Gov. Tony Evers Tuesday night called for nearly $1.3 billion in new spending on mental health initiatives, addressing PFAS and bolstering the state’s workforce while calling for a big boost in state aid to local governments.

In his annual State of the State speech, Evers also knocked a GOP proposal to implement a flat income tax as a giveaway to the wealthy. And he used his fifth address to back a proposal to use up to 20 percent of sales tax revenues to boost shared revenue.

Evers had previously expressed skepticism of the suggestion to dedicate one penny of the state’s five-cent sales tax to increase the aid Wisconsin sends municipalities and counties. But he pitched his new openness to the idea as an effort to find common ground as the Dem guv once again faces a GOP-controlled Legislature that blocked many of his priorities during his first four years in the office.

Evers said the idea would mean an additional $500 million a year in new resources for local costs, including public safety, transportation and health.

“The state must fulfill its obligation to fund our communities, just like we must fully fund our public schools and invest in clean water,” Evers said. “Our state, our economy and our workforce depend on these investments.”

Beyond the $500 million boost in shared revenue, WisPolitics.com tallied nearly $1.3 billion in spending proposals Evers included in his speech. The biggest chunk was $500 million to address mental health, while he also proposed more than $360 million to make child care more affordable and another $100 million to help address PFAS.

Senate Majority Leader Devin LeMahieu and Assembly Majority Leader Tyler August decried Evers for taking credit for Wisconsin’s prosperous economy, arguing Republicans set the stage for Wisconsin’s fiscal success. 

LeMahieu, R-Oostburg, also blasted the guv for proposing nearly $1.3 billion in new spending.

“Well, it’s great that the governor recognizes how good our economy is doing,” he said. “The economy that we set up for him with our last two responsible budgets, tax cuts, responsible spending, producing the surplus that we have today, but boy, he sure is trying to spend a lot of money.”

August, R-Lake Geneva, added it’s one-time money that Evers wants to put toward ongoing costs, arguing that would put Wisconsin in debt over the long run.

“So he took a lot of credit tonight for the Republican Legislature’s work over the last four years,” August said. “But he won’t take any responsibility for some of the problems that he caused by shutting businesses down and locking teachers and students out of their classrooms.” 

Evers didn’t offer specifics on how he wanted to boost funding to local governments through the sales tax. 

His administration in November projected the state would take in nearly $7.5 billion in sales taxes during the fiscal year that ends June 30. The administration projects that will increase to almost $7.7 billion in 2023-24 and more than $7.9 billion in 2024-25.

Twenty percent of that would range from $1.5 billion to nearly $1.6 billion. 

The state budgeted just more than $700 million in direct aid payments to counties and municipalities in the current fiscal year. Adding in other direct payments pushes that total to just over $1 billion.

LeMahieu said the approach is similar to one Republicans have been working on.

“So it’s good to see that he may be somewhat supportive of a plan we put in front of him,” he said.

Evers, fresh off his reelection in November, used the speech to take a victory lap, tout his successes and call for new spending in the upcoming budget he’ll release Feb. 15.

He noted Wisconsin celebrates its 175th birthday this year while adding, “our state has never been in a better fiscal position than it is today.”

But Evers argued it was no time to be careless with a budget surplus that is expected to near $7 billion for the fiscal year that ends June 30.

Evers vowed cutting taxes will be part of his budget. But he knocked a GOP flat tax proposal, arguing that “splurging $3.5 billion to hand out big breaks to the wealthiest 20 percent of earners isn’t responsible; it’s a bit reckless.” 

LeMahieu and Rep. Rob Brooks, R-Saukville, earlier this month proposed moving the state to a flat tax over four years.

“Wisconsinites have worked too hard and have gone through too much for us to return to austerity,” Evers said. “Now is the time to stay prudent, to save smart, and to be bold with reasonable investments to keep building a lasting legacy of prosperity.”

In delivering the official GOP response, Assembly Speaker Robin Vos, R-Rochester, said Republicans’ priority in the upcoming budget will be cutting taxes and helping Wisconsinites cope with rising inflation “to make living here less expensive while maintaining our wonderful quality of life.”

He said Republicans have led the way over the past decade in reducing state and local taxes by $22 billion, but Wisconsin has a long way to go with neighboring states having a lower income tax burden.

“We must do better to remain competitive, and I promise we will,” Vos said.

Of the nearly $1.3 billion in new spending Evers proposed, the biggest chunk was $500 million for new mental health programs.

The guv declared 2023 the “Year of Mental Health,” calling for $270 million to build on a program he created with federal pandemic funds to provide school districts resources to expand mental health services.

Evers said he will propose another $230 million to expand access to mental and behavioral programs across the state.

The guv broke from his prepared remarks to tell lawmakers mental health wasn’t an issue on “just this side” but “this side also.”

“We cannot look back two years from now as we prepare the next budget and wonder whether we should’ve done more and sooner to take good care of our mental health,” Evers said. “Let’s take this seriously, and let’s start today.”

Evers’ child care proposals include providing more than $340 million in state dollars to a program he began with federal COVID-19 funds to help subsidize providers. He also wants to put $22 million into expanding partnerships between employers and child care providers. And he called for expanding the Child and Dependent Care Credit to provide nearly $30 million in tax cuts to more than 100,000 Wisconsinites.

Senate Minority Leader Melissa Agard, D-Madison, told WisPolitics.com she’s “super excited” Evers said he wants to invest in mental health and child care resources. 

“Those are things that I have heard from a lot of people in my district that matter,” she said. “And really, if we want to get people to work — as people want to and as our businesses are asking for — those are two really pragmatic ways that we can make that happen.”

Other new spending he proposed includes:

  • $100 million for a three-pronged approach to PFAS, including an increase in testing, sampling and monitoring, more resources to treat contamination, and an awareness campaign.
  • $100 million for the Workforce Innovation Grant program, which helps regions of the state address workforce challenges
  • $50 million to boost the state’s health care workforce, including increasing the number of mental health providers and expanding a nurse educator program.
  • $50 million to provide as many as 5,000 businesses grants of up to $10,000 to help with expenses such as repairs and mortgage payments.
  • $10 million for an initiative through the Wisconsin Economic Development Corp. to work with industries to retain and attract workers.
  • Nearly $10 million to expand clean energy job training and reemployment.
  • $5 million in state funds to build on a program Evers created with federal COVID-19 money to provide small businesses assistance such as mentorships and educational training.
  • $20 million to recruit, develop, and retain teachers and student teachers. Evers also said he wants to make it easier for districts to hire retired teachers and staff. 
  • $20 million to increase literacy-related programming and implement new reading practices across Wisconsin. 

Assembly Minority Leader Greta Neubauer, D-Racine, said the priorities Evers laid out such as clean drinking water, access to child care and education are “pressing issues” the state can’t wait to address.

“And we need to make sure we’re setting up our state to be in a strong financial position in years to come, which means not providing a significant windfall for the wealthiest people in Wisconsin at the expense of our long term ability to have sustainable revenue,” Neubauer said, referencing a GOP proposal to implement a flat income tax.

Watch the address here.

See Evers’ prepared remarks.

See the Press Release page for more reaction.

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