CAPITOL COMMENTARY

State Budget Update
by James L. Palmer, II
WPPA Assistant Executive Director
& Director of Governmental Affairs

The formation of Wisconsin’s two-year $58 billion budget continues to consume the vast majority of the legislature’s time and energy. As this issue reaches each of our members, Wisconsin remains the only state in the nation with a fiscal year ending on July 1 that has not yet adopted a state budget. In fact, since the beginning of this year, only 19 bills have been signed into law. The two houses of the legislature have each passed a state budget, and as predicted by many, the Republican-controlled Assembly and Democrat-controlled Senate have produced two very different documents.

THE SENATE BUDGET

The Wisconsin Senate formally adopted its version of the state budget on June 26. With an 18-15 majority over the Republicans, the Democrats approved a number of changes to the budget they received from the Joint Committee on Finance.

Among the highlights of that budget were the following:

• Arbitration of Discipline for Both Police and Fire. In an effort led by Senators Bob Wirch (D-Pleasant Prairie) and Jim Sullivan (D-Wauwatosa), the Senate budget restores Governor Jim Doyle’s proposal allowing police officers and fire fighters to arbitrate their discipline. The budget bill introduced in February by Governor Doyle had recommended that unionized police officers and fire fighters outside Milwaukee get the option of taking disciplinary matters to arbitration. On May 30, the Joint Committee on Finance rejected that proposal and modified the governor's plan to apply only to fire fighters.
• Front License Plates Are Restored. The Senate budget package restores the language and funding to require two license plates for each motor vehicle registered by the Department of Transportation. The Joint Committee on Finance had proposed doing away with front license plates in Wisconsin in an attempt to save approximately $250,000 annually.
• Veterans’ Tuition Benefits Largely Restored. The Senate budget largely restores a popular tuition benefit enacted last year for veterans. The law originally allowed veterans to attend graduate school for free and a lifetime in which to qualify for the higher education aid. Enrollment in the program exceeded expectations, resulting in skyrocketing costs and an unanticipated financial impact on the UW System. The budget approved by the Joint Committee on Finance changed the program so that veterans would only be allowed to receive free tuition for undergraduate studies and within ten years of leaving military service. The Senate budget allows veterans and survivors of veterans more access to one additional degree, including graduate school, and postpones the beginning of the ten-year limit for surviving children until they reach 18 years of age.

The Senate also approved Governor Doyle’s proposed $15 million increase in the state’s shared revenue program, through which the state distributes money to local governments to help pay for services. Finally, the Senate adopted the governor’s proposal to increase the minimum amount a local government can increase taxes from 2 to 4 percent.

THE ASSEMBLY BUDGET

By contrast, the Republican-run State Assembly passed a budget on July 10 that substantially diverges from the version passed by the Democrat-led Senate in almost every area of spending.

Among the highlights of that budget were the following:

• Funding for Local Services Suffers Huge Cut. The Assembly budget cuts shared revenue to the tune of $58 million.
• The Assembly budget includes a property tax freeze that would limit the ability of local governments to increase their budgets unless they have new construction growth in their communities. This property tax freeze, in conjunction with the cut in shared revenue aid, would likely result in layoffs or vacant positions left unfilled.
• No Funding for New Veterans’ Benefits. The Assembly budget eliminates the funding to pay for the tuition remission benefits for military veterans and their families.
• No Arbitration of Discipline. Bowing to pressure from police and fire chiefs, the Assembly’s budget eliminates the provision allowing municipal police officers and fire fighters to arbitrate their discipline.
• Supplemental Officer Program Cut. The Assembly budget imposes a 50 percent reduction in the law enforcement officer supplement grant program. The program provides grants to cities to employ additional law enforcement officers whose primary duty is beat patrolling.
• Collective Bargaining Changes. The Assembly budget would prohibit any final contract offer submitted to the Wisconsin Employment Relations Commission (WERC) for interest arbitration from requiring that the employer must pay more for employee compensation and benefits than that provided by any applicable property tax freeze. In other words, if the Republican property tax freeze were in place (which limits a local government’s ability to increase its budget by more than that community’s growth in terms of new construction), and your community has not experienced an increase in new construction, then your local association would not be able to submit a final offer that included an employee wage and benefit package that exceeds zero percent.
• Pension Contribution for All New Public Employees. The Assembly budget created a requirement that every new town, village, city, and county employee must pay the first 3 percent of their earnings toward their pension. Current law permits the employer and employees to negotiate for the employer to pay all or part of the employee-required contributions. These benefits have historically been bargained at the local level, and the Assembly budget would eliminate the ability to negotiate these arrangements in the future.

In the meantime, the Assembly budget cuts taxes on cigarettes and big oil companies, and includes a wide variety of special-interest favors, like tax breaks for people who buy gold bullion.

Flanked by law enforcement officers and fire fighters at a July 11 press conference, Governor Doyle characterized the Assembly budget as an “extreme and irresponsible” document that would hamper the ability of police and fire to effectively maintain public safety services.

The Republicans controlling the Assembly and the Democrats controlling the Senate have each appointed a select group of lawmakers to a committee to resolve their differences, a step which must occur before the budget can be sent to Governor Jim Doyle’s desk for his consideration. That process is moving at an extraordinarily slow pace, and may not conclude until sometime in October or November. In the meantime, contact your legislators to respectfully let them know how you feel.

THE WPPA AIRS ITS FIRST-EVER TV AD

In an effort to publicize the negative impact the budget will have on WPPA members, the WPPA Political Action Committee (PAC) ran a television ad in August targeting State Representative Eugene Hahn (R-Cambria) for his budget vote. The ad ran during the first quarter of the Green Bay Packers’ August 11 preseason game, and was designed to serve as a shot across the bow to lawmakers who vote to cut funding for local services.

Though only broadcast in the local Madison media market, the ad received statewide attention from television, newspaper, and radio news media. Since the ad aired, there has been a great deal of speculation that Representative Hahn will not run for reelection.

The ad is still available for viewing on the WPPA’s website, along with a wealth of information regarding recent legislative activity. Check us out at www.wppa.com to keep up with the latest information, and, as always, stay safe, stay informed, and stay in touch.