On April 3, 2025, the Wisconsin Supreme Court heard oral arguments in a case between the Wisconsin State Legislature (Legislature) and the Wisconsin Department of Public Instruction (DPI).[1] The case will effectively decide whether $50 million in funds purportedly dedicated to the 2023 Wis. Act. 20 (Act 20) literacy program requirements should be released to the DPI or remain with the Legislature’s Joint Committee on Finance (JCF). To better understand the case, this article will discuss the following: the historical authority of the JCF regarding supplemental appropriation funds, the Act 20-literacy program and the funds in question, and the history of the case.
The JCF and the Supplemental/“Emergency” Appropriation Funds
In 1911, the Legislature statutorily established the JCF, a standing committee of the Legislature.[2] Subsequently, the Legislature adopted a law that held “an emergency appropriation” in reserve, which could be allocated to state institutions, departments, and commissions if emergencies arose for which the State budget had not accounted. 1915 Wis. Laws Ch. 609, § 24a.
At the time, the law also required members of the executive branch to certify that the funds were needed to carry on the entity’s “ordinary regular work… and [ ] no other appropriation [was] available for that purpose.” Id. Until 1931, only the executive branch of government in Wisconsin had authority with respect to such funds.
In 1931, an “emergency board” was created that consisted of individuals from Wisconsin’s executive and legislative branches, who were jointly responsible for such appropriations. 1931 Wis. Laws Ch. 67, §§ 142-43. In 1949, the emergency board could only make such appropriations if they specifically found that, among other things, an emergency existed. 1949 Wis. Act Ch. 181, § 2(a)-(c).
Then, in 1975, Wis. Stat. § 13.101(3) became law. The law reassigned the emergency board’s authority with respect to such appropriations to the JCF. Since 1975, very little has changed about Wis. Stat. § 13.101(3). Currently, the statute reads:
The [JCF] may supplement, from the appropriations under s. 20.865(4)[3], the appropriation of any department, board, commission or agency, which is insufficient because of unforeseen emergencies or insufficient to accomplish the purpose for which made, if the committee finds that:
- an emergency exists;
- No funds are available for such purposes; and
- The purposes for which a supplemental appropriation is requested have been authorized or directed by the legislature.
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Act 20 and the Funds in Question
In July 2023, Governor Evers signed Act 20, which created a new childhood literacy program for school districts and charter schools. Act 20 requires, among other things, that:
(a) school districts and charter schools use two (2) separate screening assessments, to assess early literacy for four-year-old kindergarten (4K) students twice a year, which must be provided by the DPI at no cost to such districts and schools;
(b) the DPI reimburse school districts and charter schools for up to 50% of the cost of purchasing JCF-approved literacy curricula/instructional materials;
(c) an Office of Literacy be established within the DPI to create, oversee, and train up to 64 statewide early literacy coaches, who will be assigned to schools based upon results from standardized reading tests; and
(d) school boards and operators of charter schools provide professional development training for all kindergarten to grade 3 (K-3) teachers, principals of schools offering K-3 programming, and reading specialists, by July 1, 2025.
Despite the significant costs associated with Act 20, it did not include a funding mechanism. Instead, under the 2023-2025 biennial budget (i.e., 2023 Wis. Act 19), Governor Evers agreed to provide the JCF with approximately $236 million in supplemental appropriation funds. Then, in Budget Motion 103, the JCF earmarked $50 million “for a literacy program,” understood by all parties to be related to Act 20. After Act 20 became law, the Legislature presented a separate bill (i.e., 2023 S.B. 971), which was designed to create a structure for DPI to expend the $50 million as JCF transferred those funds.
Governor Evers signed S.B. 971 into law on February 29, 2024, as 2023 Wis. Act 100, but only after exercising his partial veto power to consolidate two accounts – one for funding the literacy coaching program and one for reimbursing school districts. Governor Evers indicated in a related message that “[b]y consolidating funding into one appropriation, the department w[ould] have the flexibility necessary to utilize the appropriate amount of funding for various literacy needs.” (Emphasis added).
The Legislature v. the DPI
Under article V, § 10(1)(b) of the Wisconsin Constitution, the Governor may exercise partial-veto authority if a bill is an appropriation bill. On April 16, 2024, the Legislature filed a lawsuit arguing that S.B. 971 was not an appropriation bill because within the “four corners” of the bill, no money had been appropriated. The Legislature also argued that even if S.B. 971 was an appropriation bill, Governor Evers exceeded his authority under the Wisconsin Constitution in striking part of the bill.
The Governor and the DPI responded by arguing that S.B. 971 was an appropriation bill because appropriation bills needed to either set aside public funds for a public purpose or authorize the executive to spend money set aside in that manner. Because S.B. 971 did the latter, the Governor had partial veto authority. They also counterclaimed, seeking an order directing the JCF to release the allocated $50 million to the DPI.[4]
Additionally, the DPI insisted that the Legislature, not the JCF, has the power to appropriate money under article VIII, § 2 of the Wisconsin Constitution, which reads, “[n]o money shall be paid out of the treasury except in pursuance of an appropriation by law.” The DPI contended that by appropriating money to the JCF, which has no authority to “administer statutory programs,” the Legislature created “an end-run around the normal budget process.”
On August 27, 2024, Circuit Court Judge Stephen Ehlke ruled that S.B. 971 was an appropriation bill allowing the Governor to exercise his partial veto authority “because [S.B. 971] allow[ed] for the transfer of money to DPI to fund various programs created under Act 20,” and Act 20 worked in tandem with Acts 19 and 100 as “one piece of legislation.”
Despite agreeing with the Governor and the DPI that S.B. 971 was an appropriation bill, Judge Ehlke denied their request to order the JCF to release the allocated $50 million to the DPI. Judge Ehlke indicated that the Legislature did not give the DPI the funds directly but “knowingly put funds into JCF’s supplemental account for JCF to use to supplement funding at its discretion.” Judge Ehlke also recognized that because Wis. Stat. § 13.101(3)’s procedural structure “provides for input from the executive branch,” it “does not run afoul of Wis. Const. article VIII, § 2.”
The Governor and the DPI appealed, and the Legislature cross-appealed. The Wisconsin Supreme Court accepted the case on a petition to bypass the Court of Appeals. During oral argument, the Governor and the DPI argued that under Wis. Stat. § 13.101(7), if the allocation of funds to the JCF were deemed invalid, the appropriation itself should not be deemed invalid but the $50 million in funds should be released to the DPI without condition.
Conclusion
Although the resolution in this case will effectively decide whether the DPI or the JCF should control the $50 million in literacy program funds, which will undoubtedly impact school districts and charter schools, the case could also have implications on the Wisconsin Constitution’s separation of powers, particularly with respect to the separation of powers between the executive and legislative branches. We will continue to monitor this case and provide updates to our clients on such relevant matters to school districts and charter schools.
[1] Wisconsin State Legislature v. Wisconsin Department of Public Instruction, No. 2024AP001713.
[2] Pursuant to Wis. Stat. § 13.09(1), the JCF consists of eight (8) senators and eight (8) representatives.
[3] Wis. Stat. § 20.865(4) reads, in relevant part, “[t]here is appropriated to the [JCF]” general purpose revenue (GPR) funds “to be used to supplement appropriations of the general fund which prove insufficient because of unforeseen emergencies or which prove insufficient to accomplish the purposes for which made.”
[4] To date, the JCF has only released $327,400 related to Act 20.
