Wisconsin governor slashes tax cuts and boosts school funding – for centuries

Wisconsin’s governor, Tony Evers, signed off on a two-year spending plan on Wednesday after gutting a Republican tax cut and using his broad veto powers to increase school funding for centuries.

Evers angered Republicans with both moves, with some saying the Democratic governor was going back on deals he had made with them.

Wisconsin governors have broad partial veto power and Evers got creative with his use of it in this budget, which is the third passed by a Republican legislature that he’s signed.

He reduced the GOP income tax cut from $3.5bn to $175m, and did away entirely with lower rates for the two highest-earning brackets. He also edited the plan to increase how much revenue K-12 public schools can raise per student, by $325 a year until 2425.

Evers, a former state education secretary and teacher, had proposed allowing revenue limits to increase with inflation. Under his veto, unless it’s undone by a future legislature and governor, Evers said schools will have “predictable long-term spending authority”.

“There are lots of wins here,” Evers said of the budget at a signing ceremony surrounded by Democratic lawmakers, local leaders, members of his cabinet and others.

Republicans blasted the vetoes.

The Republican assembly speaker, Robin Vos, said allowing the school revenue limit to increase effectively forever would result in “massive property tax increases” because schools will have the authority to raise those taxes if state aid isn’t enough to meet the per-pupil cost. He also said scaling back the tax cut put Wisconsin at an economic disadvantage to neighboring states that have lower rates.

Vos did not say if Republicans would attempt veto overrides, an effort that is almost certain to fail because they would need Democratic votes in the assembly to get the two-thirds majority required by state law.

Republicans proposed tapping nearly half of the state’s projected $7bn budget surplus to cut income taxes across the board and reduce the number of tax brackets from four to three.

Evers kept all four brackets. The remaining $175m in tax cuts over the next two years is directed to the lowest two tax rates, paid by households earning less than $36,840 a year or individuals who make less than $27,630. Wealthier payers will also benefit from the cuts but must continue to pay higher rates on income that exceeds those limits.

Evers was unable to undo the $32m cut to the University of Wisconsin, which was funding that Republicans said would have gone toward diversity, equity and inclusion – or DEI – programming and staff. The budget Evers signed does allow for the university to get the funding later if it can show it would go toward workforce development and not DEI.

Evers previously threatened to veto the entire budget over the UW cut. But on Wednesday, he used his partial veto to protect 188 DEI positions in the university system that were slated for elimination under the Republican plan.

Another of Evers’ vetoes removed a measure that would have prohibited Medicaid payments for gender-affirming care. The governor accused Republicans of “perpetuating hateful, discriminatory, and anti-LGBTQ policies and rhetoric” with the proposal.

No Democratic lawmaker voted for the budget, but most stopped short of calling for a total veto.

Evers ignored a call from 15 liberal advocacy and government watchdog groups that had urged him to “fight like hell for our collective future” and veto the entire budget, which they argued would further racial and economic inequality.

Evers said vetoing the entire budget would have left schools in the lurch and meant rejecting $125m in funding to combat water pollution caused by so-called “forever chemicals”, also known as PFAS, along with turning down $525m for affordable housing and pay raises for state workers.

No governor has vetoed the budget in its entirety since 1930. This marks the third time that Evers has signed a budget into law that was passed by a Republican-controlled legislature. In 2019, he issued 78 partial vetoes and in 2021 he made 50. That year, Evers took credit for the income tax cut written by Republicans and used it as a key part of his successful 2022 re-election campaign.

This year he made 51 partial vetoes.

The budget also increases pay for all state employees by 6% over the next two years, with higher increases for guards at the state’s understaffed state prisons.