The following highlights are included in the bill that will become law:

The major result of enacting this bill is lower taxes for Wisconsin, resulting in a more competitive state tax structure for individuals and businesses. In addition, we have taken steps to extend the independence of our elderly citizens, continue improving the quality of our K-12 educational system, and enable our correctional system to accommodate higher populations.

All of these measures are important to citizens, and I am pleased they have been adopted. It should be noted that the tax reductions and improvements in services are made possible by an economy that has succeeded as never before. Our record low 2.4% unemployment, expanding numbers of manufacturing jobs, and expansions of exports and high-tech endeavors have been achieved in part as a result of state government policies. We have encouraged businesses to locate and expand in Wisconsin, cut taxes, and implemented programs that encourage people to live independently. This bill continues those policies.

I have a special concern with one area in the bill. The bill provides that 100% of any projected improvement to the net general fund balance for both years of the biennium beyond $20 million, as certified by the Legislative Fiscal Bureau by September 4, 1998, is to be dedicated to expanding the property tax rent credit for 1998, with this change to be continued in future years. The Department of Revenue must propose how this tax reduction is to be structured and the proposal would need the approval of the Joint Committee on Finance but not of the entire Legislature.

Signing this provision in its entirety is not good public policy. Ideally, decisions on major permanent changes in tax policy should be made by the full Legislature in the biennial budget or in budget adjustment bills, when all other tax and spending issues can be addressed. To make a permanent tax policy change contingent on a possible surplus without regard to other budget and tax issues is short-sighted. It is also not prudent or appropriate to use revenues received over two years to fund a permanent change to our ongoing annual commitments. I have therefore partially vetoed this provision to make the change in the property tax rent credit one-time and not permanent and to provide that the increase in the credit for 1998 be funded with the increase in the balance for fiscal year 1997-98, with a maximum change of $125 million. Permanent changes to these and other tax provisions should be considered by the entire Legislature in future budgets. Under the bill as I am signing it, the property tax rent credit is likely to be increased by approximately 50%, a very generous tax reduction that I am pleased to sign into law.

I commend the leadership of both the Assembly and the Senate for providing bipartisan support for this bill. With the help of the Legislature, Wisconsin continues to build an even better future for our citizens.