As we celebrate our nation's birthday this week, not only should we reflect on the great history of our country and celebrate the many freedoms we enjoy, we also should look ahead to the new direction that our state is headed financially.
We were once known as a state with high taxes that businesses and workers would avoid. We were a state where legislatures refused to tackle the mountain of debt and only used accounting gimmicks or one-time stimulus money to put off paying our bills.
I can tell you that those bad days are over. We're righting our financial ship and are setting sail with a bright future ahead for the hardworking families of our state.
The new biennial budget officially started July 1. State lawmakers spent the past several months making the tough decisions in this tough economy. Like any family struggling with tight finances and a big stack of bills, we took a good look at our priorities. We decided that we must pay off the state's $3.6 billion deficit while maintaining essential state services and investing in job creation and education.
The result is plain and simple: The nonpartisan Legislative Fiscal Bureau says in two years, the state will be in the black, with a $300 million structural surplus. This balanced budget puts the state on solid financial ground for the first time in more than a decade.
As the co-chair of the budget-writing committee, the Committee on Joint Finance, I'm very cognizant of the fact that families can't afford to pay more in taxes, especially property taxes. Our budget holds the line on taxes: Overall taxes decrease by $24 million in our spending plan. We're protecting middle-class families and seniors by putting forth a property tax freeze so they can afford to stay in their homes.
This means taxpayers owning a median-valued home will be protected from the previously projected property tax increase of $736 over the next two years. We also eliminated regional taxing authorities and their potential to increase taxes for unwanted transit projects.
For our economy to continue to improve, we must get more people back to work. From Day One, we focused on job creation and developing a better economic climate. The budget continues our efforts by providing tax incentives for investing capital gains in Wisconsin businesses and expanding manufacturing jobs. We're investing in the Wisconsin Economic Development Corp., a new public-private partnership that has one main focus - to create jobs.
Our efforts are already paying off. Nearly 25,000 jobs have been created since January. Companies are moving to Wisconsin, many local companies are expanding and chief executives around the country are taking notice.
More than half of the budget goes to pay for local government services. Because of the needed spending reductions, we gave municipalities and school districts the tools to manage their costs. By asking employees to pay a reasonable contribution to their pensions and health care, local school districts have been able to balance their budgets and maintain important services without laying off teachers. This includes districts in Appleton, Palmyra, West Allis and Menomonee Falls, to name a few.
This is a stark contrast to the Milwaukee Public Schools, where 519 layoff notices were issued last week but officials say 200 of which could be saved if teachers paid into their pensions. Also, our tools are working in Racine County. County officials tell me they now have additional dollars to spend on county services.
Even though I fully supported the governor's initial budget plan, we found ways to improve it. For example, we invested more in education, one of our top priorities. We added nearly $116 million to K-12 classrooms, which is the single largest state expenditure in our budget. Plus, because of the great success of the Milwaukee school choice program, we're expanding it to the rest of Milwaukee County and Racine so more parents can have the opportunity to find the best educational fit for their children.
We also reversed some of the governor's proposals. The budget fully restores the successful Senior Care program, which ensures continued access to expensive medication for seniors. We also kept the recycling mandate for our citizens and continued to provide recycling grants for communities. State lawmakers also felt that the University of Wisconsin-Madison should not become a separate authority, but we granted additional flexibilities to all the universities in the UW System.
While our budget has many highlights, our major accomplishment is that we cleaned up a major financial mess. We cut up our credit cards and set the foundation for future balanced budgets not only at the state level but at the local level as well.
