Senate and Assembly Approve Budget
After all-night debates Wednesday into Thursday (Senate) and Thursday into Friday (Assembly), both houses of the Wisconsin Legislature approved the 2003-05 $49 billion biennial budget bill – with one minor amendment pending. The Senate will not meet today to consider the Assembly amendment, but will do so on Monday or Tuesday of next week. Our Budget Update has been revised to highlight the changes made by Senate and Assembly action. 

Senate - Early Thursday morning the Senate passed Senate Substitute Amendment 1 to SB 44, as amended by two Republican sponsored amendments, Senate Amendment 119, and Senate Amendment 121, by a vote of 17-16. (See the roll call for this vote.) Democrats offered 120 amendments, none of which were passed. The final vote included 16 Republicans for the budget, plus one Democrat, Sen. Gary George, District 6. Voting against the budget as amended were 14 Democrats plus Sen. Cowles (R-Green Bay) and Sen. Ellis (R-Neenah). 

On Tuesday, Sens. Cowles and Ellis announced they would not vote for a budget with a structural deficit in the amount that remained in the JFC version of SB 44. (See their letter sent Tuesday to the Governor, Senate Majority Leader, and Assembly Speaker.) Efforts to address the two Republicans’ concerns via SA 119 fell short in getting their support. Thursday morning Sen. Ellis expressed his continued concern that the amendment would not correct the problem. 

Democrat Sen. George announced that his decision and vote to approve the budget resulted from the positive gain for his district due to several provisions in the adopted amendments. These include:

• funding for a Hmong cultural center in Milwaukee;

• funding for a faith-based initiative that will work to create job opportunities and provide counseling to families impacted by gun violence; and

• creation of a Uniform Minority Business Certification Program that will streamline the application process for minority businesses wanting to do business with the state and local governments

Other highlights contained in the Senate changes to the Joint Finance version of the budget include:

• Exempts permanent or project employees of the UW Hospitals and Clinics Authority from the JFC provision that half-time to three-quarter time employees pay 50% of their health care premium.

• Provides that $2 million of the $8 million GPR provided in JFC for the Graduate Medical Education program be used for indirect GME costs. Under the JFC version, the entire $8 million was for direct GME costs only.

• Creates a refundable income tax credit for nursing home residents who pay the bed assessment. The credit is allowed on $43 per month (difference between current bed tax of $32 and $75 approved by JFC) and would first be available in tax year 2003 for assessments paid after July 1, 2003. Estimated cost of $4.4 million annually once fully implemented.

• Modifies the JFC provision that would transfer 20% of the sales tax on vehicles from the general fund to the transportation fund beginning in 2005-06 by reducing the transfer to 10% of the sales tax collected.

• Deletes $50,000 annually provided to DOJ for administration of a hotline established to receive tips regarding dangerous weapons in public schools.

[See SA 1 to SA 119, SA 119, and SA 121]  [Also see LFB memo on SA 119, & SA 121]

Assembly - On Thursday evening, the Assembly took up the Senate-passed version of the budget bill and rejected 54 of 55 amendments debated throughout the night. The bill was passed, as amended by Assembly Amendment 55, around 4:45 a.m. on Friday by a final vote of 58-37 (59-38 with pairs) with all Republicans voting for and all Democrats, except Rep. Bob Ziegelbauer  voting against. Following the vote, Ziegelbauer announced his support of the budget, sharing his belief that Joint Finance added many fiscally sound provisions to the Governor’s “great start.” Ziegelbauer reiterated the difficulty of achieving a perfect budget in the present fiscal climate, and expressed his belief that since the budget process began, he has believed “we must solve our problems by restraining government spending, not by raising taxes.”

The lone Assembly Amendment (AA 55) restored $50,000 in DOJ, but not the authority to operate a dangerous weapons hotline. Instead the money is directed for support of the Amber Alert system and a drug hotline. The amendment also deleted special levy limit adjustments related to the Town of Fond du Lac and City of Fond du Lac annexation. (The Assembly plans to include the provision in a separate “trailer bill” to be taken up in extraordinary session next week.)

The bill now returns to the Senate for action on the Assembly Amendment, which is expected early next week.

Governor - Following Senate action next week, the budget bill returns to the Governor for his final review and action. Despite persistent media speculation, we do not expect the Governor to veto the entire legislative-approved budget. We do, however, anticipate that the Governor will make extensive use of his partial veto authority before signing the bill.

Early Action - Legislative adoption of the 2003-05 budget before the end of June represents the earliest budget adoption in many years. The Governor is also expected to move as quickly as reasonably possible. Both the Democrat Governor and the Republican Legislature have been and are aware that delay merely adds to the state’s financial woes.

Nettles Confirmation
This week, the Senate Economic Development Committee unanimously voted to recommend confirmation of Cory Nettles’ appointment as Secretary of Commerce.

Wisconsin Housing Preservation Corp. and WHEDA Sue Each Other
On Tuesday, The Wisconsin Housing Preservation Corp. filed a lawsuit against the Wisconsin Housing and Economic Authority (WHEDA), alleging that WHEDA has unlawfully tried to take over the Housing Preservation Corp., a non-profit group made up of former WHEDA members that provides housing to low income people. Later the same day, WHEDA announced it would file (and did file) suit against the Housing Preservation Corp. alleging that a small group of then WHEDA officials improperly spun off the Corporation from the state and are now profiting from their actions.

Chvala Files Brief to Dismiss Four of the Criminal Counts Against Him
Former Senate Majority Leader Chuck Chvala of Madison filed a brief Tuesday with the Wisconsin Court of Appeals. The brief asks the Court to dismiss four of the State’s 19 felony charges against Chvala – specifically, it asks for dismissal of four counts of felony misconduct in office, for hiring and directing Senate Democratic Staff people to work on campaigns. Chvala challenges these counts on grounds of unconstitutional vagueness, improper Separation of Powers, and unclear guidelines within the Senate policy manual for defining proper (and thus, improper) “political activities.” The State based part of its complaint against Chvala upon the Senate policy manual’s guidelines.

Meanwhile, State of Wisconsin vs. Charles Chvala moves closer to trial. The final pre-trial hearing is scheduled for July 3, with jury selection scheduled to begin on August 6, 2003.

New Ozone Nonattainment Designations
By July 15, 2003, Gov. Doyle must submit to EPA recommendations on which counties should be designated nonattainment for the new 8-hour ozone standard. (EPA makes its decision later this year using new ozone data from 2003.) Initially, DNR pushed for a broad nonattainment designation, including 11 counties currently meeting the new standard. Along with the nonattainment designation comes various regulatory mandates affecting industrial and transportation sectors.

Pressure from state and local business groups, economic development organizations, chambers, and local officials helped in convincing DNR management to recommend only those counties actually violating the standard be designated nonattainment. However, DNR staff appeared to be developing an alternative means of getting attainment counties designated nonattainment. In a June 18 presentation to the Clean Air Act Task Force, DNR staff said they will ask the Governor to include in his recommendation a comprehensive “contribution analysis” that supposedly validates DNR staff position that the 11 attainment counties contribute to the ozone problem in those counties along Lake Michigan that are in violation of the standard. (EPA representatives who were at the meeting stated they would consider this analysis when making their final decision.) Over the next several years, we expect significant developments relating to the implementation of the new ozone standard in Wisconsin.

Extraordinary Session Called for Economic Development Initiatives
After voting to approve the budget early this morning, the Assembly adopted a resolution by voice vote calling an Extraordinary Session for next week to address several economic development related bills. The session is scheduled to begin on Monday, but the Assembly is not expected to hold a floor period until Tuesday. Consideration of each bill will pick up where consideration left off before adoption of the resolution. Bills that will be addressed in the special session are:

Single Sales Factor:
 On Monday, the Senate Economic Development Committee recommended passage of SB-197, the single sales factor bill, and referred the bill to the Joint Finance Committee. On Tuesday, Governor Doyle expressed his support of this bill, which, if passed, could improve the economic climate in Wisconsin. (See last week’s tidbits for more on this bill). The Governor urged the legislature to pass the bill, stating that “moving to a single sales factor is the best way to attract new employers and encourage job growth” in the State.

The Assembly companion bill, AB 413, was referred directly to Joint Finance on June 13. On Thursday, JFC met to address the two bills. The Committee voted to recommend passage of both bills as amended by Assembly amendment 2 and Senate substitute amendment 1 (identical to the Assembly amendment), and with emergency statements attached to allow these bills to be acted upon before final action on the budget.

Local Payments to Public Utilities:
On Tuesday, the Joint Finance Committee voted to adopt Assembly amendment 1 to AB 378, the bill creating new incentive aid payments for municipalities and counties that host power plants. (For further discussion on this bill, see the Hamilton Consulting Group’s Special Update). Additionally, the Committee voted to adopt Assembly amendment 5 to AB 378. The amendments alter the bill as follows:

AA 1:

• Creates an additional appropriation for the new aid payment structure

• Adds to the definition of repowering a facility to include renewable facilities

• Changes the effective date for ending mitigation payments from June 1 to June 10th 2003.

AA 5:

• Allows the Public Service Commission and not the Department of Revenue to determine capacity factor for the baseload incentive payments.

The Joint Finance Committee further adopted a substitute amendment conforming SB 180, the Senate companion bill to AB 378, to actions taken on AB 378. It is also expected there will be adoption of a still – to - be introduced amendment, altering the payment amounts to the City of Madison, from an estimated $200,000 per year to an estimated $350,000. (Following hours of floor debate on the budget, Assembly Republicans agreed to the amendment after Madison Democrat David Travis continued to block passage of the budget on a procedural motion in order to obtain a concession on payments to Madison under the power plant siting bills.)

Other Bills To Be Addressed In the Extraordinary Session Next Week:

• AB-394 and SB-194, relating to powers and duties of a transmission company with responsibilities for electric transmission in Wisconsin.

• AB-275 and  SB-117, prohibiting MTBE in automotive gasoline.

• AB-379 and SB-188, extending the expenditure period and life of tax incremental districts in Kenosha.

• AB-167 and SB-25, extending the expenditure period and life of a tax incremental district in Sheboygan.

0.08 Blood Alcohol Content Bill Nearing Federal Deadlines
On Tuesday, the Senate Transportation Committee held a public hearing on AB 88. No executive action was taken, although Committee chair Leibham announced at the close of the hearing that committee members would be discussing this bill, and concerns raised by Tuesday’s hearing, over the following few days and would likely vote on the bill before the end of the week.

In order to receive certain federal incentive money, counted on by the JFC budget version, the 0.08 BAC bill must be signed by the Governor by July 15, 2003, and become law by October 1, 2003.

Asbestos Legislation Remains Contentious
As the Senate Judiciary Committee began marking up the Fairness in Asbestos Injury Resolution Act of 2003, there was agreement between Republican and Democratic Committee members on several provisions, but not all. Division along party lines remains in some of the most contentious areas of the bill. So far, the mark-up session, which began this week and is expected to continue into next week, has revealed that the Committee has agreed to these changes:

• preventing payments from Medicaid or private insurance from offsetting awards owed to victims;

• doubling the statute of limitations for filing an asbestos claim from 2 years to 4 years; and

• providing compensation to exposed victims in Libby Montana, a mining town with documented high rates of asbestos-related illness.

Remaining to be sorted out, however, are:

• a definition of what “fair medical criteria” consists of, for evaluating alleged asbestos victims;

• amount of awards for victims; and

• ways to ensure that the victim compensation trust fund does not run out of money.

Although Chairman Hatch would like to see the bill pass quickly, he reportedly stated he did not intend to force a vote if it continues to look as if compromises can be reached, and an agreeable plan worked out.

Competing Clean Air Legislation May Not Carry Identical Price Tags
It was reported Monday that the Chairman of the Senate Committee on Environment and Public Works, Senator Inafe, may request review of the economic impacts of two clean air bills currently being considered in the Senate – Bush’s “Clear Skies” initiative and Sen. Carper’s bill.

While the two bills are reportedly similar on several counts, Carper’s bill would regulate carbon dioxide in addition to emissions of mercury, nitrogen oxide and sulfur oxide; Bush’s plan would not. Carper’s bill, if passed, would cost more money to implement.

Corporate Political Contributions Still Unconstitutional, Says Supreme Court
On Monday, The Supreme Court handed down a ruling banning contributions from incorporated advocacy groups to political campaigns. In a 7-2 majority opinion, authored by Justice Souter, the court rejected the claim that the ban on contributions was unconstitutional; the effect is a broadening of the 32 year old federal rule against such contributions.

The Court weighed freedom of speech against Congress’ right to control the effects of corporate money on politics, and said that the Constitutional freedom does not trump Congress’ intentions for retaining the federal ban. (See a related news article).

Saturday, June 21:

• State Rep. Debi Towns (R-43), Janesville, WI, 5:30 p.m.

Sunday, June 22:

• Reception for Tom Petri, Ripon, WI, 11:30 a.m.

Monday, June 23:

• Candidate for Alderperson Stephanie Harling (14^th), Milwaukee, WI, 5:00 p.m.

• State Rep. Dave Cullen (D-13), Milwaukee, WI, 5:00 p.m.

• State Rep. Tony Staskunas, West Allis, WI, 4:30 p.m.

• State Rep. Mary Williams (R-87), Medford, WI, 5:00 p.m.

Tuesday, June 24:

• Reelection for Milwaukee Comptroller Wally Morics, Milwaukee, WI, 7:00 p.m.

Wednesday, June 25:

• Birthday Party for Kathleen Falk, Madison, WI, 5:00 p.m.

• State Rep. Curt Gielow (R-23), Milwaukee, WI, 5:00 p.m.

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In the News

State Assembly passed budget: Milwaukee Journal Sentinel, June 20, 2003.

Veto question looms over budget: Appleton Post-Crescent, June 20, 2003.

Cowles, Hansen vote against budget bill: Green Bay Press-Gazette, June 20, 2003.

Gov's veto pen poised as budget heads his way: Madison Capital Times, June 19, 2003.

Senate approves fix to the state's $3.2 billion deficit: Milwaukee Journal Sentinel, June 19, 2003.

Budget gets narrow Senate OK: Appleton Post-Crescent, June 19, 2003. Ellis, Cowles lone GOP members against proposal.

Proposed bill aiming to assure more legal representation for poor: Manitowoc Herald Times, June 19, 2003.

New state economic chief listening to businesses: Green Bay Press-Gazette, June 19, 2003.

Senate kills loophole fix: Madison Capital Times, June 19, 2003.

Legislative panel backs business tax break: Appleton Post-Crescent, June 18, 2003.

Sentencing study dropped: Milwaukee Journal Sentinel, June 18, 2003

State needs to develop young workers: Milwaukee Journal Sentinel, June 18, 2003.

Doyle urges approval of tax break for businesses: Appleton Post-Crescent, June 17, 2003.

Job market gains ground: Milwaukee Journal Sentinel, June 17, 2003.

DNR to issue rules on spreading of PCB-laden waste: Green Bay Press-Gazette, June 17, 2003.

Give states flexibility over farm air pollution (opinion): Wisconsin State Journal, June 17, 2003.

Doyle laments cuts in fee hikes: Appleton Post-Crescent, June 17, 2003.

Tobacco marketing increases: Wisconsin State Journal, June 17, 2003.

State workers 'at risk': Madison Capital Times, June 16, 2003.

Fireworks liability exemption bill adds to confusion of current restrictions: Racine Journal Times, June 16, 2003.

Bill may raise income limits for public defense: Milwaukee Journal Sentinel, June 16, 2003.

Mercury: It's no fish story (opinion): Milwaukee Journal Sentinel, June 16, 2003.

Plug loophole, pay for health: Madison Capital Times, June 16, 2003.

Drug bill amendment would impact specialty hospitals: Milwaukee Journal Sentinel, June 16, 2003.

State Democrats favor Dean in informal poll: Green Bay Press-Gazette, June 15, 2003.

Brown County eludes ozone tag: Green Bay Press-Gazette, June 14, 2003.