WI: Budget Update 6-19-09

Budget on Its Way to Governor's Desk to be Signed by Tuesday

After a fast and furious week in the Capitol, the 2009-11 Biennial Budget is on its way to the desk of Wisconsin Governor Jim Doyle. The $62 billion spending document provides funding for the State of Wisconsin's operations starting on July 1, 2009, through June 30, 2011.

Overall, the budget process lasted nearly four months from the Governor's introduction of the bill in late February through a series of eight regional Joint Finance Committee (JFC) hearings, countless hours of briefings and meetings, and a number of marathon, closed caucus meetings.

The budget passed both houses of the legislature predominantly along partisan lines. The Senate passed the document on a 17-15 vote; the lone dissenting Democratic vote was from Senator Jim Sullivan (D-Wauwatosa), who voted with the GOP minority. Senator Alan Lasee (R-De Pere) was absent from the early Friday morning Senate vote. The Assembly passed its version of the budget on a 51-46 vote. Democratic Reps.Ziegelbauer and Krusick voted with 44 Republicans against the bill. Independent Rep. Wood voted with the Democrats. Republican Reps. Strachota and Friske were absent.

To view a link of the Senate vote on the Conference Report, click here:
http://www.legis.state.wi.us/2009/data/votes/sv0091.pdf

To view a link of the vote on the Assembly vote on the Conference Report, click here:
http://www.legis.state.wi.us/insession/insessiondocs/Votes/av0276.htm

Details of the 2009-11 Biennial Budget
As reported by the Milwaukee Journal Sentinel, the Conference Committee bill that was passed by both houses of the legislature resolved the differences between the two houses on the major issues listed below:

School choice: The package would not include an Assembly-backed plan to limit children in the Milwaukee choice program to 21,500. The program allows children to attend private schools at state expense. The Senate opted to stick with the cap of 22,500 set in 2006, and the committee agreed to that.

QEO: The committee adopted a Senate-backed plan for an immediate repeal of the qualified economic offer system of limiting teachers' pay raises. Doyle and the Assembly proposed a delay of the repeal until the 2010-'11 school year. Teachers have long complained that the QEO has unfairly kept salaries low; others say it keeps property taxes in check.

Immigration: Budget negotiators killed an Assembly plan to issue driver's licenses to those who cannot prove they're in the U.S. legally, but included a provision to allow the children of those immigrants to receive in-state tuition at University of Wisconsin schools.

Auto insurance: A Senate proposal to make auto insurance mandatory is part of the compromise. Wisconsin is one of two states that don't require it. Doyle supports the change, but the Assembly did not endorse it. The budget will also require increases in minimum liability coverage amounts that drivers must carry.

RTAs: The compromise would create a Milwaukee Transit Authority and let Milwaukee County supervisors levy an 0.5% sales tax. It would also authorize creation of a regional transit authority for a commuter rail line linking Milwaukee, Racine and Kenosha that would be paid for by raising the $2 car-rental fee to $18. Other RTAs would be authorized in Dane County, Eau Claire County and Ashland and Bayfield counties.

Seat belts: Law enforcement officers would be able to pull drivers over for not wearing seat belts under the compromise. The state will receive $15 million in federal funds if the change becomes law by July 1. The new seat belt law would only take effect if the budget by that date, however.

School-aid shift: Democrats added a shift in school-aid funding that would guarantee that no district loses more than 10% of state aid. To illustrate, the shift would give the Madison School District up to $1.8 million more, and take about that much from five Milwaukee-area suburban districts - Elmbrook, Oconomowoc, Mequon-Thiensville, Fox Point-Bayside and Nicolet.

Oil Company tax: The Conference Committee report would eliminate the Governor's plan to tax oil companies, which according to the Governor's office was said to have raised $260 million for highways and other transportation programs. One of the key provisions of the provision was that it would be written in a way that would have told oil companies they could not raise gas-pump prices to offset the tax.

Across-the-board cuts: The agreement puts in place an across-the-board 6% cut in spending by state agencies; layoffs of up to 1,400 workers; furloughs for state employees of eight days per year; and cuts in aid to local governments and schools.

Inclusion of tax increases and fees: The compromise reached this week includes more than a $2 billion increase in taxes and fees, which are:
· $310 million by raising the $1.77 tax on a pack of cigarettes by 75 cents.
· $287 million by creating a 7.75% tax bracket for single taxpayers with incomes of $225,000 and more, and married couples with incomes of $300,000 and more.
· $97 million by making consumers pay a 75-cent monthly fee on phone lines.

Also, earlier this year in February, the Governor and the Democratically-led legislature had to balance the current one-year budget by raising taxes and fees by $1.2 billion

(http://www.jsonline.com/news/statepolitics/49163297.html).

Next Steps - Veto Review and Governor Signature
The Governor is expected to sign the bill before the end of the current fiscal year, which is next Tuesday, June 30, 2009. However, it is important to note that the Governor still has the ability to veto certain portions of the bill that he does deem necessary or causes him concern.

By passing and signing the massive budget bill by Tuesday, June 30, the Governor and legislative leaders ensure that the state will receive nearly $75 million in federal funds through the Medical Assistance program and through a grant that relates to the primary enforcement of seat belts. Also, the June 30 signing will result in the earliest signing of a biennial budget bill in nearly two generations.

To view a copy of the Conference Report that was sent to the Governor late on Friday, please open the link below:
http://www.legis.state.wi.us/lfb/2009-11Budget/2009_06_25Conf%20Comm.pdf