By David Callender
Capital Times, July 25, 2005
Gov. Jim Doyle was set to use his veto pen today to restore more than $400 million in new state funding for public schools that Republican lawmakers had cut from his proposed budget and to create a “responsible property tax freeze” for the next two years.
Under the Democratic governor’s plan, taxes for the owner of an average Wisconsin home valued at $150,000 would stay the same this year as last year, and would decline by $5 next year.
Doyle was scheduled to sign the new $53 billion state budget into law at a ceremony at the governor’s mansion this morning.
“The people of our state have asked us to do four things with this budget: cut spending, cut taxes, make education the priority and freeze property taxes. I’m pleased to say this budget does all four, and we kept the faith with Wisconsin families,” Doyle said in prepared remarks for the bill signing.
Despite a $1.6 billion gap between agency requests and state tax collections at the start of this year, Doyle noted that the budget contains no increase in state sales or income taxes.
Instead, the budget cuts state income taxes on Social Security benefits for senior citizens and contains a penny-a-gallon cut in the state gas tax.
In his written message to lawmakers, Doyle said he was using his veto pen 139 times to restore funding lawmakers cut from his budget for public schools and the University of Wisconsin, eliminate “pork barrel” spending, and shift some of the costs of road construction from cash to long-term borrowing.
“While some may criticize me for being too bold, I undertook to reshape this budget to one that protects both property taxpayers and our children,” Doyle wrote, adding that he had considered vetoing the entire budget because of the cuts to public schools.
The Wisconsin Constitution allows the governor to strike out numbers, reduce appropriations, and even rewrite entire sections of any spending bill sent to him. Lawmakers have not overridden any of the hundreds of budget vetoes Wisconsin governors have made in the last 20 years.
Doyle’s vetoes mark the latest move in a running battle over Wisconsin’s property taxes, which are among the highest in the nation.
Doyle and majority Republicans in the Legislature have spent the last two years feuding over proposed property tax limits, which each side calls a “freeze.”
Doyle in his original budget sought to limit property tax increases by pumping more than $930 million in new state money into schools – which make up the bulk of most local property tax bills – and providing incentives for local governments such as counties, cities, villages and towns to limit their spending.
Republicans rejected that proposal. Instead, their version would have provided $460 million in new money for schools and would have halved the amount of per-pupil spending increases allowed under state-imposed limits. That would effectively allow school spending increases of 1 percent annually.
Doyle responded that the Republicans’ approach would have forced schools to choose between laying off teachers and slashing spending or asking taxpayers for huge property tax hikes.
The Republican plan also would have allowed local governments to increase their spending only by the amount of new construction in their communities.
The budget Doyle will sign today increases new state spending on schools to a total of $861 million over the next two years. That new money includes $124 million in new money for the school levy tax credit on homeowners’ property tax bills, which he called “direct property tax relief.”
The governor’s plan would allow 2.6 percent annual spending increases for schools.
Doyle said his “freeze” would also allow local governments to increase their spending by either 2 percent or the total value of new construction, whichever is higher.
The Republican “freeze” would have lasted for three years. Doyle’s plan will be in place for two years – or the length of the two-year state budget – “because it only works if the state keeps its commitment to funding schools and shared revenues” for local governments, he said.
Doyle said he would pay for the increased state funding for schools by cutting almost $360 million in “excessive state spending, unnecessary financing strategies, ill-conceived tax giveaways and pork barrel projects.”
Those cuts include:
• $15 million in tax breaks for families that home-school their children or send them to private schools.
• $7 million in “legislative earmarks and pork-barrel projects,” which the governor did not detail.
• $60 million in cash used to finance the Marquette Interchange on I-94 outside Milwaukee. Doyle argued that the money should come from long-term borrowing, because doing otherwise is like putting down cash to buy a house “and then not having any money left over to buy groceries, put gas in the care or help the kids get a good education.”
• $35 million from a proposed study of the Zoo Interchange on I-94 outside Milwaukee. Doyle noted that the project would not begin until 2010 at the earliest.
• An additional $75 million in unspecified cuts to the state’s highway and transportation budget.
Doyle indicated that such changes would likely come from using transportation fund money to cover costs that traditionally have been paid for with general tax funds, such as school transportation costs.
• Eliminating $94 million in proposed rate increases for nursing homes, outpatient hospital care, pharmacy costs and other spending under the Medicaid program.
Doyle stressed that the cuts would not affect eligibility or access to services for anyone in the Medicaid program for the elderly, poor and disabled; the SeniorCare program for prescription drugs for seniors, or the BadgerCare program for low-cost health insurance.
Despite his veto of the Republican tax “freeze,” Doyle credited Republicans for working with him.
“All too often in Madison, the 10 percent of issues where we disagree get far more attention than the 90 percent of issues where we agree,” he said.
Doyle noted that the two sides agreed on health care programs for the poor, elderly, disabled and veterans, as well as funding for school transportation and special education programs.
“The progress we made on a bipartisan basis is significant and will have real benefits to the people of Wisconsin,” Doyle wrote.