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)
This section requires the Department of Veterans Affairs to contract with an entity during the 2023-25 biennium to complete a study of the Wisconsin Veterans Home campus at King. The study is intended to provide a framework to guide decision making at King and must be completed by January 1, 2025.
I am partially vetoing this section to remove the specific reference to the campus at King because I object to the limited nature of the study. In my budget, I proposed a comprehensive analysis of the long-term care needs of all Wisconsin veterans, not just those who may choose to live at King. My partial veto will allow the department to complete a more thorough review of the needs of our veterans homes, which will include but is not limited to a plan for the King campus.
20. Medical College of Wisconsin Psychiatry and Behavioral Health Residency Program Reporting Requirements
Section 1
This section requires the Medical College of Wisconsin to include in its biennial report to the Governor and Legislature program data for its newly created Psychiatry and Behavioral Health Residency Program.
I am vetoing this section because I object to adding requirements to a report that is already administratively burdensome.
D. UILDING STRONG, SAFE COMMUNITIES
21. Grants for Local Projects
Section 8
This section establishes criteria for the disbursement of $50,000,000 pertaining to grants for local projects under a grant program established and operated by the State Building Commission.
I am partially vetoing this section because I object to imposing unnecessary administrative burdens, limitations, and steps on the program. I am partially vetoing this section to remove the requirement for approval by the Joint Committee on Finance because it adds an additional and administratively burdensome step to the existing and long relied upon process of evaluation of the State Building Program, including release of non-state grants, through the State Building Commission. I am also partially vetoing this section to remove the requirement that a grant administered under this program should not exceed $4,000,000 because it will severely inhibit the scope and economic opportunities of projects under this program and is not in line with the past practice of the state with regard to the amounts awarded to past non-state grant recipients. Finally, I am partially vetoing this section to remove the requirement that grants be submitted to the State Building Commission on behalf of a nonstate entity applicant by the municipality in which the construction project is or will be located because it will insert an unnecessary step in the grant awarding process and this requirement is inconsistent with State Building Commission past practice.
22. Type 1 Juvenile Correctional Facility and the National Guard Challenge Academy
Sections 9104 (8) and 9104 (9)
These provisions allocate funding for a new Type 1 Juvenile Correctional Facility and the Wisconsin National Guard Challenge Academy.
I am partially vetoing these provisions to remove the gross square footage specifications because I object to preemptively requiring a metric, such as a specific gross square footage, in the early stages of construction design. Including this metric in the bill is not consistent with prior budget acts.
23. State Capitol Fiber and Cable Upgrades
Section 9104 (11)
This provision allocates funding to develop plans and specifications for fiber and cable upgrades at the State Capitol.
I am partially vetoing this provision because the Department of Administration is already working with the chief clerk of each house of the Legislature and the Legislative Technology Services Bureau in developing plans and specifications for the project. I object to specifying this requirement in the bill because it is not necessary.
24. Lac Courte Oreilles Decision – Aid Payments
Sections 152, 163, 164, and 9451
These sections create two annual PR appropriations to make payments to counties impacted by the 2022 federal court decision that exempted from property taxes property covered under the 1854 Treaty of La Pointe that is owned by a Tribe or Tribal member within certain reservations in Wisconsin, regardless of any prior non-Tribal ownership. Included in these sections is a provision that sunsets the two PR appropriations created for the purpose of disbursing these payments on July 1, 2025. A separate provision in the budget bill places $3,613,000 in the Joint Committee on Finance PR supplemental appropriation from which funds may be allocated for making these payments.
I am partially vetoing section 163 to remove the provision that restricts the payments to only counties because I object to excluding municipalities impacted by the federal court decision from the opportunity to receive aid payments. I have heard from local elected officials who are impacted by this court decision, and I believe it is important to maintain flexibility as we continue conversations with local stakeholders on the best way to address both local needs and the impact on property taxpayers. I am also vetoing sections 152, 164, and 9451 that sunset the two appropriations on July 1, 2025, because I object to unnecessarily limiting the availability of the funds to the 2023-25 biennium. With my vetoes, the state will have flexibility to potentially provide assistance to both counties and municipalities, and the appropriation framework will remain in place to potentially allow these payments to continue beyond the 2023-25 biennium.
25. Town of Sanborn Levy Limits
Sections 315, 320, and 9144 (12)
These sections include provisions that prohibit the town of Sanborn from imposing a property tax levy above five mills, prohibit the town from requesting a chargeback of property tax refunds issued by the town, and remove the town’s ability to use the levy limit debt service exclusion for debt service on general obligation bonds issued after July 1, 2005.
I am vetoing these sections because I object to such distinct and constraining limits on local control for one specific municipality in perpetuity. While I share the concern regarding impacts to local property taxpayers, this approach of restricting local control may unnecessarily hinder the town of Sanborn’s flexibility to address its own unique fiscal circumstances as well as unanticipated future expenses needed to maintain quality of service for the local community. These decisions are best left to local residents and town officials who know best how to balance the needs of their own community.
26. Annual Transfer of Local Government Fund Balance
Section 39 [as it relates to the creation of s. 16.5186 (3)]
