Senate leader proposes to scrap Evers $1B child care plan, replacing it with $2B tax cut and expanded child care credit

MADISON - Republican lawmakers are proposing to scrap Democratic Gov. Tony Evers' plan to funnel $1 billion into child care services and workforce programs and instead want to cut income taxes by $2 billion and expand a tax credit parents may use to pay for child care costs, among other potential measures the state Senate leader released Friday afternoon.

Evers in August called on lawmakers to take up his child care and workforce legislation in a special legislative session but Republican leaders immediately criticized the amount of spending the governor proposed.

The Democratic governor’s plan would have allocated more than $365 million to child care programs, guaranteed 12 weeks of paid family and medical leave for Wisconsin workers, invested $66.4 million in University of Wisconsin System schools, awarded nearly $200 million for UW-Madison's proposed engineering building and spent millions more on workforce education and grant programs.

Now, Senate Majority Leader Devin LeMahieu is proposing to replace Evers' bill with legislation that lowers taxes for Wisconsinites in the state's broad third income tax bracket, increase the amount of the state credit a taxpayer can claim for dependents and increase the amount of money parents can deduct for sending their children to private school. The bill would also overhaul licensing in Wisconsin and to add requirements to receive government assistance while unemployed.

Both proposals lean on the state's $4.1 billion budget surplus.

In a statement, LeMahieu said "Governor Evers has said that he would provide tax relief for the middle class in exchange for state-level investments in the child care industry. We hope he keeps his word."

But Evers' spokeswoman Britt Cudaback panned the GOP proposal as an "embarrassing response" and a "completely unserious proposal."

"Governing isn’t a game — we face real challenges affecting families, farmers, businesses, and communities across our state every day," Cudaback said in a statement. "We have billions of dollars in readily available state resources to make real, meaningful investments to finally address the pressing issues facing our state, including our generational workforce challenges and a looming child care crisis."

The new bill seeks to once again to reduce the second-highest income tax rate from 5.3% to 4.4%, lowering taxes for individuals earning between $27,630 and $304,170 and for married couples earning between $36,840 and $405,550 per year.

Evers previously partially vetoed a GOP proposal in the state budget that would have reduced all four income tax brackets and focused relief on the state’s wealthiest residents. He kept in place reductions for the third-highest tax rate, which covers those who earn $36,840 and less as a couple, from 4.65% to 4.4%.

Under current law, a person who is eligible to claim the federal child and dependent tax credit may also claim a state income tax credit equal to 50% of the federal credit they receive. The bill would increase that to 100% of the federal credit. It would also increase the amount of employment-related expenses a person with dependents can claim − from $3,000 to $10,000 for one dependent and from $6,000 to $20,000 for two or more dependents.

LeMahieu said he hopes Evers reconsiders supporting the package.

"Nearly $6,000 in tax relief for average income Wisconsin families with 2 children in childcare isn’t a game. It is meaningful relief that will help address the effects of inflation," he said in response to Evers' comments.

GOP plan expands tax deductions for private school tuition

Parents who send their children to private school can, under current law, deduct up to $4,000 for an elementary school student and up to $10,000 for a secondary school student. The Senate GOP proposal would increase the deduction to $5,070 for an elementary school student and $12,660 for a secondary school student. The deduction amount would increase based on inflation going forward.

Evers proposed his plan in an attempt to extend funding for Child Care Counts, a federally funded pandemic-era program that has helped keep child care centers open in an unstable economy.

Evers and Democrats tried on multiple occasions to include $340 million in permanent funding for the program in the new two-year state budget, but Republican lawmakers opted to include $15 million for other child care services instead.

Child Care Counts will run out of funds by January 2024 without additional funding, something Democrats and program advocates warn could trigger large tuition hikes for parents, worsen staff shortages and shutter child care programs.

Advocates for the proposal argued the squeeze will force some parents and caregivers to leave their jobs, and possibly the workforce altogether, in order to care for their children. One parent testified on Wednesday that, after learning she was pregnant with her second child, she left her local school district job.

In a Senate hearing earlier this week on Evers' plan, Sen. Dan Feyen, R-Fond du Lac, told reporters after the hearing he has concerns with using state dollars for a program that was created with federal funding, but agreed the issue of child care needs to be addressed.

Changes to unemployment insurance included

LeMahieu's new legislation also proposes a handful of changes to the state’s unemployment insurance system, adding new requirements for a person to be able to receive government assistance.

The bill would specify that, after two weeks of unemployment, at least two of the four work searches required per week be direct contacts with potential employers. After one week, a claimant would be required to post a current resume to the state’s job center website. And, when an individual has less than three weeks of unemployment benefits left, a reemployment counseling session would be required

Under the proposal, a person receiving unemployment assistance who is likely to run out of benefits would be required to participate in a public employment office workshop or training program.

The bill would also jump-start a provision in state law that is supposed to require some people to take drug tests to qualify for unemployment benefits. The provision has not gone into effect because the Evers administration has not adopted formal rules on the drug-testing program. The legislation would force the administration to take that step.

The proposal would also require people receiving unemployment assistance to participate in a federal reemployment services program, and would require the Department of Workforce Development to perform a weekly comparison of state and national databases that track death records, employment records and prison records against recipients of unemployment benefits in order to detect fraud or erroneous payments.

The new bill also would allow some professionals licensed in other states to apply for and receive a reciprocal credential in Wisconsin, and would eliminate the requirement of a statutes and rules examination for a handful of medical professions including pharmacists, advanced practice nurse prescribers and counselors. It would also change the current two-year credential renewal requirement to a four-year period for most health and business professions.

Another measure would allow the Department of Safety and Professional Services to determine whether the circumstances of an arrest, conviction or other offense is relevant to the circumstances of a licensed activity without reviewing the specifics of the offense in the case of certain nonviolent crimes or ordinance violations.

DSPS would be required to reexamine the state’s occupational license requirements every 10 years.

The Evers plan included:

• $22.3 million for the Partner Up! Program, which supports employers purchasing child care spots for their employees at existing regulated child care providers across the state.

• $40 million increase in general aid for the Wisconsin Technical College System.

• $17.3 million over the biennium for the Wisconsin Grants program, which provides college students with need-based financial aid.

• $100 million to continue the Workforce Innovation Grant Program, which provides grants to regional organizations to design and implement plans addressing health care-related workforce challenges.

• $10 million for Wisconsin's nurse educators program.

• $60 million to address healthcare workforce shortage solutions through nurse education and health care opportunity grants, among numerous other programs.

• $16 million to address teacher staffing shortages.

Molly Beck and Jessie Opoien can be reached at molly.beck@jrn.com and jessie.opoien@jrn.com.

This article originally appeared on Milwaukee Journal Sentinel: Senate leader proposes to scrap Evers $1B child care plan, replacing it with $2B tax cut and expanded child care credit