Legislature Passes “Compromise” Budget Bill; Gov. Evers Quickly Signs It into Law

After a marathon floor session, the Legislature yesterday passed a “compromise” $111 billion state budget bill. The two-year spending plan for the state, which was crafted and passed with bipartisan support, was then quickly signed into law by Gov. Tony Evers at 1:30 AM today. The urgency was driven by the need to sign the budget into law before Congress completes their work on the federal reconciliation bill that would have blocked the state’s plan – included in the budget bill – to increase a hospital assessment to draw more federal health care funding to the state.

The newly minted budget spends most of the state’s $4 billion-plus budget surplus and increases overall spending by 12.4% over current law.  According to estimates, the budget would leave the state with a $829 million balance in the general fund at the end of the 2025-27 biennium.

Although WEDA did not have many budget priorities – as most of our Legislative Agenda will be addressed through stand-alone legislation – there were a handful of key economic development initiatives included in the bill. Please find below highlights from the budget bill that may be of interest to WEDA members:

  • Tax Cut Package: The budget bill contains a $1.5 billion tax cut package that includes:
    • A middle-class tax cut that largely targets taxpayers with income below $200,000 by expanding the state’s second lowest income tax bracket. Under the plan, state taxpayers will see an average tax cut of $180.
    • Reduces the state income tax on retirement income by making the first $24,000 of retirement income for those 67 and older tax-free.
    • Eliminates the 5% sales tax on electricity.
    • A film production tax credit to encourage the industry to operate in Wisconsin.
  • Talent Attraction: $5 million for a WEDC program to award talent recruitment grants to local communities for the purpose of incentivizing households outside of Wisconsin to relocate to Wisconsin.
  • Childcare: A $330 million investment in childcare, including:
    • $110 million in direct payments to childcare providers to help providers with operational costs, reduce wait lists, and lower childcare costs for families.
    • $66 million to support childcare providers serving four-year-olds while preparing them for the classroom.
    • $2 million for a grant program to help childcare providers build capacity and cut childcare wait lists.
    • $28.6 million for a pilot program to help providers accommodate more infants and toddlers.
    • The budget also includes policy changes to allow large family care centers to serve up to12 children and lower the minimum age for assistant childcare teachers to 16.
  •  UW System: Provides an increase of over $256 million for the UW System.
  • Transportation: Provides an additional $200 million in transportation funding.

The WEDA Government Affairs Team continues to fully analyze the budget bill and will provide additional updates to members as necessary.