Milwaukee bankruptcy avoidance plan clears Wisconsin Legislature

Jun 13, 2023, 9:16 PM | Updated: Jun 14, 2023, 8:08 pm

MADISON, Wis. (AP) — The Wisconsin Legislature on Wednesday passed a bipartisan plan to prevent Milwaukee from going bankrupt that also sends more state aid to every community in the state, a long-sought-after funding increase agreed to by Republican lawmakers and Democratic Gov. Tony Evers.

The measure is part of a larger deal struck by Evers and Republican legislative leaders after months of talks that also increases K-12 education funding, including private voucher schools, by more than $1 billion. It was the highest profile deal reached between Evers, in the first year of his second term, and Republicans, who have found little common ground on most issues.

The local government and education funding bills, which passed both the Senate and Assembly with bipartisan support, now head to Evers.

Milwaukee leaders warned of dire consequences and catastrophic budget cuts as the city faces bankruptcy by 2025. Milwaukee is struggling with an underfunded pension system and not enough money to maintain essential police, fire and emergency services.

“We cannot let our largest city fail,” said Democratic Sen. Mark Spreitzer before the Senate passed it on a bipartisan 21-12 vote. The Assembly passed it later on a bipartisan 68-26 vote.

Evers, speaking Wednesday on WTMJ-AM before the vote, heralded the deal as “really, really important” both for Milwaukee city and county but also children due to the increase in funding, including more for mental health.

“We’ve met the issue square on,” Evers said. “Each side gave up on some things that are important to them. That’s how compromise is made.”

Both the Milwaukee proposal and the corresponding school funding bill have their Republican and Democratic detractors, despite the bipartisan deal.

Conservatives deride the Milwaukee bill as a bailout for the state’s largest and most Democratic city and say local sales tax increases should need voter approval. The state teachers union doesn’t like increasing voucher payments to private schools that are a part of the education funding plan and called on Evers to veto it.

“This is no compromise,” said Democratic Sen. Lena Taylor, who argued that the deal did not do enough to help Milwaukee. “This is grand theft.”

Democratic senators also objected to various parts of the bill that weren’t related to state aid, like a ban on local communities from placing advisory referendums on the ballot and limiting how long local health officials can order businesses closed during a health emergency.

“This Frankenstein monster of a bill should be slaughtered,” said Democratic Sen. Chris Larson, of Milwaukee.

Republican Sen. Mary Felzkowski said the bill was not perfect, “but let’s not let perfect get in the way of very, very good.”

The deal resolved the largest sticking point over who could determine whether Milwaukee city and county can raise the local sales tax to pay for pension costs and emergency services. Under the bill, that power rests with the Milwaukee County Board and the Milwaukee Common Council. Some Republicans wanted to require voter approval before taxes could be raised.

The long-sought-after proposal to stave off Milwaukee’s bankruptcy also sends more money to all of Wisconsin’s towns, villages, cities and counties.

The roughly $1.6 billion in aid to local governments — known as shared revenue — would be paid for by tapping 20% of the state’s 5-cent sales tax. Aid would then grow along with sales tax revenue.

Shared revenue to local governments has remained nearly unchanged for almost 30 years and was cut in 2004, 2010 and 2012.

Evers and Republicans have praised the deals as transformational wins for Milwaukee and local governors, as well as the state’s schools, while conceding that there are elements they oppose.

Evers, a former state superintendent, has long opposed expanding the state’s private school voucher system, which allows public school students to attend private schools for free. Under the deal, payments that private schools receive to accept public school students would increase. That would lower costs to allow private schools to expand the number of non-voucher students they accept.

“This is a historic attack on public education,” Democratic Rep. Ryan Clancy, of Milwaukee, said of the voucher school funding boost.

Advocates for voucher schools say the additional funding will help slow the closure of cash-strapped voucher schools. More than 40% of private schools that received vouchers have closed since the program began in Milwaukee in 1990. That was the first voucher program in the country. It expanded statewide in Wisconsin in 2013, but there are enrollment caps that would not grow under the deal.

The Senate passed the school funding bill on a bipartisan 24-9 vote, with two Democrats joining all Republicans in support. The Assembly passed it 62-31, with two Democrats joining Republicans in support.

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Milwaukee bankruptcy avoidance plan clears Wisconsin Legislature