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Wisconsin's Democratic governor and Republican legislative leaders negotiate a big deal

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on tax cuts and school funding and it blows up in the Wisconsin Senate. What

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just happened? Let's talk about it. This is Inside Wisconsin Politics. I'm Sean

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Johnson here with my colleagues Zach Schultz and Rich Kramer in Eau Claire. Hey

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guys. Hello. Hey Sean. So we are going to have plenty of time here to unpack the

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motives of all the players in this drama that unfolded at the Capitol. But first

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let's start with kind of what led to this for people who haven't paid attention to every twist

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and turn of this big deal. We've been calling it at the Capitol. Zach, what was in this thing

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that was negotiated by Democratic governor Tony Ebers and the Republican legislative leaders?

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Well, the top line picture is it's $1.8 billion and spending most of it one time only looking

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at the projected surplus that would be available for next year of that $300 million for special

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education funding for public schools. That's been a democratic priority for a long time.

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$350 million in rebates or tax buy downs for property taxes that would go money going to the

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schools but that they would only use to reduce property taxes not new spending. And then there

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were going to be individual rebates for tax filers 300 per person or 600 for a married couple.

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And then we see a match to the federal plan for no taxes on tips and overtime. And Sean

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a month ago we asked, what's the possibility that this could actually happen? And my answer

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at the time was, well, this is the only time it could happen because we have three leaders that

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are all leaving the stage. It's legacy time. What we didn't account for is everyone else who's

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still running for re-election or election in Wisconsin sinking this deal. Three legacy leaders

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getting the compromise wasn't enough. And to me, this is a political Rorschach test.

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How you view this particular deal kind of matches your view on politics for some people and for

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a lot of ordinary people around the state, this was the epitome of a compromise. You get a little

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bit for one side, you get a little bit for the other side. Everyone can come away, maybe a little

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dissatisfied, maybe a little happy. And money goes back to taxpayers at a time when you're

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seeing the price of gas go through the roof just to fill your tank up. And as they're about to

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run for your election, those are things that normally you'd want to see politicians pass.

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The other side of that test is political purity. And there are a lot of people looking at this

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deal saying, this isn't as good as I would like it to be. And I think we can do better when we have

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more power next year. So it started out the day, though, looked like your average special session

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day, like a bill that might pass. You have this big agreement by the leaders, by Governor Tony

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Evers, the big Democrat and the big Republicans. You had speeches to start this day, including by

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Assembly Speaker Robin Voss. We can show people that we listen and that we are willing to act,

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and most importantly, that compromise in Wisconsin is not a dead word.

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Compromise is defined as getting something that you want by giving up something that your partner

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or your opponent wants. That is really what we did here. So that's when the waiting game kind of

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began, Rich. We were both watching the Senate for a long time on Wednesday. What was it like as the

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day sort of played out? It was a lot of hurry up and wait. So it's not unusual for the Senate to

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set a start time for their floor sessions, whether it be in a special session or a regular session,

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and then blow past that. That's kind of unsurprising. But this time, we kept getting these notices

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that, oh, it's going to be three o'clock. Well, it's actually five, 545. And then we just went

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with half our increments, you know, six, six, 37, eight, eight, you know, and on and on and on.

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They were, I want to say, I want to say it was four hours that it took for them to go from the

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first notice, you know, when the plan was to meet at 3 p.m. and when they actually met.

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And then once they got on the floor, you heard some of the same complaints from Democrats and

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Republicans about this bill that you heard in the assembly. The opponents said that they didn't

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like the process of how it was, you know, thrown together, Senate Democrats were out of the picture,

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et cetera. And then there were concerns about costs and this being a projected budget surplus,

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et cetera. And how this could plunge us into a deficit in the coming budget cycle.

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Yeah. So that night, we had a very unusual scene kind of play out the assembly met

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after waiting all day to see what the Senate was going to do. They passed this bill in short order.

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The Senate is meeting at the same time. And it's clear that things are not going well there.

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You hear a speech from Senate Democratic Minority Leader Diane Hesselmann, who made it clear she

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was not happy with this bill. This is a completely reckless proposal stitched together in a

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backroom deal by three people who will not be running around and won't be here when the

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consequences of a multi-billion dollar deficit comes home to roast. It's simply something I can't

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support. And this bill actually fails on a vote of 15 to 18. And I know people probably think big

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deal. Things pass, things fail. Bills don't actually get to the point of failure hardly ever

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in the state legislature. If it doesn't have the votes, it does not come to the floor,

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especially something as big and dramatic as this. And for the governor to negotiate this and his

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Senate Democrats stand unified against it to help kill it with a few Republicans,

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something we do not see every day. Zach, what do you think was motivating Senate Democrats here?

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There's two factors. I think first is they were insulted. They were left out of the loop.

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That is huge, actually. Every single time over the past few years that they've needed to pass a

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big budget bill, especially with Republicans having a smaller majority in the state Senate,

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they've had two members that have voted against every bill that Senators Noss and Cappenga.

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They've consistently said we can't support this extra spending we're voting no.

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That means in practice, Republicans don't have a working majority when it comes to

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passing that kind of legislation. They need Democratic votes.

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Governor Evers knows that. Senate Majority Lemahue knows that everyone knows they need at least

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a couple Democratic votes and probably more. So the fact that they were not consulted did not

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have any input on this bill and made it clear from the very first time it was announced that

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they were unhappy with it showed. And I think that showed up in that long pause in the assembly.

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The assembly had the votes. It was they were going to wait and see if they had the votes in the Senate.

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The second part of why Senate Democrats were not in line with this comes next fall.

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And that's with the re-election. They are not quite certain, but very confident that they're

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going to flip the majority in that chamber and that when they come to power in the next session,

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they will not only have a say, they will be the deciding factors and how any bills are passed

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and how budgets are passed. And so they can direct where that money goes. And if they think

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they get lucky and there's a Democratic governor and a Democratic assembly, then they're going to

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say all this money will be available for us to spend in ways that we prefer instead of having

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to compromise, which is what has sunk every possibility of all these budget surplus deals

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since Tony Evers has been governor. The fact that the next election might bring better outlook

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for each of the sides. And so they've decided not to compromise.

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And I think this was a clear cut case where circumstances matter completely.

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If Tony Evers were running for election in November and he said, this is my big bill, Democrats,

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this is what I want to run on. I mean, they would have voted yes. Now, Republicans probably

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wouldn't have brought it up in that case. So, you know, it's a theoretical exercise. But

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Senate Democrats, I'm confident it would have been with him. He is not on the ballot, though,

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this November as Diane Hessel-Mein noted. And Senate Democrats are poised to, they think,

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take that majority. She has essentially been a co-majority leader on some of the big bills that

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have come through the Senate this year from the budget to gambling. And so, to freeze them out

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of talks like this, which is the way they viewed it, certainly, and to end up with a bill that was

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pretty Republican in nature. And so, about a billion and a half in tax cuts was not something

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that they enjoyed, you know? Well, and don't forget, there is another factor when it comes to

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everyone looking at the next budget the next year. And that is, there's a lot of people who think

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we may be looking into a recession. So, most of this surplus is a projection of what the economy

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is going to bring in for tax revenues. If there's an economic downturn in the next six months,

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that money disappears all by itself without having been sent out. So, you send it out,

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even though most of this is one-time spending, it may not be there next year. Now, they say,

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even in the worst of circumstances, at least the state will have a little bit money to start

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the next year with. So, that is a legitimate concern, considering where gas prices and grocery

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prices are right now, and with no end to a war in Iran, that the economy could shift and go down,

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and these tax revenues may not materialize. Rich, Senate Democrats don't have this power if

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Republicans just stick together, and all their members vote for the bill negotiated by their

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leader, Devin Lemahue, and Assembly Speaker Ivan Voss. In fact, in the Assembly, all the

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Republicans did stick together, and they voted for that bill. So, what's gone on in the Senate with

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a few Republicans there who decided, yeah, we're just not going to do this.

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Well, what was surprising is that two of the three Republicans that voted against this proposal,

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they're not running for re-election. So, maybe that made them feel freer to

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speak their mind. But, as Zach mentioned, you've also got Senator Steve Noss as one of them, and he's

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pretty well known for voting against, especially spending, you know, large spending packages.

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So, it seems like Devin Lemahue didn't have the sort of control over his caucus that

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Robin Voss did in the Assembly. That's been pretty obvious given the past bills where you need a

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Democratic support to get them over the finish line. But what's also been really interesting is

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seeing Republicans attacking Republicans after the fact. So, in particular, Senator Van Wengard,

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who is retiring, he went on social media afterwards after the bill failed and said it was a good

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deal for Wisconsin. But, you know, every dim and noss and cappinga and Rob Hutton wanted to spend

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more and keep more of your money. So, you've got a Republican saying that Steve Noss wants to

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keep your tax dollars from you, which is pretty interesting in the grand scheme of things.

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But, you also had Democrats kind of saying, good riddance, Tony Evers. I mean, it's just

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really fascinating to see this breakdown. It's just unlike anything I've ever seen. And,

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I wanted to ask both of you, Sean, how many times in your careers have you seen a bill

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pass, you know, this kind of bill with this kind of buildup where you would expect the votes have

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to be there before it gets to the floor to avoid embarrassment? How many times have you seen it

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clear one chamber and then die in the Senate? It is pretty rare. I thought of a couple.

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One, the vote on state employee contracts ahead of when Scott Walker took office. Another one

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that featured lame ducks? It did. I mean, this weird stuff happens at the end here when everybody's

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position has changed. Circumstances matter. But you had the assembly Democrats passed new

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contracts for state employees. The thought was that that would protect them when Scott Walker took

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office. And Senate Democrats led by Russ Decker and Senator Jeff Playley at the time voted no,

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and they failed. So, it has happened. Another one on ethanol mandate way back in like 2006, I think.

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But it is pretty sparse the way this stuff happens. But it does point out exactly what

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we're talking about. Once a politician is no longer running for reelection and they become a lame

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duck, they lose a lot of control. What's most impressive about all this is Robin Voss holding

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his entire caucus together. Even though he's going to be exiting stage right, he still has

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enough to keep his chamber together. Senator Lemmy, who really never had firm control over

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Republicans in the Senate. That's always been called herding cats over there. So,

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that's not terribly surprised. Cappenga and Nas have made it quite clear. But all of these people

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leaving office really gives people a lot of freedom to think about their own interests

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next year, completely aside from what you would expect in the typical bill process.

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Yeah, Steve Nas. I mean, has been a thorn in the side to leadership for his entire career,

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basically, or at least the part that I've observed anyway. And can you imagine him on his last

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vote ever in the legislature saying, you know, I'll take one for the team for Robin Voss. I mean,

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I think it's pretty predictable that he was going to be a no vote. But let's kind of unpack

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where Assembly Republicans were on this and why they decided we're going to take this vote. Because

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I think by the time that both chambers got to voting at night, I bet Assembly Republicans knew

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darn well that this thing was going to fail in the state Senate. And they wanted to take this

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vote anyway. Why? Because they're all up for reelection this fall. Everyone that's not retiring

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has an absolute desire to go back to their constituents and say, I was willing to put $300

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in your pocket. I was willing to give more to the schools. I was willing to lower your property

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taxes. It's not my fault. This failed. That does bring us around to some of the interesting

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calculations that we're looking at, especially on the Democratic side. So one of the people I was

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watching is Jeff Smith, who's a Democratic senator. He's the assistant majority leader,

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so he's pretty high ranking in his caucus. He's going to move up if they control the chamber.

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He voted no on this. His staffers tell me he was no the entire time, mainly for the structural

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deficit concerns. But within his district, one of the Assembly Democrats, Jody Emerson, voted yes.

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You go south from there into the cross. Brad path in the Senate voted no within his district,

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Joe Billings and Steve Doyle, two Assembly Democrats in competitive districts both voted

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yes in the Assembly. They understand what it's like to go back to the voters and have to say,

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oh, no, I voted against this because we'll spend it better next year when people are feeling the

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pinch right now. There's a lot of political calculations that go into some of these moves

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and looking unified as a team does help. We also saw another state Senate race, Howard Markline

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voted yes. He's in a competitive district, Jenna Jacobson, the Assembly Dem, who's running against

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him, also voted yes. It would put her in a terrible position, easy marketing for Markline if she

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voted no on this deal. So some of this, it has to be political maneuvering.

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And I think you could look at this bill and say, potentially, it's a little gimmicky, right?

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You're going to spend almost $900 million just on these $300 checks and it's going to be gone.

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You have lawmakers on the record from both parties for bills like this in the past saying,

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oh, that's a gimmick. We can't do that. Which side of that gimmick do you want to be on when you're

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doing doors in November and people are struggling with costs? It's a popular kind of bill,

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giving people money and saying that you work together with the other side.

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So Sean, let's look at the outside players in this because Tom Tiffany was a big factor in this.

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I've seen some Republicans online saying he would have been better off being quiet,

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given how it played out. Instead, he did come out against this bill and he was on the record

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talking to at least one state senator who did vote for it, but weighing in on his concerns

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about this bill, what do you make of that? Yeah, from a practical perspective, I get it. From a

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political perspective, I do not. I don't understand what he was doing. What I mean is from a practical

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perspective, if Tom Tiffany thinks he's going to be governor, then I bet he wants to either have

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that money in there so that he doesn't take office with the deficit or if the economy does okay,

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maybe he wants to come in as governor and throw a special session for a Tom Tiffany tax cut,

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not a Tony Evers tax cut. Get things started off right. From a political perspective, I don't

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know why you come out against this. It's like a theoretical exercise because you're not in

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their voting, but why come out against a big tax cut? Why attack Tony Evers? He's not on the ballot.

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All these Democrats who are also against this bill might be running against you in November,

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so how do you differentiate yourself here by agreeing with them? I'm not sure.

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A rich one question I had for you that we kind of traded notes on throughout the night was,

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will voters actually remember this? Will anybody be rewarded or punished?

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You know, it's a huge question. All of what you're saying makes sense to me,

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someone who's been really following this, but I also remember being at a Supreme Court election

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night event in a fella at the hotel not knowing there was an election that day. So there's a part

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of me, I'm always skeptical that this sort of thing will stick in a voter's mind. It's different,

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I guess, if you're getting your door knocked consistently and people reminding you of that,

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or if you see a lot of commercials, but in the grand scheme of things, a $300, $600 check,

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that's a big deal. But, you know, all the political infighting and everything like that,

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I just, I'm not sure if people will carry that all the way to November.

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There's a lot going out there right now in national and world politics, that's for sure.

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That's all the time we have for today. Thanks for joining us. This has been Inside Wisconsin

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Politics. Our colleague Anya Van Wechtenonk will be back next week. Be sure to follow us on

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wpr.org, pbswisconsin.org, youtube, or wherever you get your podcasts.