State Budget Signed into Law!

Funding for Shared Revenue, Housing, PFAS, Transportation and More

Today, Governor Evers signed the biennial 2023-25 State Budget into Law. This budget provides historic increases in shared revenue funding, housing, PFAS, and more, and it also includes income tax cuts. We are grateful to the Senate, the Assembly, and the Governor for the hard work done on this monumental budget. The budget contains numerous provisions, and we wanted to highlight the issues that are especially important for villages and cities across the state. Amazingly, all of the League’s legislative priorities for this session have been included in bills recently signed into law with corresponding funding for the bill given in this state budget. The only bill that needs final resolution is the PFAS Bill, and we are grateful to the bill authors for their hard work on this important issue.

Shared Revenue

The state budget provides the funding for the provisions of the Shared Revenue Bill, signed into law as Act 12. Specifically, the budget transfers an ongoing 20% of sales and use taxes (a penny of the sales tax) to the newly created local government fund. The budget also funds the $300 million for the Innovation Fund, and the $3 million for innovation planning grants.

Annual Transfer of Local Government Fund Balance Partial Veto:

The state budget sent to the Governor did much for Shared Revenue funding, and we are grateful. However, it did transfer back to the general fund the unused balance of the local government fund at the end of each fiscal year. The Governor used his partial veto power to remove this provision to ensure that the local government funds stay with local governments. This is important because it retains the full 20% in the local government fund, and it is the first step in making sure local governments really receive the penny!

Innovation Grants Partial Veto:

The state budget provides for the distribution of innovation grants and innovation planning grants, for a newly created Innovation Fund in the Shared Revenue Bill that was signed into law. The budget language that was sent to the Governor required any unused balances in these funds to lapse back to the general fund. The Governor used his partial veto power to ensure that unused balances of the innovation grant and innovation planning grant money remains in the newly created local government fund to provide the state with the necessary budget flexibility to address unmet county and municipal needs. The intent of this partial veto is to ensure that this money be used to extend Innovation Fund programs in the future or to increase other state aids to counties and municipalities. We appreciate this veto and the protection of the Innovation Fund for local governments.  

Housing

The Legislature passed a package of Housing Bills that will provide workforce and senior housing across the state, and the Joint Finance Committee then provided $525 million in the state budget to fund the Housing Bills. Specifically, this budget provides $50 million in one-time funds to the Wisconsin Housing and Economic Development Authority (WHEDA) to support a housing rehabilitation program to low- to moderate-income households to renovate or repair their current home and address hazards like lead and mold. It invests $275 million in one-time funds for the newly created Residential Housing Infrastructure Revolving Loan Fund at WHEDA to support the creation of new affordable and senior housing. It provides $100 million in one-time dollars to fund the newly created Main Street Housing Rehabilitation Revolving Loan Fund at WHEDA to improve rental workforce housing on the second or third floor of existing buildings. It also allocates $100 million in one-time funding for the newly created Commercial-to Housing Conversion Revolving Loan Fund at WHEDA for the conversion of vacant commercial buildings to new residential developments of workforce or senior housing.

PFAS

The state budget provides $125 million in PFAS funding to help fight PFAS contamination across the state. Senate Bill 312/Assembly Bill 312 creates several new grant programs and requirements relating to PFAS, and this bill will likely receive much, if not all of the $125 million set aside in the state budget to help ensure clean drinking water for communities and families that are dealing with PFAS toxicity in their drinking water, in their biosolids, and on their land. 

Transportation

The state budget includes many transportation provisions, including a one-time GPR transfer of $555 million to the transportation fund, a 2% increase in general transportation aids in each year of the biennium, a 25% increase in connecting highway funding, a one-time, $100 million increase in the Local Roads Improvement Program, $150 million in the newly-created Local Roads Improvement Program-Agriculture (ARIP), a 2% increase in mass transit operating aid, increases in State Highway management and operations, and funding for the Local Bridge Improvement Program.

Transportation Partial Veto:

Even before this state budget, there have been uneven distributions in the Transportation Fund. The state budget provides 2 percent increases in each year of the biennium for the general transportation aids program for both counties and municipalities. This stays intact in the enacted state budget. However, the Governor did use his partial veto power to delete mileage aid payment increases, stating that the disparate impact of 2011 Wisconsin Act 32 on the mileage aid versus share of cost aid components of the general transportation aids formula remains unaddressed. We agree, and this is something the League has been researching.     

Going Forward

Look for future League communications and trainings related to our priority legislation implementation. 

The League will be working with our members and DOR on the implementation of the Shared Revenue Bill (now Act 12). 

We will be working with WHEDA on the housing incentives implementation and the legislature and the DNR to get the much-needed PFAS Bill over the finish line. 

As always, please contact us with any questions. We are grateful for you! Much of this is because of your hard work and advocacy.  

Remember Tuesday’s noon zoom roundtable meeting. We’ll be covering a lot of this. Excited to see you all then!

To learn more, visit the Municipal Agenda on the League's website.