By MacIver Institute
A lot has been going on at the Capital – here’s an update on some of the top stories.
Annual Fiscal Report: $7 Billion Surplus; Tax Collections Up But Spending Up a Bit More
The state released its Annual Fiscal Report (AFR) which shows the state has a more than $7 billion surplus. It also shows tax collections increased nearly a half billion dollars, and spending increased a bit above that.
On top of the surplus, the state’s Rainy Day Fund continues to grow, reaching another record high, hitting $1.8 billion. In 2011 the Rainy Day Fund was 0, and in the past 12 years it’s steadily increased. The $1.8 billion is about 1.8% of the state biennial spending, enough to fund all state operations for about 13 days.
There are plenty of plans for spending the $7 billion surplus – including …
Milwaukee Brewer Stadium Bills Up In Assembly
Two bills to send state and local dollars to assist the Milwaukee Brewers to perform maintenance and improvements on the taxpayer-financed stadium jointly owned by the Brewers and the 5-county stadium district (Milwaukee, Ozaukee, Racine, Washington and Waukesha). A 0.1% sales tax in those counties raised $609 million that went to the stadium. The stadium tax ended in 2020; this year the Brewers threatened to leave the state if more tax dollars were not sent their way to fund improvements.
Evers proposed spending $290 million. Assembly Republicans proposed a $610 million deal in September with about $400 million from the state and $200 million from the city and county of Milwaukee. Milwaukee leaders objected, (more interested in giving themselves raises, double-crossing the state to fight the few strings attached to their massive bailout, and declaring Republicans the “enemy”) than in what the loss of the team would do to their finances. So the plan went back to the drawing board.
The Assembly is set to okay two bills that would spend $545 million tax dollars to keep the team in Milwaukee. Here’s the basic breakdown:
• $411 million from state taxpayers
• $67.5 million from Milwaukee County
• $0 City of Milwaukee
• $67.5 million state contributions on behalf of the City of Milwaukee
The remainder of the $545 will come from state coffers as well. The bills require DOR to turn over to the stadium district a portion of the administrative fee they take for managing the sales tax collections of the new city and county sales taxes. In addition, once the state has funded what would have been the City of Milwaukee’s share – $67.5 million – then they’re required to reduce the administrative fee charged to the city. The bill also reduces the administrative fee for the county effective 2024. These changes give the city and county a special deal no other municipality that levies a sales tax receives, giving them a little boost to their bailout deal. For being such good partners.
The team, valued at $1.6 billion will:
• Contribute $100 million
• Extend the lease for 27 years
• Have access to $50 million in loans from the state.
Evers “Finds” $170 Million Federal Covid Cash, Sends to Child Care Subsidy Program
Evers said he found $170million that he will use to keep Covid child care subsidies in place through mid-2025. Evers has control of a roughly half-billion dollar slush fund of unobligated and unspent pandemic aid.
Evers has been insistent on continuing subsidies for childcare providers that were intended to help them get through the pandemic. Last week Senate republicans released their own plan …
Senate Republicans Propose Childcare and Tax Cut Plan
The senate plan would provide a middle-class tax cut and create a state child-care tax credit, along with increased private school tax deductions and other workforce development provisions.
The plan will cut taxes by $2 billion, and impact taxpayers earning $27,000 per year and above. The governor may be dead set against tax relief for middle-income earners, but kudos to the legislature for continuing to push returning (at least part of) the $7 billion surplus to the people who build it.
The childcare tax credit could mean as much as $5,200 to a family of four with two children and is estimated to cover nearly a quarter of average childcare costs.
The governor’s office called the bill “embarrassing.” So likelihood of it being signed into law seems small.
Lawsuit Filed Alleging School Choice is Unconstitutional
In another entry under the ‘elections have consequences’ header, as we’ve predicted, a lawsuit was filed directly with the state Supreme Court, bypassing lower courts, claiming school choice violates the constitution and has put the public school system into a death spiral.
Death spiral indeed. New assessments are out and show that under 40 percent of kids can read or do math at their own grade level.
AG Kaul and Governor Evers File Redistricting Brief
The brief, filed with the state Supreme Court, asks them to declare the current legislative maps unconstitutional and to draw new boundaries.
Oral arguments in the redistricting case begin Nov. 21.
State Employee Pay Plan Passes Committee
But without the UW pay plan included. The pay plan will give state employees a 4% bump this year and 2% the following. UW employees would have received the same increase, but the unwillingness of administration to eliminate Diversity, Equity and Inclusion staff – even as 10 of 13 campuses face deficits – has stalled the pay plan in the legislature, which wants the UW to cut the unnecessary positions and end race-based indoctrination on campuses.