Frederica Freyberg:

After the partisan finger-pointing, the nearly $88 billion two-year state budget is now in the hands of Governor Tony Evers because the Legislature passed the spending plan this week. And now the governor who wields the most powerful veto pen in the nation scours the document before signing up or down or making partial strike-thrus. Republican budget writers included more than $3 billion in tax cuts, while nixing Evers’ items like expanded Medicaid and more money for schools. Senior political reporter Zac Schultz joins us now from the Capitol with what’s next. Thanks for being here.

Zac Schultz:

My pleasure.

Frederica Freyberg:

So interestingly, unlike past budgets, some Assembly Democrats voted for this one. What was that about? Was it about the tax cuts?

Zac Schultz:

I think you have to look at the geography of where those Democrats are from. In both the Assembly and the Senate, they represent western and northwestern Wisconsin, where at the top of the ticket, at least, the electorate has shifted more Republican. So they are covering up for a more conservative electorate that’s still keeping in office. One of the members in the Assembly had just flipped a Republican suburban district in Milwaukee. So they have to cover their base of who they have at home. And remember, there’s not a lot of nuance in voting for a budget. This budget has lots of things any lawmaker likes or doesn’t like but you only get to say yes or no. So you have to be pretty clear on what you want the ultimate message to be to your voters back home.

Frederica Freyberg:

How do Republicans regard this spending plan?

Zac Schultz:

They absolutely love it. This is the first time that all the Republicans have voted for a budget in quite a while. In past budgets, you’ve seen some of the conservative Republicans say we still don’t support it because it doesn’t do enough or doesn’t go far enough. Republicans build their brand around tax cuts and that’s what’s in this budget so they absolutely love it.

Frederica Freyberg:

And Democrats and by extension Governor Evers?

Zac Schultz:

They’re focused mainly on the education spending. They’re worried that they’re not enough in there, that the Republican focus was strictly on maintenance of effort, that federal requirement that allows the federal COVID relief dollars to come in, but not actually providing any additional state support and how that may fall out in the actual school district when it comes to funding the operations of a school.

Frederica Freyberg:

So Evers has this mighty veto pen. What can he do and what can’t he do?

Zac Schultz:

There have been restrictions. Back to the Tommy Thompson era and Jim Doyle, they’ve — we’ve used constitutional amendments approved by the voters to narrow just a little bit what can be struck and what can’t be. It’s not as big a pen as it used to be. He can still reduce numbers, although it seems unlikely. He can strike out some words or language. But Republicans have been extremely careful to make sure that they don’t put the words in there that he could use to strike out. They’ve taken out references to “may not exceed” just in case Evers strikes out the “not” and says “may exceed.” So a lot of that language is a cat and mouse game when it comes to how the budget is written from the Legislature side and then how Evers and his team view the budget, what they can do with the veto pen.

Frederica Freyberg:

There was some discussion of this earlier, but if he vetoed the whole thing, Wisconsin would lose, I understand, that more than $2 billion in federal school funding, right?

Zac Schultz:

Yeah. There really is no option right now for the governor to veto the whole document because Republicans have said they won’t come back. They won’t give him another budget to work with. This is it. Really it would be pinned on the governor if the schools didn’t get the federal funding and still didn’t have more state support in the mix. Add in the fact there were Democrats who supported this on the floor in both chambers. That showed that they realize that the governor was going to have to make his changes through partial veto as opposed to vetoing the whole document.

Frederica Freyberg:

Meanwhile Wisconsin saw a $4.4 billion tax revenue windfall. Notwithstanding the economic strain of COVID, when is the last time there was this much to work with?

Zac Schultz:

You have to go back a couple decades ago. Back in Tommy Thompson’s era, remember they sent home surplus checks to everyone. They just wrote a check out. But that was the difference between how we’re structuring it now under this budget and back then. Back then they sent home one-time surplus but the revenue was still there for the next time. These tax cuts are permanent. So the personal property tax is gone. These tax brackets are lowered. Those don’t just come back. So if this money came in because of increased COVID spending, those stimulus dollars and the increased unemployment benefits being spent and surging the economy, that won’t happen in the next budget. So it’s a big question of what will the budget picture look like then.

Frederica Freyberg:

Well, aside from kind of the process of all of this, which you know, probably most people don’t care as much about, what stands out for how people in Wisconsin will be impacted by a two-year state spending plan?

Zac Schultz:

Well, the main thing is if you’re a middle income or higher, you’re going to see tax benefits. You’re going to enjoy those tax benefits. Everyone else it’s a question of how much they are and whether it really impacts your life. The other big, big fallout is going to be in public schools. If that federal money isn’t able to replace enough of the operational spending they didn’t get from the state, we’ve heard schools already talk about having to make cuts or possibly layoffs, which would seem incongruous at a time with all this money coming in but that’s a real big concern and how that plays out will definitely impact the next budget and the election.

Frederica Freyberg:

Well, Zac, thank you very much for covering this. Appreciate it.

Zac Schultz:

Thanks Fred.