The Winners In Shared Revenue, K-12 Funding Deal

Wisconsin State Capitol. Photo by Mariiana Tzotcheva.

For once, all the politicians’ press releases were right. It was a historic package —  with $274 million more in state aid to local governments, $1 billion more for K-12 public schools and much higher tuition payments to Choice students enrolled in private schools — that became law last week.

That’s why legislators from both parties, Milwaukee-area leaders and local government officials stood around Gov. Tony Evers at the signing-ceremony photo op last week in Wausau.

Let’s sort out the many winners in specific parts of the historical deal, which:

-Dedicates one-fifth of the 5% state sales tax to help local governments operate. It’s a historic win for counties, cities, villages and towns. But it could pose problems for future budget-writing legislators in an economic downturn, since the sales tax now brings in 35% of all state general-fund income.

-Requires two-thirds votes by Milwaukee’s Common Council and Milwaukee County supervisors to start collecting local-option sales taxes – 2% in the city and 0.4% in the county – that must be used to pay off pension debts. A win for Evers, Milwaukee Democrat legislators and Milwaukee elected leaders, because Assembly Republicans had insisted that referendums had to pass before those local-option sales taxes could be levied.

-Creates a $300 million “innovation fund” that would award state grants to local governments that combine services or duties, if they prove those mergers save at least 10% of pre-merger costs. A potential win for taxpayers, if it results in significant savings in how critical local services are funded.

-Requires local governments to maintain current levels of law enforcement, fire department, and emergency medical and emergency telecommunications services. Win for Republicans, who have opposed progressives’ calls to “defund” police departments and for police unions, a key constituency for the GOP.

-Provides K-12 public schools with an additional $1 billion in state aid over the next two years, which officials said will equal two-thirds of K-12 costs. Win for Evers, the former superintendent of public instruction who had insisted that $1 billion in new state aid be part of any deal.

-Budgets $50 million for reading and literacy programs to help recover Covid-caused learning loss. A win – for now – for Republicans, but how the $50 million is spent will be determined by the state Department of Public Instruction, an agency closely allied with Evers and viewed with suspicion by Republican legislators.

-Raises per-pupil state aid for Choice students, who attend private schools, and charter school students from $8,399 to $9,500 for kindergarten through eighth grade students and from $9,045 to $12,000 for high school students. Win for Republicans, since Evers has opposed Choice and its growth his whole career.

-Designates $30 million for school-based mental health programs. A win for everyone, although that is much less than what the governor recommended in his budget proposal.

-Says no local government “may discriminate against, or grant preferential treatment, on the basis of, race, color, ancestry, national origin, or sexual orientation in making employment decisions.” Win for Republican legislators, who also cut the UW System’s budget by $32 million to eliminate diversity, equity and inclusion programs.

-Repeals the personal property tax, which was projected to bring in $173.8 million next year. Win for businesses and also for local tax assessors, who found the tax difficult to administer and collect.

-Restricts local health officers such that they may only close businesses for up to 30 days to deal with pandemics or other health emergencies, unless a local government votes for a 30-day extension of the closings. Win for Republicans.

-Prohibits counties and local governments from holding advisory referendums. Win for Republicans weary of local voters second-guessing their refusals to expand Medicaid with federal dollars, create a non-partisan body to recommend new Congressional and legislative district lines, and adopt tougher gun-control laws. Local governments could still hold advisory referendums on property tax issues, however.

-Requires the state Department of Natural Resources (DNR) to get approval from all local governments before it can recommend purchase or easements of recreational property north of east-west State Highway 8 to be preserved under the Knowles-Nelson Stewardship Program. Win for northern Wisconsin Republicans.

-Limits local governments’ powers to regulate quarries, including hours of blasting. Win for northern Wisconsin Republicans.

Losers? Milwaukee-area residents, who can eventually expect to pay higher sales taxes. And tourists lose, since they pay a significant percentage of sales taxes. A new state report says Milwaukee County visitors paid $216 million in state and local taxes last year.

All told, Republicans had some big wins but so did Evers, Democrats and local governments. This was truly a bipartisan bill.

Steven Walters started covering the Capitol in 1988. Contact him at stevenscotwalters@gmail.com.