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Legislature's budget committee starts to whittle down $385 million surplus

The Legislature's Joint Finance Committee met Wednesday to take up several proposals to spend the state's $385 million surplus.

The Legislature is racing to finish its business for the year, with Gov. Scott Walker and Republican lawmakers still haggling over how to allocate a $385 million budget surplus.

Senate Majority Leader Scott Fitzgerald, R-Juneau, said Thursday he expects “chaos” over the next several weeks and would not guarantee that several of Walker’s top priorities would pass during the final push.

There’s little time for lawmakers to act before they break for election season. The Assembly plans to meet five days in February, while the Senate will be in session on Feb. 20 and possibly only one day beyond that.

The Legislature’s budget committee was set Wednesday to take up the first in a series of proposals that will whittle down the state’s $385 million surplus.

Walker has proposed a series of measures that he described last month in his annual State of the State address as an “ambitious agenda for 2018.” The various proposals include a $100-per-child tax credit that could cost $244 million over two years, a $50 million per year rural economic development fund and $6.45 million in additional aid to rural schools.

Other Walker proposals wouldn’t necessarily draw down general state revenues in the current biennium but would rely on funds from other areas of the budget. For example, Walker has said an $80 million proposal to build regional juvenile youth prisons to replace the troubled Lincoln Hills youth prison could come from already approved borrowing.

Assembly Speaker Robin Vos, R-Rochester, said Republicans are close to reaching agreement on overhauling the youth prison system that would close the troubled Lincoln Hills-Copper Lake youth prison in Irma. Vos said he hopes to announce a deal early next week under which the most serious juvenile offenders would be held in one or two state-run prisons and the others would be housed by counties.

Walker said the plan would only work if all 72 counties were on board.

Walker also has said his $200 million proposal to stabilize the health care marketplace would come from unspecified Medicaid savings. Fitzgerald has expressed skepticism that the funds, including $50 million from savings in the state program, will be available.

The state’s $3 billion in tax credits for Foxconn, which will be spread out over more than a decade, are accounted for in the state’s current revenue projections. Walker called this week for making similar tax credits available for Kimberly-Clark, which recently announced 600 layoffs in the Fox Valley, and other paper manufacturers. The cost for such offers isn’t accounted for in the current budget.

Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, the leaders of the Joint Finance Committee, said Wednesday they have not had a conversation about a target for how much they want to draw down the state’s surplus.

“Many of us worked hard to get a balanced budget that did not overspend,” Darling said. “So I think we’re all conscious of spending and we’re not just looking for things to spend money on.”

Both said there could be changes to Walker’s child tax credit proposal, including making it available only to families that pay taxes and only applying it in one year of the budget. They noted they still haven’t seen a bill and didn’t commit to any details.

Nygren said any bills that are passed out of the finance committee will likely be taken up and pass the Assembly. Darling said she couldn’t guarantee the same outcome in the Senate.

The Joint Finance Committee is planning to increase the amount of tax credits developers can claim for redeveloping historic properties. The Legislature set the amount at $5 million in the 2017-19 budget, but Walker used his partial veto authority to remove a zero from that amount to make it $500,000. The new bill would increase the amount to $3.5 million.

That proposal would cost $3.5 million in the current two-year budget but is expected to cost $18.9 million in the next budget, $33.2 million in 2021-23 and $58.8 million in each biennium after that. Darling said Walker has agreed to the $3.5 million level.

The committee is also taking up Walker’s call for a $6.8 million package to expand a Wisconsin Economic Development Corp. advertising campaign from Chicago to other Midwestern cities. Part of the package would fund an effort to recruit veterans transitioning to the civilian workforce.

Walker has touted the advertising campaign as necessary given the state’s worker shortage. Democrats have railed against it as being less effective at recruiting millennials than having appealing state policies. They also say it amounts to a taxpayer-subsidized recruiting tool for Foxconn, which has plans to create up to 13,000 jobs at a $10 billion Racine County facility.

The committee also is considering parts of a foster care package based on recommendations from an Assembly study committee. The bills would cover tuition for students who grew up in foster care ($940,000); create a grant program to assist foster parents ($400,000); provide more funding for court-appointed advocates for abused children ($250,000); and fund the statewide 2-1-1 hotline, which the United Way of Wisconsin operates to connect callers to community-based services ($210,000).

Finally, a bill offering grants to address drug trafficking, substance abuse prevention, juvenile and family drug treatment courts, and drug treatment for county jail inmates would cost $3.35 million.

The Associated Press contributed to this report.


Matthew DeFour covers state government and politics for the Wisconsin State Journal.