The Assembly Democratic Caucus will enter the next year with 45 members — ten more than last session. Assembly Minority Leader Greta Neubauer (D-Racine) speaking at a press conference before an April 25, 2023 floor session. (Baylor Spears | Wisconsin Examiner)

Assembly Minority Leader Greta Neubauer (D-Racine) said in a year-end interview that the new makeup of the state Legislature is going to have a real impact next legislative session. 

The Assembly Democratic Caucus will enter the next year with 45 members — ten more than last session — after the recent elections under new legislative maps, and the work to prepare for next session has started. 

“The fair maps already started to change the culture of the state Legislature. We saw more bipartisan work last session. I expect that that will only increase as we go forward,” Neubauer told the Wisconsin Examiner. “We’ve got legislators who are going to be looking over their left and their right shoulder — a lot of people in competitive districts who are going to need to listen to their constituents and get things done.” 

Assembly Democrats are looking to get things done, Neubauer said. To prepare, leaders are having one-on-one conversations with members. New lawmakers are participating in a freshman orientation this week and a caucus retreat is scheduled for later this week.

“We are working as a group to identify our top priorities — what it would take for us to vote for the budget, for example — and working to collectively leverage our power.” Neubauer said. She said many of the caucus’ new members have a local government background or have worked in advocacy roles or as a union leader, which is helpful.

Neubauer said she thinks the majority party will need some Democratic support to pass important bills, which could give Assembly Democrats the chance to shape forthcoming legislation. 

“We want to make sure that we are taking advantage of those opportunities to get real wins for our constituents and pass important policy,” Neubauer said. 

Assembly Speaker Robin Vos (R-Rochester) said during a press conference last month that he would still be seeking “consensus” among Republicans before moving forward on issues, even with the new slimmer margins. However, Neubauer said she thinks there will be more opportunities to work together on certain issues as there may be more members of the Republican caucus pushing their leadership to take up certain issues including investment in education, lowering costs, expanding access to health care including by extending postpartum Medicaid coverage, protecting the environment and providing clean drinking water.

“The reality is that he now has a lot of members who are in very close seats, who are going to need to go home and answer for their votes,” Neubauer said. “There’s a lot of really popular issues that Republicans have refused to take significant action on that I anticipate will be getting more air time in the coming session.” 

Neubauer said she hasn’t spoken with Vos about the upcoming session, but hopes to soon.

Budget writing and other legislative priorities

When the Legislature returns to session next year, Gov. Tony Evers and the Legislature will work on writing the next two-year budget. State agencies have delivered their requests to Evers, who will write his own budget proposals. The Legislature will then write and vote on its own version before sending it to Evers, who will have the opportunity to sign or veto the budget. 

“I am hopeful that in this budget, we will be able to lower costs for families in Wisconsin in housing and child care and prescription drugs. I hope that we’re able to make real investments in education and giving every kid the opportunity to succeed in our state,” Neubauer said.

School funding a top priority

Neubauer said education funding will likely be a top priority for the caucus, and that the proposals from the UW System and the Department of Public Instruction are strong. The UW System is requesting an additional $855 million from the state for many priorities, including wage increases, general operations costs, mental health services and extending the Wisconsin Tuition Promise. The Department of Public Instruction has requested an additional $4.3 billion to support schools struggling to meet costs; the request follows a record year for school referendum requests. 

“I really appreciate the ambition and the effort to make the necessary investments to give every student in Wisconsin the ability to succeed,” Neubauer said. “We know that the state Legislature has not been keeping up its end of the bargain in terms of funding for our public schools and the Assembly Republicans have seemingly decided that their role is to attack and undermine the UW system rather than support and uplift it.” 

Neubauer said she hopes they’re able to get a significant increase for education spending given the state’s significant $4 billion surplus, but noted that those priorities need to be balanced with other important priorities. When it comes to specific policies for investment for K-12 education, Neubauer said Democrats will be focused on increasing the reimbursement rate for special education, securing a “significant” increase to per pupil aid and mental health resources. 

“It should not be falling to local communities to raise their property taxes in order to fund their schools, and I think for many of us, you know, we walk into our local schools and we see what’s been cut, and we see where additional resources could really make a difference for kids, and we think this is just wrong.” Neubauer said. She noted that Racine County, where she is from, is one community dealing with financial difficulties, including deficits and budget cuts. “We’re not doing right by them, and so I do think that’ll be a big focus for us in this budget, and then we will see where else we can support families to make ends meet and to have great opportunities in Wisconsin in the years ahead.” 

Republican lawmakers, including leaders and those on the budget committee, have said that “returning the surplus back to taxpayers” will be one of their top priorities. Neubauer said that Democrats would be open to talking about targeted tax cuts that benefit middle class families.

“What we’ve seen from Republicans in the last several years is proposals that primarily benefit the richest Wisconsinites and corporations, and we’re not interested in that,” Neubauer said. “We know that many people are struggling to make ends meet in Wisconsin, but it can’t break the bank, and it needs to be targeted.”

Funding local government

Neubauer said local government funding will likely be another key priority for Democrats this coming session. Even with the shared revenue overhaul last session, she said many Wisconsin communities are still struggling to fund essential services. 

“We did make progress, but we had fallen so far behind,” Neubauer said. “We’ve got red and blue communities that are coming to us and saying with the federal dollars going away here at the end of the year, they’re going to have a very difficult time funding their public health departments, their parks and community centers, their public safety and those are all essential to our community’s well being.”

Prying loose JFC’s grip on the public purse

Neubauer said she hopes with the maps that there will be more accountability for lawmakers on the Joint Finance Committee if they decide to withhold funds next session. Lawmakers dedicated money to several issues last session — including $125 million to combat PFAS, $50 million to support new literacy initiatives and $15 million for hospitals in the Chippewa Valley — however, the funds have been withheld by the Republican-led Joint Finance Committee due to policy differences after the funds were allocated. 

Neubauer said she hopes this will happen less in the coming session. She pointed out that Sen. Duey Stroebel, a prominent Republican member of the committee, was ousted from his seat this election cycle by Democrat Sen.-elect. Jodi Habush Sinykin. Sen. Joan Ballweg, another member of the committee, also lost her reelection bid. 

“People of Wisconsin don’t really like that. Those are important priorities to people across the state,” Neubauer said. “I think that having more legislators and competitive seats will mean that the people, I hope, on the Joint Finance Committee are hesitant to do that.” 

Neubauer said that the multiple court cases challenging  JFC’s enhanced authority could also help with the issue. 

“We’ve already seen one decision from the Supreme Court that said that they had overstepped, and there are other cases moving through,” Neubauer said. “I think that’s a good thing, and it makes me hopeful that Republicans on the Joint Finance Committee will no longer be able to act as sort of another Legislature in preventing the implementation of these programs that have already been passed and already been signed.”

Beyond budget priorities, Neubauer said that the caucus is continuing to think about other longer term issues — including legalizing marijuana, addressing gun safety, protecting abortion rights, addressing climate change, ensuring everyone has access to clean drinking water and public safety reforms — but she expects some of those will require a Democratic majority. 

Neubauer said that Democrats are always working towards the majority in the Assembly, and she thinks the last election laid the groundwork for a Democratic takeover in two years. She noted there could be the opportunity for a Democratic trifecta in that election cycle.

“We’ve got strong candidates that ran this cycle, many of whom want to run again. We really built our grassroots infrastructure in communities where we haven’t had competitive districts for quite some time, and I think we learned some things about how to run such a big program with so many candidates under these fair maps,” Neubauer said.

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Gov. Tony Evers kicks off a budget listening session in Appleton, Wis. on Monday, Dec. 2 | Photo by Andrew Kennard

Members of the public traveled to Einstein Middle School in Appleton Monday to tell Gov. Tony Evers about their priorities for Wisconsin’s 2025-2027 budget. 

During the first of Evers’ five planned listening sessions around the state ahead of his next budget proposal, Wisconsin residents expressed concern about the cost of housing, Wisconsin prisons and other issues in a breakout group attended by the Examiner. 

In opening remarks, Evers expressed support for addressing “long neglected” priorities and cited Wisconsin’s budget surplus of over $4 billion for the 2024 fiscal year. 

Evers said his priorities include expanding BadgerCare, legalizing marijuana, protecting access to reproductive health care, gun and justice reform, protecting the environment and investing in kids and schools. 

Local Republican state Rep. Ron Tusler (R-Harrison) has a different view on the surplus, Fox 11 reported. He wants to use it to  return money to taxpayers and provide relief from inflation.  

Members of the public split into six breakout groups. Each group focused on different topics relevant to the budget. The Examiner attended the “Strong & Safe Communities” group, which addressed issues ranging from affordable housing to Wisconsin’s prison system. 

A De Pere resident brought up the high cost of housing, saying that she and her husband are from Door County but couldn’t afford to live there even though they both work. Even in De Pere, “all the houses in my neighborhood are getting bought up and flipped,” she said. 

Tom Denk, who was formerly incarcerated, said he wants to see change in Wisconsin prisons. He said he wasn’t allowed access to enrichment  programs in prison. 

“The DOC needs more funding because their staff need to be educated. They need to have that trauma-informed care,” Denk said. “Because most people are going to get out of prison. I’m one of them.”

Substance abuse and anger management programs in the Wisconsin prison system have waitlists in the thousands. The Department of Corrections’ website says the agency tries to enroll people in programming as they get close to their release date. 

Karen Winkel, a homeless prevention specialist, said many of her clients have been recently released from the Department of Corrections or the Green Lake County Jail, with “no place to go. There’s no place to live.” 

Lisa Cruz, executive director of Multicultural Coalition, Inc., said her nonprofit is overwhelmed with serving immigrants and refugees. 

“It’s [a] humanitarian crisis,” Cruz said. “And I think we often think about that happening somewhere else, in another country, maybe in another state. It’s right here and it’s right now.”

Members of the group expressed concerns about American Rescue Plan funding running out, including funding for services for crime victims. Wisconsin passed $10 million in funding for victim services earlier this year, but providers are still facing budget cuts. 

“My agency received a 72% reduction, really impacting nearly half of our budget,” said Isabel Williston, executive director of ASTOP Sexual Abuse Center. 

Jared Hoy, secretary of the Wisconsin Department of Corrections, attended the group discussion, but mostly listened since the focus was on the public’s input. 

An informational packet distributed at the event described positions the governor has taken on criminal justice. These include increasing funding for Wisconsin’s TAD (treatment alternatives and diversion) program and addressing staffing shortages that have worsened conditions in state prisons. 

Evers will introduce his budget proposal early next year, Communications Director Britt Cudaback told the Examiner in late October. In his remarks, Evers praised Wisconsin’s new legislative maps as more reflective of the “will of the people.” In last month’s election, the maps helped Democrats flip 14 previously Republican-held seats in the Legislature, narrowing Republican majorities. 

Evers’ next listening session is Wednesday evening in La Crosse, followed by Milwaukee, Ashland and a virtual session.  

Members of the public can submit comments on budget priorities through the governor’s constituent services page. 

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A shrinking share of income from Wisconsin residents and business goes to education and other public services, while corrections and police costs increase. (Getty Images)

Wisconsin residents and businesses pay less than 10% of their income on state and local taxes, according to a new report published Friday, continuing a trend that has been underway for more than two decades.

The report, produced by the Wisconsin Policy Forum, credited rising incomes, a 2021 state income tax cut and state limits on local property tax increases for helping to reduce Wisconsin’s state and local tax burden.

Wisconsin residents and businesses paid 9.9% of their income to cover state and local taxes in 2022, the report finds. That’s a drop from 10.3% in 2021 and from 12.5% in the year 2000.

The trend might not last, however. Initial information on collections suggest little change in the state and local tax burden for 2023, which could continue in 2024 and 2025, the report states. While income growth has been strong, “taxes have also grown in at least some areas.”

On average nationwide, state and local taxes amounted to 11.1% of individual and business income in 2022, according to the report — 1.2 percentage points more than Wisconsin. The share of Wisconsin income going to those taxes “has never been so far below that of the nation,” the report states.

The report reflects only state and local taxes, not federal taxes, which the Wisconsin Policy Forum analyzes separately.

While Wisconsin taxpayers are paying a little less, the state is also spending a smaller share of its income, particularly for education, the report finds.

Direct state and local spending grew by 7% in 2022, reaching $65.06 billion. But spending fell as a share of state income, to 18.3% in 2022 from 18.6% in 2021.

“Overall K-12 spending in Wisconsin rose 4.4% in 2022, but that was less than half of the 9.8% increase nationally,” the report states. Spending on K-12 education was 5.1% of state income in 2000 — the eighth highest among states. By 2021 it had dropped to 3.9%, and by 2022, to 3.8% — ranking 31st from the top.

“This represents a major shift in the single largest area of state and local spending,” the report states.

The report sets the stage for the top priority for lawmakers and Gov. Tony Evers in the coming year — drawing up Wisconsin’s 2025-27 state budget, with likely debates over school funding and the state’s projected surplus of about $4 billion.

A trend for two decades

In the year 2000, Wisconsin ranked third among the 50 states in the share of personal income going to state and local taxes, according to the Wisconsin Policy Forum. By 2022, the state’s rank had dropped to 35, an all-time low.

Wisconsin’s ranking in taxes per capita has also fallen. In 2021, when the total annual state and local tax bill averaged $5,689 per capita, the state was in 24th place. In 2022, Wisconsin’s fell to 29th place, with an average bill of $5,966 per capita.

The single largest contributor to Wisconsin’s lower tax burden was a change in the state income tax brackets included in the 2021-23 state budget, reducing the third bracket from the bottom to 5.3% from 6.27% — reducing state tax revenue by $1 billion in 2022.

The report points out that its calculation “shows only a drop in Wisconsin’s average tax burden — some taxpayers here benefited less and others more.”

Legislative Fiscal Bureau estimates compiled when the change in the third bracket took effect “showed 98.9% of the total decrease was expected to go to tax filers with state Adjusted Gross Income of more than $40,000 and 74% of the total to filers with income of more than $100,000,” the report states.

In 2020, before the change took effect, Wisconsin ranked 13th among states for the share of personal income going to the state income tax. By 2022, with the tax cut in effect, the state’s rank fell to 30th.

Two other changes may have contributed to that shift, according to the report. One affected business owners who received Paycheck Protection Act pandemic relief loans, but then were allowed to keep the money instead of repaying it to the federal government. In 2021 Wisconsin enacted legislation waiving state income taxes on those funds.

In addition, Wisconsin revised its income tax tables for 2022, reducing the amount of tax money the state collected that would subsequently be refunded to taxpayers.

Corporate income and general sales tax revenues also grew more slowly in Wisconsin compared to nationally, the report said, also likely contributing to the state’s lower relative tax burden.

The report found that property taxes, which fund public schools and local and county government, grew 2.9% in 2022, keeping pace with the national average.

Wisconsin’s 2021-23 state budget included a freeze on per-pupil revenue caps to local school districts. That limited how much local districts could raise property taxes without getting  voters’ permission through a referendum, as well as how much state aid they could collect. As a result, the share of Wisconsin income paid to property taxes dropped to 3% in 2022 from 3.2% in 2021, “contributing a significant share of the overall decrease in the state’s tax burden,” the report states.

“The state’s higher than average property taxes — particularly on homes — remain the most salient tax for most state residents,” the report states. “That may keep some taxpayers from grasping the overall decrease in taxes that has taken place over the past two decades.”

Where costs are rising

Higher education spending has risen slightly in recent years, from 1.8% in 2021 to 1.9% in 2022, and Wisconsin’s rank has risen, too, to the 20th highest state on that measure.

Spending by state and local government on the prison system, jails and other corrections costs rose 11.3% in 2022, with Wisconsin ranking 9th among states in its corrections spending as a share of state income, according to the report.

Police spending in Wisconsin rose 5.8% in 2022 — ahead of the national average of 3.8%, and putting the state at 27th highest for police spending. Fire protection spending has fallen, however, both in the amount of money allocated and the state’s ranking for firefighter spending as a share of income.

Public social services spending, such as for Medicaid, increased 6.5% in 2022. Wisconsin ranks 21st nationally for that spending as a share of state income.

Looking ahead, the report suggests that the 2024 wave of successful referendum measures, primarily for public schools, will lead to property tax increases by the end of this year.

“These increases should also help to counteract at least somewhat the drop in K-12 spending levels as local school leaders try to rebuild their budgets after the two recent years of frozen revenue limits,” the report states.

But it also forecasts conflicts ahead between lawmakers who have continued to press for reducing Wisconsin taxes and the Evers administration as well as local taxpayers who approved school referendum questions and want to see increased financial support for public schools in the 2025-27 budget.

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