Steven Walters
The State of Politics

No Christmas In May For Republicans

Tax collections haven’t risen so GOP lawmakers may have to swallow Walker budget cuts they opposed.

By - May 11th, 2015 10:14 am
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Assembly Speaker Robin Vos

Assembly Speaker Robin Vos

We adults suggest that a child “color within the lines.” Republicans who control the Capitol got this advice last week: “Spend within the lines.”

General-fund tax collections will total $30.8 billion in the two-year budget cycle ending in mid-2017 – and no more, the non-partisan Legislative Fiscal Bureau told Republican Gov. Scott Walker and Republican legislators. GOP leaders had been hoping for Christmas in May, and that their present would be an extra $200 million or $300 million in tax collections to erase painful budget cuts Walker recommended in February.

“For those of us who have been crossing our fingers and going to church on Sunday, it didn’t work,” lamented Assembly Speaker Robin Vos. “We’ll figure a way to make it all work out in the end.”

Veteran Fiscal Bureau Director Bob Lang played the role of the grinch who stole Christmas. In a five-paragraph memo, Lang said July-through-April tax collections were below estimates and then added this warning about the future: “If there is any additional revenue in the current year, it will likely be offset by reduced growth rates in 2015-16 and 2017-17.”

Still, Lang is sticking with predictions that tax collections will go up by 4.7% next year, and 3.7% in the following year, but the net effect of all this is that Republicans must work with the budget figures they have, not the ones they were hoping for.

The co-chairs of the budget-writing Joint Finance Committee nonetheless pronounced the tax-collection glass to be half-full. “Meeting our expectations is actually a good thing,” said Rep. John Nygren. “Yesterday, we had revenue estimates that were on target,” added Sen. Alberta Darling.

Out-of-power Democrats denounced Republicans. “There’s no pot of gold and it’s time to get serious about how we’re going to fund the state’s priorities,” said Democratic Rep. Gordon Hintz, a Finance Committee member.

Republican leaders sent these signals on how they will color within the new spending lines:

*First, the $127-million cut in state aid for K-12 schools that Walker proposed in February will be erased. How? Walker proposed paying for a $106-million credit that controls property taxes in the two-year budget cycle ending in mid-2017. Upon further review, Nygren said, that $106 million can be grabbed as a down payment on aid to schools next year. That would push the $106 million payment into the 2017-19 budget cycle, however.

Democratic Assembly Leader Peter Barca didn’t know which sound-bite quip to use when that was announced – “accounting trick” or “kicking the can down the road.” He went with “accounting trick.”

State aid to K-12 schools is the “single largest” use of general-fund taxes, Vos noted. The governor had budgeted $5.1 billion in K-12 state aid, but if his $127 million cut is restored, that will rise to more than $5.2 billion.

*The UW System will have to live with either the $300-million two-year cut in state aid that Walker recommended, or something very close to that cut. This year, state aid to the 26-campus UW System will total $1.17 billion. Lang’s no-new-money report makes it “difficult” to significantly reduce the proposed $300-million cut in aid to the UW System, said Senate Majority Leader Scott Fitzgerald.

*Get ready to pay more to register your car or light truck with the state Department of Transportation. Because Walker and Fitzgerald insist that there be no increase in 30.9-cent per gallon state gas tax, Republican leaders are gathering the votes to raise the $75 annual registration fee by up to $25. That increase – from $75 to $100 – would raise an additional $116.7 million per year, according to the Fiscal Bureau. That would allow Republicans to dial back Walker’s request to borrow $1.3 billion over the next two years to continue major highway repair and construction projects.

The refusal to raise the gas tax comes despite widespread support for that change among Assembly Republicans. More than 40 of the 63 Assembly Republicans are willing to consider a gas tax increase, one Assembly Republican estimated last week.

One thing Republicans haven’t figured out is how to pay for Walker’s plan to remove (as of next year) the 1,000-slot limit on the number of Choice students, who attend private schools at state expense. It’s a 25-year-old program Democrats want to eliminate outright, while GOP leaders want to expand it. But with what money?

To “invest in our children and our people,” as Democratic Sen. Lena Taylor of Milwaukee puts it, Democrats want to limit a new manufacturing and agriculture tax credit that Republicans passed two years ago. It will cost the state treasury $509 million in the next two years. That could solve a lot of budget problems.

Nah, Republicans answer, we still think that tax break was a good idea.

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at stevenscwalters@gmail.com

5 thoughts on “The State of Politics: No Christmas In May For Republicans”

  1. Labitokov says:

    Republican math:

    “For those of us who have been crossing our fingers and going to church on Sunday, it didn’t work,” lamented Assembly Speaker Robin Vos. “We’ll figure a way to make it all work out in the end.”

  2. PMD says:

    Has anyone asked Arthur Laffer for comment?

  3. Casey says:

    I for one think the gas tax is a lot more fair. I own a car but rarely drive it so my family doesn’t put as much wear and tear on the roads and don’t pay as much in gas tax but we have to pay just as much as the person who drives a 40 mile commute in registration fees.
    Also how about stop OVER building hwys. This state needs highways for commerce but I’m always amazed at the four lane hwys in the middle of nowhere in the northwoods. And once they’re build they have to be maintained.

  4. TF says:

    @Casey: agreed on highways. The roadbuilders are the only industry in Wisconsin who seem to profit under all economic conditions and all administrations, Doyle and Walker alike. Highways and freeways are under incessant construction, reconstruction, and re-reconstruction. What a farce.

  5. Bill Kurtz says:

    Casey, you’re totally right, the gas tax is fairer than license plate fees because those who drive more pay more. And there’s another reason it’s better: out-of-staters using our roads pay it, they don’t pay license fees.

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