Kicking off the new budget season, state agencies in Wisconsin will submit their 2017-19 biennial budget requests to the governor next month. Agencies requests are due to the governor’s Department of Administration budget office and to the Legislative Fiscal Bureau (LFB) on September 15, 2016. In his July 25 budget letter to agency heads, Governor Walker instructed most agencies to maintain “zero-growth” in general purpose revenue (GPR) appropriations. There are some exceptions to the flat-funded directive, some include K-12 funding, entitlement assistance programs (Medicaid) and cost-to-continue basic needs for the state’s institutions.

Last session, the legislature passed and the governor signed 2015 Wisconsin Act 201 into law that provided additional requirements for state agencies’ budget requests. Now due to Act 201, in addition to providing a zero growth budget for the 2017-19 biennium, state agencies also need to submit a budget with a five percent reduction from the 2016-17 fiscal year’s adjusted base budget. Act 201 also requires the additional scenario not include any federal funds or debt service, and does not allow certain exceptions.

Just like the last biennial budget, it is expected the most contentious budget items will be those with the largest price tag – education (K-12 and higher education), Medicaid and transportation. The tussle over the next biennium’s transportation funding started early, with legislators and the governor exchanging opposing positions in the media this summer.

In late July, co-chair of the legislative budget-writing Joint Finance Committee (JFC), Rep. Nygren (R-Marinette) issued a statement, calling on legislators to find a “sustainable solution” to the transportation fund without relying on bonding. Nygren referenced a recent LFB memo, that projected the Department of Transportation will need an additional $939 million in revenue to maintain current transportation funding levels in the next budget.

Governor Walker has continue to reiterate his position that there should be no tax or fee increases in the DOT budget unless the increase can be offset by an equal or greater cut in other taxes. Throughout the summer, other legislators have weighed in on either side of the debate. Most recently, on August 17, Rep. Ripp (R-Lodi), Chair of the Assembly Committee on Transportation, addressed the issue in a letter to Governor Walker, asking to “keep all the options on the table.” Meanwhile, on August 13, Sen. Stroebel (R-Saukville), penned an editorial supporting the governor’s firm position.

There will likely be many more legislators weighing in on the transportation issue after the agency’s budget request is submitted on September 15.

For complete coverage of the 2017-19 state budget, be sure to regularly check The Hamilton Consulting Group’s 2017-19 State Budget Issue Page.