Wisconsin Legislature: 97_10

A323 The Legislature is to be commended for its hard work and bipartisanship in passing a budget. Wisconsin has waited a long time for this budget bill to be passed but the end product is good. The bill reduces and then permanently restrains the growth of state income taxes, continues our commitment to lower property taxes and makes responsible spending decisions within our ability to pay. The budget advances education and training programs to give all of our citizens the opportunity to succeed and enhances our environment.

While the product of the budget deliberations was a good one, the process itself needs improvement. Nearly 500 days elapsed from the time budget instructions were sent to state agencies in May of 1996 until the signing of the budget bill in October 1997. The bill itself was not passed by the Legislature until 91 days after the last budget ended. The debate dragged on so long that the budget outlook changed several times during the process. Since agencies prepared their 1997-99 budget requests, revenue estimates have been revised upward on three different occasions, school aid estimates have been revised upward twice, a major lawsuit against the state was settled and the Congress and the President agreed to major federal budget changes. All these events complicated a process that is difficult enough under normal circumstances. I challenge the Legislature to pass the next budget by June 30, 1999.

The budget I am signing appropriates $18.6 billion in fiscal year 1997-98 and $18.8 billion in fiscal year 1998-99, for a total of $37.4 billion in the biennium. This budget represents annual appropriation increases from all fund sources of 8.4% in fiscal year 1997-98 and 1.1% in fiscal year 1998-99, or an increase in the second year over the base year of 9.5%. Appropriations of general purpose revenue are set at $9.8 billion in fiscal year 1997-98 and $9.9 billion in fiscal year 1998-99, for a total of $19.7 billion GPR in the biennium. The GPR appropriations represent increases of 6.5% in fiscal year 1997-98 and 1.6% in fiscal year 1998-99, or an increase in the second year over the base year of 8.2%. Almost all of the increase in GPR spending is accounted for by three major items: settlement of the Special Investment Performance Dividend lawsuit ($215 million); increases in school aid funding; and increases in funding for the correctional system.

The budget bill continues the commitment we made to provide meaningful property tax relief. Property taxes on December 1997 tax bills are expected to drop for the second consecutive year, with taxes reduced by 1.2% on a home at the median value of $93,300. The budget also provides tax relief that our citizens deserve in a number of other ways, including substantial income tax cuts.

The combined effect of the tax cuts in the last two budgets is dramatic. The total state and property tax burden on Wisconsin citizens is now at its lowest level in 15 years when measured as a percentage of personal income. By the end of this biennium, the total state and property tax burden will have dropped in just five years from 12.1% of personal income in 1993-94 to 11.3% of personal income in 1998-99.

The budget bill I am signing has a total of 152 vetoes. A number of these vetoes are technical in nature or needed to correct drafting problems. The budget bill also contained over 130 new directives requiring agencies to prepare reports, studies or plans for the Legislature or Joint Finance Committee, or perform certain activities before funding is made available to the agencies. I vetoed the most burdensome of these new reporting requirements because most state agencies have seen their funding reduced in this budget, on top of the reductions in the last budget. Adding new workload demands at a time when budgets are further constrained interferes with the ability of agencies to provide basic services to citizens. I believe there are far too many legislative directives in the budget since the day to day management of state agencies is the responsibility of the executive branch of government.

I did not feel it was appropriate to use my veto power to eliminate any of the various budget reductions that the Legislature proposed for District Attorney offices, but the reductions are too severe and will harm prosecution efforts in all counties of the state. Instead, I will seek to have separate legislation introduced to restore the cuts made to the budget for District Attorney offices to ensure that DA offices around the state can operate effectively.

The partial vetoes I am executing will improve the general fund's ending balance by $20.5 million. The savings from vetoes are important to maintain adequate budget reserves for the management of state government.

The highlights of this budget include the following:

Tax Relief

• Reduces individual income tax rates by 1% in tax year 1998 and indexes the standard deduction and income tax brackets for changes in inflation beginning in tax year 1999.

• Creates a credit designed to eliminate any remaining tax liability for working families with incomes below $9,000 for a single filer or $18,000 for married filers.

• Increases the married couple credit over a four-year period beginning in tax year 1998, with the maximum credit increasing from the current level of $300 to $420 by 2001.

• Restores the lottery credit as a credit to all parcels of real and personal property. Under this proposal, the average credit is expected to be $84 on the December 1997 tax bills.

• Funds an increase in the school levy credit of $150 million beginning in FY98 as the final component in achieving two-thirds state funding of school costs beginning in the 1996-97 school year.

• Continues the state's commitment to property tax relief. When the state first achieved two-thirds state funding of school costs, the owner of a median value home saw a $121 reduction in his or her property taxes on the December 1996 tax bill. Under this bill, this same homeowner will receive an additional $25 reduction on the December 1997 tax bill.

• Specifies that any increase above $20 million in the general fund's expected balances be used to eliminate delays in school aid payments.

A324 • Provides the Department of Revenue with additional funding and positions to improve service to taxpayers and enhance the fairness of our tax collection system.

Economic Development and Transportation

• Improves highway safety and enhances economic development by increasing state and federal support for highway construction projects and local transportation aids by over $120 million annually.

• Establishes a new $5 million county road improvement program and increases existing local road improvement funding by over 42% to focus transportation resources on critical infrastructure projects.

• Increases local transportation aids by over 11% to meet maintenance and rehabilitation costs and to limit growth in property taxes.

• Establishes a three-tier transit aid distribution structure and increases state assistance to local systems by over 9%.

• Supports the installation of mobile data computers in State Patrol vehicles and the initial development of an improved radio and data communications system for state and local law enforcement efforts.

• Provides $10 million in grants and $22.5 million in loan guarantees for redevelopment of contaminated and underutilized land.

• Provides additional funds for rural and agricultural economic development through the Department of Commerce.

Education

• Requires school districts to adopt rigorous academic standards in core subject areas (reading and writing, mathematics, science, history and geography) by the fall of 1998.

• Requires school districts to implement a high school graduation test by the 2000-2001 school year and requires students graduating in the class of 2003 to pass the test in order to receive a high school diploma.

• Provides $200 million in grants and borrowing authority to implement the Technology for Educational Achievement (TEACH) initiative. TEACH will put technology into every school in the state, as well as provide support for technology initiatives in the University of Wisconsin and Wisconsin Technical College systems, private colleges and public libraries.

• Creates the Youth Options program which will allow high school juniors and seniors to attend technical college campuses full-time to earn their high school diplomas as well as credits toward a degree or certificate.

• Consolidates the School-to-Work program in the Department of Workforce Development and increases financial support for career counseling centers and the youth apprenticeship program.

• Expands the charter school program to allow UW-Milwaukee, the Milwaukee Area Technical College and the city of Milwaukee to create charter schools.

• Creates a public school choice program that increases educational options for parents and students by giving them the choice of which public school district to attend, beginning in the fall of 1998.

• Maintains the state's commitment to fund two-thirds of school costs by providing increases in state school aid of $239 million for the 1997-98 school year and an additional $212 million for the 1998-99 school year.

• Provides $12.8 million over the biennium to expand the number of grade levels and add an estimated 37 school districts to the Student Achievement Guarantee in Education (SAGE) program, which reduces class sizes for schools that serve low-income neighborhoods.

• Provides $2.5 million to increase aid for public library systems by 21.5% over the biennium.

• Increases the low-spending revenue limit exemption for school districts from the 1996-97 level of $5,600 per pupil to $5,900 in 1997-98 and $6,100 in 1998-99.

• Beginning in 1998-99, allows school districts to increase their revenue limits to recognize 20% of their summer school enrollment.

• Provides $666,000 to expand the P-5 program (which provides additional resources for districts with large numbers of low-income students) in Milwaukee, Kenosha, Racine and Beloit.

• Provides an adjustment to the allowable increase in revenue limits from $206 per pupil in the 1997-98 school year to an estimated $211 in the 1998-99 school year.

• Holds school districts harmless from declining enrollment which exceeds 2% in the 1997-98 school year, and modifies the provision to authorize a 75% hold harmless in 1998-99.

• Provides the Board of Regents of the University of Wisconsin System with the authority and fiscal flexibility necessary to increase faculty compensation by the amount necessary to recruit and retain high quality faculty.

• Provides $5.2 million over the biennium to increase Wisconsin higher education grants (WHEG) to students attending the University of Wisconsin System by an average of 20%.

• Provides $4.8 million over the biennium to increase financial aid to students attending the Wisconsin Technical College System and Wisconsin's private colleges.

Environmental Protection and Resource Management

• Increases the redevelopment potential and environmental quality of contaminated property by expanding liability exemptions for sites that are cleaned up to Department of Natural Resources standards.

A325 • Creates a new Wisconsin Land Council to recommend state land use goals, coordinate state programs that impact land development, develop a technology infrastructure to support information dissemination and decision-making, and seek cooperation between state, local, federal and tribal governments regarding land use policy and planning issues.

• Creates a Safe Drinking Water Fund to provide subsidized loans and loan guarantees for improvements to municipal and private drinking water systems.

• Increases municipal recycling grants by $31 million over current law through calendar year 2000.

• Enhances the competitiveness and environmental responsibility of Wisconsin businesses by authorizing environmental performance agreements that emphasize continuous improvements in production processes and associated waste generation.

• Streamlines environmental permit issuance and implements time limits on permit processing.

• Increases funding for water quality protection efforts by $15 million related to the priority watershed program, new nonpoint source performance standards and the soil and water resources management program.

• Seeks to improve service to the public through automating campground reservations, hunting and fishing license issuance and recreational vehicle registration.

• Enhances recreation and winter tourism opportunities by increasing local snowmobile aids by 57% over the biennium through a new GPR appropriation, a new $10 sticker for non-resident snowmobiles and growth in existing revenue sources.

• Reduces agrichemical licensing fees and surcharges due to a surplus in the agrichemical cleanup fund.

Human Services

• Provides $9.2 million GPR to fund an additional 1,192 Community Options Program (COP) slots over the biennium.

• Provides an increase of $146 million over the biennium to meet the increased needs for child care that will result from the statewide implementation of W-2.

• Provides a 21% increase in the grant payments for Community Service Jobs and Transition placements under W-2 to recognize that people in these two categories have additional barriers to work.

• Provides $34.4 million GPR over the biennium to fund the state assumption of responsibility for the operation of child welfare services in Milwaukee.

• Provides $3.6 million GPR over the biennium to support a women's health initiative, to assure that the particular health needs of women are met.

• Provides for an increase in the cigarette tax of 15 cents per pack. The anticipated revenue from this increase, $82 million over the biennium, will help to fund the health initiatives in the budget.

• Provides $2.0 million GPR over the biennium for grants to school districts and local communities for tobacco education.

• Provides $2.6 million GPR over the biennium to increase services to the victims of domestic abuse.

• Adds dental sealants for children as a new Medical Assistance benefit. By the end of the biennium the costs of this new benefit will be outweighed by the savings in other dental costs for children.

• Provides $15.7 million GPR in FY99 to institute the new Badgercare health insurance program for children and their parents. This program will cost $67.1 million all funds annually and will make health insurance available for all low-income children and their parents who are not covered by Medical Assistance.

• Provides $3.0 million GPR over the biennium in increases for benefit specialists and elder abuse services, two programs of importance to senior citizens.

Justice

• Provides the resources necessary to enforce Wisconsin's sex predator law to ensure continued public safety.

• Provides additional state funding and staff for critical drug enforcement programs in the Department of Justice.

• Increases funding for programs that assist victims of crime.

• Provides additional support to local law enforcement by adding state crime lab resources, including full funding of the state's DNA analysis program and funding for critical surveillance equipment and additional crime lab analysts.

• Provides funding for 2,157 new prison beds and 1,830 contract beds to help relieve prison overcrowding.

• Authorizes the Department of Corrections to contract with private providers for prison beds in other states.

• Provides capital funding to construct a 600-bed probation and parole and AODA facility in Milwaukee.

• Provides capital funding to construct another 1,000 prison beds at a site or sites to be determined in the future.

• Provides funding for the VINE System (Victim Information and Notification Everyday) to inform victims of offender location, parole eligibility date, mandatory release date and offender's date of release from prison.

• Increases from three to six the number of private business partnerships authorized to provide prison employment opportunities in Wisconsin prisons.

• Increases funding for youth aids by providing an additional $8.5 million to counties.

A326 • Doubles funding for youth diversion programs designed to divert youth from gang activities in Milwaukee, Racine, Kenosha and Brown Counties and in the City of Racine.

• Provides the resources for the next phase in developing Wisconsin's integrated justice information system to enhance the information sharing capabilities of local law enforcement, the courts, the public defender, district attorneys and the correctional system. The budget also provides nearly $7 million to further improve the information technology infrastructure of the public defender and the district attorneys.

• Ensures the continued success and stability of the Circuit Court Automation Program (CCAP) by providing 23 positions and additional funding to the courts to continue to provide circuit courts with information technology targeted at improving the efficiency of court operations throughout the state.

State Government Operations and Efficiency

• Eliminates nearly 50 attached boards, councils and commissions that the Lieutenant Governor's study recommended be sunset.

• Funds all state obligations related to implementation of the Special Investment Performance Dividend court order and also funds benefit supplements to ensure there will be no discontinuity in the receipt of existing pension benefits by pre-1974 retirees.

• Provides improvements in programs and benefits for Wisconsin's veterans, including extending eligibility to include peacetime veterans, creating a new personal loan program which increases maximum loan limits and expanding the purposes for which loans can be made, restructuring and strengthening the primary home loan and home improvement programs, and expanding the tuition fee reimbursement program.

• Provides funds to reimburse 100% of costs in the National Guard Tuition Grant Program.

• Provides funds for the State Elections Board to convert and implement a system for electronically reporting and accessing election campaign finances, as recommended by a Governor's blue ribbon commission on campaign reform.