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Jan. 17, 2003

Wisconsin Politics

Doyle Names More Appointees
Gov. Jim Doyle continued to put the finishing touches on his Administration this week by adding Donsia Strong Hill as Secretary of the Department of Regulation & Licensing. Strong Hill, an attorney with Strong Hill Associates from the Green Bay area, specializes in municipal bond financing. She is a former Brown County Assistant District Attorney.

At the Dept. of Transportation, Ruben Anthony was named Deputy Secretary and Randy Romanski was named Executive Assistant. The Deputy Secretary of the Dept. of Administration is Laura Engan and Sean Dilweg has been named Executive Assistant.

Doyle also appointed several to various boards.

UW System Board of Regents:

• Mark Bradley, a Wausau attorney
• Peggy Rosenzweig, a former Republican State Senator
• Jesus Salas, an instructor at the Milwaukee Area Technical College
• David Walsh, a partner at Foley & Lardner and Doyle transition team co-chair
• Danae Davis, an employee of Miller Brewing Company

Natural Resources Board:

• Christine Thomas, a UW-Stevens Point professor
• Alan Grischke, a Wausau attorney
• Jonathan Ela, a founding member of the Sierra Club Midwest office in Madison

Agriculture, Trade & Consumer Protection Board:

• Cindy Brown, a marketing director in Menomonie
• Enrique Figueroa, director of the Roberto Hernandez Center at UW-Milwaukee
• Mike Krutza, CEO of Farm Credit System Financial Services in Wausau
• Brian Rude, director of external relations at Dairyland Power Coop in Coon Valley
• Andrew Diercks, President of the Wis. Potato & Vegetable Growers Assn., Coloma
• Margaret Krome, Ag. Policy coordinator at the Michael Fields Agricultural Institute, Madison

Case to Proceed Against Foti and Jensen
Dane County Circuit Judge Daniel Moser ruled Wednesday that the criminal cases against former Assembly Speaker Scott Jensen, Majority Leader Mickey Foti, and former staffer Sherry Schultz may proceed. Jensen, Foti and Schultz were each charged with felony misconduct in public office as a result of the caucus investigation. (Click here for more information on the charges.) After listening to two days of testimony during the preliminary hearing, Moser concluded that there is probably cause to proceed to trial. However, he appeared to invite the appellate court to consider certain issues raised by the defense before the case goes to trial. Attorneys for Jensen and Foti have indicated they will seek an appeal quickly.

Assembly Committee Assignments Set
Assembly Minority Leader Jim Kreuser appointed the Democratic members of the Assembly Standing Committees, as well as members to the Joint Committees. All Legislative Committee’s are now set for the 2003-04 Legislative Session. Click here to view the Assembly Standing Committee make-up. Click here to view the Joint Committees. 

Policy Developments

Doyle to Cut $2 Billion
Gov. Jim Doyle indicated this week that he plans to cut more than $2 billion in spending next year through unprecedented cuts in services. Doyle noted that the state is projected to collect only $10 billion in taxes next year, but is on track to spend approximately $12 billion.

Priorities (areas where cuts will not be recommended by the Governor) include $5.2 billion in funding for public schools and $1 billion for shared revenue. He is also committed to allocating money to rebuild the Marquette interchange in downtown Milwaukee. Doyle also indicated he does not plan to expand the sales tax to current exemptions or raise taxes or auto registration fees.

Doyle does, however, plan to divert $330 million from the building fund; increase hunting and fishing fees; delay prison openings (estimated to save $32.7 million); cut up to 15 percent from state agencies; and, attempt to gain more from Wisconsin’s tribes when the gaming compacts are re-negotiated.

DOA Secretary Sends Agencies Strict Directives
DOA Secretary Marc Marotta recently sent a memo to agency heads directing them to take several steps to address the state’s current and looming fiscal challenges. Steps include:

• Avoid filling vacancies to the extent practicable.
• Place strict limitations on out-of-state travel.
• Identify savings in the current operating budget that can be lapsed to the general fund.
• Place a moratorium on all state building contracts not contractually obligated to continue.
• Place a moratorium on new office space requests and renewals of existing leases.

Marotta indicated in his memo that these measures will help to "set the stage for the additional reductions necessary to balance the state budget."

Education Funding Critical To Budget Deliberations
State government aid to local schools is the single largest portion of state General Purpose Revenue (GPR) spending. In 2000-01, aid to schools was $4.4 billion or nearly 40 percent of the state’s GPR budget. Complicating this is the fact that the state legislature does not vote directly on state aid for education, but rather, the two-thirds funding law requires two-thirds payment for “partial school revenues.”

Another complicating factor to the two-thirds funding mechanism is revenue caps placed on school districts beginning in the 1993-94 school year. These caps limit the amount a school district can raise from a combination of state aid and property taxes. In an attempt to make revenue limits workable, the state legislature handed local officials a tool to address the growth of employee salaries and benefits.

Known as the Qualified Economic Offer provision, the QEO allows school districts to avoid compulsory arbitration by offering salary and benefit increases of 3.8 percent per year. This helped slow the growth of spending and, therefore, somewhat slowed the growth of the state’s two-thirds commitment. Removing the QEO without addressing the two-thirds funding could result in a fiscal nightmare for state policymakers.

This week a group calling themselves the Wisconsin Alliance for Excellent Schools released a foundation plan called the Wisconsin Adequacy Plan to replace the current school aid formula. The plan basically calls for a foundation level of funding of $8,500 per child, with adjustments for special needs; a 6 mill property tax levy for K-12 schools, lower for K-8 and Union; and an increase in sales tax from the current 5 percent to 6.2 percent.

In addition, former WEAC leader Morris Andrews developed a plan to overhaul the current school funding system at the request of former Governor Scott McCallum. Andrews worked with stakeholders including representatives from business and labor to reach his recommendations.

Governor Doyle has stated many times that education is a priority and that his budget will not be an attack on public education. During his campaign he introduced an Education Equity Plan to improve education in Wisconsin. In the plan, Doyle calls for the elimination of the QEO and the revenue limits on school districts. The removal of these two provisions, coupled with the state fiscal condition, cause many observers to believe there will be major changes in the state’s school funding mechanisms in the Governor’s budget.

According to the Milwaukee Journal, Doyle told editors that he could either "spell out a comprehensive reform" when he presents his budget to the Legislature or he could announce a dollar amount for state education spending and then initiate "an open discussion about reform."

Identity Theft Task Force Completes Its Work
The Identity Theft Task Force, headed by Rep. Mark Gundrum (R-New Berlin), held its final meeting this week. The final product of the Task Force is currently being drafted and should be circulated to co-sponsors soon. The Task Force, which is comprised of legislators, law enforcement and business leaders, began meeting in June of 2002 to attempt to strengthen Wisconsin’s laws on "identity thieves."

The draft includes provisions that create penalties for persons who obtain credit, goods, services, employment or anything else of value by the unauthorized use of an individual’s or entity’s personal identifying information or documents. Another provision relating utility service to identity theft victims provides that a utility must provide service to a person if they provide an affidavit stating they are a victim of fraud and a police report stating the same. Previous drafts contained notification requirements of unauthorized use for entities; however, those provisions will not be included in the final draft. The Hamilton Consulting Group will have a detailed summary of the language once it has been finalized.

"Pay to Play" on Legislative Fast Track
Rep. Mark Gundrum’s legislation ending "Pay to Play" activities will likely be voted on during the first floor period day of the new Legislative Session. A public hearing on the bill was held on Jan. 13 and an Executive Session has been scheduled for Thursday, Jan. 23 to vote the bill out of the Assembly Judiciary Committee. According to Rep. Gundrum, the proposal would clearly make it illegal to directly exchange official legislative actions for campaign contributions.

Federal Developments

Bush Supports Medical Liability Reform
President Bush called on Congress to enact medical liability reform that would provide for an unspecified limit on punitive damages and a $250,000 cap on non-economic damages. Bush indicated that the steady increase in litigation is the key factor driving the overall growth in healthcare costs. The White House estimates Bush's plan would save the federal government at least $28 billion per year and reduce health costs for all by more than $60 billion. Bush's plan – presented as a general outline and not in legislative language – would also provide for payments of judgments over a period of time rather than in a lump sum. The President also wants to limit the time a patient has to file a suit and would reduce the amount that physicians must pay if the plaintiff has received other compensation from an insurer. In addition, Bush is seeking reform that ensures individual physicians pay judgments in proportion to their fault and would not be held liable for mistakes of others. 

Feingold Introduces Legislation to Delay Pentagon's Data-Mining Program
Sen. Russell Feingold, D-Wis., announced plans to introduce a bill that would delay the Pentagon's data-mining program known as Total Information Awareness (TIA). Funded by the Defense Advanced Research Projects Agency, TIA would enable searches of a network of databases from sources like credit card companies, medical insurers and motor vehicle departments for information that, the program's proponents say, could allow the police to combat terrorism.

Bipartisan Effort to Strengthen EPA Ombudsman
The EPA's ombudsman would get expanded power to conduct independent reviews of federal cleanup decisions in the Superfund program under legislation proposed by Rep. Jerrold Nadler, D-N.Y., and Sen. Mike Crapo, R-Idaho. The bill would formally authorize the Office of Ombudsman and separate its funding and staffing decisions from EPA, making it an independent entity operating within the agency. The measure is aimed at responding to citizen groups that complain about EPA officials frustrating ombudsman investigations of agency decisions. Click here for GAO’s report on EPA’s ombudsman; and here for Jerrold Nadler’s press release.

Political News

State's residents out of touch with dire reality of budget cuts, poll finds: Milwaukee Journal Sentinel, Jan. 17, 2003. 51% of those polled favored cuts.

Doyle appoints 9 to natural resources, agriculture panels: Milwaukee Journal Sentinel, Jan. 17, 2003. More board members resist displacement.

State pay pacts in trouble: Madison Capital Times, Jan. 16, 2003. Republican legislators say state can't afford raises McCallum negotiated.

Doyle prepares to slash spending: Milwaukee Journal Sentinel, Jan. 16, 2003. 'Enormous' cuts in services likely.

Democrats: Bush policies not working: Daily Reporter, Jan. 16, 2003. Administration criticized for growing deficits.

Judge rules misconduct case may proceed: Wisconsin State Journal, Jan. 16, 2003. Conduct represented a "systematic use of state resources and time" to benefit Republican candidates.

Doyle anticipates deficit of $400 million this year: Milwaukee Journal Sentinel, Jan. 15, 2003. Drop in December sales tax boosts gap for budget ending in June.

Doyle names area attorney to Cabinet post: Appleton Post-Crescent, Jan. 15, 2003. Strong Hill, appointed Sec. Regulation & Licensing, will take a “fresh look” for potential cost-saving programs.

Ex-caucus workers testify on campaigning: Milwaukee Journal Sentinel, Jan. 15, 2003. Capitol strategizing detailed in hearing for Jensen, Foti, ex-aide.

Pay raise estimate for state workers rises nearly $62 million: Milwaukee Journal Sentinel, Jan. 15, 2003. Union will have to return to table, lawmaker says.

Sportsmen forced to help foot state budget deficit bill: Oshkosh Northwestern, Jan. 15, 2003. DNR raises hunting, fishing fees.

Significant Blood Shortages Have Strains National Supply: First Coast News, Jan. 15, 2003. During the past two weeks, Red Cross blood inventories have dropped roughly 50 percent.

Lawmaker has problem with regent appointees: Eau Claire Leader-Telegram, Jan. 14, 2003. Kreibich says Chippewa Valley not represented.

Lawmakers optimistic about state budget: Sheboygan Press, Jan. 14, 2003. Area legislators are guardedly hopeful as the state prepares to craft a new budget.

Analysts: State could lose under Bush plan: Daily Reporter, Jan. 10, 2003. State Legislature would need to approve going along with Bush's plan, if it passes Congress

Lawmakers set their goals (I): Eau Claire Leader-Telegram, Jan. 11, 2003. Besides budget, targets include respite care, feathers, prisons.