Photo by Michelle Stocker, The Capital Times

Senate Majority Leader Scott Fitzgerald says lawmakers may split with the governor on several areas in his budget, including funding for K-12, tax cuts, the school choice program and self-insurance, among others.

Fitzgerald predicted lawmakers will agree to increasing funding for K-12 education in the upcoming biennium. But he wouldn’t commit to the $649 million that Walker proposed.

“There’s a lot of different places where the new revenue could go,” Fitzgerald told a luncheon in Madison Thursday.

Fitzgerald told today’s luncheon lawmakers could “absolutely” seek to further expand the state’s school choice program in the coming budget.

Fitzgerald, R-Juneau, said he’s “not sure” why Walker’s budget proposal didn’t include, for example, increasing the current caps on the program’s growth in each district. He predicted GOP lawmakers will continue their “pretty substantial effort” in past sessions to expand school choice.

On self-insurance, Fitzgerald said lawmakers have always been curious about whether the change would save money. Walker’s proposal would have the state work with several third-party administrators to pay employees’ health claims directly, rather than paying monthly premiums to health insurance companies.

Walker’s office says the move would save $60 million in the next biennium, but Fitzgerald said that was “far less than what most people anticipated.”

The proposal, Fitzgerald noted, would cause some health insurers to lose a major chunk of their current enrollees, raising a possibility that those companies “could falter.”

“Now that you’re not seeing those types of numbers, people are worried about the job loss it could create across the state,” Fitzgerald said.

He said self-insurance was the “perfect type of item” for the Legislature’s Joint Finance Committee to evaluate. Yesterday, the state Group Insurance Board kicked off the process for negotiating the self-insurance contracts, but those contracts will need approval from JFC.

Fitzgerald was also skeptical of Walker’s proposal to cut income tax rates for the lowest two brackets, which Fitzgerald said amounted to a “meager” cut that may not result in “enough bang for the buck.”

Instead, Fitzgerald said, lawmakers might look to eliminate other smaller but “more effective” taxes such as the utility tax.

A coalition of business groups has also pushed for a repeal of the personal property tax, saying it’s now riddled with several unfair exemptions that leaves some businesses paying taxes on items like time clocks. But Fitzgerald said that might be a harder lift since that would lead to local governments asking the state to backfill their decreased revenues.

“I’ll eliminate any tax as long as you figure out a smart way of doing it. … You’ve got to know what the fallout is,” the Juneau Republican said.

He also pushed back against comments from Vos, R-Rochester, that the budget debate could go into October. Lawmakers, he said, don’t want to head to their Fourth of July parades without getting a budget approved.

“I don’t see this thing going beyond 1 July,” Fitzgerald said.

See more on the luncheon later today in the REPORT:

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