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June 23, 2017Published Article

State Budget Impasse Continues

Action by the Legislature’s Joint Finance Committee (JFC) on the 2017-2019 State Biennial Budget has been put on hold as legislative leaders in the Senate and Assembly continue negotiations around the remaining big-ticket items. Those items – K-12 education, transportation and taxes – have loomed large on the horizon since the governor introduced his Executive Budget in February. Since JFC’s first meeting on May 1, the committee has voted on numerous provisions in the budget, including the UW-System, the state Medicaid program, the technical college system, workforce and economic development programs, and a range of others.

Now, with the end of the state fiscal year fast-approaching on June 30, the Senate, the Assembly, and the governor remain at odds over how to allocate funding for roads and schools, as well as what changes to make to income and property taxes. Earlier this month, the Assembly Republican caucus introduced their own K-12 education funding plan, which the Senate Majority Leader immediately dismissed. Senate Republicans have said they are crafting their own K-12 education plan, but the details of that plan have not been released.

Meanwhile, some majority party members in both houses are calling for a complete repeal of the personal property tax – which would reduce revenue for municipalities and schools by an estimated $250 million per year – while others want to cut income tax rates further. In his Executive Budget, the governor included both an income tax rate reduction and elimination of the state forestry tax, which is the only state portion of the property tax.

The transportation funding debate continues to revolve around those who are advocating for new revenue sources and higher levels of investment in the state’s transportation infrastructure, and those who believe the Department of Transportation should focus on improving efficiency and cost-saving measures. The possibility of toll roads coming to Wisconsin has increased in recent weeks as the governor has softened on his opposition to tolls, and the two legislative leaders appear open to utilizing tolling as a long-term revenue option.

While it’s not clear when the budget impasse will end, Capitol insiders don’t expect the outstanding big-ticket items to be resolved anytime soon. It appears highly unlikely that a new budget will be in place when the next biennium officially begins on July 1. As a wise man once said, the worst thing that happened to the state budget process was air conditioning in the State Capitol.

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