Crunch Time in the Joint Finance Committee; Key Decisions Come to a Head Tuesday
The Joint Finance Committee (JFC) convenes again on Tuesday, June 4, in what is expected to be its last meeting on the biennial budget bill. The committee has to tackle three of the biggest parts of the budget – tax policy, K-12 education financing (including school vouchers), and Medicaid issues.
Many members of the majority party have said that they would like to provide more funding to public schools than the very small amount recommended by the Governor. But they have to balance their interest in doing that – by using some of the general fund surplus and increased tax growth in the next biennium – with their desire to use that funding to cut income taxes more than the Governor proposed.
Also, as I noted in Wednesday’s blog, proponents of the tax cuts have to balance the size of those cuts with the higher GPR cost of the Governor’s BadgerCare plan – which covers a lot fewer people at a much greater cost ($119 million more in 2013-15 and $460 million more from January 2014 through June 2020). The Governor’s choice seems to be driven primarily by political and ideological considerations, rather than fiscal considerations, but the fact that he underfunded his proposal creates a fiscal problem for the legislators who want to back his decision not to accept then enhanced federal Medicaid funds for closing a large gap in BadgerCare.
A complicating factor is the understandable desire of many legislators, including some of the fiscal conservatives, to avoid creating a large structural deficit in the following biennium (2015-17). That’s a very high priority for a few GOP Senators who could be swing votes on the bill. Although it might be pretty easy to devise a plan that splits the new general fund revenue between tax cuts, schools and Medicaid, it’s very challenging to avoid using the current surplus to achieve those objectives without creating a large budget hole at the outset of the next biennium.
GOP leaders will be busy in behind-the-scenes meetings on Monday and Tuesday developing “omnibus” motions that combine decisions relating to numerous different Fiscal Bureau papers. In developing those motions, they are probably striving to develop compromises between the various factions within the Republican caucuses in each house — compromises that will not only win broad support among the GOP members of the Finance Committee, but will also minimize intra-party disputes as the budget proceeds. We are likely to learn on Tuesday (or perhaps the wee hours of Wed. a.m), how most of the Republicans in the legislature have decided among themselves to balance their fiscal, political and ideological priorities.
A full list of the items being considered by the committee on Tuesday can be found here, with links to each of the papers.