In Wisconsin’s 175-year statehood, we have never begun a biennial budget process in a better fiscal position. Since I have been Governor, after 30 years of enduring Accepted Accounting Principles (GAAP) deficits, we have had three consecutive fiscal years with a positive GAAP balance and ended fiscal year 2021-22 with a record- setting $4.64 billion balance. We attained—and have maintained—our state’s first underlying AAA bond rating from a rating agency in decades. We have paid down existing debt; we have reduced our reliance on bonding by nearly $400 million annually; we reduced our total long-term debt obligations by $365 million in fiscal year 2021-22 alone compared to the prior year. Finally, we have aggressively refunded our existing debt to achieve overall present value savings of over $465 million.
We have had the lowest unemployment rate in state history, and we have had the highest number of people employed ever in our state’s history. Our Budget Stabilization (“rainy day”) Fund is at the highest level ever—a record-setting $1.8 billion, which is more than five times larger than it was when I took office. And, yes, we began this biennial budget process with the largest surplus in state history.
We have gotten to work these last four years making smart, strategic investments— and our economy shows it. So, we began this biennial budget process with an historic opportunity, and with it, historic responsibility—not to be careless or reckless, but to save where we can and stay well within our means while still investing in needs that have long been neglected to protect the future we are working hard to build together.
In many ways, Republicans in the Legislature have failed to meet this historic moment, sending my budget back to my desk absent critical investments in key areas that they know—and publicly acknowledge—are essential to the success of our state, all while providing no real justification, substantive debate, or any meaningful alternative. That decision is, to put it simply, an abdication of duty.
State funding for high-speed broadband. Affordable and accessible child care. Substantial categorical aid increases for our schools. Fully funded universal school breakfasts and lunches. Investing in our University of Wisconsin and Wisconsin Technical College Systems. Targeted tax relief for caregivers, parents, seniors, and veterans and their spouses. BadgerCare expansion. Expanded paid family leave. Legalizing and taxing marijuana much like alcohol. Investments in community-driven solutions to our workforce challenges. These aren’t controversial concepts; my budgets have always been about pragmatism and solutions, not wish lists or politics, from the beginning.
I understand that, in light of these short-sighted decisions, there are those who would have me veto this budget in its entirety—to send the Legislature back to the drawing board to start from scratch. Vetoing this budget in full would mean abandoning priorities and ideas that I have spent four years advocating for; it would mean leaving schools and communities in the lurch after rightfully securing historic increases for the first time in years; it would mean forgoing the first real and substantive Republican effort to address PFAS after years of inaction; it would mean forfeiting the one of the largest investments in workforce housing in state history; it would mean deserting our justice system and state workforces, our tourism industries, our farmers and producers, and our veterans, among others.
While Republicans in the Legislature might be perfectly comfortable abdicating the duty we share with the historic opportunity and responsibility before us in pursuit of political favor and partisan praise, I am not.
My allegiance has been and always will be to the people of this state—Wisconsinites to whom I have pledged to always try do the right thing and to make difficult decisions when it matters most. That pledge and my obligation as Governor are why I am enacting this budget with substantial improvements today.
In addition to the critical efforts to expand access to affordable housing statewide, address PFAS in our water, and make historic investments in communities across our state, I am also pleased this budget provides substantial and well-deserved increases in compensation for correctional officers, youth counselors, psychiatric care technicians, assistant district attorneys, and public defenders; uses our surplus funds to support our Capital Budget to reduce the need to authorize new bonding and future debt service costs; provides sizeable investments in tourism marketing and advertising initiatives; and includes the resources necessary to continue our work fixing our roads and making sure our infrastructure is built for a workforce and economy of the 21st century.
But even as I am glad the Legislature joined me in making critical investments in several key areas, the fact remains that this budget, while now improved through strategic vetoes, remains imperfect and incomplete.
Of urgent concern to me as Governor is that while this budget makes some critical investments to help support some portions of our state’s workforce, Republicans returned this budget to me without critical components of my comprehensive plan to address the workforce challenges that have already plagued our state for generations and will continue to without further action.
The Legislature must make the substantial investments necessary to stabilize our state’s child care industry and ensure child care is affordable and accessible so we can keep parents in our workforce. Failing to do so will cause calamitous consequences for employers, our workforce, and our state’s economy. And, yes, that means the Legislature should also expand paid family leave; invest state resources in high-speed internet; provide targeted support for new, innovative, and high-need areas and industries across our workforce; and make substantial investments in education at every level, including our higher education institutions. These efforts, among other key provisions I included in my proposed biennial budget, are essential for maintaining our economic momentum and retaining and recruiting talented workers across our state.
So, today, I am giving the Legislature a second chance. I am using my broad, constitutional veto authority to ensure ample state resources are readily available for the Legislature to complete their work on this budget—to do the right thing, to rise to meet this moment of historic opportunity and responsibility, and to focus on passing real solutions for the urgent challenges facing our state.
The following is an abbreviated summary of items in this budget, which includes my vetoes ensuring state resources necessary remain readily available for the Legislature to finish its work on this biennial budget in the months ahead:
INVESTING IN WHAT’S BEST FOR KIDS
DEPARTMENT OF PUBLIC INSTRUCTION
Building on our historic progress in fully funding our public schools, this budget and 2023 Wisconsin Act 11 provide an overall increase of nearly $1.2 billion in spendable authority for public school districts, including state categorical aids. This increase will be more than ten times larger than what the increase in spendable authority was for public school districts in the 2021-23 biennium. While this is progress compared to the last biennium, this budget is well short of my proposed level of spending for our schools. We must continue to work to prioritize school funding during this biennium and into the future. This budget is an important step toward meeting our ultimate goals for our schools and our kids.
• The 2023-25 biennial budget increases the level of state support from 67.8 percent in fiscal year 2022-23 to an estimated 68.8 percent in fiscal year 2023-24 and 69.4 percent in fiscal year 2024-25. These will be the highest levels of state support for school districts since the calculation was initiated in fiscal year 1996-97 under the state’s former “two-thirds” funding goal.
• This historic investment is generated by a $325 per pupil increase on revenue limits in each fiscal year, in addition to an increase in the low revenue ceiling from $10,000 to $11,000 per pupil in the first year of the biennium. This is the largest increase in statewide revenue limit authority since revenue limits were first imposed on K-12 schools in 1993-94, and it is permanent and base- building.
• Through my veto, in future biennia and effectively in perpetuity, school districts will have continued, additive per pupil revenue adjustments of $325 every year, sustaining school district spending for years to come. This veto provides school districts with a level of budgeting certainty that they have not experienced since the statutory indexing mechanism for the adjustments was deleted in 2009-10.
• These record-high per pupil revenue limit increases also have the potential to take the burden off community members when it comes to school funding, as it reduces the need for districts to seek operating referenda.
• Estimates show more than half of the state’s 421 school districts would be able to use the low revenue ceiling increase in fiscal year 2024-25, meaning that countless students across the state will be able to attend schools that are better able to ensure that they have the staff, facilities, and resources they need to succeed.
• Every kid has the right to a quality education, regardless of their ability, yet Wisconsin, like many other states across the nation, has faced a special education staffing crisis. This budget:
o Provides $97 million GPR over the biennium to achieve a special education reimbursement rate of 33.3 percent each year, which is the highest reimbursement rate our state has seen in over 20 years; and
o Invests $4.6 million GPR over the biennium for high-cost special education aid, increasing the reimbursement rate of these programs from its current 39.5 percent to 45 percent in 2023-24 and 50 percent in 2024-25. This aid helps school districts pay a portion of their eligible special education costs for pupils with specific and elevated educational needs.
• Wisconsin’s strength lies in its diversity, which is why this budget provides $3 million GPR over the biennium for bilingual-bicultural aid. This will be the largest biennial increase in bilingual-bicultural aid in at least 30 years, ensuring that English language learners are properly supported and receive an education that addresses their specific language needs.
• Wisconsin’s students can’t succeed in the classroom if they can’t get to school, which is why this budget provides $5.9 million GPR over the biennium to increase the reimbursement rate for high-cost transportation aid to 75 percent in each year and increases the state reimbursement rate to districts transporting students 12 miles to and from school from $375 to $400, beginning in fiscal year 2023-24. These investments will provide better access to school transportation to students in rural and isolated areas.
• I have been working to address literacy issues since long before being elected Governor, and improving reading outcomes remains a top priority for me. This budget makes a significant investment in improving our kids’ reading skills by providing $50 million GPR to fund a new literacy initiative.
• Earlier this year, I declared 2023 the Year of Mental Health in Wisconsin because I know our kids can only achieve their full and best potential when they can bring their full and best selves to the classroom. To address the mental health crisis facing our kids, this budget provides $30 million GPR over the biennium to continue funding for school-based mental health modeled on my “Get Kids Ahead” initiative, helping schools provide needed mental health services to their pupils through community partnerships.
• The budget increases state funding by $1.2 million GPR over the biennium to fully fund the state’s sparsity aid program for eligible districts in both fiscal year 2023-24 and fiscal year 2024-25.
• The budget increases state funding by $14 million SEG over the biennium for school library aids.
DEPARTMENT OF CHILDREN AND FAMILIES
Doing what is best for our kids includes working to ensure kids and families have access to quality, affordable child care and every kid can grow up in a safe, nurturing home. The 2023-25 biennial budget makes critical investments to support the Department of Children and Families in achieving these goals.
• The Wisconsin Shares program has provided countless Wisconsin families access to quality child care, and this budget allocates over $53 million in Temporary Assistance for Needy Families funds (TANF) in fiscal year 2023-24 and $71.2 million TANF in fiscal year 2024-25. This funding will ensure the program meets the federal child care funding requirements, in addition to waiving copays for families under 100 percent of the federal poverty level.
• Wisconsin families deserve quality care for their kids, which is why this budget invests $30 million TANF over the biennium into the state’s YoungStar program so that child care providers have the resources to keep their doors open and keep improving their quality of care.
• As a result of a partial veto, this budget provides $15 million in fiscal year 2023-24 at the Wisconsin Economic Development Corporation that can be used for grants to child care providers.
• The budget provides $875,000 TANF over the biennium for Tribal child care contracts in order to support recruitment, retention, and expansion of child care providers in Tribal areas.
• The Wisconsin Early Education Shared Services Network (WEESSN) has created cross-sector partnerships that strengthen early care and education programs throughout the state. This budget allocates $2.5 million TANF in fiscal year 2024-25 to support the development and expansion of WEESSN and the work it does to provide free administrative services to regulated child care programs across the state.
• Social emotional learning (SEL) plays a critical role in a child’s development, which is why this budget invests $535,000 TANF annually for SEL training and technical assistance to child care providers with the goal of reducing instances of kids being removed from daycare for behavioral issues.
• This budget, as impacted by a partial veto, provides an additional $5 million TANF in fiscal year 2024-25 for the TEACH and REWARD programs to ensure we can maximize funding for the approaches that will best develop and retain early childhood educators.
• This budget provides $1.3 million TANF annually to increase funding for child care resource and referral services, which extend a vital lifeline to countless families across the state.
• This budget invests more than $1.4 million TANF over the biennium to move the child care licensing application process online, making the licensing process more efficient and helping more providers open their doors.
• This budget provides an increase of $5 million TANF in fiscal year 2023-24 to Boys and Girls Clubs so that they may continue to improve the social, academic, and employment skills of kids in our state.
• This budget provides additional funding to increase Caretaker Supplement benefit payments to $275 for the first child and $165 for each additional child. This adjustment will take effect July 1, 2023.
• This budget increases funding to child support agencies by $5.9 million all funds in fiscal year 2023-24 and $14.7 million all funds in fiscal year 2024-25 to allow the agencies to improve their systems of collecting delinquent child support.
• This budget provides more than $22 million all funds in fiscal year 2024-25 to continue the Child Support Modernization IT project, which aims to implement a flexible, updated, and better supported child support system so that Wisconsin can continue meeting federal performance standards and more quickly and easily accommodate changes in the child support landscape.
• This budget increases foster care age-based rates by 5 percent.
• Kinship care is an integral part of the state’s child welfare system that helps maintain familial relationships when possible. To ensure this kind of care remains possible, this budget provides $277,400 TANF in fiscal year 2023-24 and $4.2 million TANF in fiscal year 2024-25 to re-estimate kinship care costs and increase payment rates from $300 per month to $375.
o Further, this budget provides $8,600 all funds in fiscal year 2023-24 and $17,100 all funds in fiscal year 2024-25 to increase child-specific foster care payments from $300 per month to $375 per month.
• The Wisconsin Statewide Automated Child Welfare Information System (eWiSACWIS) is integral to the state’s child welfare system, which is why this budget allocates more than $2.6 million all funds in each fiscal year to make necessary improvements to the system.
• This budget allocates nearly $1.2 million FED in each year of the biennium to develop a youth justice data and reporting system.
• The Department of Children and Families received a one-time investment in the 2021-23 biennial budget to conduct trainings for congregate care providers. This budget continues to fund this training by providing the agency with $200,000 all funds in each fiscal year.
• Ensuring the continued integrity and protection of child welfare and child care data is a priority for the state, which is why this budget allocates nearly $1.2 million all funds in each fiscal year to support the Department of Children and Families’ critical cybersecurity efforts.
• This budget provides $2 million FED in each year to the Department of Children and Families to distribute to Children’s Wisconsin for a statewide, online parenting support program, namely the Positive Parenting Program (Triple P).
• This budget also provides $500,000 GPR in each fiscal year to increase grants made by the Child Abuse and Neglect Prevention Board to support child well- being, including through the Positive Parenting Program (Triple P).
• This budget provides $500,000 GPR in each fiscal year to increase grants made by the Child Abuse and Neglect Prevention Board to support family resource centers that serve families across the state.
STRENGTHENING OUR ECONOMY & FUTURE WORKFORCE
TAXES AND ECONOMIC DEVELOPMENT
Over the course of my first term, I have been proud of our efforts to support our workforce and deliver tax relief to working families, including enacting one of the largest tax cuts in state history, to deliver $1.4 billion annually to taxpayers. This budget builds on this important work.
• This budget provides additional tax relief to working families by reducing the individual income tax rates for the bottom two income tax brackets to provide $175 million of individual income tax reductions over the 2023-25 biennium. By cutting the bottom two tax rates further, this budget continues responsible individual income tax reductions, which now total nearly $1.5 billion annually since 2019.
• To spur additional investment in this state, the state is increasing the refundable share of the research credit from 15 percent under current law to 25 percent beginning in tax year 2024. This increase will provide an incentive for critical research and development spending by Wisconsin businesses that will improve their competitiveness and help develop new products.
• We must continue to attract big events to Wisconsin. Recent successes include hosting the 2020 Democratic National Convention, the 2021 Ryder Cup, the 2024 Republican National Convention, and the 2025 NFL Draft. To keep this momentum, Wisconsin is investing $10 million for the creation of an event and opportunity promotion fund administered by the Wisconsin Economic Development Corporation to attract large scale events.
• This budget fosters entrepreneurship by investing $25 million in the Badger Fund of Funds program overseen by the Department of Administration. This significant investment is aimed at continuing to further develop Wisconsin’s start-up business ecosystem. Improving Wisconsin’s entrepreneurial environment is vital to the state’s economic success, especially in high-growth industries in medical and informational technologies. As a result of my partial veto, the additional $25 million provided by this budget will be evergreen, allowing these new funds to continue to be invested in our state’s entrepreneurs.
• Wisconsin is continuing to build on our successes in attracting and investing in our businesses through a provision in this budget incentivizing business investment by providing an income exclusion on commercial lending by excluding interest earned on commercial loans under $5 million from state taxation.
• This budget provides $590 million in property tax relief through increases in the existing School Levy Tax Credit over the upcoming biennium.
• This budget ensures that typical property tax bills in Wisconsin will be held below the rate of inflation over the coming biennium.
• In recent years, Wisconsin has been lagging behind midwestern states in the funds that we dedicate to tourism marketing. This budget provides $34 million over the biennium to raise Wisconsin’s profile across the country as a premier business, cultural, and recreational destination. This is the largest increase in state history in marketing and advertising funds for the Department of Tourism, and with this investment the department will be able to will run a competitive marketing campaign and keep pace with our neighboring states.
o Of these funds, $3 million over the biennium will be used for grants to “Discover Green Bay” and “Visit Milwaukee” to help capture the attention of the thousands of folks that will attend the 2025 NFL Draft and 2024 Republican National Convention and to show all the wonderful entertainment opportunities Wisconsin has to offer.
• Tourism is an important part of our Wisconsin economy and art tourism is equally as important. That is why it is vital to fund the arts in this budget. Wisconsin will invest $552,500 over the biennium in the Wisconsin Arts Board. This funding is crucial in order to maximize the federal match funding available through the National Endowment for the Arts grants. These funds will continue supporting the tremendous work of individuals and organizations engaged in the arts.
SUPPORTING OUR WORKFORCE
• Investing in the next generation of Wisconsin workers is critical to the future success of our state. This budget invests $7 million over the biennium for the youth apprenticeship program, which gives high school juniors and seniors an opportunity for career exploration and skills development.
• Modernization of technology is crucial for the Department of Safety and Professional Services (DSPS) to continue offering efficient and quality service for professional licensing. This budget upgrades and enhances department information technology systems, subscriptions, and equipment by providing $6.7 million over the biennium. This will allow DSPS to continue effective operation of credentialing and building plan review and permitting software as well as call center functions, ultimately supporting job growth and economic development.
• The budget provides 7.0 FTE positions to allow DSPS to bolster the improvements the department already has made on license processing efficiency, which in turn helps our state’s workforce and our economy by getting people into jobs and providing critical public services faster. These additional positions make progress toward the resources the department needs.
• In order to meet substantially increased public demand for assistance with license and credential application processes, the budget provides 6.0 FTE customer service positions to ensure more customer calls are answered in a timely fashion.
• The budget will increase capacity for DSPS to conduct building plan reviews by providing the department with $465,200 and 3.0 FTE positions. This will help the department review building plans and related inspections quickly and accurately, which will keep building project workers in jobs and decrease project costs.
• The budget will provide DSPS with increased spending authority of $100,000 in fiscal year 2023-24 to develop an assured provider pilot program to modernize the continuing education certification process for realtors.
• To continue support for the successful youth firefighter training grant program and increase the number of volunteer firefighters in the state, the budget provides DSPS with $75,000 in each year of the biennium.
HIGHER EDUCATION
• As part of the state’s building program, the following University of Wisconsin (UW) System projects are enumerated:
o UW-Eau Claire Science/Health Science Building
o UW-Madison Camp Randall Sports Center Replacement
o UW-Stout Heritage Hall
o UW-Oshkosh Donner-Webster Residence Halls
o UW-La Crosse Center for the Arts Parking Ramp and University Police Building addition
o UW-Stevens Point Champions Hall
o UW-Oshkosh Gruenhagen Conference Center
• In addition, the budget provides project planning funds for UW-Milwaukee and UW-Whitewater to ensure important building projects on those campuses continue to progress.
• The budget also sets aside $32 million for the UW System in the Joint Committee on Finance supplemental appropriation, allowing the UW System to request funding during this biennium. This funding is critical to maintaining affordable access to higher education for Wisconsinites, and I encourage the Legislature to promptly release these funds to the UW so that the system can continue its important mission of educating Wisconsinites and bolstering our workforce.
