June 2021 Extraordinary Session10:05 A.M. THURSDAY, July 8, 2021
The Assembly was called to order by Chief Clerk Blazel, pursuant to Assembly Rule 5 (4). The Assembly dispensed with the call of the roll.
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Executive Communications
State of Wisconsin
Office of the Governor
Madison
July 8, 2021
To the Honorable Members of the Assembly:
The following bills, originating in the Assembly, have been approved, signed and deposited in the office of the Secretary of State:
Bill Number Act Number Date Approved
(in part) 58 July 8, 2021
Respectfully submitted,
TONY EVERS
Governor
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Pursuant to s. 35.095 (1)(b), Wisconsin Statutes, the following 2021 Acts have been published: Act Number Bill Number Publication Date
Wisconsin Act 58 Assembly Bill 68 July 9, 2021
hist137842Wisconsin Act 59 Assembly Bill 406 July 9, 2021 _____________
Governor’s Veto Message
July 8, 2021
To the Honorable Members of the Assembly:
Two years ago, I wrote to you at the completion of the 2019-21 biennial budget process. I was – and am – proud I was able to sign a better version of the 2019-21 budget prepared by Republicans in the Legislature, and that, in many cases, we were able to make key investments in areas that had been underfunded or neglected altogether for the better part of the prior decade.
I was glad the Legislature decided to join me in making historic investments in and down payments on key priorities like making healthcare more affordable and accessible, fixing and building new infrastructure, and doing what’s best for our kids by working to fully fund our public schools. While Republicans rejected my efforts then to expand healthcare to tens of thousands of Wisconsinites, we were able to make important investments to improve mental healthcare and treatment and increase support for direct care and rural healthcare providers. We also provided more than $465 million in new funding for our local roads, highways, and transit aids. We also invested $330 million into general school aids – the largest in more than a decade – funded a $97 million increase for special education – the largest ever – and, by using my broad veto authority, were able to provide nearly $100 million more in per pupil aid for our schools compared to the budget passed by the Legislature.
Because of the historic investments we were able to make in the last biennial budget, our state was well positioned to enter the new biennium. Unfortunately, since signing that budget, Wisconsin has experienced unrelenting challenges in the face of the coronavirus pandemic – one of the worst public health crises in a century. And we have worked around-the-clock to keep Wisconsinites healthy and safe and put our state and our economy in the best fiscal position to rebound and recover.
The sudden and severe health crisis had an immediate effect on our economy that required us to make difficult decisions in 2020 to reduce state spending in many areas. In addition to lapsing funding from many agency budgets, we also knew it made sense to take advantage of the interest rate environment. As governor, I am proud to say that we have saved our taxpayers roughly $274 million by refinancing existing state debt to date over the last two and a half years.
We invested billions into our state’s response, including distributing more than 26 million pieces of PPE and sanitizing supplies to hospitals, long-term care facilities, veteran’s homes, and frontline workers. We provided more than $379 million to help stabilize our economy and support nearly 53,000 of our small businesses, more than 15,000 farms, and our lodging, hospitality, and tourism industries – work that was critical for ensuring folks across the state could rebound from this pandemic and continues still today. This year, we have announced as much as $420 million to help as many as 84,000 small businesses and $140 million to support our state’s tourism and entertainment industries that have been hit especially hard during this pandemic.
My administration also worked hard to make Wisconsin one of the best states in the country for our vaccine distribution program and getting available shots in arms, which has helped ensure folks could get back to business and our economy could recover. I am also proud today that our unemployment rate is among the lowest in the entire country and has nearly returned to pre-pandemic levels.
These efforts – both our state’s response to the public health crisis and our efforts to stabilize our economy – have been critical for the economic recovery our state is seeing. Our hard work and resilience have carried us through this crisis as we bounce back with an economy that we will continue to make even better than before the pandemic hit. Today, we anticipate having a nearly $2.39 billion general fund surplus as we start a new fiscal year, which will be the largest opening balance in state history. According to estimates from the Legislative Fiscal Bureau, we expect to increase our rainy day fund by over $800 million later this summer, more than doubling the current record high balance of $762 million.
Amidst one of the most trying times in our history – just as we have done before – we listened to hundreds of Wisconsinites from across our state and heard their urgent pleas for fueling our recovery and rebuilding our economy – that we must invest in healthcare, education, infrastructure, small businesses, farmers, and protecting our environment to ensure the state could weather the storm of COVID‑19. So, that’s what we did.
Because we made critical decisions to get our state in the best position to recover, we were able to propose bold solutions to address the urgent crisis we faced. I introduced my 2021-23 biennial budget – our Badger Bounceback Agenda – providing a blueprint to not only get our economy back on track and back to normal, but to ensure we could bounce back better and stronger than we were before this pandemic hit.
We again proposed to expand BadgerCare – this time with the added incentive of more than $1 billion in federal funds through the American Rescue Plan Act – and invested in healthcare by increasing funding for our direct care workforce, our community health centers, and substance abuse treatment. We put additional revenues into our schools by increasing state support for students with disabilities, mental health aids, and directly for our rural districts. We again proposed the largest state investment in broadband in state history and held true to our goal of continuing to rebuild and maintain our roads and bridges throughout our state by providing additional general transportation aid to our counties and municipalities.
Shortly after releasing my budget, I was heartened to hear bipartisan support and praise for many of the provisions in our Badger Bounceback Agenda. Unfortunately, many of the priorities for which I know had and still have bipartisan support failed to receive the bold and meaningful investment our Badger Bounceback Agenda proposed and that they deserve.
There is much to be said about areas where this budget fails to deliver on the support Wisconsinites need after facing a severe economic crisis like we did last year. When I delivered my budget message in February, I said there would be those who would give us the false choice between making healthcare more accessible and saving hard-earned tax dollars; between fully funding our public schools and cutting taxes at the same time; between supporting our farmers, rural communities, and small businesses and protecting our natural resources and investing in new, clean jobs; between spending within our means while still supporting Wisconsinites who need help to recover. In many ways, the Legislature's budget presents false choices between the priorities the people of this state care about and deserve.
But after a long eight years of politicians making decisions for all the wrong reasons, I ran to be the governor of this state and promised I would always put people before politics—that I would always try to do the right thing, that I would work to find common ground, and that I would make decisions based on what’s best for our kids and our state.
That’s a promise I intend to keep as long as I am the governor of this great state. And it’s among the reasons why vetoing the entire budget was not an option.
I am proud to be the ‘Education Governor,’ and I believe, as I have often said, that what’s best for our kids is what’s best for our state. So, this budget begins and ends where it always does for me – with education.
Years ago, a Republican-led, bipartisan commission on school funding recommended returning to two-thirds funding. I am proud that after providing several opportunities to meet this obligation during my time as governor, Republicans in the Legislature have decided to join me in restoring two-thirds funding for our schools, and we will finally be hitting that mark in the next biennium for the first time in two decades.
I am also glad that legislators joined me in doing what we can to pay our bills on time as today we eliminate a $75 million delayed general school aid payment for our public schools, something that was put in place beginning with the 1997-98 school year. This action will also improve our state’s general fund balance under Generally Accepted Accounting Principles (GAAP) by an equivalent amount.
This budget also provides roughly $685 million in additional net general and categorical school aids. I am proud that during my time as governor, we have worked to reverse the course of eight years of cuts and underfunding to education at every level. by investing in special education, school mental health, sparsity aid, and transportation costs.
At the end of the day, vetoing this budget in its entirety would have meant not only jeopardizing these investments but also likely causing our kids and our schools to lose $2.3 billion in federal funds when they need it the most. Moreover, leaving $2.3 billion up to the chance that Republicans – who took nearly 300 days to pass a second COVID-19 response bill during this pandemic – would come in and pass a meaningful budget in a timely fashion is not a risk I am willing to take for our kids or our schools.
This budget isn’t good enough for our kids, and Republicans could and should have done more. While they might be fine forcing Wisconsinites across the state to go to referenda just to support their public schools, I am not.
Two years ago, when I signed my first biennial budget, I used my broad veto authority to provide nearly $100 million more in per pupil aid. Of course, Republicans and their allies have worked since that time to prevent me from being able to use that same authority this time around.
Well, other people playing politics hasn’t stopped me from doing what’s best for our kids before, and it’s not going to stop me today.
This past year has been tough for all of us – but it’s been especially tough for students and their families, schools, and educators. Our schools and our students have faced unprecedented challenges during the coronavirus pandemic – from distance learning to reducing class sizes to spending money that had been budgeted for pencils on PPE. I have been working every day to find a way to get to yes for our kids and our schools because that’s what they deserve – elected officials who will do more than the bare minimum. That’s why today I’m announcing I’m investing more than $100 million in federal funds into our kids and our public schools. Schools in districts across our state will be able to use these funds to support kids in the classroom, hire educators and staff, provide additional educational or mental health supports, buy art supplies, or computers, keep the lights on – whatever they need.
Here’s the bottom line: this investment is a critical step in ensuring our kids, our state, and our economy can continue to recover, but I also want to be clear today: we must do everything we can to support our kids and our schools if we want our economic recovery to continue.
And we’re not just going to do everything we can to invest in our schools – when I said investing in our schools and cutting taxes are not mutually exclusive, I meant it. During the last biennium, I was proud to sign our last budget that, together with 2019 Wisconsin Act 10, provided an estimated $577 million in individual income tax relief through income tax rate reductions targeting lower and middle income earners. Then, the first bill I signed this biennium, 2021 Wisconsin Act 1, provided roughly $480 million in tax relief for Wisconsin businesses and families affected by the coronavirus pandemic. Even before this 2021-23 budget, I signed into law $2 billion in cumulative tax relief for Wisconsin families and businesses. When I ran for governor, I promised I would cut taxes for middle-class families by 10 percent. Today, I am keeping my word.
Today I am signing one of the largest tax cuts in Wisconsin state history. The bipartisan budget I signed today, along with prior reductions, not only delivers on my promise to cut taxes for middle-class families by 10 percent – I am cutting middle-class income taxes by 15 percent – and newly providing tax relief to more than 1.6 million Wisconsin taxpayers. When combined with prior reductions, 2.4 million filers will be receiving tax relief as a result of my actions.
This budget alone provides $2 billion in individual income tax relief over the biennium and approximately $1 billion annually going forward. Together with prior individual income tax rate reductions in the 2019-21 biennial budget and in 2019 Wisconsin Act 10, the median family of four will enjoy over $800 in annual tax relief beginning in tax year 2021, with approximately $550 of that coming from this budget. Combined, these reductions provide an approximate 15 percent reduction in individual income taxes compared to the rates in place in 2018 before I took office. This combined tax cut is the result of reducing the bottom two individual income tax bracket rates in the previous Legislative session with the budget's reduction to the third individual income tax bracket. The budget also provides additional targeted tax relief. This budget expands the exemption for income earned by Wisconsin servicemembers to cover all active-duty income, providing $20.2 million in annual tax relief. Further, beginning in tax year 2022, families claiming the federal child and dependent care tax credit will be able to claim 50 percent of that credit for Wisconsin purposes, providing $9.8 million in additional relief for families. Taken together with prior actions since 2019, Wisconsin individual income taxpayers will experience over $1.4 billion in annual tax relief beginning in tax year 2022. My action today ensures that our state continues to recover while also providing tax relief to folks across our state at a time when our economy and working families need it most.
Additionally, as was the case during the last budget, I am glad the Legislature joined me in supporting a number of other provisions and initiatives included in my Badger Bounceback Agenda.
I was proud to make significant investments to support the servicemembers who have served our state and our country and was glad to have the Legislature join me in this work by increasing funding for Veterans Service Office grants and providing $200,000 toward suicide awareness and prevention and mental health services, especially for veterans in underserved communities and areas. One legislative Republican called this “a really good budget for veterans.” I agree.
We are also continuing our work to fix our roads and invest in infrastructure across our state. While I am disappointed that the Legislature continues to reject increased, meaningful investments in support of mass transit and transportation alternatives, I am glad our budget will provide $100 million into improving local roads across our state, invests in our harbor and freight rail systems, and increases general transportation aids for our local communities in both years of the biennium.
Additionally, the coronavirus pandemic underscored and exacerbated the urgency with which we must work to expand access to reliable, affordable Internet. In 2021, high-speed Internet is no longer a luxury – it is a necessity – and it is a key part of supporting small businesses, increasing access to healthcare in our rural communities, and addressing the digital divide in our classrooms. I am disappointed that in the Year of Broadband Access, the Legislature failed to meet my nearly $200 million proposed investment into broadband – the largest state investment in state history, and nearly quadruple the investment of the last budget – and decided to use bonding for broadband investments, which will ultimately cost taxpayers more in the long-run. But I am proud my Badger Bounceback Agenda was able to push the Legislature to make increased investments in making high-speed Internet more accessible and includes $129 million in funding over the biennium to support the expansion of the Broadband Expansion Grant program.
The biggest problems with this budget are not the things in it which need to be removed with the stroke of a pen, but rather the work the Legislature left undone – whether it is investing in our kids and our schools, criminal justice reform measures, equity initiatives, or support for our state’s small businesses, there was much more that we could have accomplished together. Therefore, I am once again using my broad constitutional authority to rework this budget in order to bring it closer to the one I assembled for the people of our state.
My actions today will improve this document and leave resources available to ensure that this unfinished business can be addressed, including meaningfully investing in our kids and our schools. In addition, investments in healthcare, clean water, protection of our natural resources, and support for our small businesses and entrepreneurs are all critical to our continued economic recovery and to our state’s future.
The following is a short summary of how this budget, including my vetoes, will continue to build upon our foundation by putting us in position to do so going forward:
Healthy Communities
Increases Medicaid dental rates by 40 percent by providing an additional $46 million over the biennium.
Provides a 12 percent rate increase in fiscal year 2021-22 and another 12 percent in fiscal year 2022-23 for nursing homes.
Increases funding for direct care workforce serving individuals in the Family Care program by $104 million over the biennium.
Increases funding for Medicaid personal care rates by over $78 million over the biennium.
Provides an additional $104 million to hospitals who serve a disproportionate share of low-income individuals through Disproportionate Share Hospital payments.
Provides a 15 percent increase to the reimbursement rates for autism services for adaptive behavioral health treatment.
Increases funding for Community Health Centers and Free and Charitable Clinics by $2 million each over the biennium.
