Brian Dake

Gov. Tony Evers unveiled a capital budget Thursday that calls for $2.5 billion in new building projects around the state, an amount larger than any capital budget approved by former Gov. Scott Walker.

The state would borrow roughly $2 billion to pay for the budget, which includes more than $1 billion in new building projects throughout the University of Wisconsin System.

“This will be something that lots of people can find projects that they’ll appreciate,” said state Department of Administration Secretary Joel Brennan at a Wispolitics forum Thursday in Madison. Brennan said a backlog of building projects was part of the reason the capital budget would borrow so much more than it did in recent years.

“There’s so much of the stock of buildings at the university system that were built in the 50s and 60s and there is a lot of it that is getting beyond its usable life all at the same time,” Brennan said. “So I think there’s an opportunity there to make some investments that are not only doing things to make sure that we’re replacing buildings that are old but forward thinking and looking at where are we going in terms of economic development and workforce development in the state.”

Republicans said they were still reviewing Evers’ proposal, but at least a couple said they were concerned by the level of borrowing.

“Really sounds like the People’s Budget … so long as those people live inside the MSN/MKE bubble,” tweeted Assembly Majority Leader Jim Steineke, R-Kaukauna.

“At a first glance, the level of spending and bonding is alarming,” said Sen. Majority Leader Scott Fitzgerald, R-Juneau. “We’ll continue to review the capital budget proposal and discuss it as a caucus moving forward, but Senate Republicans are committed to protecting hard-working Wisconsin taxpayers.”

Wisconsin companies exported $22.7 billion of goods from the state in 2018, a 1.8 percent increase from 2017, according to data from the U.S. Census Bureau. The state’s export growth ranks 38th in the country and was well behind the 7.6 percent increase in exports nationally.

Canada remained the top destination for Wisconsin products in 2018, up 1.7 percent to $7.03 billion in goods. Shipments to Mexico increased 8 percent to $3.5 billion, keeping it as the number two destination for the state.

Imports from China into Wisconsin increased by more than $1 billion last year, a 14.4 percent increase that kept China as the top importer into the state.

Gov. Tony Evers last week opened debate over the state budget by proposing new funding for key priorities such as public schools and Medicaid health programs. Leaders of the GOP-controlled Legislature immediately rejected much of the plan, signaling that the final 2019-21 budget is likely to take a far different form.

Still, it is worth taking a broad look at the governor’s proposal to see how it would affect the state’s spending, taxes, and overall financial health. It will be equally important to examine the Legislature’s eventual budget bill with the same lens.

Evers would increase spending in the state’s general fund, or main account, by 3.8% in fiscal year 2020 to $18.5 billion and by 7.4% in fiscal 2021 to $19.8 billion. This two-year increase of $2.7 billion in general purpose revenue (GPR) does not factor in additional spending of federal funds or money from separate state accounts such as the transportation fund. The budget also calls for significant increases in overall spending. All funds expenditures would rise by a proposed 5.4% in 2020 to $40.7 billion and 4.9% in 2021 to $42.7 billion.

To help cover the new spending, the governor’s budget would use both a net increase in income and capital gains taxes and additional revenues in existing taxes due to economic growth. The governor is proposing a 10% income tax cut for low and middle-income earners plus an expansion of the Earned Income Tax Credit and several other smaller income tax cuts. However, the tax decreases are outweighed by several other larger increases that would primarily affect upper-income earners.

For example, the budget would place limits on who could claim an income tax credit for manufacturers and add to capital gains taxes in certain cases. It would also raise income tax collections by mirroring some provisions of the 2017 federal Tax Cuts and Jobs Act and hiring more auditors to enforce current law.

Overall, the bill would increase state GPR tax collections by $688.7 million over the next two fiscal years. This total does not include $608.7 million in new gas taxes and vehicle registration and title fees sought by the governor that would flow into the state’s separate transportation fund to pay for additional spending on state highways, local roads, and other infrastructure projects.

The additional GPR taxes, however, do not cover all of the proposed spending. The budget bill also would draw down a surplus in the general fund, which is expected to close the current fiscal year on June 30 with $691.5 million. Under the Evers proposal, the state is projected to close the next two-year budget cycle in June 2021 with just $105.3 million in its main account.

When you shop for a product at your local Wisconsin business, you expect to get the correct amount of product for your money and to be charged the correct price for the items. Keeping a fair marketplace takes a good faith effort from businesses to ensure that their scales, registers, and pumps are accurate and requires regular monitoring to ensure that businesses are held accountable for these responsibilities.

To this end, the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) tests product scales, registers, gas pumps, and fuel quality at stores throughout the state every day. The final numbers are in for the department’s 2018 field inspections, and consumers faced a fair marketplace throughout Wisconsin yet again last year.

“Year after year, Wisconsin businesses show that they respect their customers and take their responsibilities seriously in keeping their measurement and sales devices accurate,” said Lara Sutherlin, administrator for the Division of Trade and Consumer Protection.

DATCP’s weights and measures team conducted 258,720 inspections at 6,580 business locations statewide in 2018. In line with results from recent years:

• Wisconsin gas pumps continued to provide the correct amount of fuel, or even over-deliver, in nearly 100% of our tests in 2018.

• Prices at the register were also accurate or in a consumer’s favor in nearly 99% of our tests.

• Tests on scales used to weigh products specifically sold by weight were accurate or measured in the customer’s favor almost 100% of the time.

• Products sold by weight were labeled accurately in almost 99% of tests.

Inspectors also tested 5,036 fuel samples for quality last year, and nearly 99% of the samples met required national standards.

Sen. Alberta Darling, R-River Hills, said Republicans will hold the line against the tax hikes and increased spending that Democratic Gov. Tony Evers proposed in his first budget.

“I think the level of spending is outrageous, and I think the level of intimidation for a lot of our reforms is really unnecessary,” she said.

Darling said Republicans “dug out of a hole” and grew the economy in Wisconsin since 2009, when Dems controlled the guv’s office and both houses of the Legislature.

“If we have this level of spending and taxation, we’re going to go back to 2009 and I’m really afraid of that,” Darling said.

In his first budget proposal, Democratic Gov. Tony Evers will increase Wisconsin’s minimum wage, raise the gas tax, provide new funding for schools and give income tax cuts to middle income families.

To pay for his priorities, Evers’ two-year spending plan which he calls the “People’s Budget,” would roll back part of a manufacturing and agriculture tax credit program, expand Medicaid, use much of the state surplus, raise fees in transportation and limit the long-term capital gains tax.

Evers introduced the budget proposal Thursday night in the state Assembly chambers, but many of the provisions are likely not to pass the Republican-controlled state Legislature.

Republican Senate Majority Leader Scott Fitzgerald had previously hinted that Republican leaders may create their own base budget if Evers includes proposals they do not agree with. Assembly Speaker Robin Vos has called any plan that includes raising any income or sales taxes a “non-starter.”

State statutes require that Wisconsin have a balanced budget annually.  Evers’ budget increases spending by roughly $2 billion a year each year of the biennium from current spending, an increase of about 5 percent a year.

To pay for some of his priorities, Evers will spend down a surplus that is expected over the next two years. The state will enter the 2019 biennium with a $616 million surplus, and Evers budget would end the 2021 biennium with only $20 million. Evers’ administration said it will not spend any money from the state’s rainy day fund.

President Donald Trump announced Sunday on Twitter that he would be delaying an increase in tariffs against China and plans to meet with Chinese President Xi Jinping to settle on a final trade agreement.

Trump said ongoing trade negotiations with China have been “very productive” and he would delay the tariffs, which were set to go into effect on March 1, ahead of a meeting with President Xi at the president’s Mar-a-Lago resort in Florida.

“I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” Trump wrote on Twitter. “As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1.

He continued: “Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”

Cities and villages in Wisconsin rely more heavily on property taxes than any other state in the Midwest, and to a greater degree than most states nationally, according to a new report by the nonpartisan, independent Wisconsin Policy Forum.

In 2015, Wisconsin municipalities received 42.2% of their revenues from the property tax, but only 1.6% from sales and income taxes combined, WPF noted. Nationally, on average, municipalities got 23.3% of their revenues from the property tax with an additional 21.3% from sales and income taxes.

Other states tend to rely on a broader combination of revenues, including local sales taxes, local income or license taxes, charges for services, and federal aids. In Wisconsin, state law allows only  the state to levy an income tax and reserves the sales tax for the state, counties, and a limited number of municipalities that qualify as “premier resort areas.”