Gov. Scott Walker said Wednesday that he’s revising nearly 100 areas of the state’s new budget, axing a plan championed by Assembly Republicans to increase revenue for school districts that spend less than others and dramatically curtailing a popular state tax credit that helps restore historic buildings.
Walker plans to sign the two-year budget, passed by lawmakers last week, at an elementary school in Neenah on Thursday.
Among the provisions Walker announced he will partially veto is a plan to increase the amount of money school districts that spend less per student than the state average can raise in property taxes. The Neenah School District could have taken advantage of the Assembly Republicans’ plan in future years.
Walker said he vetoed the provision “because the result is a substantial increase in property tax capacity that school districts may exercise without voter input.”
Walker tweeted Wednesday that his veto “protects taxpayers,” and added that his education spending plan adds $639 million for all schools. Lower-spending districts still could increase revenues if local taxpayers authorize them to do so by referendum vote, he added.
Rep. John Nygren, R-Marinette, who pushed for the plan, said he’s “severely disappointed” with the veto, which he said rejects “an opportunity to correct a long-term inequity in our K-12 funding system.”
Kim Kaukl, who oversees the Wisconsin Rural Schools Alliance, said the vetoed provision “would have allowed these districts an opportunity to move closer to an even playing field with neighboring districts. This veto continues to punish the districts that were frugal prior to revenue caps being instituted.”
Walker also used his line-item veto authority — which, in Wisconsin, is far more expansive than in most states — to lower a new cap on how much can be claimed for a single land parcel through the historic rehabilitation tax credit, which helps finance the restoration of historic commercial buildings.
Walker lowered the cap on tax credits that may be claimed from $5 million per parcel to $500,000. Current law places no such limits on the credit.
Walker wrote in his veto message that the program has become too costly to the state.
Walker also said Wednesday that he’s axing funding to fill five vacant positions on the state Elections Commission because the commission “has been operating effectively with fewer staff.”
Instead of hiring more staffers, the commission should manage peak workload periods “by hiring limited term employees or contractors, as they did during the 2016 presidential election,” Walker wrote.
Prevailing wage scrapped right away
A new board to advocate for state prosecutors that Attorney General Brad Schimel has long supported also was cut. Walker said its creation was another “layer of bureaucracy.”
He also used his veto authority as part of the deal to make repeal of the prevailing wage for state construction projects take effect immediately, rather than a year from now.
The repeal applies to the prevailing, or minimum, wage requirement for workers on public construction projects funded by state government. The requirement applying to local-government-funded projects was repealed by Walker and lawmakers two years ago.
In all, the vetoes improved the state’s general fund balance by $16.5 million, according to Walker’s spokesman Tom Evenson.
The vetoes to the $76 billion state budget, which runs through June 2019, include a number of promises Walker made to three Republican senators last week to secure their support on the spending plan.
As part of the deal with Sens. Chris Kapenga, R-Delafield, Steve Nass, R-Whitewater, and Duey Stroebel, R-Saukville, Walker vetoed a provision that would have for one year eliminated an exemption to revenue caps on school districts that they can use for energy-efficiency projects and instead eliminated the exemption entirely.
Walker’s vetoes changed how the University of Wisconsin System will distribute $26.25 million in new funding.
The budget still allows the Board of Regents to set up a plan for distributing those funds based on how campuses perform in a range of metrics, but Walker changed it to strike a provision that lets UW institutions choose the categories on which they’re measured. The Joint Finance Committee will also be required to review the Regents’ plan at a public meeting, rather than through a more passive approval process.
Another veto requires a major expansion of the System’s Flexible Option program, which provides degrees and certificates to adults who can demonstrate their knowledge of subjects such as nursing. The budget now requires UW to double the number of programs it offers through the Flexible Option by December 2019, rather than increase them by 25 percent as the Legislature sought.
Changes to for-profit college board
Walker vetoed a section of the budget that would have required staff from the Educational Approval Board — the small agency now responsible for regulating for-profit colleges — to be retained when the board’s operations are moved under the larger state Department of Professional Services next year. Members of the Joint Finance Committee had amended the budget to require that staff members be carried over.
The change means that while the equivalent of 6.5 full-time positions will be moved from the board to DSPS at the start of 2018, EAB staffers won’t be guaranteed a job at the department.
Walker also eliminated a requirement that the agency’s board, which directs the staff, stay in place until July 2018 to ease the transition. The budget now calls for the board to be shut down immediately.
EAB executive director David Dies warned that the changes risk losing staff and board members’ specialized knowledge of how to regulate for-profit colleges, which have faced mounting public scrutiny over whether their programs mislead students.
Walker said he would veto increased legislative oversight of the Group Insurance Board, which oversees state worker benefits.
The Legislature sought to appoint four members to the 11-member board, which is controlled by the governor, and review benefits changes. Walker vetoed similar provisions two years ago.
“I do not believe that they should micromanage plan design, contract negotiations and the financial and programmatic management of the program,” the governor said.
Walker’s plan to save $60 million by self-insuring state workers isn’t in the budget, however. The insurance board last month approved other changes, including dipping into the program’s reserves, expected to save the same amount.
No word yet on possible overrides
Walker’s vetoes also:
- Require school districts to conduct referendum votes only on regularly scheduled primary and general election days.
- Eliminate a $2.5 million study looking into toll roads in Wisconsin.
- Remove a provision that would have removed local oversight of rock quarries.
- Restore a tax credit for working families, which has given a modest credit to about 725 individuals making about $9,000 a year.
Before Walker’s vetoes were announced, Assembly Speaker Robin Vos, R-Rochester, said it’s “too early to tell” whether he would seek to override any of Walker’s vetoes, a Legislative maneuver that hasn’t been used in more than 30 years.
State Journal reporters Nico Savidge and David Wahlberg contributed to this report.