New estimates showing Wisconsin taking in about $500 million more than expected through June 2015 have triggered a frenzied debate among lawmakers about how much of the additional money should go toward public schools and tax cuts.
“We’re not going to be spending it willy-nilly. We’re going to do due diligence,” said Sen. Alberta Darling, R-River Hills, co-chairwoman of the Legislature’s powerful budget committee. “So it’s good news today, but it doesn’t mean we’re going to celebrate and go off to a spending binge.”
The improved revenue projections, released Thursday by the nonpartisan Legislative Fiscal Bureau, brought immediate calls from Gov. Scott Walker, some of his fellow Republicans and Democrats to put more money toward schools.
But while many lawmakers agreed education should be a priority, Republicans also called for deeper tax cuts and boosting state reserves while Democrats stressed focusing on public schools and worker training programs.
Walker said the projections show “our sound fiscal management means we can continue to invest in our priorities while protecting taxpayers.”
Improved estimates are projected to result in an approximately $525 million net balance by June 2015, the fiscal bureau said.
“The surplus and increased revenue projections should be invested in aid for our schools, lowering income taxes for middle-class families, holding the line on property taxes, and building our rainy day fund,” Walker said in a statement.
The fiscal bureau projected that general fund tax revenues would be higher than previous estimates by $215 million in the fiscal year that ends June 30. By law, half would need to go toward the state’s rainy day fund.
The new figures came as lawmakers continued to debate Walker’s proposed $68 billion budget for 2013-15, which includes about $30.5 billion in state spending over two years. Once the budget committee completes its work, the legislation will be considered by each chamber. Lawmakers hope to pass a final budget by June 30.
School funding paramount
Assembly Republicans on the Legislature’s budget committee said Thursday they would like to increase funding for schools by $100 per student.
“We have listened to the citizens that spoke out during public hearings throughout Wisconsin and to our colleagues,” said Rep. John Nygren, R-Marinette, co-chairman of the committee.
A joint statement by Assembly Republicans on the committee also said they wanted to give Wisconsin taxpayers a deeper income tax cut and they remained committed to the expansion of school voucher programs.
Some Senate Republicans have called for a bigger increase in school spending — as high as $200 per student.
On Thursday, Sen. Jennifer Shilling, D-La Crosse, said the increase should be $275 per student, and also called for some of the money to be used on worker training programs.
She and other Democrats said the money could start restoring education funding in the wake of steep cuts Walker and the GOP-controlled Legislature made in the current budget.
Walker’s spending proposal would increase state aid to schools by $129 million for 2013-15, but it caps overall state and local tax spending on schools at this year’s level. So the additional money would effectively lower property taxes rather than fund school programs.
Mary Bell, president of the Wisconsin Education Association Council, said all of the additional money could be used for public schools.
“The call to reinvest in public education is getting louder as communities begin to understand the devastating impact the governor’s proposed budget will have on neighborhood public schools,” Bell said in a statement. “Today’s announcement provides an opportunity for lawmakers to answer that call.”
But Republicans made it clear education was not the only priority.
“Our promise is to give Wisconsin taxpayers the largest possible income tax cut that we can afford,” said Rep. Dale Kooyenga, R-Brookfield.
Darling and Nygren said they didn’t have a specific dollar amount for how much more income taxes may be cut. Walker’s budget initially proposed a $343 million cut, which would likely mean a cut of about $83 a year for the average taxpayer.
The state chapter of Americans for Prosperity, a conservative group committed to limited government and free markets, called for “substantial tax relief.”
“Now the Legislature needs to do the right thing and give the money back to the people who have worked so hard, the taxpayers,” said Luke Hilgemann, state director of AFP-Wisconsin.
Darling said she hoped to look for ways to improve education, lower taxes, prevent a structural deficit and reduce bonding.
“I think we have to really take a deep breath. It’s just like if you won the lottery,” Darling said. “I think most people would say, ‘You know, what is the best way to invest that money?’”