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LFB: GOP Lawmakers Would Need to Put Another $428 Million Into K-12, Higher Ed to Qualify for $3.1 Billion in Federal COVID Aid

By Dee Pettack | May 27, 2021

From WisPolitics.com . . .

GOP lawmakers would have to put another $428 million into K-12 and higher education to ensure Wisconsin gets $3.1 billion from federal COVID-19 relief packages, according to the Legislative Fiscal Bureau.

That price tag is based on the actions of the Joint Finance Committee to date. If the GOP-controlled committee spends additional general purpose revenue in other areas of the budget it hasn’t taken up yet, lawmakers would have to add even more into education to meet the federal government’s maintenance of effort requirement to qualify for the money.

Likewise, if the committee cut spending from current levels, the required commitment to education would go down.

Ahead of today’s Joint Finance scheduled actions on the K-12 and higher ed budgets, LFB put together an overview of the federal requirements to ensure the state qualifies for the money through the American Rescue Plan Act President Biden signed this spring.

Separately, LFB prepared a memo at the request of committee member Sen. Jon Erpenbach, D-Middleton. It included details beyond what was in the budget papers on the ARPA funds as well as the Consolidated Appropriations Act former President Trump signed in December.

Under both stimulus packages, states must maintain the same proportion of spending allocated to K-12 and higher education in 2021-22 and 2022-23 as their average allocation for 2016-17 through 2018-19.

According to the memo, which was shared with WisPolitics.com, the Evers administration last week notified the federal government of baseline state spending on K-12 and higher ed. Based on those figures, the state would have to spend almost 35.3 percent of all GPR on K-12 in each year of the 2021-23 budget to meet the requirement. It would have to spend nearly 8.9 percent of GPR on the UW System, tech colleges and the Higher Educational Aids Board.

That amounts to $387 million more for K-12 education and $41.2 million for higher ed.

The combined federal aid to K-12 schools under the CAA and ARPA is more than $2.2 billion. For higher ed, the federal aid in the two packages is $878.2 million.

The memo also notes states have the option to seek a waiver from the maintenance of effort requirement.

To do so, states would have to submit details about their level of support for education for a fiscal year in which the waiver was sought as well as information such as how COVID-19 caused a fiscal burden that affected their ability to maintain education spending levels.

In January, the Legislative Fiscal Bureau projected Wisconsin would finish the current fiscal year June 30 with a nearly $1.9 billion surplus and would see an additional $1 billion in revenue growth over the biennium. The LFB is expected to do new revenue projections for the upcoming two-year period that take into account the $594 million tax cut that lawmakers approved and Gov. Tony Evers signed in February.

Joint Finance Co-chair Mark Born, R-Beaver Dam, said yesterday lawmakers only recently became aware of the maintenance of effort requirement.

“We question the legality of Governor Evers unilaterally accepting funds that lock the legislative branch into funding criteria without any consultation before accepting the money,” Born said.

Evers spokeswoman Britt Cudaback said GOP lawmakers wouldn’t have to worry about meeting the maintenance of effort requirement standard if they simply passed the guv’s budget as introduced.

Read the memo.

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