Tony Evers signs Republican-written state budget that cuts income taxes, announces $100 million more for schools

Molly Beck
Milwaukee Journal Sentinel
Gov. Tony Evers shows the 2021-23 biennial budget now known as 2021 Wisconsin Act 58 after signing it Thursday, July 8, 2021, at Cumberland Elementary School, 4780 N. Marlborough Drive, in Whitefish Bay. The bill provides one of the largest tax cuts in Wisconsin's history. Evers also announced $100 million in new funding for public schools in the biennial budget.

WHITEFISH BAY - Wisconsin Gov. Tony Evers on Thursday signed into law a new state budget written by Republican lawmakers that includes billions in income tax cuts and announced he would be providing school districts with an additional $100 million in federal funding to make up for what he characterized as a plan that falls short for schools. 

The Democratic governor signed the $87.3 billion two-year state spending plan in an elementary school library in a Milwaukee suburb, igniting his reelection campaign that will rely on areas like Whitefish Bay where a shifting electorate could prove crucial in Wisconsin's tight statewide races. 

The governor tweaked the plan using his veto authority in 50 largely minor areas but left intact the centerpiece of the Republican plan — a more than $2 billion tax cut package that would reduce the state's third tax bracket for about half of Wisconsin residents to 5.3%. 

"This morning, I’m signing one of the largest tax cuts in Wisconsin state history," Evers said at a news conference held in the library of Cumberland Elementary School. "The bipartisan budget, along with prior reductions, not only delivers on my promise to cut taxes for middle-class families by 10%, I’m cutting middle-class income taxes by 15%."

Republicans immediately blasted Evers for taking credit for the tax plan.

"Governor Tony Evers deserves NO credit for signing our budget," Senate Majority Leader Devin LeMahieu, R-Oostburg, said in a statement. "This was not a bipartisan process of colleagues sharing ideas. He got boxed into a corner and rather than fight for his unpopular budget and risk a political knockout, he and his team threw in the towel and signed our responsible budget."

"He is not a fighter. He is not a leader. He did not sign our conservative budget out of bipartisan motives. He is merely sensible enough to recognize a better budget when he sees one."

In response to the GOP criticism, Evers said it was a bipartisan effort because he signed the plan.

"I signed the budget — simple as that. I could have vetoed that. I made a promise to the taxpayers of the state that I would reduce taxes by 15% ... so it is a bipartisan effort," he said. 

While Evers backed the reductions in income taxes and property taxes included in the budget, he announced he would veto separate legislation that would eliminate a tax businesses pay on equipment and furniture.

Evers said a full budget veto was not an option because, in part, it would have jeopardized the federal aid for schools. He also announced he would direct $100 million in federal funding to schools because the budget included a tenth of school funding he proposed.

The new funding does not have rules for how the money may be spent, he said. 

“This budget isn’t good enough for our kids and Republicans could and should have done more. And while they may be fine forcing Wisconsinites across the state to go to referendum just to support their public schools, I am not," Evers said.

I-94 expansion, end of tuition freeze

The budget green-lights an expansion of I-94 in Milwaukee and ends the 8-year-old freeze on in-state tuition at University of Wisconsin schools. It also lowers property taxes by about $100 this December for the owner of a typical home.

Two years ago, Evers used his veto powers to increase school funding by $65 million.

This time, his vetoes were much more restrained. That’s in part because of a 2020 state Supreme Court decision that limited Evers’ veto authority. It’s also because Republican lawmakers were more careful about how they worded phrases in the budget, which minimized Evers’ opportunities to strategically strike out parts of the budget.

Evers vetoed a provision that would have permanently doubled how much in general taxes the state shifts to the transportation fund, which is primarily funded with gas taxes and vehicle fees.

The state puts 0.25% of its income and sales tax collections into the transportation fund. The Republican version of the budget would have increased that amount to 0.5%, but Evers partially vetoed the measure to make the change temporary instead of permanent.

Evers also vetoed a part of the budget that would have sent $550 million into the state’s rainy-day fund.

The effect of the veto is minimal because Evers doesn’t have the power to spend that money on his own, so it will simply remain in a different bank account. The veto may give Evers a rhetorical advantage because the state will be sitting on so much cash. For instance, he could use the situation to urge lawmakers to pass supplemental legislation to give schools more money.

Jill Underly, Wisconsin superintendent of public instruction, speaks before Gov. Tony Evers' signing of the 2021-23 biennial budget now known as 2021 Wisconsin Act 58 Thursday, July 8, 2021, at Cumberland Elementary School, 4780 N. Marlborough Drive, in Whitefish Bay. The bill provides one of the largest tax cuts in Wisconsin's history. Evers also announced $100 million in new funding for public schools in the biennial budget.

Evers planned to tour the state Thursday promoting the plan, which was written by Republican lawmakers and received bipartisan support in the Legislature — the first time in 14 years that a state budget had the backing of legislators from both parties.

Evers said there is still “unfinished business” and called on the Legislature to work with him to use existing state resources to invest more in schools.

“The biggest problems with the budget are not the things that need to be removed by the stroke of a pen, but rather the work the Legislature has left undone,” Evers said.

Some Republicans praised Evers for signing the budget they wrote while taking shots at him for touting a tax cut after proposing a budget that would have increased taxes on capital gains and large manufacturers. Evers’ initial version of the budget included both tax increases and tax cuts and would have resulted in a net increase in taxes of about $1 billion over two years.

"The taxpayers of Wisconsin should be celebrating the fact that today Governor Evers has done an about-face on his plan to raise taxes by more than a billion dollars and instead signed a Republican spending plan that delivers significant tax relief," said a statement from Assembly Majority Leader Jim Steineke of Kaukauna.

Assembly Minority Leader Gordon Hintz, D-Oshkosh, said Evers' signature shows "he won’t punish our state in order to engage in tired political fights, and show once again that the people of Wisconsin are always his top priority."

Hintz, who voted against the budget in part because of the funding level for schools, praised the governor's plan to give school districts more federal money and said Evers' vetoes provide lawmakers a new opportunity to increase funding long-term. 

“I also applaud Gov. Evers for announcing the investment of $100 million new federal dollars in Wisconsin schools. The future of our kids is paramount, and this investment will provide critically important resources in light of Republicans’ education cuts. At the same time, we know that much more school funding is needed to avoid cuts and layoffs in the next two years. Through today’s partial vetoes, Gov. Evers has put the legislature in a position to restore more of the school funding that Republicans cut from his original budget. I call on legislative Republicans to act immediately to fund our schools and invest in our kids’ future.”

Evers also on Thursday vetoed a bill to eliminate the personal property tax, which is levied on businesses for their equipment and furniture. Getting rid of the business tax is expected to save businesses — and cost the state — about $245 million a year.

That’s about $45 million more than originally anticipated. Lawmakers changed their estimates after acknowledging the legislation would likely provide a tax break for railroad companies along with other businesses.

Evers said the legislation was "a bad bill" and he plans to veto it because it was rushed. 

An initial version of the bill also would have provided a tax break to manufacturers based in other states and overseas that have warehouses or other facilities in Wisconsin. Legislators dropped that provision before the Assembly adopted the bill in June. 

The bill picked up four Democratic votes in the Assembly but none in the Senate. 

Patrick Marley and Hope Karnopp of the Journal Sentinel staff contributed to this report.

Contact Molly Beck at molly.beck@jrn.com. Follow her on Twitter at @MollyBeck.