MADISON – Gov. Tony Evers will propose a state budget Tuesday that includes helping small businesses deal with the economic fallout of the COVID-19 pandemic, legalizing marijuana and allowing the sales tax to rise to 6.5% in some areas.
Republicans who control the Legislature will spend the coming months rewriting much of the Democratic governor’s spending plan.
They have made clear they will toss out parts of it, just as they did with his last budget two years ago. For instance, Republicans oppose legalizing recreational marijuana, even as some of them call for legalizing medical marijuana.
Evers and Republicans have seen eye to eye on little but were able two years ago to agree on a budget on time that both sides could live with.
This time, the challenges may be tougher because of the pandemic and politics. Evers and Republicans have fought for a year over how the state should respond to COVID-19. Republicans recently voted to strike down Evers’ statewide mask requirement, only to see Evers put it back in place an hour later.
The budget is the best way for Evers to try to drive his agenda for the second half of his term as he decides whether to run for re-election. Republicans, meanwhile, are lining up to try to take the governor’s office in 2022.
Once in their hands, lawmakers will recraft Evers’ budget and send it to him for final approval. Evers can use his partial veto powers to throw out portions of the Republican version of the budget, but he doesn’t have a way to add provisions to what they send him.
The budget is due by June 30, but state operations will continue at current spending levels if legislators miss that deadline.
Evers will deliver his budget speech at 7 p.m. Tuesday, but for weeks he has been detailing parts of his plan, such as the one that would legalize and tax recreational marijuana. The measure would generate about $166 million over two years, and Evers wants to use tens of millions of dollars from it to help rural schools and give grants that work to improve diversity and racial equity.
Under another budget provision, Evers would allow counties and larger local governments to raise the sales tax by half a percentage point — if approved by voters in a referendum. That could mean the sales tax could go up by one percentage point in some areas. For instance, it would go up by that amount if voters in Milwaukee and Milwaukee County each approved bumps of half a point.
The sales tax in most parts of the state is 5.5%, and Evers would allow it to go up to 6.5% in some places.
Additionally, Evers would provide $200 million over two years to small businesses to help them recover from the pandemic. His budget would also create a $100 million venture capital fund for startups.
Evers wants Medicaid expansion
Portions of Evers’ budget hinge on expanding the state’s BadgerCare Plus health program under the Affordable Care Act, which is also known as Obamacare.
Obamacare requires the federal government to pick up more health-care costs when states broaden Medicaid programs like BadgerCare. Evers wants to take advantage of it so that the state can provide coverage to tens of thousands of more people while seeing its own costs go down by $643 million over two years.
Evers would use some of the savings to put an additional $150 million over two years toward treating mental health and substance abuse.
Evers campaigned on expanding BadgerCare and made it a centerpiece of his 2019 budget. Republicans got rid of the provision then and have promised to do the same this time. They contend expanding the program makes the health-care system too reliant on the government.
Evers also wants to put an additional $106 million over two years toward child care and early education programs. His budget would also change state law to allow workers to qualify for family leave when their child care providers are closed.
Evers is also pushing for putting an additional $43 million over two years toward supporting farmers, expanding agricultural markets and connecting Wisconsin producers with food banks.
The state’s finances have held up better during the pandemic than some budget observers had feared. A recent report by the nonpartisan Legislative Fiscal Bureau found the state is expected to take in $1.2 billion more through the summer of 2023 than had been anticipated two months ago.
The state’s rainy-day fund will have almost $1 billion in it, giving the state a cushion in case its revenue starts to dry up.
Republicans will be angling for a slimmer budget than what Evers wants, so they will have to find places to cut spending or limit increases over the coming months.
On Tuesday, hours before Evers delivers his budget address, Republicans plan to approve a set of tax cuts that would reduce state revenue by about $540 million over three years. Evers hasn’t said whether he will sign that legislation.
And if Republicans stick with their plans, they will have to do without the additional funds they could get by expanding BadgerCare and legalizing and taxing marijuana.
Contact Patrick Marley at email@example.com. Follow him on Twitter at @patrickdmarley.