May 16, 2008
Volume #30, Issue #14
WISCONSIN’S BUDGET DEFICIT REPAIRED AT LAST - After months of
wrangling, the $652 million
budget “pothole” has been filled, with the final patch work completed Friday
through a series of vetoes issued
by Governor Jim Doyle.
For months, lawmakers balked at the Governor’s repair plan, which relied upon a
combination of new money
raised from the proposed hospital assessment, accounting maneuvers, and
borrowing to fill the budget gap.
Earlier this week, lawmakers went into Special Session to approve their own
budget fix which ditches the
hospital assessment, takes less from the Transportation Fund, delays school aid
payments, taps into the
Tobacco Settlement money and closes a corporate tax loophole to pay the bill. It
also includes some other
completely unrelated policy items.
The lawmakers’ plan was passed by the Senate on a vote of 17-16, with Senator
Tim Carpenter (D-Milwaukee)
being the lone Democrat to break ranks and vote against the package. The
Assembly voted 51-46 on a
strange bipartisan vote with both Republicans and Democrats crossing party lines
to vote for or against the
package.
Governor Doyle had long stated his strong opposition to delaying payments to
schools and using more of the
Tobacco lawsuit monies, and Friday he issued his budget signing statement, which
included some line-item
vetoes that reshape the plan approved by lawmakers. Here are some highlights of
the Governor’s vetoed
budget plan:
TRANSPORTATION FUND: The Governor’s vetoes result in the use of
$103 million of Transportation Fund
dollars, of which $39 million will be backfilled with bonding revenue. (In all,
the $5.3 billion Transportation Fund
will be cut by some $64 million in this biennium).
FUNDING FOR TRANSPORTATION PROJECTS: In spite of the fund
transfer, there is some good news for
transportation budgets of local governments. The State Highway Rehabilitation
Program is boosted by $56.9
million, and there is some $25 million in new money for the State Highway
Maintenance program.
The plan to delay the State’s April transportation payment to counties remains
in the final budget. Therefore,
instead of quarterly payments of 25% being made in January, April, July and
October, the change would result
in payments to counties of 25% in January, 50% in July and 25% in October.
REVENUE SOURCES: The Governor signed into law the provision to
close a corporate tax loophole. Under
current law, corporations like Wal-mart have devised a clever scheme to claim
ownership of the property of
their stores in other states, charge the in-state branch excessive rent to
under-report their in-state branch
profits, resulting in lower corporate tax liability. The budget repair bill
makes this scheme illegal, and nets the
state treasury some $15 million over the next year.
Doyle also expressed deep disappointment with the failure to adopt the hospital
assessment, which would
raise hundreds of millions of dollars for the State’s ever-growing Medical
Assistance obligations while helping
hospitals at the same time. He pledged to revisit the hospital assessment in his
next budget bill in February of
2009.
CHILD CARE FUNDING (WISCONSIN SHARES): The budget signals a major
victory for AFSCME, with an
$18.6 million increase in Wisconsin Shares, child care subsidies for low-income
families. A deficit of $18.6
million had arisen in the program, leading the Department of Workforce
Development to implement and
emergency rule that balanced the shortfall on the backs of providers who care
for children enrolled in Shares.
Many of AFSCME’s newly-organized child care providers had been negatively
affected by the rule, and
AFSCME had been lobbying to get rid of it. With the increased funding, the
Governor announced that he is
directing DWD to drop the rule next week.
RESERVE FUND: Governor Doyle used his veto to restore the State’s
reserve fund to approximately
$100 million. The Legislature had sought to leave $25 million in the fund.
PROPERTY TAX EXEMPTION FOR LOW-INCOME HOUSING: The Governor vetoed
the Legislature’s
plan to create a property tax exemption for certain low-income housing, stating
that full public debate should
happen on this topic and arguing that lawmakers ought not to include this
proposal in a budget repair bill.
There is widespread disagreement over how much property this could affect and
what it could cost local
governments – and, ultimately, the services that local governments – and AFSCME
members – provide.
To read the text of the veto message, go to The Wheeler Report at
www.thewheelerreport.com.
LEGISLATIVE WEBSITES. . .For those
"online", here are some good info spots: