May 6, 5:41 PM EDT

No additional tax revenue projected in Wisconsin; lawmakers vow K-12 won't be cut by $127M


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AP Photo/John Hart

MADISON, Wis. (AP) -- Wisconsin tax collections won't grow beyond earlier projections, state lawmakers were told Wednesday, forcing Republican legislative leaders to consider an accounting move to fulfill their promises to undo Gov. Scott Walker's proposed $127 million cut to public schools.

The news was a blow to the Republican governor, who has been forced to defend the unpopular budget cuts while preparing for a likely presidential run. Walker and lawmakers had been saying for months that they were anticipating higher tax collections to help mitigate the governor's budget cuts to K-12 schools and the University of Wisconsin System.

But they got the sobering news Wednesday that the projections first made in January would not change.

"For those of us who have been crossing our fingers and going to church on Sunday, it didn't work," Republican Assembly Speaker Robin Vos said at a meeting of the Transportation Development Association. "Now we have to figure out what to do."

Even with the bad news, Vos said Republicans were committed to not undoing previous tax cuts or raising taxes. But they are looking at increasing vehicle registration fees to help reduce borrowing to pay for roads and also considering accounting moves - such as putting one $106 million payment for schools into the next budget - to essentially reverse Walker's proposed cut.

The nonpartisan Legislative Fiscal Bureau reported the state is on track for 3.7 percent growth this year as predicted in January, with no changes expected in the forecast for the next two years, either. The disappointing forecast forces the Republican-controlled Legislature to consider alternatives to reduce Walker's cuts, including accounting moves, increasing borrowing, making other reductions or raising taxes and fees.

Those decisions will be made in the coming weeks, but in the meantime Republicans were quick to say that protecting public schools from the cuts Walker proposed was a priority. Walker also said on Twitter that "we will fully fund K-12 schools in this budget."

Other decisions, including what to do about the $300 million cut to UW, have yet to be made, Vos and other Republicans said.

The revenue projections makes it "much more difficult" to lower the UW cut, Republican Senate Majority Leader Scott Fitzgerald said. Rep. Kathy Bernier said she didn't think it would be possible to lower the UW cut.

UW President Ray Cross has promised to resign if he couldn't substantially reduce the cut and keep employee protections. The university remains committed to working with the Legislature, UW System spokesman Alex Hummel said in a statement.

Walker's plan to borrow $1.3 billion for roads has also run into bipartisan opposition. Vos wants to reduce the borrowing by about $300 million and said he is considering raising the $75 vehicle registration fee. Republicans have talked about an increase of $25 to $35.

"Everything's on the table," said Republican Rep. John Nygren, co-chairman of the Legislature's budget-writing Joint Finance Committee.

That committee has been working on making changes to Walker's plan for weeks, but has put off its biggest decisions on the hopes that more money would be available.

The committee is scheduled to complete its work later this month, with the Senate and Assembly voting on the budget in June. Walker has said he wants to wait until the budget passes before announcing his plans for the White House.

Democrats were quick to seize on the revenue forecast, saying Republicans and Walker's policies have failed the state and they should now re-prioritize to make sure there is enough money to fund schools, the UW System and long-term care needs.

"Earth to Walker: it's not working," said Democratic Sen. Lena Taylor, of Milwaukee.

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Associated Press writers Todd Richmond and Dana Ferguson contributed to this report.

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