Wisconsin Democratic Gov. Tony Evers and Republicans who control the state Legislature announced a deal Tuesday on a new two-year budget that cuts income taxes, increases funding for the Universities of Wisconsin despite a threatened cut and raises fees to pay for transportation projects.
The deal in the battleground state, where Evers and Republicans have a long history of not working together, emerged the day after the deadline for enacting a new budget. However, there is no government shutdown in Wisconsin when the budget is late. The Legislature is scheduled to pass it this week.
Evers called the deal “a pro-kid budget that’s a win for Wisconsin’s kids, families and our future.”
Here is what to know about Wisconsin’s budget deal:
Tax cuts
Evers and Republicans agreed to $1.3 billion in income tax cuts largely targeting the middle class. More than 1.6 million people will have their taxes cut an average of $180 annually.
Republicans pushed for cutting taxes given the state’s roughly $4.6 billion budget surplus.
The deal would expand the state’s second lowest income tax bracket and make the first $24,000 of income for people age 67 and over tax-free. It also eliminates the sales tax on electricity, saving taxpayers about $178 million over two years.
Republican legislative leaders praised the deal as providing meaningful tax relief to the middle class and retirees.
“This budget delivers on our two biggest priorities: tax relief for Wisconsin and reforms to make government more accountable,” Republican Assembly Speaker Robin Vos said in a statement.
And Senate Republican Majority Leader Devin LeMahieu praised it as a compromise that cuts taxes but also stabilizes the state’s child care system and strengthens schools by increasing special education funding.
Higher education
The Universities of Wisconsin would see a $256 million increase over two years, the largest funding increase for the UW system in about two decades. UW Regents had asked for an $855 million overall increase, and Republicans in June floated the possibility of an $87 million cut.
The deal also imposes a faculty minimum workload requirement and calls for an independent study on the system’s future sustainability.
Prison closing
Republicans will be voting on a plan Tuesday to close the 127-year-old Green Bay Correctional Institution by 2029 as Evers proposed. However, it’s not clear what other elements of Evers’ prison overhaul plan Republicans will endorse.
That part of the budget was not under the negotiated deal with Evers, which means he could make changes to it with his powerful partial veto.
Schools, roads and child care get more
There will be $200 million in additional tax revenue to pay for transportation projects, but Evers and Republican leaders did not detail where that money would come from.
The agreement increases funding for child care programs by $330 million over two years, a third of which will be direct payments to providers. The money will replace the Child Care Counts program started during the COVID-19 pandemic. That program, which provides funding to child care providers, expired on Monday. Evers, Democrats and child care advocates have been pushing for additional funding to address child care shortages throughout the state.
Funding for K-12 special education programs will increase by $500 million.
State employees, including at the university, would get a 3% raise this year and a 2% raise next year.
The budget deal was reached after Republicans killed more than 600 Evers proposals in the budget, including legalizing marijuana, expanding Medicaid and raising taxes on millionaires.
Democrats credit redistricting
Democrats said Republicans were forced to compromise because they didn’t have enough votes in the Senate to pass the budget without Democratic support.
Democrats gained seats in November under the new maps drawn by Evers and narrowed the Republican majority in the Senate to 18-15. Two Republican senators said they planned to vote against the budget, resulting in Senate Democrats being brought into the budget negotiations with Evers and Republicans.
“What we are seeing playing out in this budget is the consequence of Wisconsin’s new fairer maps — legislators working together to find compromise and make meaningful progress for the people of Wisconsin,” Democratic Sen. Jodi Habush Sinykin said in a statement.
Republican budget committee co-chair Sen. Howard Marklein said, “This budget has involved an awful lot of compromise.”
What’s next?
The deadline for finishing the budget was Monday, but unlike in other states and the federal government there is no shutdown in Wisconsin. Instead, the previous budget remains in place until a new one is signed into law.
The Legislature’s budget-writing committee was voting on the plan Tuesday. The full Legislature is set to meet starting Wednesday to give it final passage.
Once the budget clears the Legislature, Evers will be able to make changes using his expansive partial veto powers. But his office said Evers would not veto any budget provisions that were part of the deal he reached with Republicans.
Evers, who is midway through his second term, has said he will announce his decision on whether he will seek a third term after he has signed the budget. He has 10 business days to take action on the spending plan once the Legislature passes it.
Associated Press writer Todd Richmond contributed to this story.
Wisconsin Watch is a nonprofit and nonpartisan newsroom. Subscribe to our newsletters to get our investigative stories and Friday news roundup.This story is published in partnership with The Associated Press.
A unanimous Wisconsin Supreme Court handed a victory to the Republican-controlled Legislature on Wednesday in a power struggle with Democratic Gov. Tony Evers, reining in the governor’s expansive veto powers.
The court, in a ruling where the four liberal justices joined with three conservatives, struck down Evers’ partial veto of a Republican bill in a case that tested both the limits of his veto powers and the Legislature’s ability to exert influence by controlling funding.
The court also ruled that the Legislature can put money for certain state programs into an emergency fund under the control of its budget committee. Evers had argued such a move was unconstitutional.
The ruling will likely result in the Legislature crafting the budget and other spending bills in similar ways to get around Evers’ partial vetoes and to have even greater control over spending.
The ruling against Evers comes after the court earlier this year upheld Evers’ partial veto that locked in a school funding increase for 400 years. The court last year issued a ruling that reined in some powers of the Legislature’s budget committee, while this ruling went the other way.
Evers clashes with Legislature
Evers, in his seventh year as governor, has frequently clashed with the Legislature and often used his broad veto powers to kill their proposals. Republican lawmakers have tried to take control away from the governor’s office by placing money to fund certain programs and state agencies in an emergency fund controlled by the Legislature’s budget committee. That gives the Legislature significant influence over that funding and the implementation of certain programs within the executive branch.
Evers argued that the Legislature is trying to limit his partial veto power and illegally control how the executive branch spends money.
The Supreme Court on Wednesday sided with the Legislature.
It ruled that Evers improperly used his partial veto on a bill that detailed the plan for spending on new literacy programs designed to improve K-12 students’ reading performance. The court also sided with the Legislature and said the budget committee can legally put money into an emergency fund to be distributed later. That is what it has done with the $50 million for the literacy program.
Fight over literacy funding
In 2023, Evers signed into law a bill that created an early literacy coaching program within the state Department of Public Instruction. The bill also created grants for schools that adopt approved reading curricula to pay for changing their programs and to train teachers on the new practices.
However, Republicans put the $50 million to pay for the new initiative in a separate emergency fund controlled by the Legislature’s budget committee. That money remains in limbo amid disagreements about how the money would be used and who would decide how to spend it.
Evers argued that the Legislature didn’t have the power to withhold the money and the court should order it to be released to the education department.
The Supreme Court declined to do that, saying the money was appropriated to the Legislature and the court has no authority to order it to be released to the education department to fund the literacy program.
Evers urged the Legislature’s budget committee to release the money.
Republican co-chairs of the committee said Wednesday they looked forward to releasing the money, and they blamed the governor’s veto with delaying it going to schools.
If no action is taken by Monday, the $50 million will go back into the state’s general fund.
The Legislature has been increasing the amount of money it puts in the emergency fund that it can release at its discretion, but it remains a small percentage of the total state budget. In the last budget, about $230 million was in the fund, or about half of a percentage point of the entire budget.
Evers used his partial veto power on another bill that created the mechanism for spending the $50 million for the new program. He argued that his changes would simplify the process and give DPI more flexibility. Evers also eliminated grants for private voucher and charter schools.
Republican legislators sued, contending that the governor illegally used his partial veto power.
State law allows only for a partial veto of bills that spend money. For all other bills, the governor must either sign or veto them in their entirety.
Because the bill Evers partially vetoed was a framework for spending, but didn’t actually allocate any money, his partial vetoes were unconstitutional, the Supreme Court said, agreeing with Republican lawmakers.
“The constitution gives the governor authority to veto in part only appropriation bills — not bills that are closely related to appropriation bills,” Justice Rebecca Bradley wrote.
Republican legislative leaders called the ruling a “rebuke” of Evers.
“While the Governor wanted to play politics with money earmarked for kids’ reading programs, it is encouraging to see the Court put an end to this game,” Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu said in a joint statement.
Wisconsin Watch is a nonprofit and nonpartisan newsroom. Subscribe to our newsletters to get our investigative stories and Friday news roundup.This story is published in partnership with The Associated Press.
Local advocacy organization JOSHUA held a prayer vigil outside Green Bay Correctional Institution. | Photo by Andrew Kennard for Wisconsin Examiner
Wisconsin Gov. Tony Evers included a prison accountability office in recommendations for the upcoming state budget. That proposal was tossed out by the state Legislature, along with hundreds of others made by Evers. And so far, prison reform advocates haven’t found a Republican sponsor for a separate bill.
The Wisconsin Examiner’s Criminal Justice Reporting Project shines a light on incarceration, law enforcement and criminal justice issues with support from the Public Welfare Foundation.
The proposed Office of the Ombudsperson for Corrections would conduct investigations, inspect prison facilities and make recommendations to prisons in response to complaints. The proposal would cost about $2.1 million from 2025-2027.
Deaths of prisoners, staffing problems and lawsuits have drawn attention to serious problems in Wisconsin’s prison system.
“How many more millions of dollars are we going to spend in fighting lawsuits, dealing with litigation?” said Susan Franzen of the Ladies of SCI. The prison reform advocacy group wants to see independent oversight of the Wisconsin Department of Corrections.
“We’re willing to spend that money, but we’re not willing to take a million dollars to put something in place that can help start addressing these things and eventually get proactive, so we don’t have all this litigation going on against the Department of Corrections,” Franzen said.
“Unfortunately, [Evers] sends us an executive budget that’s just piles full of stuff that doesn’t make sense and spends recklessly and raises taxes and has way too much policy,” Joint Finance Committee co-chair Rep. Mark Born (R-Beaver Dam) said in May, after the committee killed more than 600 items in Evers’ budget proposal. “So, we’ll work from base and the first step of that today is to remove all that policy… and then begin the work of rebuilding the budget.”
Meanwhile, the Wisconsin Department of Corrections has already partnered with Falcon Correctional and Community Services, Inc., a consulting and management firm, for a third-party review.
The Falcon partnership includes a comprehensive study of the Division of Adult Institutions’ health care program, behavioral health program, correctional practices and restrictive housing practices, the Examiner reported. The study was projected to take six months.
Rep. Jerry O’Connor (R-Fond Du Lac), vice chair of the Assembly Committee on Corrections, said “our first priority” is addressing staff shortages in various areas, ranging from guards to social workers.
For the most recent pay period, the DOC reported a vacancy rate of 16% for correctional officers and sergeants at adult facilities. Columbia Correctional Institution has the highest vacancy rate among adult facilities, at 35.4%. Waupun and Green Bay Correctional Institutions have vacancy rates over 20%.
The second priority O’Connor listed in an email to the Examiner is the hundreds of millions of dollars needed for facility reorganization.
“Based on the pressing financial requests for address[ing] critical staffing shortages and housing issues, I do not see [the governor’s recommendation for an ombudsperson office] getting passed or funded,” O’Connor said.
Senate President Mary Felzkowski (R-Tomahawk) criticized the potential structure of the ombudsperson’s office, Wisconsin Public Radio reported in February.
“De facto lifetime appointments (which the ombudsperson appears to be), almost a dozen new bureaucrats, and millions of dollars are not creative solutions,” Felzkowski said, according to WPR.
Would the ombudsperson be independent?
To Franzen, “it feels like we’re back to square one, with the original plan of trying to get a bill, and we’ll keep trying,” she said.
Ladies of SCI Executive Director Rebecca Aubart said she is still hopeful about finding a Republican to sponsor an ombudsman office.
Aubart said she’s heard support for oversight of the DOC, , “but it just appears that nobody’s willing to stick their neck out to be the one to sponsor it,” she said.
The Examiner reported in October that 20 states had an independent prison oversight body. Michele Deitch, director of the Prison and Jail Innovation Lab, wrote about independent oversight in an essay published by the Brennan Center in 2021.
“They can identify troubling practices early, and bring these concerns to administrators’ attention for remediation before the problems turn into scandals, lawsuits, or deaths,” Deitch wrote. “They can share best practices and strategies that have worked in other facilities to encourage a culture of improvement.”
The proposed Office of the Ombudsperson for Corrections was described in a summary of the governor’s corrections budget recommendations. It would be attached to the Department of Corrections.
Officials in the Evers administration said the office would operate in a “‘functionally independent’” manner, Wisconsin Public Radio reported in February.
Franzen said she’d rather it be completely separate from the DOC, but would support any movement toward some type of oversight at this point. Aubart said independence is a “cornerstone to any ombudsman.”
What would the office do?
The proposed office’s powers include conducting investigations, having witnesses subpoenaed, inspecting facilities at any time and examining records held by the DOC.
If the ombudsperson made a recommendation to a prison regarding a complaint from a prisoner at the facility, a warden would have 30 days to reply. The warden would have to specify “what actions they have taken as a result of the recommendations and why they are taking or not taking those actions.”
If there was reason to believe a public official or employee has broken a law or requires discipline, the ombudsperson could refer the issue to the appropriate authorities.
The ombudsperson would report to the governor at the governor’s request. Each year, the ombudsperson would submit a report of findings and recommended improvements to policies and practices at state correctional institutions, as well as the results of investigations.
Mark Rice, transformational justice campaign coordinator at the advocacy coalition WISDOM, said he also wants to see an additional mechanism to hold the Wisconsin Department of Corrections accountable.
“Currently incarcerated people, and people who have loved ones who are currently incarcerated, need to really be more at the center of decision-making,” Rice said.
The co-chairs and vice-chairs of the Joint Committee on Finance did not respond to the Examiner’s requests for comment.
A Wauwatosa police squad on the scene of a non-fatal officer-involved shooting. (Photo by Isiah Holmes/Wisconsin Examiner)
The State Assembly’s Committee on Judiciary held a public hearing Wednesday to discuss a bill which, if passed, would restrict the use of John Doe hearings in cases where prosecutors decline to charge police officers after deadly force incidents. Republicans and law enforcement supporters of the bill (AB-34) said officers need to be protected from repeated investigations, and that anti-police groups have abused Wisconsin’s John Doe law to harass innocent officers who’ve been involved in civilian deaths. A long line of attorneys, legislators, social workers and others spoke in opposition to the bill, arguing that it adds to an array of legal privileges and protections police already enjoy.
Wisconsin’s John Doe law allows for a judge to be petitioned to review a case where prosecutors have already decided not to file charges. Once a John Doe hearing has been called, the judge may hear arguments from the petitioner as to why probable cause should be found that a crime was committed. If the judge agrees that probable cause does indeed exist, then special prosecutors may be appointed by the judge to review the case. Those prosecutors, however, ultimately decide whether charges will be pursued, regardless of whether a judge finds probable cause of a crime.
The Wisconsin Examiner’s Criminal Justice Reporting Project shines a light on incarceration, law enforcement and criminal justice issues with support from the Public Welfare Foundation.
Rep. Clint Moses (R-Menomonie), an author of the bill, said the law had been used to “unfairly target” two officers who’ve been involved in deadly incidents. Former Wauwatosa officer Joseph Mensah killed Jay Anderson Jr. in 2016, claiming that Anderson lunged for a gun on the passenger seat of his vehicle. Anderson was the second person Mensah had killed in a year. He was involved in a total of three fatal shootings over his five year career at Wauwatosa PD. Mensah left Wauwatosa PD in late 2020 and was hired by the Waukesha County Sheriffs Department, where he is a detective.
In 2021, a John Doe hearing was called to review Anderson’s shooting, after which Milwaukee County Circuit Court Judge Glenn Yamahiro found probable cause existed to charge Mensah with homicide by negligent use of a dangerous weapon. The second John Doe hearing, started in 2023, focused on Madison police officer Matthew Kenney for the 2019 killing of 19-year-old Toney Robinson. A judge declined to allow the hearing to go forward.
“After the investigations, the court confirmed that he had acted in self-defense,” Moses said of the John Doe hearing in Anderson’s case. Mensah’s John Doe hearing “mirrored” reviews done by the Milwaukee County District Attorney’s Office, U.S. Attorney’s Office, FBI, and Wauwatosa PD, he said. “It’s concerning that such investigations, which echo previous exhaustions, can be perpetuated, consuming significant time and resources,” said Moses.
While speaking Wednesday, Moses incorrectly referenced Mensah’s 2015 shooting as being the reason for the John Doe hearing in 2021. “Officer Mensah used self-defense to protect himself while on the job in a situation in 2015,” Moses testified on Wednesday. In 2015, Mensah killed 29-year-old Antonio Gonzales while still in his probationary period at Wauwatosa PD. Neither Gonzales, nor Mensah’s third fatal shooting of Alvin Cole in 2020, were the subjects of John Doe hearings.
Last year, when the bill was first introduced, Moses joined Sen. Rob Hutton (R-Brookfield) in claiming that families of people killed by police were seeking vengeance against officers. Moses confused details of Mensah’s shootings during those hearings as well. When asked about the mix up, Moses admitted to Wisconsin Examiner that he had not closely followed the Mensah cases.
Rep. Clint Moses (Wisconsin Legislature)
As Moses testified on Wednesday, Hutton joined him in the committee room. Hutton, who has brought forward Senate versions of the bill, has said that although he’s taken extensive feedback from law enforcement about the bill, he has not reached out to the families of people killed by police. During a hearing in February, Mensah testified in favor of the bill.
Mark Sette, vice president of the Wisconsin Fraternal Order of Police, said the bill is “crucial” and that law enforcement “have both the duty and right” to use deadly force to protect themselves or others. Sette said that police must make split second decisions in high-stress circumstances, and that deadly use of force incidents “are rare”. Sette praised Wisconsin’s process of conducting reviews of deadly force incidents led by an outside agency, saying that the investigations are thorough. Sette said that repeated investigations prevent officers from moving on with their lives, and trap them in a cycle of psychological trauma and financial stress.
West Allis Police Chief Patrick Mitchell, a former president and current legislative chair of the Wisconsin Chiefs of Police Association, also praised the investigative process. Mitchell pointed to the Milwaukee Area Investigative Team (MAIT) as an example of how thorough reviews of deadly force incidents by police can be.
Not everyone was sold on the bill, however. Rep. Andrew Hysell questioned Sette and Mitchell about whether or not it’s possible for a district attorney to make a mistake in clearing an officer of wrongdoing. Sette said although it’s possible, that it’s “incredibly unlikely” because of the thoroughness of deadly force investigations. Hysell said that district attorneys aren’t infallible, and that the bill — if passed — would set in stone a prosecutor’s decision, and deny one legal avenue for families of people killed by police.
Detective Joseph Mensah (right) testifies before the Senate Committee on Judiciary and Public Safety. (Photo by Isiah Holmes/Wisconsin Examiner)
After Moses, Sette, and Mitchell came numerous people from a variety of backgrounds voicing opposition to the bill. Gregory Jones, vice president of the Wisconsin NAACP and president of the organization’s Dane County branch, urged lawmakers to dig deep, ask tough questions, and consider all aspects of how the bill could negatively impact civil rights and the pursuit of justice.
Amanda Merkwae, advocacy director at the American Civil Liberties Union (ACLU) of Wisconsin, stressed that the bill takes away judicial discretion and elevates law enforcement as a privileged class above all other citizens. Merkwae noted that prosecutors and law enforcement have close working relationships, and that district attorneys often rely on the very officers whose actions they’d need to review when citizens are killed.
The advocacy director also cited investigations by MAIT, citing an investigation by Wisconsin Examiner in partnership with Type Investigations, which reviewed 17 MAIT investigations from 2019-2022, all of which resulted in no charges against officers. Merkwae listed the article’s findings including that officers who kill citizens are interviewed as witnesses or victims only, can refuse to have their interviews recorded, and may amend their statements after viewing video evidence. In several MAIT investigations, officers were not separated from one another to prevent statement contamination despite this being a required policy.
Mensah and other officers provided contradictory statements and were not separated from one another after his third shooting. These facts were raised during a federal civil trial into Alvin Cole’s death earlier this year. The trial ended in a hung jury, with jurors unable to unanimously agree on whether Mensah’s killing of Cole was excessive.
Jay Anderson Sr. (left) and Linda Anderson (right), the parents of Jay Anderson Jr. in 2020. (Photo by Isiah Holmes/Wisconsin Examiner)
Merkwae said that last year, Wisconsin had 24 fatal police encounters, up from 14 incidents the prior year. “So by creating a separate standard for police officers, this bill sends the message that they are above the law,” said Merkwae. “Which, I think, is a dangerous precedent that erodes trust and makes community engagement with law enforcement more fraught and less effective.”
Rep. Ryan Clancy (D-Milwaukee) also spoke in opposition. Clancy said that he hadn’t planned to speak on the bill, but decided to when he heard Mensah’s name being used. “The idea that an officer who killed three people in three different incidents is a poster boy for why this is good legislation rather than bad is mindblowing to me,” said Clancy. “Joseph Mensah serves as an example of how our current system is failing the people that it is designed to protect. Had Joseph Mensah been held accountable after the first time he shot and killed somebody, he wouldn’t have shot and killed a second and a third person, in three different incidents. And it is sickening to me that he was brought up as an example of how this is necessary because he feels that some folks are mean to him in trying to find some measure of accountability.”
More people rose to speak against the bill after Clancy. Some were social workers and medical staff, who recounted being spat on, punched, kicked, scratched, and hurt yet never once considering criminally charging the person who hurt them. It’s a privilege that police officers have which they do not, the speakers argued. At one point, a Wisconsinite who wished to be identified only as G. Lee attempted to testify while wearing a hat that used an obscenity to criticize President Donald Trump. Committee Chair Ron Tusler (R-Harrison) called the hat offensive and got into an argument with Lee, after which he called for the assistance of the Capitol Police and called the committee into recess.
Wauwatosa Police Department squad cars responding during a standoff with protesters on July 7, 2020. (Photo by Isiah Holmes/Wisconsin Examiner)
When the hearing re-started, G. Lee was allowed to testify on AB-34 while wearing the hat, though he was warned any breaches of decorum would result in him being removed. Lee apologized that the hat “threatened or offended” Tusler, and stated that Tusler reacted from a position of power. Comparing that to the powers police have, Lee said “what scares me about the decorum set in this room, and the measure tied to this bill, is about power.”
Lee, speaking directly to Tusler, said that when the hearing was stopped because of Tusler’s feelings, “One of my concerns here is that we are privileging the feelings of law enforcement over the feelings of families who’ve actually lost loved ones to bullets. That’s an important thing to consider here. The whole system is set up to protect a particular part of the state power, and you’ve used your state power to make a message.”
This article has been edited to correct a misspelling of Menomonie, represented by Rep. Clint Moses.
Wisconsin’s constitution gives the Legislature two methods for removing judges from office.
Impeachment starts with a majority Assembly vote based on “corrupt conduct in office” or commission of a crime. A two-thirds Senate vote following a Senate trial would result in removal.
“Removal by address” occurs through a two-thirds vote of each chamber, based on misconduct. The judge would have an opportunity to make a defense.
Wisconsin judges run in nonpartisan elections. Bothchambers of the Legislature have a simple Republican majority.
Republicans called for the Legislature to remove Milwaukee County Judge Hannah Dugan after the FBI arrested her April 24. She is charged with two crimes for allegedly obstructing Immigration and Customs Enforcement from arresting a criminal defendant in her courtroom.
The Wisconsin Supreme Court temporarily suspended Dugan. The Supreme Court can also remove judges for misconduct, based on a state Judicial Commission investigation.
Reading Time: 11minutesClick here to read highlights from the story
A new analysis of the formula the state used to distribute new aid to municipalities last session finds a statistically significant benefit to Republican communities.
Municipalities of fewer than 5,000 people received on average a 202% increase in shared revenue, compared with 25% for cities between 50,000 and 110,000. The state’s smallest communities have increasingly voted Republican in statewide elections while the state’s mid-sized cities have more consistently supported Democrats.
As Republicans drafted the legislation that would be signed into law as Act 12 by Democratic Gov. Tony Evers, they adjusted the formula based on population in ways that benefited smaller communities.
Though Act 12 was hailed as a historic turning point, many municipalities continue to ask voters for permission to exceed the state’s strict limits on raising property taxes.
It was a big win for Wisconsin’s small towns.
Soon after the Legislature overhauled local government funding in 2023, reports surfaced of huge increases in state aid for tiny places.
Shared revenue, the state’s primary local aid program, jumped thousands of percentage points for towns and villages with less than 100 residents, while percentage increases were far more modest for the largest cities.
On Wisconsin’s political map, the biggest cities are also the bluest, and those Democratic strongholds are frequently the targets of scorn from the Legislature’s Republican majority. By contrast, small towns are growing ever more red, particularly in rural areas.
An analysis for Wisconsin Watch finds a statistically significant correlation between how a community votes and how much its shared revenue increased under the legislation known as Act 12.
An excerpt from Wisconsin 2023 Act 12, which increased state aid for local municipalities. (Via Wisconsin.gov)
On average, each percentage point of GOP vote share corresponds to a 2.1% increase in shared revenue, according to calculations by Phil Rocco, associate professor of political science at Marquette University.
To swing aid payments toward those small red towns, Republicans broke with the first century of shared revenue history and adopted a complex formula that divides Wisconsin communities into five tiers by their 2022 populations. Rocco found that formula resulted in average increases of 202% for communities of less than 5,000 people, but just 25% for cities with 50,000 to 110,000 residents and 35% for cities larger than 110,000.
Dale Knapp, research director for the Wisconsin Counties Association, drafted the formula using parameters set by lawmakers. Knapp said the initial goal was to give “a bigger bump” to communities that were getting less aid per capita under the old shared revenue formula, but as Republicans saw how specific communities would be affected by different versions of the new formula, they asked for more tweaks based on population size.
Only once before had the state used such an approach. In 2012, when the GOP controlled all of state government, Gov. Scott Walker’s budget also split communities into population tiers, slashing shared revenue more deeply for most big cities than for the smallest towns.
In a state where Republicans notoriously gerrymandered legislative districts by tweaking the lines to lock in their majority, was shared revenue gerrymandered too?
Senate President Mary Felzkowski, R-Tomahawk, responded with a terse “no” when asked if she and her Act 12 co-author, Rep. Tony Kurtz, R-Wonewoc, had any partisan motive. They said they were correcting an imbalance that had shortchanged small communities.
Wisconsin state Sen. Mary Felzkowski, R-Tomahawk, speaks during a Republican press conference on June 8, 2023, in the Wisconsin State Capitol to announce a tentative agreement between legislative Republicans and Gov. Tony Evers on a shared revenue bill. (Drake White-Bergey / Wisconsin Watch)
“The new formula is trying to close these gaps between the communities who had done really well under the old formula and those who did poorly,” Kurtz testified at a committee hearing on the legislation. “The old shared revenue formula directed money at larger municipalities, so the new formula aims more funding at smaller municipalities to try to distribute aid a little better.”
But Democratic lawmakers have no doubt the formula was politically biased, said Sen. Kelda Roys, D-Madison.
“Clearly the way it was developed advantages Republican areas of the state and disadvantages larger urban areas like Milwaukee and Madison,” Roys said. “This Legislature has a history of punishing the biggest cities in the state.”
Democrats introduced several amendments that would have changed the formula to distribute shared revenue increases more evenly among communities of different sizes. All were defeated. That part of the debate received little public attention, overshadowed by clashes over other Act 12 provisions that granted new sales tax power to Milwaukee and Milwaukee County while sharply limiting how they and other local governments could spend taxpayer dollars.
Yet the debate over state aid to local governments didn’t end with Act 12’s passage. Although the legislation was hailed as a historic turning point in public funding, many municipalities are still struggling with tight budgets more than a year later. Dozens appealed to voters to approve property tax increases over the past year.
Instead of revisiting the shared revenue formula or the property tax levy limits that force communities to call those referendums, Democratic Gov. Tony Evers is recommending a different approach in his 2025-27 state budget: For any county or municipality that freezes or cuts property taxes, Evers proposes a new state aid payment equaling a 3% levy increase.
How we got here
All that is a long way from how shared revenue started in 1911. Right after adopting the nation’s first state income tax, the Legislature decided to distribute most of its proceeds to local governments, based on how much income tax their residents paid.
Starting in 1972, lawmakers switched to the first of a series of formulas that used factors such as population, equalized value and local property tax levies. The goal of those formulas was to ensure that all local governments could afford “minimum levels of public services, regardless of their ability to finance those services through their property tax base,” according to a Legislative Fiscal Bureau paper. Because the formulas directed more money to larger cities and to communities with lower property values, the Legislature added an extra boost for municipalities with populations under 5,000, starting in 1994. Similar formulas were used to cut shared revenue in 2004 and 2010, with payments frozen in between.
Back then, the size of a community’s population wasn’t strongly related to its partisan preferences, according to data compiled by John D. Johnson, research fellow at the Marquette Law School’s Lubar Center for Public Policy Research and Civic Education. Democrats like President Barack Obama, Gov. Jim Doyle and Sens. Herb Kohl and Russ Feingold regularly carried many smaller communities.
Then-Gov. Scott Walker speaks at the State of the State address in Madison, Wis., at the State Capitol on Jan. 10, 2017. (Coburn Dukehart / Wisconsin Watch)
But in the “red wave” election of 2010, an overwhelming majority of communities with populations under 50,000 swung Republican to elect Walker as governor. That pattern has held for every gubernatorial election since then, and for most presidential and senatorial elections as well, Johnson’s data show.
Walker’s first budget, for the 2011-13 biennium, again cut shared revenue, but used population tiers that favored the smaller places that had fueled his victory. At the time, he linked the move to his controversial Act 10, which all but eliminated the power of most public employee unions to bargain for wages and benefits. Walker and his aides argued that Act 10 gave larger cities the “tools” to absorb the cuts through such tactics as shifting more health care costs to employees, while smaller communities with fewer workers couldn’t save as much that way.
However, the formula for the 2012 cut still retained some of the old formula’s factors. That allowed Milwaukee to escape with only a 4% trim to its shared revenue. By contrast, Madison’s shared revenue was chopped 25%, and reductions averaged 10% for the next 10 largest cities.
After that, shared revenue was frozen at 2012 levels. Without adjustments for changes in population and property values since 2003, disparities grew, while inflation ate away at the buying power of the stagnant allocations, said Knapp and Jerry Deschane, executive director of the League of Wisconsin Municipalities.
Walker’s 2011-13 budget also tightened the state’s limits on property taxes, blocking local governing bodies from approving tax hikes in most communities without new construction. That forced local officials to seek voter approval for any increases beyond the state limits.
Caught between limited taxing authority, frozen shared revenue and rising costs, Milwaukee and Milwaukee County found themselves careening toward a “fiscal cliff” that would force deep cuts in services. At the same time, Felzkowski said, town officials in her district were warning her that they and their counterparts across Wisconsin were having trouble paying for emergency medical service for rural residents.
Milwaukee Mayor Cavalier Johnson and Milwaukee County Executive David Crowley forged a coalition with other local governments to seek changes to the funding system. Evers responded by proposing a $576 million increase to the $753 million shared revenue program in his 2023-25 budget. Republicans shot down that plan, but started work on the legislation that became Act 12.
In discussions with local government leaders, GOP lawmakers made it clear they didn’t want to change the existing shared revenue formula, Deschane and Knapp said. Felzkowski said other Republican legislators with experience in local government told her the existing formula was “broken,” and they didn’t want to create the kind of “tweaked mess” that resulted from years of incremental changes to the state’s school aid formula.
Instead, Act 12 created a new formula to distribute increases, called “supplemental aid,” in addition to the shared revenue base payments that had been frozen since 2012.
A thumb on the scale?
To analyze the legislation, Rocco developed a database of how much revenue each community would receive, compared with the Evers plan. Separately, Marquette’s Johnson had compiled a database of how every community in Wisconsin has voted in major statewide elections since 2000.
Wisconsin Watch asked the two scholars to merge their databases to determine whether Act 12 was politically neutral in distributing shared revenue increases of $206.9 million to municipalities and $68 million to counties.
Using Johnson’s data for gubernatorial races from 2010 through 2022, Rocco found a consistent and statistically significant bias toward Republican-voting communities in the percentage increases authorized by Act 12. The formula for counties — which didn’t include population tiers — showed no such bias, he said.
The largest proportional boost in municipal shared revenue was 5,748% for Rusk County’s town of Cedar Rapids, which at 36 residents is Wisconsin’s smallest community. The state’s second-smallest community, the town of Popple River in Forest County, scored a 5,070% increase for its 43 inhabitants.
By contrast, the smallest percentage increase, 10%, went to Milwaukee, although the legislation also authorized Wisconsin’s largest city to levy a new 2% sales tax. Shared revenue rose 56% for Madison, with no new sales tax power. Those two cities are the state’s biggest sources of Democratic votes.
Shared revenue increased around 20% for 10 predominantly blue cities with 2022 populations between 50,000 and 110,000, but a 67% boost went to Waukesha, the only red city of that size. Sen. Mark Spreitzer, D-Beloit, said he didn’t think the formula was engineered to favor Waukesha, although he expressed frustration that similarly sized cities like Janesville didn’t get more.
Sen. Mark Spreitzer, D-Beloit, shown during a press conference on Transgender Day of Visibility on March 31, 2025, at the State Capitol in Madison, Wis., says he’s frustrated mid-sized cities like Janesville didn’t get more state aid in Act 12. (Joe Timmerman / Wisconsin Watch)
Drafting notes show the original version of the legislation would have given even lower increases to most cities between 50,000 and 110,000, before negotiations with the governor’s office and others. However, the increases of 22% for Janesville and 67% for Waukesha remained the same in the original and final versions.
Spreitzer said Assembly Republicans, led by Speaker Robin Vos, R-Rochester, “drew that line” between cities above and below 50,000 in population, directing the smallest increases to the bluest cities. A Vos spokesperson did not respond to emails requesting an interview.
Deschane, Knapp, Felzkowski and Spreitzer said percentage increases could be misleading because many smaller towns and villages were receiving such tiny sums to begin with that a gigantic percentage increase still would result in relatively modest dollar amounts. They said per capita figures and total allocations could be more telling.
However, Rocco’s findings for pro-Republican bias in Act 12 are almost identical when looking at the shared revenue increase per capita instead of the percentage increase.
A separate analysis by the nonpartisan Wisconsin Policy Forum highlighted striking variations in per capita allocations among communities of different sizes, based on 2023 populations.
Milwaukee saw the smallest percentage increase in shared revenue under Act 12, although the legislation also authorized Wisconsin’s largest city to levy a new 2% sales tax. (Coburn Dukehart / Wisconsin Watch)
Before Act 12, per capita payments averaged $87 both for communities with less than 1,000 residents and for those with more than 20,000, except for Milwaukee, the Policy Forum found. But with the Act 12 increases, the smallest communities shot up to an average of $157, compared with $114 for the largest, again excluding Milwaukee, the Policy Forum calculated.
While Milwaukee’s per capita payment was $416, Madison’s $28 was the state’s third-lowest, compared with $34 for Waukesha, $76 for Janesville and more than $100 for each of Wisconsin’s seven other largest cities, the Policy Forum said. By contrast, the state’s smallest incorporated municipality, the village of Big Falls in Waupaca County, ended up with the largest total per capita aid: $1,040 for each of its 58 residents.
Rocco’s analysis cites research by other scholars who found that federal aid formulas “offer lawmakers a means of concealing bias” by using “ostensibly neutral” factors to “move aid toward communities they represent,” benefiting similar communities as well.
While Felzkowski denied trying to help red areas, she said her goal was to send more money to rural areas that can’t generate much property tax revenue, yet still must provide services to more remote locations than cities do.
“I’m a rural legislator,” Felzkowski said. “My largest community at the time was 9,000 people, and I represented my district.”
Overall, Act 12 boosted total shared revenue dollars for communities under 5,000 by 64%, compared with a 14% increase for cities of more than 50,000. Shared revenue payments to Wisconsin’s 13 largest cities dropped from 53% of the municipal total to 45%, while the slice for communities under 5,000 rose from 21% to 27%. One-third of the state’s population lives in those small communities, compared with 28% in the largest cities.
Rocco also found evidence of bias toward Democratic-voting cities in the per capita increases in shared revenue that Evers proposed in his 2023-25 budget. Unlike Act 12, the same bias wasn’t consistently statistically significant in percentage increases.
The Evers plan didn’t use population tiers. Instead, it revised the original shared revenue formula, with its per capita and equalized valuation factors, and added a boost based on local public safety spending. That would have benefited larger cities with bigger police and fire departments — the same kinds of cities that typically vote Democratic.
“The partisan affiliation of Wisconsinites impacted or benefited is not a factor the governor or our office consider in making policy decisions,” Evers’ spokesperson said in an email. “The governor proposed more funds be distributed to local communities and consistently pushed for a fairer distribution to mid-major communities while continuing to invest in all towns, cities, and counties across the state.”
Unfinished business
Cities large and small applauded the financial lift they received from Act 12. Milwaukee pulled back from its fiscal cliff, keeping its services and workforce intact. Monona was able to cover inflationary cost increases and hand out 3% raises to its employees, said the Madison suburb’s former Mayor Mary O’Connor.
But it didn’t take long before those cities and others were again facing tough choices. Milwaukee officials said the city had to raise property taxes, fees, fines and borrowing for 2025 to avoid service cuts and layoffs while meeting the public safety spending requirements of Act 12. Monona found itself short of what it needed to keep up with inflation and to pay employees enough to keep other cities from luring them away, O’Connor said.
And even though the Act 12 increases were earmarked for public safety and transportation, multiple communities still needed more to pay for emergency medical, fire and police services. Yet their leaders lacked authority to raise property taxes enough to cover those costs.
“Wisconsin has the strictest property tax limits in the country, and that is an ongoing challenge,” Deschane said.
Because property tax increases are tied to new construction, Monona officials estimate the city would need to attract a $20 million project every year to justify levy hikes sufficient to keep up with its costs, O’Connor said. That’s not realistic for a community with less than 9,000 residents and no vacant land, she added. The city along Lake Monona is hemmed in on all sides by Madison.
Snow falls on the Wisconsin State Capitol before the State of the State address Jan. 22, 2025, in Madison, Wis. (Joe Timmerman / Wisconsin Watch)
Monona, Madison and 40 other municipalities decided to ask permission for higher tax increases. Wisconsin voters last year approved 21 municipal tax referendums, including those in Madison and Monona, and rejected 15. That includes two communities that went to a second referendum after losing on their first try. Another nine such questions were on the April ballot, including a second bid for one community that lost on its first attempt in 2024. Voters approved four and rejected five.
“Were it not for (Act 12), the number of municipal and county referenda in 2024 might have been even greater — and it is notable that even with Act 12, these referenda still reached near-record levels,” the Policy Forum observed.
Act 12 provides for shared revenue to grow as state sales tax collections grow, Deschane noted. Evers is seeking some additional sweeteners in his 2025-27 budget, including a 90% increase in a fund that compensates local governments for providing municipal services to tax-exempt state buildings.
But the governor didn’t propose changing the Act 12 formula to address the inequities that larger cities cited. And the Legislature rejected his 2023-25 budget recommendation to ease the levy limits as many local officials are pleading. Instead, his latest budget calls for $339.8 million over two years in new incentive payments for frozen or reduced levies. Still, many local referendums are seeking larger increases than the 3% boosts that communities could receive from that incentive program.
Evers’ office called Act 12 “a bipartisan compromise” that “delivered a generational increase for shared revenue,” but acknowledged “more is needed to continue to support the sustainability and strength of our communities across the state.” The budget plan represents an attempt to address local concerns about levy limits “while holding the line on property taxes,” the statement said.
Felzkowski and Deschane said they don’t know if the Legislature would support revisiting these issues in the next budget. Both see Act 12 as a major accomplishment, but they agree local government finance reform will continue to be an issue in the future.
“It’s not done,” Felzkowski said. “It’s never going to be done.”
Wisconsin Watch is a nonprofit, nonpartisan newsroom. Subscribe to our newsletters for original stories and our Friday news roundup.
As local governments across Wisconsin continue to wrestle with tight budgets, $300 million in state aid remains unspent.
That money could have provided a major boost to the $275 million in shared revenue increases that the Legislature approved in a historic overhaul of local government funding.
Instead, lawmakers deposited the $300 million in an “innovation fund” to reward cities, villages, towns and counties that cut expenses by consolidating or privatizing services.
It’s an approach championed by Assembly Speaker Robin Vos, R-Rochester, who at one point wanted to reserve $1 billion for the incentive payments, legislative records show. Senate President Mary Felzkowski, R-Tomahawk, says she expects the state’s smallest communities will benefit most from the plan.
But Democrats say the money could have been better used as part of the main shared revenue distribution than in what Sen. Kelda Roys, D-Madison, calls “a set-aside slush fund.”
Act 12, the landmark 2023 local government legislation, increased shared revenue allocations to counties and municipalities throughout the state. Yet even though that cash infusion helped many communities, dozens are still calling referendums to seek voter approval to raise property taxes beyond state levy limits.
Under Act 12, the innovation fund will pay financial incentives to cities, villages, towns, counties and Native American tribes that successfully present proposals to contract with each other to share services or to hand them off to a business or nonprofit organization. Each agreement needs to cut costs by at least 10%, and the state Department of Revenue will give top priority to plans that save money on law enforcement, firefighting and emergency medical response, without jeopardizing service.
The Revenue Department expects applications for those grants will be available in July.
A related $3 million program provides planning grants to communities of less than 5,000 residents to prepare their proposals for the main innovation grants. To date, $1.7 million has been distributed in three rounds to 58 local governments, many of which received more than one of the 98 grants. With nearly half the allocation unspent, the application deadline was extended to April 30, adding two more rounds.
Proposals to combine fire departments and emergency medical services dominate the planning grants awarded so far. Others focus on sharing police, public works and administrative services.
A Vos spokesperson didn’t respond to requests for an interview. But legislative drafting notes indicate he championed the innovation fund — and even wanted it to be more than triple its final size.
“I just talked to the Speaker. He wants to put the whole billion in the first year” of the state’s fiscal biennium, says an email from an aide to Rep. Tony Kurtz, R-Wonewoc, who co-authored Act 12, to legislative staff working on the bill.
During the discussions that led to Act 12 — and for years beforehand — Vos repeatedly questioned whether the city of Milwaukee and Milwaukee County were spending taxpayer money wisely. He urged them to do more to share and privatize services.
Mayor Cavalier Johnson and County Executive David Crowley responded with lengthy lists of how much their governments already had done to cut expenses and share services. The city’s list included establishing a joint recycling center with Waukesha County; reaching mutual aid agreements with suburban fire departments; contracting to take over fire and emergency medical protection for West Milwaukee; and privatizing snow removal at bus stops.
But none of that qualifies for an innovation grant. Act 12 specifies the grants are only for deals taking effect after Nov. 13, 2024, not for any previous moves by local governments.
Felzkowski said she thought the innovation fund would help small rural towns and villages consolidate services. In addition to merging fire departments, she suggested they might find efficiencies by sharing human resources and information technology staff. Sen. Mark Spreitzer, D-Beloit, said larger communities might benefit as well.
But Spreitzer questioned the fund’s emphasis on reducing overall costs instead of improving services. For example, if two or more communities wanted to share a fire chief and use the money saved to hire more firefighters, the state should encourage them to do that, he said.
Gov. Tony Evers’ office did not respond directly when asked what the governor thought of the fund.
While Roys said she is a “big believer in efficiency,” she also believes local governments should consolidate services only if it’s the right thing to do, not because they’re coerced into doing it.
The innovation fund is “kind of holding them over a barrel and forcing them to compete,” Roys said.
Wisconsin Watch is a nonprofit, nonpartisan newsroom. Subscribe to our newsletters for original stories and our Friday news roundup.
Login
