I have repeatedly recommended restoring the inflationary indexing of the per pupil revenue limit adjustment, which was in place prior to fiscal year 2009-10. Providing increased and continuing resources to school districts through the per pupil revenue limit adjustment, as recommended by the Legislature's 2019 Blue Ribbon Commission on School Funding, should be something all Wisconsinites can support.
I have often said that what is best for our kids is what is best for our state. As a result of this veto, I am requesting the Department of Public Instruction provide and account for this per pupil revenue limit adjustment authority of $179 plus $146 for a total of $325 in each year from 2023-24 until 2425.
2. High Poverty Aid
Sections 67, 394, 395, 396, 400, 401g, and 9334
These sections repeal and remove funding from the existing aid for the high poverty school districts appropriation under s. 20.255 (2) (bb). School districts are eligible for this aid if at least half of their enrollment meets the income criteria for a free and reduced-price lunch in the federal school lunch program. I am vetoing these sections to retain the appropriation that exists under current law in s. 20.255 (2) (bb) with zero dollars, and to retain the statutory references to high poverty aid. I object to eliminating this aid program without also providing sufficient increases in general equalization aid. The Legislature has chosen to provide greater investment in the school levy tax credit than general equalization aid in this budget. This is a less equitable funding model for school district costs and is in direct conflict with recommendations by the Legislature's 2019 Blue Ribbon Commission on School Funding. Through this veto, I am retaining the appropriation so that the state has a clear pathway to support high poverty school districts. 3. Lakeland STAR Academy
These sections provide $250,000 GPR in fiscal year 2023-24 and $500,000 GPR in fiscal year 2024-25 in a newly created annual appropriation for grants to the Lakeland STAR Academy. Specifically, they require the Department of Public Instruction to provide a grant to the Lakeland UHS School District for the Lakeland STAR Academy. No payments could be made from this appropriation after June 30, 2025.
I am partially vetoing section 51 [as it relates to s. 20.255 (2) (ag)] and vetoing the remaining sections in their entirety to eliminate the grant program for Lakeland STAR Academy. I object to providing state grants to a specific school when the Legislature has failed to provide the needed level of state dollars in a number of critical programs that serve schools statewide, such as special education, school nutrition, or mental health categorical aid programs. There are hundreds of charter schools authorized by public school districts, and it is unfair and inequitable to single only one school out for a state grant. As I have said before, every kid in Wisconsin should be able to get a great education in a public school regardless of what district they live in, and state funding decisions should not pick winners and losers among our kids. 4. Online Early Learning Pilot Sunset Date
These sections modify the repeal of the online early learning program; grant appropriation under s. 20.255 (3) (df) from July 1, 2023, to July 1, 2027, and make modifications for the service provider contract to continue until the new sunset date. I am partially vetoing section 51 [as it relates to s. 20.255 (3) (df)] and vetoing the remaining sections in their entirety because I object to extending the existing sunset date on this program before the compiled annual reports regarding the program are submitted to the Legislature and made public. The program, which aims to provide prekindergarten online instruction in six school districts, has seen lower than expected participation and had less than 20 percent of children complete the final assessment in the only year in which that data is available. If the participating school districts find sufficient value from services provided by the contracted program administrator, they may utilize their significantly increased revenue limit authority to support such services in the future. 5. Child Care Fund
These sections create a continuing appropriation for the Wisconsin Economic Development Corporation to create a revolving loan fund for child care providers. Separately, $15,000,000 GPR was placed in the Joint Committee on Finance's supplemental appropriation for this purpose.
I am partially vetoing these sections to remove references to revolving loans because I object to limiting the Wisconsin Economic Development Corporation’s flexibility in disbursing these funds to child care providers given the Legislature’s refusal to make substantial investments to bolster our state’s child care industry and help keep child care providers open to support our state’s workforce. By partially vetoing these sections to remove references to revolving loans, any funding made available under this appropriation could be distributed as grants to child care providers instead of loans.
Wisconsin already has historically low unemployment and historically high workforce participation. Child care is an essential part of keeping workers in our state’s workforce, which is critical to maintaining our state’s economic momentum. As a result of the Legislature’s inaction, more working families will struggle to find and afford quality child care, workers who cannot find or afford child care will be forced to leave our workforce, and employers will continue to struggle to retain and recruit workers across our state, especially in our rural communities.
I recommended providing more than $303 million GPR over the biennium to address the longstanding, structural challenges of the child care industry in Wisconsin by continuing the successful Child Care Counts program. Investing in child care is what is best for our kids, it is what is best for our families, and it is also what is best for our state’s workforce. The Legislature’s decision to include less than a fraction of what I proposed to stabilize our child care industry for a revolving loan fund suggests a fundamental lack of appreciation for and understanding of the magnitude of the child care crisis facing our state and its implications for our state’s workforce and our economy. By some estimates, failing to provide the necessary state funds to continue Child Care Counts will affect tens of thousands of Wisconsin’s kids, could cause thousands of child care programs to close, and could result in hundreds of millions of dollars in losses to our workforce and economy. Given this, the Wisconsin Economic Development Corporation should have flexibility to utilize these funds in the way that will be most helpful to addressing our child care crisis.
While my actions today improve the Legislature’s minimal effort, I also want to be clear: this is not a long-term solution to our state’s longstanding child care crisis. The Legislature’s work during this biennium to meaningfully support our state’s child care industry remains incomplete.
6. REWARD Bonuses
Section 282c
This section specifies that the additional $5,000,000 allocated for child care quality initiatives be spent on bonuses to child care workers under the REWARD program. Under current law, the Department of Children and Families has the flexibility to distribute funding between the child care scholarship program (TEACH) and the child care bonus program (REWARD) as needed.
I am vetoing this section because I object to placing additional constraints on the department in administering the TEACH and REWARD programs. Given the Legislature’s failure to meaningfully address Wisconsin’s child care needs, it is essential that the department have as much flexibility as possible with the funding available for child care related purposes. By vetoing this section, the department will have the necessary flexibility to use the new funding and base funding for both the TEACH and REWARD programs as needed to best retain early childhood educators.
B. STRENGTHENING OUR ECONOMY & FUTURE WORKFORCE
7. Individual Income Tax Rate Reduction
Sections 328, 329, 332, 333, 336, and 337
These sections reduce the individual income tax rates in the third and fourth income tax brackets from 5.30 percent to 4.40 percent and 7.65 percent to 6.50 percent, respectively, effective with tax year 2023.
I am vetoing these sections because I object to the Legislature’s chosen course of action on individual income taxes on multiple grounds. First, states receiving federal funding under the State and Local Fiscal Recovery Fund (SLFRF) of the American Rescue Plan Act of 2021 are prohibited from utilizing these funds to either directly or indirectly offset tax reductions. The income tax proposal forwarded to me could result in the state having to repay billions of dollars it received under from the SLFRF, which is a risk to the state that I am unwilling to take.
Second, their plan is focused heavily on cuts benefiting the wealthiest individuals in our state as roughly one-half of their proposed tax cut would go to filers with incomes above $200,000. The Legislature did this while ignoring my recommendations to provide over $1.2 billion over the biennium of targeted income tax relief to the true middle-class as well as to family caregivers, veterans with disabilities, seniors who can no longer claim the Homestead Credit, and hard-working but low-wage earners who can no longer claim the Earned Income Tax Credit.
Third, this approach is fiscally irresponsible going forward and would put Wisconsin in a position where we would almost certainly have to reduce current funding and ongoing commitments to our schools, healthcare providers, local municipalities, and many other priorities in the next budget.
While my vetoes eliminate the Legislature’s tax cuts for the top two individual income tax brackets, my action preserves the tax cuts in the bottom two brackets, with the rate on the lowest bracket dropping from 3.54 percent to 3.50 percent and the second bracket dropping from 4.65 percent to 4.40 percent. By enacting the tax cuts for the bottom two tax brackets into law, the cumulative annual amount of responsible individual income tax reductions that I have enacted since being sworn in as Governor has increased to $1.5 billion annually.
The fiscal effect of this veto is an increase in general fund tax revenue of $1,402,500,000 in fiscal year 2023-24 and $1,333,600,000 in fiscal year 2024-25.
8. Withholding Table Update
Section 9137
This section requires the Department of Revenue to update individual income tax withholding tables to reflect the tax rates, income brackets, and sliding scale standard deduction that are in effect for taxable year 2024. The adjustments made under this section would take effect on January 1, 2024. The withholding table update would therefore reflect the rate reductions included in the 2023-25 biennial budget and indexing adjustments to both income tax brackets and the sliding scale standard deduction.
I am vetoing this section in its entirety because I object to legislatively directing the Department of Revenue to make these withholding table adjustments, as adjusting the withholding tables is already within its authority. This veto does not change anyone's tax liability. The secretary of the Department of Revenue has the ability under current law to make these adjustments as appropriate and will assess whether and when these updates should be made within the full context of revenue collection trends and other state priorities, as was done with the reduction in taxes in the 2021-23 biennium. The estimated fiscal effect of this veto is an increase in general fund tax revenues of $603,400,000 in fiscal year 2023- 24.
9. Fund of Funds Program
Sections 31, 32, 33, and 35
These sections require the fund of funds program to repay the additional $25 million provided to the fund of funds program under the bill and, thereafter, to pay 90 percent of gross investment returns for deposit in the general fund. Additionally, these sections require the Department of Administration to submit a report by March 1, 2024, assessing program performance and recommendations for improvement.
I am vetoing these sections because I object to payments that reduce the balance of assets available to the fund of funds for investment. These payments may undermine efforts to attract additional co-investors in the fund of funds program if such investors do not have confidence that the program will be able to continue into the future. Allowing the program to retain and reinvest the funds will improve the state’s venture capital ecosystem and support increases in start-up funding across Wisconsin. Further, I object to the additional reporting requirement, since comprehensive reports under the current program were submitted in 2015 and 2018, and the program provides quarterly reports under current law.
10. Diversity, Equity, and Inclusion Positions
Section 9147 (1)
This section requires that 188.80 FTE GPR positions performing functions related to diversity, equity, and inclusion be deauthorized for the Board of Regents of the University of Wisconsin System.
I am vetoing this section because I object to this infringement on the Board of Regents' authority to manage the University of Wisconsin System and believe it is in the state's best interests to allow the system to preserve and continue its dedication to diversity, equity, and inclusion as it sees fit.
The Board of Regents is not an extension of any branch of government or political party; the Regents have long been entrusted with the independence and autonomy to not only make the decisions that are best for our students and our campuses but to protect the institutions that have defined our state for generations.
These positions function to improve the University of Wisconsin experience for all and work to help students, staff, and faculty from all backgrounds and experiences reach their full potential. Importantly, the University of Wisconsin System and the Board of Regents are also not alone in this important work—their commitments and efforts relating to diversity, equity, and inclusion mirror those that have been heralded by the private sector and corporate industry for years, including by business leaders and chambers of commerce in Wisconsin.
At a time when our University of Wisconsin System’s enrollment is already declining as our state faces historically low unemployment and historically high workforce participation, the Legislature should be focused on efforts and investments that will support retaining and recruiting talented workers. This is a step in the opposite direction.
As a result of this veto, the Board of Regents retains position authority for these 188.80 FTE GPR positions performing functions related to diversity, equity, and inclusion at campuses across the University of Wisconsin System.
11. Washington County Branch Campus Transition
These sections provide $3,350,000 GPR in fiscal year 2023-24 in the Joint Committee on Finance’s supplemental appropriation for release to the University of Wisconsin System after it develops and submits a plan to the Joint Committee on Finance to restructure the University of Wisconsin-Milwaukee at Washington County branch campus. Specifically, the plan would transition the Washington County branch campus to a joint operation of Washington County and the Moraine Park Technical College district board, rather than a University of Wisconsin System campus.
I am partially vetoing section 51 [as it relates to s. 20.865 (4) (a)] by lining out the amount under s. 20.865 (4) (a) and writing in a smaller amount that reduces the appropriation by $3,350,000 in fiscal year 2023-24, and vetoing section 9147 (2) to remove the plan requirement. I object to the Legislature singling out only one of our state’s branch campuses when many campuses are facing challenges, in part due to the Legislature’s repeated failure to provide an adequate level of funding for the University of Wisconsin System. I further object to the Legislature determining a matter that is within the purview of the discretion and responsibility of the University of Wisconsin Board of Regents and the University of Wisconsin-Milwaukee, as well as the Wisconsin Technical College System Board and Moraine Park Technical College. As a result of this veto, these entities may collaborate if they so choose, but they will not be treated differently than other counties or campuses. I further request that the Department of Administration secretary not allot these funds. 12. Visit Milwaukee Earmark
Section 9143 (3)
This provision requires the Department of Tourism to award a grant of $10 million GPR in fiscal year 2023-24 to the Greater Milwaukee Convention & Visitors Bureau, Inc., also known as "Visit Milwaukee." Funding for the grant is provided in the department's appropriation under s. 20.380 (1) (b). I am partially vetoing this provision because I object to the Legislature providing this level of funding to Visit Milwaukee when they have failed to adequately fund so many important priorities for our state, from child care to higher education. As vetoed, this provision requires a grant of $1,000,000 to Visit Milwaukee, instead of $10,000,000; retains the remaining $9,000,000 for general marketing purposes; and removes the requirement of awarding the grant in fiscal year 2023-24. This will provide greater flexibility to the department to use its expertise to maximize available funding to increase tourism. By engaging individuals with Wisconsin's many entertainment and recreational options throughout the state, we will raise Wisconsin's profile across the country as a premier business, cultural, and recreational destination.
13. Talent Attraction and Retention Initiatives
Section 9149
This section creates a requirement specifying that the Wisconsin Economic Development Corporation (WEDC) must expend at least $4,000,000 during the 2023-25 biennium from its existing appropriations on initiatives for talent attraction and retention, of which $2,000,000 must be expended in consultation with the Department of Veterans Affairs for the attraction and retention of veterans in Wisconsin’s workforce. Additionally, this section requires WEDC to evaluate and report program outcomes related to these talent attraction and retention initiatives to the Assembly Committee on Jobs, Economy and Small Business Development and the Senate Committee on Economic Development and Technical Colleges on or before September 1, 2024, relating to fiscal year 2023-24, and on or before September 1, 2025, relating to fiscal year 2024-25.
I am vetoing this section because I object to the Legislature restricting WEDC in program areas where it already makes such investments and has full authority to collaborate with state agencies, including the Department of Veterans Affairs.
Addressing our state’s longstanding workforce challenges is a top priority for my administration, as was reflected in my recommendations and investments in this biennial budget, many of which the Legislature removed. Thankfully, WEDC, the Department of Workforce Development, and the Department of Veterans Affairs have not sat around idly, awaiting the Legislature’s directive to conduct talent and attraction efforts or implement efforts to support veterans in our workforce—this is work we have been doing for some time without prompting by the Legislature. If the Legislature were serious about supporting my administration’s ongoing efforts to meaningfully address our state’s workforce challenges and retain and recruit talented workers, they would provide new funding to expand and bolster these very efforts.
Talent attraction and retention will continue to remain a top priority for my entire administration, and this veto will allow WEDC to continue its efforts with more flexibility and collaboration in its approach than it would have had under the requirements proposed by the Legislature. I further object to these requirements because they ignore the important assistance to veterans provided by the Department of Workforce Development. With its existing funding and authority, I expect WEDC to continue to work on vital talent attraction and retention initiatives, including those aimed at attracting and retaining veterans. Additionally, I object to the creation of an unnecessary reporting requirement by the Legislature.
14. Vibrant Spaces Grant Program
Section 436
This section prohibits the Wisconsin Economic Development Corporation (WEDC) from expending its funds on the Vibrant Spaces Grant program, as constituted under WEDC’s policies and procedures on May 1, 2023, or any similar program.
I am vetoing this section because I object to the Legislature’s micromanaging of WEDC activities. Programs developed and administered by WEDC are approved by its board of directors, which includes members of the Legislature. If the board wishes to approve or deny any specific program proposed by WEDC, the board has the ability to do so.
C. SUPPORTING HEALTHIER WISCONSINITES
15. Medicaid Coverage of Gender-Affirming Care
Sections 308, 309, 310, and 311
These sections prohibit, to the extent permitted by federal law, Medicaid payment for puberty-blocking medicine used for the purposes of gender dysphoria or gender transition and gender-affirming surgery.
I am vetoing these sections because I object to perpetuating hateful, discriminatory, and anti-LGBTQ policies and rhetoric, including those targeted at the transgender and gender nonconforming community. Gender-affirming care for transgender and gender nonconforming people with gender dysphoria is recognized as the standard treatment by most major medical associations. Reducing access to gender- affirming care would only magnify the inequities in health outcomes already faced by the LGBTQ community. I support LGBTQ Wisconsinites and will continue to do everything in my power to protect their rights and keep them safe.
16. Housing Rehabilitation
These sections create GPR continuing appropriations for the Wisconsin Housing and Economic Development Authority (WHEDA) to create revolving loan funds, including one for housing rehabilitation projects.
I am partially vetoing these sections because I object to the Legislature providing funding for housing rehabilitation only through a revolving loan program rather than as a grant or a forgivable loan program. Unlike the other housing-related revolving loan programs that the Legislature funded in this bill, this program is targeted to homeowners and not developers. These homeowners already struggle to afford rehabilitation or renovation projects in their homes to deal with lead, mold, and other safety or structural issues. By partially vetoing these sections, the funds in the appropriation could be distributed as grants or forgivable loans to homeowners that WHEDA determines most need the assistance.
17. Family Care Managed Care Organizations Report
Section 244
This section requires the Department of Health Services to collect and make publicly available the financial summaries of the managed care organizations for the Family Care program, the Family Care Partnership program, and the Program for the All-Inclusive Care for the Elderly. Specifically, the department is required to report the executive leadership salaries for the organizations, as well as the amounts retrieved by the state under the contractual risk corridors.
The section further requires the managed care organizations for these programs to track and report to the department the total authorized and total provided care plan hours by service category. Finally, the section requires the department to report this information to the Joint Committee on Finance by April 1 of each year.
I am vetoing this section because I object to the Legislature dictating this level of specificity in statute, and because I object to imposing these administratively burdensome requirements on the department. Finally, I object to the Legislature not providing any resources for the department to perform this work.
18. Newborn Screening Program Card Fee
Section 438m
This section specifies that the newborn screening card fee imposed by the Department of Health Services cannot be less than $159.25. This section also requires that at least $110.75 from each newborn screening card sold be credited to the Wisconsin State Laboratory of Hygiene.
I object to this section because the fee increase does not meet the funding needs of the newborn screening program and does not distribute the revenues collected equitably between the two agencies. I am, therefore, partially vetoing this section to increase the minimum newborn screening card fee to $195 and to specify that at least $75 from each newborn screening card sold be credited to the Wisconsin State Laboratory of Hygiene. Newborn screening is an important tool in caring for our youngest Wisconsinites, and it is important that the program have an adequate level of funding. As a result of this veto, the amount of the fee will be closer to reflecting the needs of the program. I am also directing the Department of Health Services to work with the Wisconsin State Laboratory of Hygiene to determine an appropriate total fee to meet the needs of both agencies, as well as determining the share of the fee to be credited to the Wisconsin State Laboratory of Hygiene.
19. Study for a Master Plan for the Veterans Homes
Section 9148 (1)
