Gov. Scott Walker called for a $343 million income tax cut, education reform and economic development initiatives in his biennial budget address Wednesday.
Walker said his top priority remains improving the economy, touting the differences from when he took office two years ago: a budget surplus this year after a $3.6 billion deficit in 2011 and a roughly one point drop in the unemployment rate.
“Our tough but prudent decisions two years ago put us in the position to further reduce the tax burdens of our citizens while still investing in all our priorities,” Walker said.
Walker said his $630 million in total tax cuts, as well as his plan to keep property tax rates low, would “truly stimulate the economy.”
But Senate Minority Leader Chris Larson, D-Milwaukee, said Walker’s “definition of the middle class” was wrong, so his income tax cuts are more beneficial to higher-income earners.
Walker called for venture capital funding and increases in transportation and mental health funding. He also proposed that school aid be based more on performance and advocated an expansion of voucher schools. Democrats criticized both ideas.
Walker plans to give Medicaid to everyone under the poverty level, about $11,000 for an individual, and put everyone earning more than that in private insurance. He also said he wants a work training requirement for able-bodied FoodShare recipients. Both of those proposals, Walker said, would move people from “government dependence to true independence.”
Although Walker would leave the state with a $43.1 million surplus in 2015, that might go down to a $188.2 million deficit. Under a different accounting measure that has been “mismatch[ed]” for decades, the state would have a $2.6 billion deficit, according to the budget.
The Legislature will make changes to Walker’s budget and pass it as a bill sometime this summer, which the governor could then sign into law.
Walker plans university investments
The University of Wisconsin System would see a $181 million funding increase over the biennium under Walker’s recommendations, compared to $315 million in cuts the UW System took over the past two years.
“This is the best budget we have seen in many cycles,” Interim Chancellor David Ward said in a statement.
Walker’s investments include $20 million for the UW System’s economic development programs, as well as $2 million for its new flexible option online degree program.
The state would also continue to fund the UW System with a block grant, giving it more flexibility over its budget and compensation plans, which UW System officials have said is key to improving its faculty’s below average salaries.
Walker said last year he supports a tuition cap for UW System students, who have seen yearly increases of 5.5 percent for more than five years. While his budget did not explicitly include a cap on tuition, it only allows additional tuition expenditures for differential tuition and enrollment increase.
United Council of UW Students is waiting for confirmation on whether that would effectively mean a tuition cap, according to Dylan Jambrek, the group’s government relations director.
Walker’s budget would likely increase financial aid as well by giving more funding to the Higher Educational Aids Board than it requested, Jambrek said.
It would also tie the college tuition tax deduction to inflation, which his budget estimates would mean a savings of $670,000 for taxpayers.
“This budget, at least at first glance, shows serious support for university students,” Jambrek said.
Walker also plans to invest in the UW-Madison campus, such as a $3 million increase in UW public health programs and $3.75 million for the UW Carbone Cancer Center.
Democrats criticize tax cut levels, education plan
Larson, the Senate minority leader, criticized Walker for proposing an income tax cut that would favor high-income earners more. Individuals making under $161,180 and couples making under $214,910 would benefit from Walker’s proposed tax cut.
“If this is who he’s thinking is the middle class, I think he’s missing his mark,” Larson said.
State Superintendent Tony Evers said Walker’s priorities on education are wrong, a comment Democrats echoed.
Evers said Walker’s $1,400 per pupil increase in aid to voucher schools, as well as a statewide expansion, is much more than the one percent increase in aid to public schools and his keeping revenue limits for public schools. He also criticized Walker’s plans to give public schools bonuses based still-developing performance standards.
Democrats spoke out against Walker’s denial of the federal Medicaid expansion funds, saying his plan costs the state more yet covers less.
Republican leaders said they largely agreed with Walker’s proposals, although Assembly Speaker Robin Vos, R-Rochester, hinted at changes like making sure Walker’s proposed transportation spending is fiscally responsible.