Overview

This summarizes the final disposition of the 2013-15 biennial budget as affected by Governor Walker's signing and partial vetoes on June 30, 2013. The summary is limited to issues of greatest interest to the WCC and Catholic groups. For the most part, it describes the final outcome and does not address how particular budget items or programs evolved through the process. It also is limited to noting where changes have occurred and generally does not report on programs that remain unchanged from the previous biennium.

Governor Scott Walker's 2013-15 budget calls for total expenditures of about $70 billion over the biennium. Of this amount, just under half (43 percent or $30 billion) is paid for with general purpose tax revenue. Another $19 billion or 27 percent of the spending is financed with federal dollars. Most of the remaining 30 percent or $18 billion is paid for with segregated fees or program revenues collected in other fees and charges.

The budget includes a freeze on University of Wisconsin tuition and fees, state income tax reductions, increased funding for K-12 public education, the expansion of parental choice in education, changes to Medicaid eligibility, and increased transportation funding.

Tax Policy

The budget includes significant tax cuts in excess of $780 million over the next two years. These include a reduction in state income tax rates and a $30 million tax deduction for tuition costs for parents of students who attend religious or independent schools. The budget provides another $75 million in tax credits to promote economic development.

State Aid to Local Governments

The budget essentially maintains 2011-13 levels of shared revenue for counties and municipalities. With some exceptions it also continues the current freeze on property taxes.

Direct, Community, and Youth Aids. The budget provides a small increase in direct aid payments to counties and municipalities. Community aids remain at usual levels, but reflect projections of federal block grant award amounts that may be subject to federal sequester adjustments. Youth aids stayed at base funding levels.

Children and Families

Child Care. The budget reduces funding for Wisconsin Shares by $31 million because of lower caseloads this year. It modifies the tiered reimbursement system under YoungStar to provide four-star child care providers up to a 10 percent increase from the base reimbursement rate. Three-star providers would not see any increase and two-star providers would see a cut in reimbursements. The changes are designed to reward the highest quality providers.

Child Support. The budget increases funding for county child support enforcement, but it also creates a pilot program that cuts in half (from 1 percent under current law to .5 percent) the interest rate that noncustodial parents have to pay on their child support arrears.

Foster Care Rates. The budget increases foster care and kinship care reimbursement rates by 2.5 percent in 2014, and by another 2.5 percent the following year. The budget also allocates $945,700 general purpose revenue should the Legislature enact separate legislation to extend foster care and kinship care to youth with disabilities who are up to age 21, as long as they are in school full-time and have an Individualized Education Program (IEP) in effect. The current limit is up to age 18.

Independent Living Grants. The budget provides $232,700 in new funding each year for counties to help youth make the transition from foster care and other out-of-home care to independent living.

Wisconsin Works (W-2). The budget reduces funding for W-2 based on projected enrollment. It creates a more flexible Trial Employment Match Program (TEMP) to replace trial jobs and expands it to noncustodial parents. It also creates a similar program for Milwaukee, known as Transform Milwaukee.

Domestic Violence. The budget funds two domestic violence centers in Milwaukee and Madison.

Education

School Aids. The budget increases school aid (combined general and categorical aid) $289 million over two years, including a categorical aid increase of $75 per pupil per year ($150 total).

Parental Choice Programs. The budget increases the maximum voucher payment from $6,442 to $7,210 for K-8 students and to $7,856 for high school students in 2014-15. Beginning in 2015-16 and future years, the voucher payments will increase by the per pupil adjustments in school aids to public school districts, if positive. Lastly, the 38.4 percent of the voucher payment attributable to local property taxes in Milwaukee will be reduced by 3.2 percent per year.

Administrative Changes. Participating choice program schools will be permitted to avoid the requirement of providing occupancy permits if their local municipality provides a letter stating it does not issue such permits. Laws affecting the building usage charge have changed, and there is a new formula for summer school choice payments. Statutory changes would also subject schools to only one audit, even if they participate in multiple choice programs; allow reserve accounts; permit a general calculation of per pupil costs for grades K-12; and require ongoing certification of the school's accredited status.

Program Expansion. The budget also creates a statewide parental choice program, but limits participation to 500 students in 2013-14, and 1,000 students in 2014-15 and each year thereafter. Also, no more than one percent of any one school district's student population may participate in the program. For this statewide program, the maximum income of eligible families is set at 185 percent of the federal poverty level (FPL).

All schools wishing to participate in this program must have been in operation as of May 1, 2013, and the intent to participate form must have been submitted by July 26, 2013, for the 2013-14 school year. Program applications may be accepted beginning August 1. By August 9, schools must report to the Department of Public Instruction (DPI) the number of applications received.

If the number of interested applicants exceeds the student participation limit, then program participation will be limited to the 25 participating schools with the most applications. Each of the 25 schools will allocate 10 choice student seats, to be provided to applicants through random drawing, with preference given to siblings. The remaining 250 available slots statewide will be filled by a random draw among the remaining applicants in those 25 schools, again with preference given to siblings. DPI will then develop a waiting list for those not selected.

Individual Income Tax Deduction for Private School Tuition. The budget creates an income tax deduction for tuition paid to a private school. The deduction will begin in the 2014 tax year and is limited to tuition expenses of up to $4,000 per year per pupil enrolled in grades kindergarten through eight, and up to $10,000 of expenses per year per pupil enrolled in grades nine through twelve.

Education Effectiveness Evaluation System. The budget includes $13.5 million to implement a teacher evaluation system through DPI, which may also charge school districts and charter schools for its use.

High Cost Transportation Aid. The budget increases the pupil transportation rate for pupils transported over 12 miles from $220 to $275. It also creates a high cost transportation categorical aid program that allows a school district to receive additional aid if it incurs transportation costs in the prior year that were 150 percent above the statewide per member average.

Work-Based Learning Program. The budget creates a program that allows any school in Wisconsin that meets certain criteria, to create a work-based learning program where 100 percent of the students in grades nine through twelve receive some form of occupational training and work-based learning experiences. A school participating in the Milwaukee parental choice program is permitted to operate such a program.

Home-Based Education. The budget allows pupils in a home-based private educational program to attend up to two courses per semester at a public school if the school board determines there is sufficient space and the students meet minimum standards for admission as determined by the district offering the course.

Student Information System. The budget provides that more than one entity may provide services under the Statewide Student Information System (SSIS).

Assessments. The budget requires the state superintendent to approve a new assessment for grades 9 through 11 and funds the administration of the ACT Suite of assessments, including Explore, Plan, ACT, and WorkKeys. It also funds implementation of the SMARTER Balanced and Dynamic Learning assessment systems in 2014-15.

Read to Lead Screener. The budget provides $2.8 million for a reading screener for those entering four-old-kindergarten (4K), 5K, kindergarten, and first grade. It adds this requirement for second graders, as well as an oral vocabulary assessment, beginning in 2014-15.

Common Core Standards. The budget prohibits DPI from taking further action to implement any common core standards developed by the Common Core State Standards Initiative until DPI conducts a comprehensive evaluation of the standards. It also requires DPI to adopt college and career readiness educational standards no later than July 1, 2014, that meet national and international benchmarks and are aligned with postsecondary educational expectations. DPI is to implement standards that use the common core standards as a model when necessary to comply with federal standards, though higher academic standards may be adopted. Any common core standards adopted by DPI before July 1, 2013, shall remain in effect until DPI adopts the new educational standards following the requirements for this process outlined in the budget.

School Accountability Report Cards. The budget requires DPI to annually, by September, publish a school and school district accountability report (also called a "school report card"), using multiple measures that determine a school's performance. It also requires that, beginning one year after an independent charter school or a private school participating in a parental choice program begins using the statewide student information system, or a system that is interoperable with that system, DPI include that school in the annual accountability report.

Health and Human Services

Medicaid. Currently, parents and caretakers of children are eligible for Medicaid benefits (with no premium payment) if they live in households with incomes at or below 133 percent of FPL ($15,282 for individuals, $31,322 for a family of four). Parents or caretakers with incomes at or below 200 percent of FPL may purchase Medicaid coverage. Additionally, childless, nondisabled adults have access to Medicaid benefits under the BadgerCare Core plan, but enrollment has been suspended in this program since 2009.

Under the budget, eligibility rules for Medicaid have changed. For a nondisabled adult, Medicaid eligibility is for incomes at or below poverty level ($11,490 annually for a single person, $23,550 for a family of four). As of January 1, 2014, nondisabled adults currently receiving Medicaid benefits and earning above poverty level will no longer be eligible for Medicaid and directed to enroll in subsidized coverage under the new health insurance exchange marketplace.

Coverage for pregnant women will remain at current levels and there is no change to eligibility for children up to 300 percent of FPL. Children in families above 300 percent of FPL will be directed to purchase coverage in the exchange marketplace.

The Department of Health Services (DHS) may continue to provide health care coverage to certain individuals currently covered through Medicaid if there is not a federal certified health exchange for Wisconsin in place this fall. Also, those earning up to 200 percent of FPL may continue on Medicaid if they live in a county that does not have a qualified health plan offered through the exchange operating there.

Family Care. The budget does not expand the Family Care program (the community-based long term-care program for low-income elders and those with disabilities) into new counties, but it does provide funding for DHS to create a comprehensive projection of the expected future need for publicly funded community-based long-term care in the state.

FoodShare. The budget makes changes and provides additional funding to permit DHS to implement the federal work requirements for the FoodShare program. Under the budget, all able-bodied adults without dependents (ABAWDs) are required to work an average of 20 hours per week, participate in and comply with the requirements of a work program for 20 hours a week, or spend 20 hours per week in any combination of work and participation in a work program, or participate in and comply with a workfare program.

The budget specifies that if the work requirement is not fulfilled, DHS could limit the individual's eligibility for FoodShare benefits to three months over a three-year period. (This may require DHS to request a waiver or an amendment to the waiver from the U.S. Department of Agriculture.) The budget also allows DHS to exempt up to 15 percent of ABAWDs participating in FoodShare from the time limits.

Mental Health. The budget includes over $28.9 million (as proposed by the Governor) as an increase in funding for mental health services, and for the establishment of an Office of Children's Mental Health. Over $1.3 million in funding is to support the creation of three regional peer-run respite centers, as well increased funding for coordinated service teams, in-home care, institutional care, and community services.

Self-Directed Services and Secondary Education. The budget directs DHS to request a waiver from the Centers for Medicare and Medicaid Services (CMS) to receive federal medical assistance percentage (FMAP) for home- and community-based services provided to developmentally disabled individuals who receive post-secondary education on the grounds of institutions. Participation in the program is limited to 100 individuals per month per year.

Disproportionate Share Hospital Payments. The budget adds $30 million in state revenue and $43.5 million in federal money for the disproportionate share hospital payments, which go to hospitals that serve low-income and uninsured persons.

Implementation of Health Care Changes. The budget provides $38 million to income maintenance consortia for Affordable Care Act implementation.

Health Exchange Navigators. The budget requires navigators, who will assist clients in traversing the insurance exchange marketplace, to be licensed with the Office of the Commissioner of Insurance.

Electronic Verification of Residency for Medicaid. The budget requires DHS to electronically verify the residence of an Medicaid applicant or recipient. If DHS is unable to verify the applicant's or recipient's residence electronically, the applicant or recipient must provide adequate proof of residency, in the manner determined by DHS, to be eligible for MA. This policy takes effect on January 1, 2014, and affects applications received or continued eligibility reviews commenced on or after this date. This does not apply to any of the following:

• an individual who is receiving benefits under the FoodShare program or under the TANF block grant program and who presents an acceptable form of residency verification for receipt of these benefits;
• an individual who resides in a nursing home, intermediate care facility, inpatient psychiatric hospital, or other residential care facility, and whose care in the facility is paid for by Medicaid; and
• a child residing in a foster care placement under the care and placement responsibility of a county department or the Department of Children and Families.

Criminal Justice

Treatment Alternatives and Diversion (TAD) Program. TAD provides state grants to counties to establish and operate programs that provide alternatives to prosecution and incarceration for criminal offenders who abuse alcohol or other drugs. The budget doubles TAD funding from $1 million to $2 million annually, and mandates annual reports. The budget provides an additional $500,000 annually for drug courts in counties that do not currently have such programs.

Office of Justice Assistance (OJA). The budget eliminates the OJA and moves its programs to the Department of Justice (DOJ), except for programs related to homeland security, which are moved to the Department of Military Affairs.

Juvenile Detention. The budget permits the courts to place juveniles in a juvenile detention facility, a juvenile portion of a county jail, or a place of non-secure custody for up to 365 days, as opposed to the current limit of 180 days.

DNA Collection. The budget requires DNA collection from adults and juveniles who are arrested for felonies and convicted of misdemeanors. Law enforcement agencies are limited in what samples they can send to the DOJ.

GPS Surveillance. The budget provides $250,000 over two years to help local governments around the state set up a GPS tracking system, particularly aimed at domestic abusers and those who have restraining orders.

State Public Defender. The budget increases funding to retain experienced public defenders and to pay for private bar attorneys.

State Prosecutors. The budget increases funding to retain experienced assistant district attorneys.

Victim Services. The budget provides $5.35 million to counties for their crime victim and witness programs, and an additional $4.06 million for programs that assist victims of sexual assault.

Other

Payday Lending. The budget modifies current law governing payday loans to provide that borrowers will be in default of the loan if they are more than 10 days late on an amount that is equal or greater than the value of one full installment payment. The current law on this point permits a borrower to be 40 days late. This provision does not apply to a loan secured by a motor vehicle.

Unemployment Insurance Benefits. The budget increases the work search requirement so that a claimant must generally conduct at least four (up from two before the budget went into effect on July 1) reasonable search actions for suitable work during a week of unemployment. The budget also gives the Department of Workforce Development the authority to require more than four reasonable work search actions.

Governor Vetoes Bail Bonding in Budget

Governor Walker vetoed a provision in the state budget that would have permitted commercial bail bonding in Wisconsin, explaining that he objected to the "potential negative impact on the payment of restititution to victims and fines." The WCC had previously requested the veto in a letter.

Governor Signs Abortion Ultrasound Bill

On July 5, Governor Walker signed the ultrasound bill (SB-206) into law as 2013 Wisconsin Act 37. While the ultrasound requirements went into effect on July 8, U.S. District Judge William Conley has placed a temporary restraining order on the implementation of the law's requirement that abortion doctors have admitting privileges at a hospital within 30 miles of their abortion clinic. Judge Conley will conduct a trial on this provision on November 25. The WCC testified in support of the bill (testimony).

Upcoming Hearings of Interest

(N.B. Only bills of interest are flagged. In most cases, committees will be considering other bills as well.)

Assembly Family Law, 10 am, Tue, July 30, 417-N

Executive Session on:

AB-17. Adoption (T. Larson) The restoration of information from an original birth certificate after adoption.

Hearing on:

SB-68. Maintenance (Grothman) Termination of maintenance upon the payee's or payer's death and notices relating to maintenance.

AB-211. Child Placement (Kleefisch) A presumption that equalizing physical placement to the highest degree is in the child's best interest.

New Bills of Interest

SB-225. Sexual Contact (Lassa) The statute of limitations for sexual contact with a child. To Judiciary and Labor.

SB-226. Child Enticement (Olsen) Seizure of property used in the crime of child enticement. To Transportation, Public Safety, and Veterans and Military Affairs.

SB-227. Electronic Certificates (Lehman) Carrying and displaying in electronic format certain approvals and safety certificates issued by the Department of Natural Resources. To Natural Resources.

SB-228. School Start Date (Darling) The commencement of fall classes in public schools. To Education.