Surplus Bill Fallout: GOP Coopts Dems' Midterm Narrative

Resolved, Wisconsin's legislative Democrats erred in not supporting the Evers, Vos, LeMahieu surplus bill.

As most Media Rants readers know, my spouse Lori Palmeri represents the 54th assembly district (includes much of Oshkosh and a few surrounding towns) in the state legislature. She is a Democrat running for a third term this fall. The 54th AD is "purple"; it leans slightly Democratic, but to win and keep the seat the Dem has to stay in touch with the pulse of the residents, knock on doors, and work in good faith with members of the legislature on the other side of the aisle. If legislative redistricting were done in a sane, nonpartisan manner, most of Wisconsin's 99 assembly districts would be as purple as the 54th. That is, there would be no seats that are "safe" just because of the way the district lines were drawn.

Lori was one of ten assembly Democrats to vote for the $1.8 billion tax relief and school funding bill negotiated by Democratic Governor Evers, Republican Assembly Speaker Robin Vos, and Republican Senate leader Devin LeMahieu. This "Surplus Bill" failed when three Senate Republicans and not one Senate Democrat could bring themselves to vote for it.

Lori struggled mightily with the bill. Even though the legislation had some good parts (e.g. increased special ed funding and some tax relief), she was uncomfortable with a bill that would probably throw the state into a budget deficit at the end of the 2027-2029 biennium. To work through her discomfort, she did what purple district politicians have to do: she talked to her constituents. From school district officials she learned that the special ed funding really was as urgent as Democrats have been saying for years. Pretty much everyone she spoke to said that the legislature should do whatever it could to make life more affordable, and while the surplus bill clearly wasn't perfect, it was the only piece of legislation with a realistic chance of passing.

The fact that the Marquette Poll showed such overwhelming, bipartisan support for the bill demonstrates that what Lori was hearing in her district represents the feelings of voters across the state.

Before I further antagonize some of my Democratic friends, allow me to stipulate that I fully recognize:

• Speaker Vos and Senate leader LeMahieu have never acted in good faith in their [limited] negotiations with Democrats over the years, and there is no reason to believe that they suddenly had a change of heart when it came to the surplus bill.
• Governor Evers erred by not seeking more consultation with the Democratic leaders in the Assembly and Senate before and during the negotiations. (In fairness to the governor, it might be that he sincerely thought he was representing the legislative Dems' priorities in the negotiations, as they have repeatedly called for affordability relief and in 2024 were calling for the surplus to be used for special ed funding.).
• The fact that the three principal actors in this drama (Evers, Vos, LeMahieu) are lame ducks not returning to office in 2027--meaning they will not have to be accountable for any of the bill's potential negative consequences--makes the fact that they did not invite more representatives into the negotiations even more bizarre and troubling.

Even given those stipulations, Democrats HAD to know that a bill promising tax relief and a rebate, no matter how imperfect, would be popular. The only way their opposition to the bill makes sense is if they feel confident they will attain a "trifecta" in the November elections; i.e. keep the governor's office while returning the assembly and senate to Democratic majorities for the first time since 2009-2010.

I think it is still possible for the Dems to achieve the trifecta, but the defeat of the surplus bill actually makes that result more difficult. Assembly Republican majority leader Tyler August, in a piece for Wisconsin Right Now, provided the points that will probably appear in every piece of Republican literature as we head toward November:

If Democrats can’t work with their own Democratic governor, who exactly will they work with? And if lowering property taxes, adequately funding our schools, and helping taxpayers with rising costs don’t make the top of their priority list, what will their priorities be? That should concern Wisconsin voters . . .

There are absolutely differences between Republicans and Democrats on major issues, and there always will be. But when common ground exists on policies that help taxpayers, provide relief to families, and responsibly invest in priorities like education, elected officials should not allow ideological politics to derail meaningful progress.

The failure of this legislation to advance does not change the reality that families across Wisconsin are still facing rising costs and growing pressure on household budgets. Those problems did not disappear because one vote failed.

Yes, it is absolutely sickening to witness a Republican Party that is the major cause of funding shortfalls in education and local property tax increases can now so shamelessly accuse the Democrats of failing on those fronts. Unfortunately, the Dems' failure to support the surplus bill puts THEM on the defensive in a year when Republicans at all levels should be in that position.

In essence, Republicans are using the failure of the surplus bill to coopt the Dems' 2026 midterm narrative: government needs to do whatever it can to make life more affordable for citizens. In response, the Dems do what they always do, which is to offer bullet point explanations that win the argument but lose the narrative. For example, here's Milwaukee Democratic Senator Chris Larson (who I generally agree with on most issues) explaining on Facebook why the surplus bill deserved to fail:

I know there are some who are disappointed that the surplus bill failed to pass last night. In the end there was strong opposition from members of both parties - here are some reasons why:

1. The rebate checks would have completely skipped about 30% of WI adults, including seniors on Social Security, and half of the dollars would have gone to those making over $100,000 per year.
2. About half of the money that was earmarked for public schools would not have gone to the classroom at all, instead going to offset property taxes.
3. The average property tax reduction for a median-value home would have been just over $100 - not nothing, but not enough to change family spending decisions in a major way.
4. The bill made permanent tax changes with 1-time funding - setting us up for a $2.9 billion deficit by the end of the next state budget - making service cuts or tax hike very likely in the next 2 years
5. The surplus at this time is only theoretical. It's not actually real dollars until the end of June, 2027. Trump's actions are leading our nation toward recession, which could have made the $2.9 billion number even worse.
6. The 3 primary authors of the bill will all be retiring at the end of the year and would not have had to deal with the consequences of their decision.
7. Proposed changes to how the technical college system is funded would have risked the long-term sustainability of these crucial institutions.
8. The tax exemption on overtime would have benefited many people who make over six figures, while leaving fewer dollars for critical public services.
9. The way school aids were handled in this bill would have worsened existing disparities in our funding formula, creating winners and losers.

Many other Dems have repeated those points in other media, including Tik Toks, Instagram reels, radio and television appearances, etc. (A prominent exception was Democratic candidate for governor Missy Hughes.). 

When I listen to the way Democrats argue against the bill--armed with Legislative Fiscal Bureau memos, alternative bills that would better address school funding and tax relief, and righteous denunciations of GOP hypocrisy--I am reminded of what might be the only fully accurate claim in the Dems so-called "autopsy" of the 2024 election: "Democrats are trying to win arguments while Republicans are focused on winning elections."

So what happens now? Speaker Vos is apparently asking the Governor to take another crack at getting the surplus legislation passed before November. Think of the position that puts the Democrats in. If they continue to oppose the legislation, they will be accused of ignoring the clear preference of a bipartisan majority of voters. If they change their vote in response to public pressure, they will be accused of flip-flopping and not having the courage of their convictions. What a terrible position to be in, especially in a year when ALL the pressure should be on Republicans.

It might well be that Donald Trump has so severely damaged the Republican brand that by November the surplus vote might not matter. Still, in rejecting their own governor's surplus bill, the Dems have handed the Wisconsin GOP an undeserved lifeline. My advice to the Dems, for what it's worth, would be to support the surplus bill if it somehow comes back to the legislature before November. Better to be accused of flip-flopping than lose the affordability narrative.