|
Legislature Takes Final Action on State Budget
BREAKING NEWS: Just moments ago, the Wisconsin State Assembly voted to approve the 2025-2027 Wisconsin State Budget. With the Senate's approval earlier this evening, 2025 Senate Bill 45 now heads to the Governor who is expected to sign the bill in the early morning hours of Thursday, July 3rd.
After negotiations broke down twice over the previous weeks, legislative leadership and the Governor again resumed negotiations on the 2025-2027 State Budget. This came as a deadline was quickly approaching to make changes to hospital reimbursements before Congress approves Medicaid cuts.
And as they say... third try is the charm. Early Tuesday, the Governor and legislative leadership announced a deal which was followed by Joint Finance Committee passage Tuesday afternoon. After around 15 hours of legislative sessions and caucuses, the budget has passed both chambers on bipartisan votes yesterday and today.
Many of the League's priorities for the 2025-2027 State Budget were included in this agreement. To highlight some of the important items for municipal leaders in the budget, here's ten things you need to know.
1. Shared Revenue - As a follow up to 2023 Wisconsin Act 12, the first increase to shared revenue payments in over two decades, with action in this budget, cities and villages will see their first sales tax increase this year of 2.3%. Next year, the increase will be 3.4%, followed by an estimated 2.9% in 2027. With these increases and other budgetary actions, the League was able to protect the penny and ensure cities and villages see the growth in the sales tax reflected in their disbursements.
2. Environmental Improvement Fund - The Clean Water Fund Program for wastewater utilities and Safe Drinking Water Loan Program for water utilities, collectively known as the Environmental Improvement Fund, finances capital projects necessary for clean water around the state. After falling short of needs in the last biennium, a huge investment was critical to meet capitalization needs to draw down federal funds and ensure Wisconsin projects receive a loan. After just $46.0 million was approved in the last budget, $732.3 million was approved in this budget, ensuring projects aren't delayed and saving ratepayers money over the life of the loan!
3. Municipal Services Payments - It's been 22 years since the amount allocated for Municipal Services Payments, or the way the state pays their bills for municipal services at state-owned facilities, has been increased. In that time, the state has fallen to only paying an average of 37.6% of their bills, causing other property taxpayers to pick up the rest. After two decades of stagnation, a significant League initiative helped push reimbursements higher by $7.0 million per year, raising the reimbursement percentage to over 50%.
4. General Transportation Aids - Cities and villages on average only have about 14% to 16% of their roadwork construction and maintenance costs covered by state aids through GTAs. Simply, GTAs have failed to keep pace with inflation over the last two and a half decades, resulting in more projects being delayed and more projects being bonded. A 3.0% increase in each year of the biennium for this budget doesn't cause us to close the gap and catch up, but it does help to ensure we don't fall further behind and represents a higher increase than we've seen in previous budgets.
5. Local Roads Improvement Program - While GTAs are meant to fund the day-to-day needs of municipalities, the Local Roads Improvement Program is meant to assist with those major reconstruction projects to lower annual maintenance costs in the near term for a municipal project that may otherwise be delayed. Now funded four budgets in a row, LRIP will provide $100 million to local transportation projects over the next two years, creating a smoother ride ahead for many Wisconsinites.
6. Shared Ride Taxi Funding - Transit exists throughout the state, including through the Tier C transit system which serves populations between 2,500 and 50,000. Between a few bus services and many shared ride taxi services, Tier C exists communities throughout the state. With nearly $2 million in new funding approved, Tier C transit will be seeing nearly 30% more funding in the second year of the biennium than base funding, minimizing the impact of a handful of Tier B systems that will move into Tier C which causes Tier B systems to also see an increase. Finally, paratransit aids are increased by 10% in the first year of this budget.
7. Emergency Medical Services Training - Recognizing the need for more EMTs throughout the state, the budget sets aside $10.5 million to fund programs created by a bill that's worked its way through bipartisan committee votes in both chambers. Specifically, the Wisconsin Technical College system would receive grants for the provision of EMS courses, and employers that pay for their new EMT's initial training expenses could be reimbursed for those costs. The bill will have to be passed and signed into law before the funding is released to these new programs. Stay tuned for further action on these trailer bills.
8. Talent Recruitment Grants - With the dwindling population of eligible workers both for municipalities and for private employers in cities and villages, we need to take an all-the-above approach to ensure we're not shrinking in population. $5 million was provided in the budget to allow municipalities to market themselves or provide direct incentives to out-of-state households who move to their municipality. Cities or villages could receive up to $500,000 per year from the Talent Recruitment Grant Program.
9. State Film Office and Tax Credits - Recognizing the continued need to market Wisconsin as a destination in many ways, the 2025-2027 State Budget also creates the State Film Office, hires a director for the office, and allows the director to certify tax credits of up to 30% of eligible expenses to produce films in Wisconsin. Getting us on the big screen or on your TV screen will help to show all Wisconsin has to offer... and it's a lot!
10. Childcare Programs - The workforce challenge isn't just a result of a dwindling pool of eligible workers, it's also due to otherwise eligible Wisconsinites leaving the workforce, moving out of your municipality, or exiting the state due to rising costs. Childcare is one of those big costs for young families. With over $175 million in new funding invested in various childcare programs paired with regulatory changes, providers will have assistance to ensure that slots are available and affordable for young Wisconsin families.
The League would like to express our gratitude to the Joint Finance Committee members, led by Co-Chairs Marklein and Born, legislative leadership, and the Governor for working through differences and crafting a compromise that builds on yesterday's progress and provides a path for tomorrow's success.
For a full recap of provisions of municipal importance in the 2025-2027 State Budget after it's enacted and into law, watch for Monday's Legislative Bulletin.
| 
