Wis. budget gets $500M anticipated revenue boost

Scott Bauer, Associated Press

MADISON, Wis. (AP) -- Wisconsin's budget surplus grew by $500 million Thursday, leading to a bipartisan call by state lawmakers and Gov. Scott Walker to put some of the money toward public schools two years after funding was cut by more than $1 billion.

Beyond schools, though, lawmakers and Walker disagreed on the best way to use the surplus reported by the nonpartisan Legislative Fiscal Bureau. Republicans said they were committed to cutting taxes, putting money in reserves, and reducing the amount of bonding used for roads projects. Democrats called for investing more in worker training, but didn't endorse deeper tax cuts.

The numbers put Walker and the Legislature in unfamiliar territory. When the governor took office two years ago, the state was facing a $3.6 billion shortfall. The state entered this year with roughly a $500 million surplus, but Walker spent nearly all of that in his budget proposal. Now, there's another $500 million available.

The positive news set off a feeding frenzy of sorts in the Capitol, as Republicans and Democrats staked out positions on how the money should be used. But the Republican co-chairs of the committee in charge of coming up with a spending plan urged caution.

"We have to take a deep breath," said Republican Sen. Alberta Darling. She likened the news to winning the lottery, but said the wise course was not to spend the money immediately and instead come up with a responsible plan.

"It's good news today but it doesn't mean we're going to celebrate and go on a spending binge," Darling said at a news conference. "We're not going to be spending it willy-nilly."

Walker said he was committed to increasing funding for schools, cutting taxes and putting money in reserves.

"(The) surplus is good news for the state of Wisconsin," he said in a statement.

Walker came into office intent on cutting into the $3.6 billion shortfall, starting in 2011 with his proposal that forced public workers to pay more for their pension and health care benefits while also effectively ending their ability to collectively bargain. He survived the resulting 2012 recall effort, and argued that move and other deep cuts to public education and University of Wisconsin funding were necessary given the gravity of the state's budget.

Now, faced with an unexpectedly large surplus, Republicans and Democrats are calling for the restoration of some of the cuts to K-12 schools and elimination of Walker's proposed spending freeze.

"We must put the $500 million back into our neighborhood, public schools to provide future generations with the best education possible to compete in a 21st century economy," said Senate Democratic Minority Leader Chris Larson.

Wisconsin schools primarily use a combination of state aid and property taxes to pay for their expenses. Revenue limits determine how much they can spend. Without the ability to spend more, additional state aid goes to lowering property taxes. So, schools want to be able to spend more, not just receive additional aid that can't be spent in the classroom.

Walker has only said he wants to give schools money, but hasn't committed to allowing them to spend it. His budget continues a spending freeze for another two years.

Assembly Republican leaders said in a joint statement Thursday that they would support giving schools enough money to pay for a $100 per-student spending increase. Senate Republican leaders have called for as much as a $200 per-student increase. Democratic Sen. Jennifer Shilling, a member of the budget committee, called for a $275 per-student increase. And the Wisconsin Association of School Boards backed a $200 per-student increase.

"The $200 increase corresponds with historical increases based on the annual inflation rate," said John Ashley, executive director of the group.

Walker and Republican lawmakers also called for cutting taxes more than Walker originally proposed in light of the surplus. Walker called for a $343 million cut, netting the average taxpayer about $83 a year.

"Our promise is to give Wisconsin taxpayers the largest possible income tax cut that we can afford," Rep. Dale Kooyenga, R-Brookfield, said. "The revenue numbers released today put us one step closer to accomplishing that goal."

The rosier revenue projection was driven primarily by unexpected strength in individual income tax collections since January, according to the memo from Fiscal Bureau director Bob Lang.

The Joint Finance Committee is in the middle of its process of taking votes on Walker's budget plan and expects to complete its work by early June. The budget must be passed in identical form by both the GOP-controlled Senate and Assembly before being signed by Walker.

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