LEGISLATIVE UPDATE
Fiscal Uncertainty
for Schools Ahead
John Forester
Executive Director
School Administrators Alliance
WASBO members,
I can
only imagine
that your professional
lives
at this point
in time must feel like a never-ending
trail of frustration and uncertainty.
Unfortunately, nothing I have written
in this newsletter piece on 2020-21
State Budget uncertainties will do
much to change that reality.
We do not definitively know the
depth or the duration of the state’s
revenue problem looking forward.
Here is what we do know:
• Wisconsin is likely to finish the
current fiscal year in the black,
making it unusual among the states
in this regard. Many other states
have been forced to make deep cuts
to balance their 2019-20 budgets.
• In Wisconsin, tax collections were
very strong for the first three quarters
of the current fiscal year. Then, the
bottom fell out of tax collections in
April, largely for two reasons: 1)
COVID-19 severely impacted the
economy and tax collections, and 2)
the income tax filing deadline was
extended to July 15th.
• Several weeks ago, we learned
through State Capitol sources that
the Legislative Fiscal Bureau (LFB)
was estimating privately that Wisconsin
has a $2-3 billion revenue
problem for 2020-21. The state also
has about $655 million in available
rainy-day funds to apply to the
problem. Has the outlook improved
since that initial private estimate? It
is certainly possible. But we simply
have no way of knowing.
• LFB likely will not do new revenue
projections until August (after the
income tax filing deadline of July
15th).
• While we are currently focused on
the 2020-21 fiscal year, as we look
forward, the fiscal uncertainty clearly
extends at least through the 2021-23
biennium as well.
• With the 2020 elections on the
horizon, lawmakers are not engaging
in much public discussion regarding
a budget repair bill. In fact, I think
most would prefer to ignore it until
after the election. But, if we do have
a $2-3 billion problem and only
$655 million in available rainy-day
funds, the big question for school
administrators is, “How much will
public schools participate in the
solution?” My assumption is about
35% of the total.
• In conversations with SAA members,
GOP legislators have generally
acknowledged that their caucuses
have discussed the possibility of
implementing a freeze for K12 education
in 2020-21. However, a K12
freeze only nets the state about $222
million in aid savings for 2020-21. If
we end up with a $2-3 billion
problem or more, the state will have
to go much deeper than simply a $0
base budget for the second year of
the biennium.
• Unless we get solid information that
Wisconsin’s fiscal outlook is better
than was anticipated several weeks
ago, I believe we need a significant
package from the federal government
to backfill state and local
government revenue loss. That may
be the only thing that will help us to
avoid deep cuts to K12 education for
next year.
• If that is the case, you may be wondering
where is the SAA campaign
targeting our U.S. Senators and Representatives
in support of that
much-needed federal stimulus
package? It is coming. The SAA
follows the lead of our national associations’
lobbying specialists on
federal issues. They are currently
saying the timing is not right and
that such a campaign will likely be
much more effective later this
month.
Stay tuned. The SAA will continue to
inform members of the latest developments
on these and other issues
of concern.
Thanks for
reading and,
as always,
thanks for
all you do on
behalf of the
children you
serve.
8 June 2020 • Taking Care of Business • WASBO.com