By CJ Szafir
With the full legislature scheduled to vote on the state budget this week, the debate can be summarized as follows. Democrat Governor Evers is advocating for unprecedented state spending increases – on top of net billion-dollar tax increases – on top of unprecedented spending increases from the federal government through COVID relief funding. In stark contrast, the Republicans on Joint Finance Committee want to keep the state tax burden on everyday Wisconsinites as low as possible while utilizing federal COVID relief funding to increase investments in K-12, higher education, and medical assistance (among other policies).
At heart of the disagreement is what role federal COVID relief funds should play in deciding how to craft Wisconsin’s state budget. Last February, in a state budget preview for Empower Wisconsin, I wrote: “the #1 story of the state budget: federal money.” And that was before the Biden Administration spent over $2 trillion in the American Rescue Plan.
In the last year, the federal government funneled over $40 billion into Wisconsin in the name of COVID relief. It went to businesses, state government, schools, and residents. This has produced some jaw dropping numbers and statistics that are almost hard to fathom.
With that in mind, here are the three most shocking numbers related to the federal COVID relief funding that will help the public better understand the state budget debate.
- Without any additional state funding, COVID relief funding alone will increase spending on Wisconsin’s K-12 schools by 15%, giving massive increases to big districts like Milwaukee ($11,242 / student), Racine ($5,138 / student), Beloit ($5,292 / student), etc.
This will happen even though at the start of 2021, only 20% of Wisconsin school districts were fully open to in-person learning, five days a week, according to AEI. The biggest culprits of school closures were large urban districts, which already receive a significant amount of non-COVID related federal funding (Title 1).
Looking at the chart below, which adds COVID relief funding to the existing state (and federal) student allocation, Milwaukee Public Schools is receiving around $27,086 per student even though its school doors were closed for over 12 months. Madison public schools is well over $19,000 per student.
In contrast, private schools in the Milwaukee Parental Choice Program did not have the same access to federal COVID relief funds and state taxpayer funding of the voucher last year per student was $8,300 (K-8) and $8,946 (9-12).
- Wisconsin is receiving so much federal COVID funding that it could fund a year of the state budget by itself.
Wisconsin is receiving federal COVID funding through a number of sources – American Rescue Plan, CARES, Consolidated Sources. These pots of money are going directly to the governor, school districts, higher education, and local governments. This is in addition to the stimulus checks, paycheck protection program, and additional amounts of state and local government funding.
Put another way, the federal government is essentially matching dollar-for-dollar what the state spends on our budget for a year.
And this is all on top of the normal federal funding Wisconsin receives, which brings us to the last point.
- Federal COVID funding is a nearly 104% increase on top of the existing federal funding that Wisconsin expects to receive for the 2021-2023 biennial budget.
Remember, in normal times, the feds pump money into Wisconsin, i.e. medical assistance, K-12 education, and higher education. We are receiving a massive, unprecedented increase in federal spending.
And for those that believe in state’s being the laboratories of democracies, this is very bad. The federal government will be exerting more control over the state’s than ever before.
CJ Szafir is president at IRG with research from John Gray, former policy director at the White House for Vice President Mike Pence.