restitution alternative for certain misdemeanor offenses.
  • Changes the Department of Corrections process to allow the revocation of extended supervision, probation, or parole of a person and changes the sanctions procedures for specific rule violations.
  • Provides, at the discretion of the county sheriff, for a person in jail on extended supervision hold to be eligible for Huber.
  • Increases the scope of the earned release program and allows a sentencing court to reduce the term of a person’s extended supervision, under certain conditions.
  • Makes changes to the juvenile justice system including: (a) creating a sentence adjustment procedure for youth under 18 who commit a crime; (b) eliminating the Serious Juvenile Offender program; (c) eliminating life without the possibility of extended supervision for juvenile offenders; (d) limiting the use of detention sanctions or holds; and (e) prohibiting the use of restraints on anyone under the age of 18 when appearing in court in most cases.
  • Raises the age of adult jurisdiction to 18 years of age and removes the automatic original adult court jurisdiction for all youth under 18.
  • Appropriates $20 million GPR to county reimbursement for costs related to raising the age of adult jurisdiction to 18.
  • Appropriates funding for state police officers to wear body-worn cameras.

 

Education

  • Provides $612.8 million GPR in state general aid to school districts across the biennium, the largest increase since the 2005-07 biennium.
  • Restores the requirement that the state provide at least two-thirds funding of partial school revenues.
  • Converts special education aid to a sum sufficient appropriation. Increases special education aid by $296.7 million GPR in FY 2021-22 and $412.9 million GPR in FY 2022-23 to reimburse eligible special education cost at 45 percent and 50 percent in those fiscal years, respectively.
  • Increases funding by $61.2 million over the biennium to fund per pupil payments of $750 in each year and to provide an additional $75 per economically disadvantaged pupil.
  • Provides $54 million for mental health aids and grants for schools as well as mental health programming through DPI.
  • Increases funding by $9.7 million GPR in FY 2021-22 and $18.3 million GPR in FY 2022-23 to provide 15 percent reimbursement of eligible costs and to reform the current bilingual-bicultural categorical aid program.
  • Increases high-cost special education aid by $1.7 million GPR in FY 2021-22 and $7.8 million GPR in FY 2022-23 to reimburse eligible high-cost special education costs at 40 percent and 60 percent in those fiscal years, respectively.

UW and Technical College Systems

  • Increases general operations funding for the UW System by $20 million GPR in each fiscal year.
  • Continues the UW System tuition freeze for the 2021-22 and 2022-23 academic years. Provides $16.8 million GPR in FY 2021-22 and $33.6 million GPR in FY 2022-23 to offset the tuition freeze.
  • Increases general aid to the Wisconsin Technical College System and system institutions by $18 million GPR annually.
  • Funds need-based financial aid in the Wisconsin Grants program as follows: (a) for the UW System by $6.2 million GPR in FY 2021-22 and $12.4 million GPR in FY 2022-23; (b) for the Wisconsin Technical College System by $2.3 million GPR in FY 2021-22 and $4.6 million GPR in FY 2022-23; (c) for tribal colleges by $48,200 PR-S in FY 2021-22 and $96,400 PR-S in FY 2022-23; and (d) for private, nonprofit colleges by $2.8 million GPR in FY 2021-22 and $5.7 million GPR in FY 2022-23.
  • Provides $13.8 million GPR in FY 2021-22 and $25.2 million GPR in FY 2022-23 for a tuition promise grant program that pays tuition and segregated fees on behalf of students whose household adjusted gross income is $60,000 or less.
  • Provides the UW System Board of Regents with the authority to obtain extensions of credit to provide short-term funding for expenses associated with athletic and educational programs. This provision requires approval by the Board of Regents at a public meeting to ensure transparency.
  • Provides the UW System with the ability to designate certain program revenues for investment outside of the State Investment Fund through the State of Wisconsin Investment Board.

 

Broadband

  • Appropriates over $200 million to expand broadband access in Wisconsin. This includes an increase in funding for the PSC’s Broadband Expansion Grant Program to $151.7 million over the biennium, compared to $48 million during the 2019-21 biennium. The $151.7 million is comprised of $74.8 million GPR in FY 2021-22 and $72.9 million GPR in FY 2022-23 in addition to the statutorily required minimum of at least $2 million annually in funding from the state’s Universal Service Fund.
  • Eliminates several statutory restrictions for certain municipalities defined as broadband “underserved” or “unserved” to directly invest in broadband infrastructure and provide service to residents. Allows these communities to apply directly for broadband grants from the PSC.
  • Creates a Broadband Line Extension Grant Program, funded at $1.75 million GPR in FY 2021-22 and $3.5 million GPR in FY 2022-23, to provide grants and financial assistance to eligible households to subsidize the cost of a line extension from existing broadband infrastructure to a residence without access to 25/3 mbps service. Provides 1.0 FTE GPR position and associated funding to the State Broadband Office to assist with the initiative.

 

Miscellaneous Provisions

  • Repeals the limitations on public employee collective bargaining from 2011 Act 10.
  • Repeals the provisions of 2015 Act 1, commonly known as “Right to Work,” which prohibited requiring membership in a labor organization or payments to a labor organization as conditions of employment.
  • Repeals project labor agreement neutrality provisions under current law.
  • Reinstitutes the prevailing wage requirement for employers conducting state and local public works projects.
  • Increases the state minimum wage from $7.25/hour to $10.15/hour by 2025 and creates a committee to study options to achieve a $15/hour minimum wage.
  • Includes $25.1 million SEG for Next Generation 9-1-1, of which $21.7 million is provided in FY 2022-23, including $7.5 million for grants to public safety answering points (PSAPs).
  • Allocates $6.5 million GPR for a new statewide interoperable communications system.
  • Aligns state law with federal law by increasing the minimum age to purchase cigarettes, nicotine products, tobacco products, and vapor products from 18 to 21.
  • Establishes restrictions on retailer placement of cigarettes, nicotine products, or tobacco products such that those products could only be placed in locations that are inaccessible to customers without the assistance of the retailer or the retailer’s employee or agent, such as behind the counter or in a locked case.