Better Choices: A Blueprint for Avoiding Harmful Budget Cuts
Legislators Can Avoid Deep Cuts without Raising Taxes
Wisconsin needs a budget that invests in the building blocks of a strong economy. Healthy families, safe and stable communities, and a well-educated workforce are assets critical to helping Wisconsin remain an attractive place to live, raise families, and do business. By strengthening these resources, the state budget can lay the groundwork for broad-based prosperity and an economy that works for everyone.
Unfortunately, the budget proposed by the Governor makes deep and unnecessary cuts to investments vital to Wisconsin’s long-term economic success. For example, the proposed budget would reduce resources for public education – a cut that would come on top of dramatic reductions in resources that have already occurred. The budget would also make deep cuts in state support for the University of Wisconsin System, giving a tremendous blow to one of the engines of Wisconsin’s long-term prosperity. The proposed budget would also make it harder for people with disabilities to get the help they need to contribute to their communities.
A budget blueprint released today by the Wisconsin Budget Project lays out a plan for avoiding deep cuts proposed by the Governor. As the following graph illustrates, the new budget plan accomplishes that objective by reallocating resources and eliminating new tax cuts rather than raising any taxes.
The alternative budget proposal would free up an estimated $782 million by making three changes:
- Saving an estimated $345 million by expanding access to BadgerCare for adults with low incomes, which would qualify Wisconsin for a much larger share of federal Medicaid funding;
- Freeing up $226 million by capping a new corporate tax break that is now expected to cost more than twice the amount originally anticipated; and
- Halting the proposed expansion of the school levy credit, because it diverts funding from more important priorities and does little to help most Wisconsinites.
The Wisconsin Budget Project recommends using the funding generated by those changes in the following ways:
- Restoring the $300 million that the budget bill proposes cutting from the UW System budget;
- Providing $200 million more than the Governor proposed for public schools – to eliminate the proposed cut of $150 per student in the 2015-16 school year and to provide $73 million more than the Governor recommended for general school aid (while adjusting revenue caps to allow school districts to spend the increased aid);
- Removing the significant cuts in health care services for seniors, people with disabilities, and very low‑income adults, which are projected to save $33 million in the 2015-17 biennium;
- Using $11 million to adjust the Homestead Tax Credit and about $26 million to undo the cut made in 2011 to the state Earned Income Tax Credit (EITC), beginning in tax year 2016; and
- Using at least $50 million (of the remaining $212 million) to increase the state’s very meager budget reserves, and using the rest to mitigate other harmful spending cuts in the proposed budget.
Further details can be found in “Better Choices for the Wisconsin Budget: Legislators Can Avoid Deep Cuts without Raising Taxes.”
Jon Peacock and Tamarine Cornelius