Legislature to Vote on $70 Billion Budget

The Joint Finance Committee’s (JFC) budget bill, ASA 1 to AB 40, will now be taken up for consideration by each house of the legislature. Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald have both indicated they would like to pass the JFC version of the budget with as few changes as possible. Amendments are likely to be limited to technical amendments and a few substantive amendments agreed to in advance by majority party leaders in each house.

The house that takes up the budget first rotates each cycle, and it is the Assembly’s turn this year. A completely clean passage by the first house to consider the bill rarely, if ever, happens. So when the Senate begins to debate the budget it must choose between working off the Assembly’s version or starting from scratch on the JFC version. This year, since both houses are controlled by the same party, it is more likely that the Senate will take up the Assembly version. Whatever passes the Senate must exactly match the Assembly, or the Senate must send the bill back to the Assembly for its approval.

Ultimately, a conference committee could be convened to reconcile final differences between the two houses, but that is not expected this budget cycle as leadership is working to iron out any differences in advance of passage. While there have been flare ups in both Republican caucuses relating to legislators bottom lining specific policy enactment for their votes, Senate and Assembly leadership have maintained a relatively strong working relationship throughout this process and continue to do so.

After both houses pass an identical bill, it goes to Gov. Scott Walker for his final approval. Walker can sign the bill directly or use his veto power to modify portions of the bill. It is rare that a sitting governor does not use his veto pen in some fashion, but to this point Gov. Walker has not publicly tipped his hat on any potential veto targets.

If the governor does make any vetoes, the legislature may attempt to override or may accept them. The final product becomes the state’s budget for the next two years.

The Assembly kicked things off on Tuesday, June 18, with a plan to hold a final vote on Wednesday evening. The Senate is expected to take up the budget on Thursday, June 20. WisconsinEye will provide live video of the floor debates.

Legislative Fiscal Bureau Papers Provide Details on Budget

The Legislative Fiscal Bureau has released documents summarizing the Joint Finance Committee’s version of the budget bill compared to Gov. Walker’s original proposal. LFB also has an estimate of the budget’s impact on property taxes and a list of policy items included in the final proposal.

Dollar and Cents
The JFC budget calls for a total two-year budget of $68.3 billion plus $1.8 billion in bonding ($70.1 billion) compared to the Governor’s original $68.2 billion spending plan plus $2.2 billion in bonding ($70.4 billion).

Although the state is slated to collect $28.5 billion in taxes over the biennium, the changes included in JFC’s budget would decrease net taxes by -$684,949,500 (-$341,758,900 in 2013-14 and -$343,190,600 in 2014-15) and would increase net fees by $7,673,700 ($3,242,700 in 2013-14 and $4,431,000 in 2014-15). In addition, it is estimated that measures included in JFC’s budget to enhance the collection of current taxes would generate an additional $92,044,000 ($31,872,000 in 2013-14 and $60,172,000 in 2014-15).

All of this leaves the state in good fiscal condition relative to previous years, albeit with a structural deficit going into the 2015-17 biennium. Under the governor’s proposed budget there was a projected $684 million structural deficit in 2015-17 compared to $505 million in the JFC version of the bill.

Budget Bill Summary


FY 2012-13
Base Year Doubled

Governor/Building Commission


JFC Change to Base

GPR Appropriations





All Funds Appropriations





Bonding Authority





Total All Appropriations






Property Tax Implications
The Fiscal Bureau also released a memo on Property Tax Estimates, as the JFC’s modifications to the governor’s original proposal resulted in higher property tax estimates.

For counties and municipalities, modifications included creating an expanded carryover option for unused levy authority under the levy limit, which is estimated to have a small upward effect on county and municipal tax levies relative to the estimates under AB 40. For school districts, revenue limits were modified to provide a $75 per pupil adjustment in 2013-14 and an additional $75 per pupil adjustment in 2014-15. Funding for general school aids was increased by $5 million in 2013-14 and $36 million in 2014-15 to offset a portion of the school levy increase that could result from the increases in the per pupil adjustment. In addition, modifications were made to reduce the aid reductions associated with the parental choice programs, which would have the effect of reducing the backfill levy associated with those programs.

Compared to the Governor, these modifications are estimated to increase property tax levels, as follows: (a) by $20.0 million in 2013(14) and $32.0 million in 2014(15) for school districts; (b) by $2.5 million in 2013(14) and $5.1 million in 2014(15) for municipalities; (c) by $2.0 million in 2013(14) and $4.1 million in 2014(15) for counties; and (d) by $0.8 million in 2013(14) and $1.5 million in 2014(15) for tax incremental districts. Finally, due to a higher estimated opening balance in the lottery fund and a minor change to proposed lottery operational funding, the lottery credit distribution is estimated to be higher by $8.5 million in 2013(14) and $0.1 million in 2014(15) than under the original estimates for AB 40.

As a result of the preceding changes, gross property tax levies are estimated to increase on a statewide basis by 1.7% in 2013(14) and 1.5% in 2014(15), and net tax levies would increase by an estimated 1.7% in 2013(14) and 1.9% in 2014(15). These tax changes would translate into tax bills for a median-valued home estimated at $2,973 in 2013(14) and $3,002 in 2014(15). These represent increases of $29 (0.99%) in 2013(14) and $29 (0.98%) in 2014(15).

LFB cautions that this is just an estimate based on state averages, so specific circumstances will vary.

Policy Items
The Fiscal Bureau releases a document detailing all of the non-fiscal policy items in the budget.

Criteria the LFB used to identify non-fiscal policy items included:
(1) generally, the item has no state fiscal effect;
(2) if there is a state fiscal effect associated with an item, the policy implications of the provision outweigh any potential fiscal effect;
(3) the item has been, or is, the subject of separate, non-budget legislation;
(4) the items is one that typically would be reviewed by a standing committee of the Legislature; and
(5) the provision could be accomplished without statutory directive, such as reports, studies, and audits.

Back in April the LFB identified 58 policy items in the governor’s budget bill. JFC struck 23 of those items from the budget, but added an additional 59 items. JFC now estimates there 94 non-fiscal policy items in the budget.

LFB Documents
Comparative Summary of Budget Recommendations (Governor and Joint Finance), June 11, 2013.
State Tax and Fee Modifications Included in the Joint Committee on Finance’s 2013-15 Budget Recommendations, June 13, 2013.
Use of Certain Funds Within the Joint Finance Committee’s 2013-15 Budget Recommendations, June 12, 2013.
Non-Fiscal Policy Items Contained Within 2013 AB 40, June 11, 2013.
2013-15 and 2015-17 General Fund Budget, June 11, 2013.
Property Tax Estimates, Governor versus Joint Finance, June 11, 2013.