State Budget; Process Preview
The Wisconsin Legislature’s Joint Committee on Finance (JFC)
has begun voting on items to be included or excluded in its
version of the 2007-09 state budget. With a “split” Legislature
- Republicans control the Assembly; Democrats have a majority in
the Senate, and JFC is comprised of eight members from each
House and each party - it is almost a foregone conclusion that:
-
JFC will divide along party
lines on virtually all controversial issues;
-
Each House (Senate and Assembly)
will adopt its own version of the budget that will differ
significantly from its counterpart in the other House;
-
Final resolution will come from
a Conference Committee, again equally balanced with members,
including leadership, from both houses and both parties, and
will require substantial compromise from both sides.
Before JFC began voting, the
co-chairs of the committee agreed to the removal of a number of
items from the Governor’s proposed budget that were deemed pure
policy, having no direct fiscal impact on the state budget.
The co-chairs also agreed on which
portions of JFC action on the proposed budget would work off of
the bill submitted by the Governor, thereby requiring nine votes
to remove an item proposed by the Governor, and which portions
would work from “base” and require nine votes to be added to the
document. This action is necessitated by the evenly divided
membership, allowing each side an “advantage” on roughly
one-half of the issues to be voted upon in committee.
See the JFC April 20 Press Release regarding Budget Procedures (bill
vs. base) for the Joint Committee on Finance and the list of
non-fiscal policy items that have been removed from the
Governor’s proposal.
The Governor’s proposed biennial
budget includes eight primary “new” funding sources, all of
which provide the necessary funding for new and/or expanded
programs also included in the budget document. The “new”
(primarily fee and tax increases) are:
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Real estate transfer fees
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Vital records Fees
-
Hospital tax
-
Cigarette Tax
-
Motor Vehicle Registration fees
and other Transportation fees
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Tipping Fees
-
Oil Company Tax
-
Transfer from the Patient’s
Compensation Fund
Republicans on JFC are expected to
vote against all the new funding sources, opposing increases in
taxes and fees. This position means that the Republicans will
also be voting against all of the new or expanded programs that
are dependent upon those funding sources, regardless of whether
or not they support the merits of the respective programs.
To further complicate the process,
most of the new funding sources require nine votes to be removed
from the bill, while many of the new or expanded programs
require nine votes to be added, resulting in increases in fees
and taxes but rejection of new or expanded programs that would
be dependent on the increased revenues. This has already
occurred with votes to increase the real estate transfer fee and
the tipping fee, but with a rejection of the programs intended
to be funded by these new revenue sources.
Whatever product comes out of JFC
will be short-lived since, as previously mentioned, the Senate
and Assembly are expected to adopt their own separate and
competing versions eventually leading to the establishment of a
Conference Committee.
The deliberations and work of Joint
Finance are, nonetheless, very important to the budget process.
Much of the philosophical debate will take place during JFC
deliberations. The committee will also clean up technical
problems and issues; identify areas of bi-partisan support; and,
set up the primary differences between the two houses and two
parties in advance of action by the respective houses and
Conference Committee.
Historically, the Legislature has
targeted July 1 as the date by which it hopes to wrap up its
budget session and pass a state budget on for final action,
including line item vetoes, by the Governor. The way things are
lining up this year, it looks like a long summer and we may not
have a new state budget until fall.
The Legislative Fiscal Bureau (LFB) website contains detailed information, including background
papers, alternatives and motions on all significant issues being
addressed by Joint Finance. We commend this website to you for
comprehensive, detailed information on issues of interest and
concern.
The State’s Real Estate Broker
Charged in Kickback Scheme
A federal criminal complaint filed by U.S. Attorney Steven
Biskupic alleges that Larry J. Lupton, a vice president for UGL
Equis Corp., sought up to $75,000 in kickbacks from a potential
bidder on a state Department of Administration building. The
real estate agent, Larry J. Lupton, was charged with asking a
bidder for a $75,000 kickback and revealing confidential bid
information.
The prospective bidders notified the
U.S. attorney and State Attorney General J.B. Van Hollen of the
alleged offenses. Both offices participated in the
investigation.
State Department of Administration
secretary Michael Morgan last week sent the company a letter
terminating the state's contract with Equis and the state has
abandoned plans to sell the lakefront building, which it had
hoped to sell for approximately $30 million, by June 30 to help
shore up the state budget.
Equis had an exclusive listing
agreement with the state of Wisconsin that included a commission
that many local real estate professionals had publicly cited as
being almost twice what they deemed appropriate for the
potential sale.
Speaker Names IT Task Force
Assembly Speaker Mike Huebsch recently announced the state
legislative members of the Speaker’s Task Force on Information
Technology Failures. Rep. Phil Montgomery will chair the
committee, which includes fellow GOP Reps. Sue Jeskewitz, Don
Pridemore, Jim Ott, and Jeff Wood. Democratic Reps. Louis
Molepske, Josh Zepnick and Mike Sheridan will also serve on the
committee.
The task force is charged with
exploring a number of failed information technology projects
currently plaguing state government, and looking to successes in
the public and private sector to find working solutions. (See April 19 Tidbits article.)
Last month, the Legislative Audit
Bureau released an audit of the Information Technology Systems
Projects in the state, finding at least six IT projects that
have experienced cost overruns and delays, including one that
was terminated this year after more than five years and $23
million had been invested. The total bill for failed and
troubled projects is estimated at more than $170 million.
Energy Bill Proposed
A Republican legislator is proposing a bill called the
Energy Independence Act, which would create a series of tax
credits for items geared toward energy independence.
In addition to using various tax
credits to encourage the research, development, sale and
purchase and renewable fuels, the Energy Independence Act alters
the motor vehicle fuel tax to encourage the consumption of fuel
containing at least 85 percent ethanol (E85) and diesel fuel
containing at least 20 percent biomass (B20). Under the bill,
both the ethanol portion of E85 and the biomass portion of B20
would be exempt from the state’s gas tax.
Economic
Development Conference Offered New Perspectives
The Association of Wisconsin Regional Planning Commission’s
Regional Economic Development Conference, held on May 2, offered
national and Wisconsin perspectives on regional economic
development.
Featured
speakers were James Otterstein, former Wisconsin Economic
Development Association (WEDA) President, and Myron Orfield,
University of Minnesota Law professor, who focused on regional
cooperation and Minnesota approaches to regional economic
development.
A week following that conference,
more than 90 economic development leaders from around the state
attended the 2007 Wisconsin Economic Development Association (WEDA)
spring conference in Janesville to discuss “Adding Value &
Leveraging Resources” to enhance local economic development.
For more information on legislation of interest to CTCW
members, go to the CTCW Tracking Report. |
