Spending bill might violate rules
$2 billion of it may violate federal rules for using American Rescue Plan money
The state Assembly passed legislation that would direct how federal pandemic relief money is spent.
MADISON - Republican state lawmakers took steps Tuesday to seize control of more than $3 billion in federal funds, but if they carry through with their plans they may have to give up as much as two-thirds of it.
State law allows Democratic Gov. Tony Evers to decide how to spend $3.2 billion that Congress gave the state under the American Rescue Plan to deal with the COVID-19 pandemic and its economic toll.
The Republican-run Assembly passed legislation Tuesday that would direct how that money is spent. But in many cases Republicans are trying to spend it in ways that federal authorities likely won’t allow.
Their legislative efforts may be all for show, however, if Evers follows through on indications he’ll veto the bills.
Among their plans is one to give $1.1 billion to property owners. The measure would provide no direct help to renters but large payouts to landlords like Assembly Speaker Robin Vos of Rochester, who has an ownership stake in $4.8 million in rental properties in Whitewater.
The proposal would provide property owners with a payment equivalent to 10% of their most recent property tax bill.
Whether their plan would be allowed under federal law is unclear.
Vos has referred to the payments as tax cuts and tax rebates. But if the payments are considered tax cuts, they can’t be funded with federal aid, according to the nonpartisan Legislative Fiscal Bureau.
If they are considered economic stimulus payments, they would be allowed, according to the fiscal bureau. The U.S. Treasury Department hasn’t yet issued rules to clarify the matter.
More than $1 billion in additional spending included in the Republican plans likewise may not be allowed under federal rules. Under those proposals the state would spend $500 million to pay off debt, $310 million to shore up the state’s unemployment fund, $308.5 million to repair roads and bridges and $68.2 million to upgrade communications equipment and establish a mental health crisis center in northern Wisconsin.
Republicans want to put some of the money in the unemployment fund because that would prevent a tax increase on businesses that would otherwise go
into effect.
Their other plans appear to be in keeping with federal rules, according to the fiscal bureau. Under those provisions, the state would provide $500 million for broadband, $200 million for small businesses, $150 million for longterm care facilities, $75 million for tourism efforts, $61 million for lead pipe replacement and environmental efforts, and $50 million for rural economic development.
The Assembly passed many of the Republican spending proposals Tuesday on party lines and planned to work into the evening to pass the remaining ones.
From there, the measures will go to the Senate, which is also controlled by Republicans.
Senate Majority Leader Devin LeMahieu of Oostburg last week said he believed much of the Republicans’ spending would eventually be deemed acceptable by federal authorities. If they are not, lawmakers can adjust their plans, he said.
The potential problems with the legislation are likely moot because Evers has signaled he will veto the bills. He plans to spend $2.5 billion on helping businesses, $500 million on continuing the state’s pandemic response and $200 million on broadband and other infrastructure projects.
Lawmakers to tell Kaul to sue
Also Tuesday, the Assembly planned to approve a measure telling Democratic Attorney General Josh Kaul to join a lawsuit filed by Republicans from other states over the provision of the American Rescue Plan that prevents using federal funds to offset tax cuts.
Vos told reporters that lawmakers could establish what stance the state would take in litigation. But Kaul spokeswoman Gillian Drummond said lawmakers could request Kaul to participate in the lawsuit but could not require him to do so.
Early in its meeting Tuesday, the Assembly on a voice vote passed Senate Bill 69, which would require middle schools and high schools to teach students about the Holocaust and other genocides.
The vote sent the bill to Evers for final approval.