Wisconsin has been anticipating a substantial deficit over the next two years, but Governor Walker says his budget for 2015-2017 is balanced and will lower property taxes.
“Property taxes by the end of 2016 will be lower than they were in 2014. That means lower property tax bills for six years in a row - how about that,” Walker said.
Walker announced $200 million more in state aid for schools – spread over two years, mainly to hold down the school property tax levy. Districts could not increase revenue for education, so spending would remain relatively flat.
When it comes to the UW System, Walker did not cite the amount he wants to cut from the state universities – reportedly $300 million, while freezing tuition for two years. But Walker touted the plan as bold; it would also give the system more autonomy to run itself.
“Recently, some have raised concerns about this propose reform. These are some of the same claims we heard four years ago, when our Act 10 reforms were enacted,” Walker said.
Act 10 gave school districts the authority to control teacher benefits and rules, while Walker cut funding by hundreds of millions of dollars.
“Today, our graduation rates are higher, third grade reading scores are better, and Wisconsin ACT scores are second best in the country,” Walker said.
On another education matter, the governor’s budget would lift the cap on Wisconsin’s school voucher program, opening it to many families, statewide.
Other policy issues including new requirements for people applying for government assistance. Able-bodied people wanting food stamps would have to enroll in a job-training program.
“Now some might claim that we’re making it harder to get government assistance. We’re not. We’re making it easier to get a job,” Walker said.
Walker did not mention the fact that he intends to borrow a billion dollars to fund transportation projects and $200 million to help the Bucks build a new arena in Milwaukee. What he did cite, is that state borrowing would be down.
“Now in my predecessor’s last budget, the total bonding level was $3.6 billion. In this budget, the total level of bonding is down to less than $1.6 billion. This is the lowest it has been in a decade,” Walker said.
While Walker says his budget will create a government that is limited yet effective, Todd Berry sees the status quo – even when it comes to borrowing. Berry is president of the non-partisan Wisconsin Taxpayers Alliance.
“It’s just like the last budget, when we borrowed almost a billion dollars for transportation in the last budget, and when the prior governor also borrowed. We’ve been kicking the can on transportation for over a decade, and we’re going to borrow again,” Berry said.
Berry says the reality is that Medicaid spending – providing health care for those in need, will continue grabbing two-thirds of new revenue in Wisconsin. So the state doesn’t have a lot of money to shift.
As for Walker labeling bold - his plan to cut money for the UW System in exchange for autonomy, Berry claims the idea is not new, although Wisconsin would do it in a different order.
“It’s the trend in American public higher education. Virginia did it years ago. Michigan’s been doing it. It’s very common. The reason it’s getting a lot of griping, is they’re going to do the cut, before they give them the autonomy,” Berry said.
Rob Henken, president of the Milwaukee-based Public Policy Forum agrees that that's a key distinction between the flexibility the governor touted in presenting Act 10 four years ago, and his latest budget.
"That's why I think some were thinking that, while there were going be big changes to the UW system, that the budgetary cuts might be phased in over time," he says. "But that's not happening, and I think that's an area that the legislature will look at very carefully."
Even with the greater autonomy that the system would receive in two years, Henken says it is unclear how much those cuts would be offset. "We are talking about a thirteen percent cut. And barring any major changes in the way you do compensation," he says, "it's hard to imagine how greater autonomy and flexibility is going to wring those types of savings."
Reaction to the governor’s budget components run the gamut. The Legislature’s budget committee will now begin sifting through the thick document, with political debate to follow.
