WI: Weekly Political and Legislative Update
|TO: Clients/Friends of Capitol Consultants, Inc./Wimmer & Company, S.C. |
FROM: Capitol Consultants, Inc.
& Wimmer Company, S.C.
DATE: March 1st, 2011
SUBJECT: Governor Walker Introduces 2011-2013 State Budget
Governor Scott Walker Introduces 2011-2013 Budget Bill
This afternoon Governor Scott Walker today unveiled his 2011-2013 Executive Budget. Governor Walker said his budget deals with the state's $3.6 billion deficit in an "honest way" after years of mismanagement by both Democratic and Republican Governors and Legislatures.
Past governors and legislators from both parties have securitized tobacco settlement revenues and raided funds set aside for transportation and medical malpractice insurance. They delayed payments and used other accounting tricks to balance the budget. They created taxes on the sick and set up shell games to net more federal funding. They used a massive infusion of one-time federal stimulus money to pay for and even expand existing programs. All these approaches only delayed the day of fiscal reckoning. (page 2, Budget in Brief)
Below is a summary of major provisions excerpted from the Budget in Brief:
Restore Fiscal Responsibility to State and Local Finances.
The budget reduces all funds spending by over $4.2 billion biennially compared to the fiscal year 2010-11 adjusted base, a 6.7 percent reduction over base year doubled. The overall general fund budget increases by $384 million, a 1.35 percent increase over base year doubled. This small increase in GPR is achieved in spite of a $1.26 billion GPR increase in funding for Medicaid to replace an equal amount of one-time federal Medicaid funding from the 2009-11 biennium. In order to balance the budget and fund Medicaid, the remainder of the budget is cut by a net $879 million GPR. Most significantly, the structural deficit is nearly erased with an estimated gap between current law revenues and expenditures of less than $100 million in fiscal year 2013-14 and a two year gap of less than $250 million by the end of the 2013-15 biennium.
Savings have been realized through higher employee contributions for pension and health care benefits - reducing both state operations appropriations and assistance to local governments and school districts. Growth in property taxes is held in check through reductions in per student revenue limits and a no-growth levy cap on municipalities, counties and technical college districts. Many nonfederal and non-segregated fund appropriations, excluding salaries and fringe benefits, have been reduced by 10 percent or more. Specific grant programs, including family planning and buy local grants have been eliminated. In recognition of declining juvenile corrections populations, the budget reflects the closure of the Ethan Allen School near Wales and the consolidation of all juvenile corrections programs at the existing facility at Lincoln Hills in Lincoln County. The State Treasurer and Secretary of State offices are also being downsized to their specific constitutional responsibilities.
The budget provides almost $200 million biennially for the new Wisconsin Economic Development Corporation, in part from a new economic development fund. The budget also creates a new Department of Safety and Professional Services consisting of the current Departments of Regulation and Licensing and parts of the Department of Commerce. The new department will be focused on streamlining Wisconsin's business licensing and related regulatory framework. To further assist businesses with job growth, capital gains taxes are eliminated for long-term investments in Wisconsin businesses and combined reporting is streamlined. The budget also provides a total of $3.2 billion during the biennium to support economic development efforts through investments in highway construction and rehabilitation projects, including $225 million to accelerate reconstruction of the Zoo Interchange in Milwaukee County. The state's busiest highway interchange is a critical economic lifeline for businesses throughout Wisconsin - ensuring its safe and smooth operation can be delayed no longer.
Protect Our Local Schools.
The budget reduces school aid by $834 million over the biennium, a 7.9 percent reduction compared to the base year doubled. School district revenue limits are reduced by 5.5 percent in fiscal year 2011-12 and held flat in fiscal year 2012-13 to ensure that this cut does not result in property tax increases. As a result of the increase in school district employee contributions toward their pension and health insurance benefits, estimated to save nearly $1 billion over the biennium, local schools will have the tools to manage these cuts without having to compromise services or affect staffing. The budget also eliminates a number of mandates. In response to calls for reform by school districts, the 180 day school year requirement is eliminated while the classroom hours requirement is maintained. In addition, teacher residency requirements are removed. Funding for an elementary school reading initiative and a student information system is provided in the budget to help improve education outcomes.
Expand Educational Options.
The budget expands the Milwaukee private school choice and independent charter school programs in support of improved educational outcomes for all Wisconsin students. The cap on the number of participants in the Milwaukee private school choice program is repealed and the income eligibility limits phased out to allow greater participation in this important program. Independent charter school authority is expanded throughout the state, with any University of Wisconsin System four-year campus authorized to create a charter school. All public schools (including virtual charter schools) are also enhanced by removing the student participation limit and expanding the open enrollment application period.
Enhance Higher Education.
The budget reorganizes the University of Wisconsin-Madison as a public authority in recognition of greater flexibility needed by our flagship university as it seeks to compete in the global teaching and research marketplace. The University of Wisconsin-Madison is one of our state's great treasures, a true engine of economic development. The budget establishes a separate board of trustees and provides greater flexibility in allocating resources, leveraging private support, managing building construction, setting tuition and compensating staff. The budget also includes a combined $250 million GPR reduction to the University of Wisconsin System and University of Wisconsin-Madison over the biennium. Despite the condition of the state's finances, the budget preserves current financial aid funding for students attending the University of Wisconsin-Madison and University of Wisconsin System campuses, Wisconsin technical colleges, and private colleges.
Refocus Health Care Programs.
The Governor recognizes that we must provide care to those who cannot provide for themselves. The single greatest threat to these fundamental health care supports and our long-term economic success is the rapid growth in health care costs. The budget takes a number of actions to begin "bending the cost curve" in long-term health care outlays. In addition to increasing health care premium contributions and seeking plan design changes in the health insurance program for state employees, the budget repair bill provides flexibility to the Department of Health Services to pursue approaches to constrain health care costs in the state's Medicaid program. The budget assumes savings from these reforms, including increased co-pays and deductibles, consolidation of eligibility determination activities, greater use of managed care, and a comprehensive review of the Family Care program and other steps necessary to bring health care cost inflation in line with our ability to pay.
Ensure Public Safety.
The previous budget included a number of changes to state sentencing laws that, if left in place, would seriously compromise the safety of Wisconsin citizens by releasing dangerous criminals into our neighborhoods. The budget deletes those sentencing changes to ensure that truth-in-sentencing remains intact. The budget also adds staff resources to the Department of Justice to help protect our children from internet predators and provides funding to the Department of Corrections to protect crime victims through a centralized system for information on offender status and location.
|Text of Governor Walker's Speech|
March 1, 2011
Embargoed until the Governor begins speaking
Contact: Cullen Werwie, 608-267-7303
Governor Walker's Budget Address
Madison-Below is the text of Governor Walker's budget address as prepared:
Speaker Fitzgerald, Speaker Pro Tem Kramer, President Ellis, Majority Leader Fitzgerald, Minority Leader Barca, Supreme Court Justices, Constitutional Officers, tribal leaders, members of the Cabinet, distinguished guests, members of the Legislature, and most importantly, fellow citizens of Wisconsin.
Each and every one of us gathered in the chamber today hold a diverse set of beliefs - beliefs that we are passionate about sharing - and that serve to guide our actions. Each of us has a vision for a better tomorrow in Wisconsin.
But we all share something in common -- an unrivaled passion for this state and the people who call it home. We all want Wisconsin to be the very best that it can be. Yet, -- because our experiences are unique and our beliefs diverse -- our paths may diverge as we tackle today's challenges. But even at the height of our differences, we can and must keep our promise to people of Wisconsin that they will always come first.
Democracy does not just expect differences, it demands them. It's the manner in which we discuss and resolve those differences that leads to bold solutions and innovative reforms. I ask that we continue to be mindful of our differences - as well our similarities - in the coming days, weeks and months. Above all, let us not lose sight of the fact that we were each elected to represent the people of this state by participating in our democratic process.
I applaud the State Assembly and those in the State Senate who are here today for not losing sight of that.
Over the past few weeks, a great deal of attention has been focused on Wisconsin. That's ok because freedom thrives each time there is a passionate debate in our society. Passion and civility can go hand-in-hand and that's what's on display here in Wisconsin.
But outside observers need to know that there is more to this state as well. Wisconsin is filled with outstanding workers and multi-generational employers. We have tremendous resources and amazing attractions. Most importantly, we have decent people in this state.
The good people of this state come from all walks of life - young and old, urban and rural, Democrat and Republican.
Recently, I learned of yet another story that affirms that sense of decency.
Some of our state employees at the Farm Center spent time with two brothers who jointly operate a dairy farm that was - literally - on the verge of financial collapse. One of the brothers was so stressed that he was considering some horrible options.
The Farm Center staff calmly walked the brothers through a variety options and got them through their immediate crisis. That day, our public employees not only helped someone's life, they may have actually helped save someone's life.
This story says a lot about the people of Wisconsin.
It certainly reinforces the financial strain that so many are experiencing across the state. Without a doubt, it shows the compassion of our people toward their fellow citizens. And it shows the professionalism of our public employees who really care about the people that they serve.
This is why we need to move this process forward and get this state working again.
I have been asked a lot over the past week about what happens next. Well, I'm an optimist. I believe that after our budget repair bill passes, tempers will cool, and we will find a way to continue to work together to help grow our economy. We will position Wisconsin to emerge from this economic downturn stronger than ever, with new opportunities for our workers and our families.
You see, for six weeks we worked together to pass bill after bill to show that Wisconsin is open for business. Most of our legislation received bipartisan support. It is my belief that we will soon get back to that type of cooperation in the Capitol.
We introduced a budget repair bill that is the first step toward addressing the long-term challenges facing our state - while laying the foundation for economic growth. The biennial budget I introduce today is built on the savings supplied by our budget repair bill - legislation, I might add, that we have already modified to address concerns expressed at the public hearing.
We need the savings in the budget repair bill because Wisconsin faces a $3.6 billion deficit. Too many politicians have failed to tell the truth about our financial crisis. They left Wisconsinites in the dark about the extent of our fiscal problems. The facts are clear: Wisconsin is broke and it's time to start paying our bills today - so our kids are not stuck with even bigger bills tomorrow.
This deficit did not appear overnight. Wisconsin got here through a reliance on one-time fixes, accounting gimmicks and tax increases. Previous governors and legislatures from both parties took money from our tobacco settlement. They raided more than a billion dollars from the transportation fund and $200 million from the patients' compensation fund. They increased taxes on the sick and set up shell games to draw down additional federal funds.
They relied on one-time federal stimulus dollars as if the money would be there forever - but it's already gone.
Wisconsin owes Minnesota nearly $60 million and some $200 million to the patient's compensation fund. In short, they governed for the short-term, with an eye only on the next election - not the next generation.
While families across this state were focused on making ends meet, the state government continued to grow well beyond our taxpayers' ability to pay. But the time has come for us to make the tough choices necessary to put our state back on the path to prosperity.
We must work together to bring our spending in line with reality. We were elected --not to make the easy decisions to benefit ourselves -- but to make the difficult ones that will benefit our children and grandchildren.
We need a commitment to the future so our children don't face even more dire consequences than what we face today. Together, we will change the way government works in Wisconsin. We will make it work for the people once again.
I have often repeated references to our state's constitutional lesson, that it is only through frugality and moderation in government that we will see freedom and prosperity for our people.
Our budget holds true to these principles by balancing the $3.6 billion deficit through permanent spending reductions and innovative government reforms.
Specifically, our budget reduces all funds spending by $4.2 billion, or 6.7 percent, and decreases the structural deficit by 90 percent from $2.5 billion to $250 million - the lowest structural deficit in recent history. That's over $2 billion we are saving from future obligations and for future generations.
That's worth repeating. Our budget reduces the structural deficit by 90 percent. In fact, it is lower than the last eight budgets presented by democrats and republicans alike.
Gone are the segregated fund raids, illegal transfers, and accounting gimmicks. Gone are the tax or fee increases. Our state cannot grow if our people are weighed down paying for a larger and larger government. A government that pays its workers unsustainable benefits that are out of line with the private sector. We need a leaner and cleaner state government.
As we decrease spending, we also increase flexibility so local government and state government have the tools to deal with reduced revenue. It's true we are reducing aid to local government by just over one and a quarter billion dollars, but we are providing almost $1.5 billion in savings through our budget repair bill. If the 14 Senate democrats do not come home, their local communities will be forced to manage these reductions in aid without the benefit of the tools provided in the repair bill. On the other hand, if the Senate democrats do come home, local units of government overall will actually see a net increase in revenue plus savings of more than $150 million.
Let me repeat that despite the reductions in our budget, local governments would gain $150 million overall in the next biennium - but only if the Senate is allowed to act.
While aid to local government represents the state's largest expenditure, the state's Medicaid program represents the area of fastest growth. Medicaid costs continue to outstrip growth in general fund revenues. Long-term care expenditures, in particular, are growing much faster than other areas of the budget. Coupled with the use of $1.2 billion in one-time federal funding - the state is facing an unsustainable budget challenge. A challenge in need of a serious and long-term solution.
While maintaining services for our most vulnerable, we must also refocus those services and find efficiencies where possible. That will mean asking some individuals to pay modest co-pays and premiums as they transition from the safety net that these programs provide to gainful employment. This will allow those individuals to begin to transition to a time in the future when they will no longer need government support, while protecting those who need these services the most.
Just as we reform our entitlement programs for the 21st century, we must also reform our education system. Clearly, we have to produce graduates who are able to compete - not only with their peers from Chicago or Des Moines - but also from Shanghai or Sydney.
And we must do so while we balance a $3.6 billion deficit. That is why -- even as we reduce school aids - overall we give schools across the state the tools to make up for those reductions with even greater savings through the budget repair bill.
Again, this is why it is so vitally important for the Senate democrats to come back and do their jobs. If they do not, our schools face massive layoffs of teachers. However, if they do come back, overall savings for schools across the state will outweigh reductions, ultimately allowing schools to put more money in the classroom.
When I campaigned for Governor, I set as a goal that all Wisconsin third graders should be able to read at the 3rd grade level. Many have noted that from Kindergarten to 3rd grade -- our kids learn to read -- and then from 3rd grade on, they use reading to learn. We need to make sure every child can read as they move on from 3rd grade.
That's why my budget creates a third grade reading initiative that will require all third graders to achieve basic literacy. I know we can do this and we owe it to our students to make sure we do.
In addition, we will expand choice and charter programs to insure that every kid gets a great education - no matter what zip code they live in. We lift the cap on the number of students eligible to participate in the Milwaukee parental choice program and phase out the income eligibility limits. And across the state, we allow any University of Wisconsin system four-year campus to create a charter school.
Competing globally also means enhancing higher education. To do this we will give our flagship, the University of Wisconsin-Madison, the tools it needs to remain a world leader in research and instruction - while continuing to be a driver of economic development for our state. This is a decision that we discussed at length with Chancellor Biddy Martin and the leadership at UW. For the past several years, she and other UW leaders have pushed for greater flexibility. Now they will have it and soon the University of Wisconsin - Milwaukee will as well.
Throughout the budget process I am open to working with lawmakers from both political parties on expanding this concept to the other campuses throughout the University of Wisconsin system. A few weeks ago, I met with all of the UW chancellors and expressed my willingness to work with them and the members of the Legislature to improve our higher education system.
We also remain committed to keeping our university system accessible to every Wisconsin student, regardless of financial resources. That's why - even in these tough fiscal times - we maintain our commitment to the state's financial aid program. Plus, we maintain the state's tuition reimbursement for our veterans.
As we refocus government, public safety remains a priority. Our budget will restore truth in sentencing by repealing the early release program approved by the last administration.
We will provide additional resources and positions in our DNA lab to assist our criminal investigations. And we will make sure that our children -- those that are dearest to us -- are protected from those who would do them harm. We provide additional resources to investigate on-line predators targeting our children. The state currently has over twenty thousand IP addresses of people who prey on our children, but we didn't have the resources to track those criminals down. Now we will.
We are proud of the leadership being provided in this area by our Attorney General J.B. Van Hollen and I am thankful that even with a tough budget, we can find resources to protect our kids.
This is a reform budget. It is about getting Wisconsin working again - and to make that happen, we need a balanced budget that works -- and an environment where the private sector can create 250,000 jobs over the next four years.
During our special session on jobs, we created a public-private agency, the Wisconsin Economic Development Corporation that will focus solely on job creation. Our budget includes the resources and the organization to get the WEDC working to stimulate our economy.
Working hand in hand with our new public-private efforts at the state level, are seven regional economic development efforts around the state. In this budget, these regional economic drivers continue to receive financial support as they collaborate to get their regions and our state growing again.
Our budget also recognizes the important role that transportation plays in economic development. In order to grow, we need to move goods and people in a cost-effective and timely manner. That is why our budget ends the raids on the transportation fund, and includes a total investment of $5.7 billion in our state's transportation system.
That's money that will create jobs - now - and in the future. Included in our budget is funding for the accelerated reconstruction of the Zoo interchange (which actually saves us $600 million from the original plans) and additional funding to continue construction of the I-94 corridor. It also includes major investments in our transportation system all across the State of Wisconsin.
We will also encourage job growth as I fulfill a campaign promise to lower taxes on those who invest in Wisconsin-based businesses and do so for an extended period of time. We will do this by eliminating the capital gains tax for investors in Wisconsin companies that provide jobs for our people. And we include tax relief for employers who hire more people to work in our state.
In this budget, we provide real tax relief for homeowners across the state by implementing property tax reform that locks in property tax levies at the local level. Time and time again, I've heard from Wisconsinites who are doing more with less and making sacrifices to keep their families going. Good people like the retired couple on a fixed income or the new parents paying for daycare and the mortgage on their first house or the middle-class working family where mom and dad still have jobs, but keeping them meant taking a pay freeze. All of them, and others like them across Wisconsin, need true property tax relief and this budget delivers.
I campaigned on creating an environment where the private sector can create 250,000 jobs over the next four years. Our budget lays that foundation, by freeing taxpayers to create jobs in the private sector, by limiting the size and scope of government, and by focusing our government on meeting core priorities. Where we must make reductions, we do so wisely, by giving local governments the tools to save even more money than overall reductions in state aid.
As I have said before, our constitution says, "the blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality and virtue."
This is the heart of our budget. We are returning to frugality and are making the long term decisions to balance our budget now -- and more importantly, into the future. We will do the heavy lifting to protect our children and grandchildren from having to make the hard decisions that were once avoided.
I know that things will get better.
Back in the 1980s - when I was growing up in the small town of Delavan - we faced similar circumstances in our state. A tough economy and a tight budget were the top issues 25 years ago.
Tommy Thompson brought into office bold new ideas and strong leadership. At the time, defenders of the status quo took offense. But by the end of his first term, those reforms helped balance the budget and those policies helped the private sector create 258,000 new jobs. I remember Governor Thompsons' optimism and the excitement he created when we turned our state around back then. If we did it a generation ago, we can do it again today.
This budget is about our commitment to the future. Like every parent and grandparent in this state, I want my two sons to grow up in a Wisconsin (at least) as great as the Wisconsin I grew up in. Working together, I know we can do it.
Thank you. May God richly bless you and your family. And may God continue to bless the great State of Wisconsin.
|Rep. Seidel: Gov. Walker's budget continues the attack on working families|
Contact: Donna Seidel
Budget Address Given as Thousands of Taxpayers are Denied Access to the People's House
MADISON - Governor Walker delivered his public address on the 2011-13 biennial budget in the State Capitol today, where public access is still restricted despite a court order that the building should be open. Rep. Donna Seidel (D - Wausau) released the following statement:
"Today Governor Walker unveiled his vision for Wisconsin. The budget should be a blueprint that reflects our state's values and priorities to keep Wisconsin moving forward. Unfortunately, Governor Walker has shown over the last few weeks that he does not share the same values as the people of Wisconsin, and his budget is just another example.
"The destructive cuts proposed by Governor Walker will deteriorate our state's proud traditions and move us backward. He has already attacked our way of life with his so-called "budget repair bill," and his biennial budget continues the assault on the middle class.
"When Democrats were faced with an even larger deficit in the last budget, we were forced to make difficult choices, but we made sure to protect Wisconsin's priorities - education, health care and quality, family-supporting jobs for our workers.
"Governor Walker is passing the buck to local governments by asking them to make the tough decisions instead of taking on the responsibility himself. His proposal cuts local aids which will decimate our social services and have a devastating effect on our way of life.
"The Governor continues to promise 250,000 new jobs over the next four years, but he has done nothing to create jobs during his first two months in office nor does his budget provide a plan for job creation. Instead of strengthening our economy by preparing a well-trained workforce, the Governor is gutting our public schools, the UW System and our TechnicalColleges.
"People across Wisconsin have shown their opposition to Governor Walker's radical ideas, and I can only imagine their voice will grow stronger as we have more time to learn about how this budget will impact working families. I hope Governor Walker will not take the same approach he has with the "repair" bill and instead, be willing to listen to the taxpayers and compromise."
Sen. Fitzgerald: Statement on budget address
Contact - Andrew Welhouse, (920) 254-6403
Madison, WI... This afternoon, Governor Scott Walker laid out his vision for the 2011-13 state budget. Senate Majority Leader Scott Fitzgerald (R-Juneau) released the following statement:
"From day one, Republicans have promised to focus on jobs, to stop the unchecked growth of government, and to bring real reform to the broken status quo. With this budget, Gov. Walker is proving that we will keep those promises.
"This budget contains some deep spending cuts, which prove beyond a shadow of a doubt why we need real reform to collective bargaining benefits in Wisconsin. The status quo is broken, and Republicans have promised since day one that we will work to fix it. We cannot afford to simply flush that problem down to the local levels, or push the problem onto the next generation. There is no short-term solution to a long-term problem.
"There is no excuse for standing silent in a system we all know is broken. The bill has come due, and now is the time to pay it.
"The eyes of the country are squarely on 14 empty seats in the state Senate, and 1,500 real jobs are hanging in the balance because of the Senate Democrats' media stunt. It's long past time for them to come to work and do their jobs.
|Sen. Miller: Statement on the governor's budget address|
Contact: Senator Mark Miller
"Over the last two weeks, we have seen the Republicans' overreach exposed.
Their attempts to use a mini budget as an excuse to strip workers of their rights, grab power, threaten health insurance programs for uninsured children, prescription drugs for seniors, and reward contributors with no bid contracts have prompted an unprecedented public outcry.
The Governor and Republicans have refused to reach a reasonable middle ground even though workers have agreed to the economic concessions the governor said he needs and Democrats have offered numerous alternative solutions.
Now we have seen the Governor unveil a budget that takes the Republican attacks on middle class and working families and the values they hold dear to a whole new level.
What the Governor has proposed is nearly $1.5 billion in devastating cuts to public schools, local fire and police protection, and the University of Wisconsin.
The Governor's budget will increase class sizes, layoff teachers, police and firefighters will be laid off, and tuition will increase.
Programs that help seniors stay in their homes and afford their prescription drugs, help get people access to affordable health care, and help families care for family members that are disabled will be threatened.
Nonetheless, the Governor was able to find money to give to large corporations that avoid paying their fair share.
The Governor's budget bill is quite simply balancing the budget on the backs of the middle class and working families; seniors, people with disabilities, children and small businesses.
Clearly the Republicans have not been listening to the people of Wisconsin who are looking to them to build up the middle class, create jobs and get our economy back on track.
Democrats will continue to fight on behalf of working families in Wisconsin."