On Thursday, June 17, the Wisconsin Legislature’s Joint Finance Committee (JFC) held an executive session to consider various motions related to the 2021-23 state budget. Click here to visit our main budget recap article for more information on the overall budget process as well as each executive session held by JFC in 2021.
Below is a list of motions that JFC considered on June 17 including whether each motion was adopted and how the committee voted. The committee includes 12 Republican members and 4 Democrats; all 11-4 and 4-11 vote tallies were along party lines. One Republican member of JFC was absent on June 17.
With the adoption of Motion 999, JFC has finished its work assembling a state budget for the 2021-2023 fiscal biennium. In its final motion, the committee moved to adopt substitute amendments incorporating its changes to the governor’s budget proposal. The motion directed the Legislative Fiscal Bureau to draft the substitute amendments and moved to recommend passage of the budget bills as amended.
- Motion 117: Shared Revenue and Tax Relief, Lottery Administration (11-4)
- Motion 118: Compensation Reserves, Employee Trust Funds (11-4)
- Motion 120: General Fund Taxes, Budget Stabilization Fund, Wisconsin Economic Development Corporation (11-4)
- Motion 2001: Maintenance of Effort Compliance and Other Considerations (11-4)
- Motion 999: Final Motion and Adoption of the Substitute Amendments (11-4)
- Motion 113: Compensation Reserves, Employee Trust Funds (4-11)
- Motion 116: Shared Revenue and Tax Relief, Lottery Administration (4-11)
- Motion 119: General Fund Taxes, Budget Stabilization Fund, Wisconsin Economic Development Corporation (4-11)
Below are highlights from the motions approved by JFC:
Shared Revenue and Tax Relief
- Create an appropriation for making aid payments to local taxing jurisdictions in the event that the Legislature eliminates the personal property tax, effective January 2022. Provide $202.35 million for the JFC supplemental on a one-time basis that the Department of Administration can request for this purpose. Republican leaders in the Legislature are moving forward with a separate bill to eliminate the personal property tax.
General Fund Taxes, Budget Stabilization Fund, Wisconsin Economic Development Corporation
- Reduce the tax rate in the third individual income tax bracket from 6.27% to 5.3% beginning in tax year 2021. Wisconsin’s third income tax bracket applies to single filers making over $23,930 but not more than $263,480 and to married, joint filers making over $31,910 but not more than $351,310.
- Update the individual income tax withholding tables to take effect on January 1, 2022, resulting in a one-time revenue reduction of $331.2 million in 2021-22.
- Create a nonrefundable individual income tax credit for child and dependent care expenses, beginning tax year 2022. The credit will equal 50% of the amount of the federal child and dependent care expenses tax credit. Also provide for a sunset of the current law deduction for the same expenses, beginning tax year 2022.
- Modify the partially refundable research tax credit to increase the refundable portion from 10% to 15% for taxable years beginning after December 31, 2021.
- Transfer $200 million from the general fund to the budget stabilization fund in 2022-23.
- Estimate a reduction in the transfer from the general fund to the transportation fund of $17.24 million in 2021-22 and $5.12 million in 2022-23.
- Increase estimated funding from the economic development fund for WEDC operations and programs by $4.3 million in 2021-22 and $5.9 million in 2022-23.
- Require WEDC to spend at least $3 million over the biennium for talent attraction and retention initiatives.
Compensation Reserves, Employee Trust Funds
- Provide $49.3 million over the biennium for the compensation reserves for cost increases associated with fringe benefits.
- Provide $87.45 million over the biennium for general state employee wage adjustments of 2% each year, effective January 1, 2022 and 2023.
- Increase judicial salaries by 3% in 2021-22 (effective January 2022) and 4% in 2022-23 (effective January 2023), in addition to the general wage adjustments provided to state employees.
- Fund a $5 hourly wage add-on for all hours worked by correctional officers and sergeants at adult institutions that have a vacancy rate above 40.
Motion 2001: Maintenance of Effort Compliance and Other Considerations
- Provide $110 million in 2021-22 and $298 million in 2022-23 in the general school aids appropriation.
- Provide $75 million in 2021-22 for general school aids, paid using the current quarterly payment schedule during the school year rather than in the following July. Delete the current law provisions under which the state annually pays that amount of aid on a delayed basis.
- Delete the general school aids reduction associated with the legacy independent charter schools in Milwaukee and Kenosha, beginning in the 2021-22 school year. Reduce general fund lapses by $82.8 million in 2021-22 and $83.9 million in 2022-23. Increase net general school aids correspondingly.
- Provide an increase of $29 million in 2021-22 and $43 million in 2022-23 for property tax relief aid for technical colleges.
- Transfer $60 million annually from the state’s general fund to the state’s unemployment reserve fund for the purposes of making unemployment benefit payments.
- Increase the annual allotment for local assistance grants under the Knowles-Nelson Stewardship Program by $1.25 million for a total annual allocation of $9.25 million during the program’s four-year reauthorization. Increase the program’s bonding authority by $5 million to finance the increase in funding.