Legislative Updates

LFB projects $4.3B surplus

A new report from the Legislative Fiscal Bureau estimates the state will end the 2023-25 biennium with a $4.3 billion surplus, $268 million more than a previous report issued by LFB two months ago. The growing surplus is attributed to a $240 million increase in estimated tax collections in 2024-25, as well as higher than expected non-tax revenues from state agencies and lower spending. Meanwhile, LFB also projected the state’s tax revenues for the next three years to be $895 million higher than it estimated in its November 2024 report. According to LFB, the improved outlook is based on updated sales tax collection data and the most recent national economic forecast. Also of note in the report, LFB anticipates $1.85 billion in higher individual income tax collections over the next three year period, but those gains are expected to be offset by $1.6 billion less in corporate income/franchise tax collections.

Reacting to the new report from LFB, Joint Finance Committee co-chairs Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam) said in a press release the updated estimates “reflect the success of Republican budgets for more than a decade,” and demonstrate that “not only can we continue to fund our obligations and priorities, but that we can also give substantial tax relief to hard-working Wisconsinites.” However, despite the optimistic forecast, Sen. Marklein and Rep. Born also signaled Republicans would take a conservative approach to the upcoming budget. “While we are encouraged by these new estimates, we remain cautious as we head into the next biennial budget. Our cost-to-continue remains substantial and even with these expected revenue increases, we must remain vigilant when crafting a budget for Wisconsin.”

Gov. Tony Evers will deliver his budget proposal February 18th. Both the governor and Assembly Speaker Robin Vos (R-Rochester) have offered competing visions for how they’d like to use the state’s surplus funds. While Gov. Evers has called for increased funding for child care, education, and mental healthcare in the next budget, Speaker Vos has said the surplus dollars should largely go towards tax cuts.

Administration Updates

Wisconsin sues to prevent

federal spending freeze

Wisconsin is one of 23 states joining California Attorney General Rob Bonta’s lawsuit to block implementration of the Trump Administration’s directive to freeze certain federal spending as it reviews whether the outlays are in line with the president’s agenda. The Administration directed “Federal agencies to temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the President’s executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

Governor Tony Evers sent a letter to President Trump to delay the directive, claiming it could have “disastrous consequences” for Wisconsin. “With very few details and specifics available, virtually no time for ample review and consideration, and no direct communication to date, states are left to plan for the worst, and Wisconsinites and millions of Americans who are rightfully alarmed and concerned by this unprecedented decision are left scrambling,” Gov. Evers wrote.

A day after the directive was issued, a federal judge in a separate case halted implementation. Following that decision, the White House rescinded its directive, though that wasn’t enough to stop the judge in the Attorneys General case from allowing the request for a restraining order to proceed. The issue remains in litigation.

Court Updates

Hagedorn recuses from collective

bargaining case

Conservative Justice Brian Hagedorn said he would recuse himself from an upcoming state Supreme Court case that will determine whether public employees have collective bargaining rights in Wisconsin. The case before the court seeks to invalidate a law passed in 2011, known act Act 10, that curtailed the ability of public sector employees to collectively bargain. In his order to the court, Justice Hagedorn noted that recusal on the Supreme Court should be rare and “only done when the law requires it.” However, he acknowledged because he had “provided legal counsel in both the initial crafting and later defense of Act 10,” he was legally obligated to recuse from the case.

The move comes just days after Democrats and Republicans in the legislature issued competing calls for certain justices to be removed from the Act 10 case. While Assembly Minority Leader Greta Neubauer (D-Racine) and Senate Minority Leader Dianne Hesselbein (D-Madison) had called for Justice Hagedorn’s recusal, Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Devin LeMahieu (R-Oostburg) filed a motion seeking to force liberal Justice Janet Protasiewicz off the case. In that motion, the GOP legislative leaders said past public comments in opposition to Act 10 made by Justice Protasiewicz during her 2023 Supreme Court campaign called into question her ability to be impartial when ruling on the case. A ruling has not yet been issued by the court on the motion for recusal, however, Justice Protasiewicz did not participate in a recent procedural motion in the Act 10 suit that asks the Supreme Court to directly take up the appeal.

The state Supreme Court has a 4-3 liberal majority with the next election on April 1, 2025, that will either leave liberals with a guaranteed majority on the court until 2028, or conservatives with a majority until at least 2026.

SCOWIS will hear case on Evers’

partial veto authority

The Wisconsin Supreme Court has agreed to hear the case which will decide if Governor Tony Evers (D) correctly used his partial veto power on a reading package which passed last year. The decision on the case will also determine if GOP lawmakers can continue withholding $50 million needed to fund the initiative. Gov. Evers and the Department of Public Instruction (DPI), as well as Republican lawmakers had appealed different parts of Dane County Judge Stephen Ehlke’s ruling in the case.

Republican lawmakers want to overturn Judge Ehlke’s ruling that Gov. Evers properly exercised his veto authority on the reading package, including allocating the funding in the state budget. In Wisconsin, Governors can use their partial vetoes only on appropriation bills, and GOP lawmakers argued the bill set the framework for the funding and was not actually an appropriation bill. Meanwhile, Gov. Evers and DPI want to overturn Judge Ehlke's rejection of their request to require the Legislature to release the $50 million before it lapses into the general fund on June 30.

Election Updates

IRG releases polling for Supreme Court race

The Institute for Reforming Government released a poll on the state Supreme Court race, finding conservative candidate Judge Brad Schimel ahead of liberal candidate Judge SuSan Crawford. Among registered voters, 40% of respondents supported Judge Schimel while 35% backed Judge Crawford. 23% were unsure, and 2% said they will not vote. RMG Research Inc surveyed 800 randomly selected registered voters online from January 17-21. The margin of error was +/- 3.5 percentage points. FiveThirtyEight gives RMG 2.3 out of 3 stars.

Schimel airs second TV ad

State Supreme Court candidate Brad Schimel is up with his second ad, saying he “put pedophiles behind bars, took on criminal illegals and cartels, protected kids and seniors from abuse.” Judge Schimel in the ad says, “Law school taught me the rights of the accused, but justice for the abused is denied all too often. I’m Brad Schimel on the state Supreme Court. I’ll apply the law equally because everyone has the right to feel safe.”

Kinser launches first digital ad

State Superintendent candidate Brittany Kinser released her first digital ad where she emphasizes her background as a special education teacher, former principal, and student literacy advocate. “I’m running for state superintendent because I want every child to read, write and do math well. I want to restore high standards and partner with parents. I want to guarantee funding reaches classrooms and supports teachers, and I want transparency, predictability and innovation at DPI,” Ms. Kinser says. The ad is running on social and digital platforms and targets likely voters.

Watch the ad here.

Committee Schedule

February 3rd - February 7th

Assembly Committee on Campaigns and Elections

February 4, 2025, at 10AM

Upcoming Events

February 7th at 12:00PM - Meet the DPI Candidate- Meet & Greet with Dr. Jill Underly (virtual)

February 14th at 12:00PM - Meet the DPI Candidate- Meet & Greet with Jeff Wright (virtual)

February 18th at 11:30AM - State of Wisconsin Fiscal Update and 2025-2027 Budget Outlook with JFC Co-Chair Sen. Howard Marklein (virtual and in-person options available)

February 19th at 11:30AM - Meet the Cabinet: Public Service Commission Chair Summer Strand (virtual and in-person options available)

RSVP to Lauren Lubenow at lauren.lubenow@michaelbest.com if you'd like to attend any of these events

ABOUT US

If you would like any additional information about the above topic, or if you would like to find time to discuss the above matter in more detail, please do not hesitate to contact your Michael Best Strategies contact.

Have a great day,

Wisconsin GR Team