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May 8, 2009
The economic news in Madison this week went from
bad to worse. The state announced that the deficit has grown by an
additional $1 billion, making the total budget deficit $6.5 billion. As a
result, Gov. Jim Doyle this week announced furloughs for all state employees
and further cuts to state agencies. The Joint Finance Committee halted work
on the budget this week while leaders in each house begin to craft plans to
reduce the budget. (For more information, please see below.)
In addition to fiscal provisions, other policy
items in the budget bill are gaining more attention. Numerous newspapers
across the state are sounding off on the liability provisions inserted in
the budget. Eight newspapers penned editorials calling on the Joint Finance
Committee members and the rest of the legislature to remove the joint and
several liability, combined fault, and jury instructions from budget. (See
below for links to the editorials.)
While the budget continues to dominate the news,
the legislature is continuing to pass legislation. Last week both the
Assembly and the Senate passed Senate Bill 20, which adds punitive and
compensatory damages to discrimination cases. Although the bill was amended
to cap the damages awards and exempts small businesses, the bill will still
have a significant impact on Wisconsin businesses. The governor is expected
to sign the bill into law within the next few weeks. (For more information
on Senate Bill 20, please see below.)
Wisconsin Developments
Legislature Passes Bill to
Add Damages to Discrimination Cases
The State Senate and Assembly last week passed legislation that increases
the potential for adding additional damages in discrimination cases. While
opponents continue to have concerns regarding the impact that the
legislation will have on the state’s business climate, the final product
included several amendments that responded to major concerns about specific
provisions in the legislation.
Sen. Hansen (D-Green Bay), the bill’s chief Senate author, introduced and
supported amendments which exempted small businesses with less than 15
employees from additional money damages; capped the amount of punitive
damages that could be assessed against a company based upon the number of
employees a company has; eliminated a surcharge that would have been imposed
on the total damage award; and, established a standard necessary for the
award of punitive damages.
The most objectionable part of the bill adds the ability to impose punitive
damages in discrimination cases.
The most important amendment, however, also related to the imposition of punitive damages. Upon
a finding of discrimination,
SB 20 Sub. 1 would have required a court to impose punitive damages without
any threshold standard relating to intent. The
amendment now provides for punitive damages only upon a showing that the
“defendant acted maliciously toward the plaintiff or in an intentional
disregard of the rights of the plaintiff,” consistent with
Wis. Stat. 895.043(3).
Senate Bill 20 does not expand the current law protections against
employment discrimination, unfair honesty testing or unfair genetic testing.
Its sole purpose is to add the potential for additional money damages.
For more information on this bill, please
contact Andy Cook.
Editorial Support Opposed to Changing
Liability Law in the Budget Intensifies
Numerous editorials across the state have urged that liability law changes
buried in the state budget should be removed and, at a minimum, be addressed
as separate legislation. (Please see the list below.)
Most of these editorials also oppose the proposed changes as bad public
policy that should not be adopted.
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Joint & Several Liability. Anyone
with equal or greater fault than the plaintiff can be held 100%
responsible (”jointly and severally liable”), even if only 1% at fault.
(AB 75, page 1605) Existing law requires a person to be at least 51% at
fault before he or she can be held responsible for 100% of damages.
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Combined Fault. A person or business
that is less at fault than the plaintiff can be sued so long as the
“combined” fault of all persons sued is equal or greater than the
plaintiff. (AB 75, page 1605) Existing law requires the plaintiff to be
less at fault than each defendant he or she is suing.
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Jury Instructions. The court must
inform the jury how the jury’s findings on fault affect responsibility
for damages; that is, to allow the jury to adjust fault determinations
to maximize awards. (AB 75, page 1588) Existing law limits a jury’s duty
to fact finding, consistent with over a hundred-year rule of
jurisprudence.
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Insurance. Mandates increased limits
for auto insurance, requires “stacking,” and expands the “Underinsured
Motor Vehicle” definition; also, prohibits reducing clauses, eliminates
“hit and run” requirements, and prohibits "drive-other-car” provisions.
Editorials:
Liability Change could doom companies: Janesville Gazette,
May 2009
Block the return of lawsuit abuse (opinion):
Wisconsin State
Journal, Apr. 28, 2009.
Uncivil fault finding (opinion):
Milwaukee Journal Sentinel,
Apr. 23, 2009.
Pluck policy from state budget (opinion): Wisconsin State Journal,
Apr. 11, 2009.
Boot out budget’s nonfiscal matters (opinion):
Green Bay
Press-Gazette, Apr. 10, 2009.
Afraid of scrutiny? (opinion):
Milwaukee Journal Sentinel,
Apr. 8, 2009.
Keep policy issues out of state budget (opinion):
Sheboygan Press,
Apr. 7, 2009.
Changes don’t serve state budget’s function (opinion):
Green Bay
Press-Gazette, Mar. 26, 2008.
Get non-budget items out of the budget (opinion):
La Crosse
Tribune, Mar. 26, 2009.
Go to
Wisconsin Civil Justice Council for more articles and documents,
or contact Bob
Fassbender or Jim
Hough for information.
More Bad Budget News
The Governor met with several mayors this week at the Capitol to discuss the
state's growing budget concerns. Gov. Doyle informed them that tax
collections were down dramatically, making the state deficit grow. On
Thursday, he held a press conference to address the worsening budget
situation.
Gov. Doyle indicated that new data show the recession has deepened
considerably and that while he will wait for the legislative fiscal bureau
revised revenue projections next week, he expects the budget gap to be in
excess of another $1 billion, to $6.5 billion To be prudent, he indicated he will plan for
an additional $1.5 billion in shortfalls, again indicating he will wait for
an exact figure from fiscal bureau.
The Governor stressed the following:
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He will not propose new taxes over and above
those contained in his original bill;
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He is rolling back the two percent pay raise
scheduled for June 1 for all nonrepresented employees;
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For represented employees subject to
collective bargaining, union officials have been notified that they can
choose to forego the scheduled two percent pay increase that was
negotiated a year ago or face layoffs of 400 employees;
-
He is imposing furloughs of eight days per
year over the next two fiscal years, which is equivalent to a three
percent pay cut for all employees;
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He is looking at deeper cuts in state agency
spending - at least 5 percent more (over that already proposed in the
original bill) in across the board cuts, including cuts to school aids,
shared revenue, and medical assistance. The Governor further indicated
that MA cuts did not include MA benefits due to federal stimulus
maintenance of effort requirements.
The Governor also noted that state employee layoffs are likely to reach 700
or more.
With updated revenue numbers expected by early next week, the Joint Finance
Committee canceled its scheduled meeting for May 7. Co-chair Sen. Mark
Miller indicated the committee would resume next week, but nothing has been
noticed as of yet.
The Department of Revenue reported last month that general purpose revenue
collections for the fiscal year through March were off about four percent
compared to the same time last year.
For additional information on Budget Issues,
contact Pat Osborne.
Smoking Ban Compromise on Fast Track
Both houses are expected to pass a compromise bill on the statewide smoking
ban. Under the compromise, businesses that fail to provide a smoke-free
environment would first receive a warning and then be fined $100 per day for
violations. Those businesses that made an effort to stop patrons from
smoking and called the authorities would not be fined. Individuals smoking
illegally would face fines of between $100 and $200.
In passing the law, Wisconsin will join Minnesota, Iowa and Illinois in
having statewide smoking bans.
Committee Approves Film Tax Credit
The Legislature's budget committee voted unanimously Thursday night to save
a film incentives program Gov. Jim Doyle wants to scrap.
The committee agreed to change Doyle's budget to cap film incentives at $3
million per year in the next two years. Other changes attempt to reward
creating jobs in Wisconsin and stimulate film projects in economically
distressed areas.
All 12 Democrats and four Republicans on the budget committee voted for the
plan.
At least 35 percent of a project's total budget is to be spent in Wisconsin.
There would be a refundable tax credit for 25 percent of salaries and wages
paid to Wisconsin residents and 20 percent for nonresidents. Salaries of
more than $250,000 would be excluded. The credit for nonresidents would be
capped at $20,000 per worker.
For more information on this issue, contact
Amy Boyer.
Recent Legislation Signed into Law
Bills recently signed into law by Gov. Doyle include:
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Assembly Bill 3 (2009
Wisconsin Act 9): Restricts the application of fertilizers
containing phosphorous to lawns, golf courses, and other mowed grassy
(turf) areas. The bill provides exceptions for agricultural land and
some manure products, and allows use of fertilizer with phosphorous to
some limited circumstances. These new phosphorous restrictions will
protect Wisconsin’s lakes and aquatic habitats while allowing for
reasonable exceptions.
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Senate Bill 36 (2009
Wisconsin Act 8): Allows the judicial system to decide whether to
suspend a person’s driver’s license if the person is convicted of a
nontraffic drug violation. The act also makes optional the suspension of
driving privileges of persons convicted of drug violations in other
states.
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Senate Bill 7 (2009
Wisconsin Act 5): Allows Chippewa Falls to file paperwork to amend
Tax Incremental District 10 by December 31, 2009. The bill will support
economic growth in the region.
Federal Developments
EPA Declares Carbon
Dioxide Emission a Public Danger
to Health and Welfare
Nearly two years after the U.S. Supreme Court gave the EPA authority to
regulate greenhouse gas emissions,
EPA Administrator Lisa Jackson ruled last week that carbon dioxide, and
five other “greenhouse gases,” are a threat to public health. By declaring
CO2 a danger to public health, EPA will have broad authority to regulate
numerous business sectors. Critics argue that EPA’s reach would be almost
limitless, regulating the type of cars people drive to the types of homes
they build. Business sectors most likely affected include oil refineries,
power plants, automobile makers, and cement makers.
In 2007 the U.S. Supreme Court ruled in Massachusetts v. EPA that
carbon dioxide emissions from vehicles could be regulated under the Clean
Air Act, and if the EPA refused to regulate CO2, it had to explain its
scientific reasoning. The EPA under the Bush administration continued to
find that CO2 was not a threat to public health. However, after President
Barack Obama was elected, the EPA signaled that it was going to revisit its
prior decision.
There will be a 60-day public comment period once the
Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases
under the Clean Air Act is officially published in the Federal
Register.
Congress Begins Hearings on Climate
and Energy Bill
The House Energy and Environment Subcommittee recently began hearings on the
Waxman-Markey bill (known as the
American Clean Energy and Security Act of 2009 Discussion Draft).
The 648-page discussion draft bill calls for imposing a federal
cap-and-trade program along with policies requiring that a larger percentage
of U.S. electricity come from renewable sources such as wind and the sun. (A
summary of the bill can be found
here.)
The bill has four main components: 1) “clean energy”, 2) “energy
efficiency,” 3) “reducing global warming pollution,” and 4) “transitioning
to a clean energy economy.”
President Obama’s climate czar, Carol Browner, announced that she would like
Congress to establish a broad U.S. greenhouse gas policy before a United
Nations meeting scheduled in December, where world leaders will begin
negotiating a framework to deal with climate change.
UW-Milwaukee Scientists Find Natural
Forces Stalling Global Warming
Two researchers from the University of Wisconsin-Milwaukee published
research in the Geophysical Research Letters earlier this year that
found that the Earth’s temperature will remain the same or actually decrease
over the next decade or more.
Originally reported in
Discovery News, researchers Kyle L. Swanson and Anastasios Tsonis
believe that natural forces are causing a temporary cooling period.
According to Swanson and Tsonis, the trend in mean temperatures since 2001
has been flat, and is actually beginning to fall.
While the pair believes that greenhouse gas emissions will eventually warm
the Earth in the future, they are predicting a number of years, potentially
decades, of a cooling trend.
EPA Considers Allowing Higher Ethanol
Mix in Gasoline
The EPA recently issued a statement seeking comment on whether to allow
gasoline to consist of as much as 15 percent ethanol.
The move could pose a problem for auto manufacturers and consumers since
consumer warranties have followed the current 10 percent standard. If the
proposed rule is adopted, consumers who use blends greater than 10 percent
ethanol could be forced to pay for repairs caused by damage to fuel lines or
components due to the higher blend. For this reason, auto manufacturers
oppose the measure.
The move would be a boon for the ethanol industry, which has suffered
immensely since the economic downturn reduced demand and dramatically
increased supply.
The EPA has until December 1, 2009 to decide whether to adopt the rule.
For more information on environmental issues
at the state or federal level, contact
Andy Cook.
News
Doyle calls for layoffs, furloughs, cuts to fill $6.5 billion
hole: Milwaukee Journal Sentinel, May 7, 2009. Forced to
call for massive new cuts in the spending plan he offered in
February.
Layoffs, furloughs, cuts to local government seen in new budget crisis:
Wisconsin State Journal, May 7, 2009. The moves come as officials expect
even lower state tax collections than earlier expected, leading to a
potential over all projected budget shortfall of $6.5 billion.
Layoffs, furloughs proposed to fix Wis. budget: Janesville Gazette, May
7, 2009. Up to 1,100 state workers could be laid off and most state workers
would be forced to take 16 days of unpaid leave under a budget-balancing
plan outlined Thursday by Gov. Jim Doyle.
Mayors to meet with Doyle about budget: Manitowoc Herald Times, May 7,
2009. The state's projected $5 billion shortfall is expected to grow by
about $1 billion — or roughly $180 for every person in the state — after tax
collections through April are counted.
Vinehout lists budget priorities: Tomah Journal, May 7, 2009. Her
priorities for the budget process are local governments, local roads and
local schools - concerned with the amount counties have had to cut their own
budgets.
Growing budget deficit threatens oil fee: Daily Reporter, May 7, 2009.
Opposition to Gov. Jim Doyle’s proposed oil franchise fee grows louder as
the state’s budget deficit grows larger.
Smoking ban would take effect in July 2010: Milwaukee Journal Sentinel,
May 6, 2009. All workplaces would be smoke-free under the bill before the
Legislature.
Compromise gives Milwaukee nearly 40% of road stimulus dollars:
Milwaukee Journal Sentinel, May 6, 2009. The deal breaks a logjam that had
some state and suburban officials fuming about delays in using money that
was to be spent quickly to help revive the economy.
Legislative hash (opinion): Milwaukee Journal Sentinel, May 6, 2009. The
Joint Finance Committee has made a mess of a proposal for a true regional
transit authority. The full Legislature should clean it up.
Milwaukee council backs Doyle's plan to end vehicle registration stickers:
Milwaukee Journal Sentinel, May 5, 2009. Concerned about a continuing wave
of vehicle sticker thefts, Milwaukee aldermen Tuesday threw their support
behind Gov. Jim Doyle's plan to eliminate the stickers altogether.
Infectious disease expert testifies flu will be back, widespread in fall:
Milwaukee Journal Sentinel, May 5, 2009. Said it is urgent that a vaccine be
developed and available by Oct. 1 for the current strain of flu, so it is
widely available this fall.
Council opposes oil tax: Superior Telegram, May 5, 2009. Superior’s City
Council is adding its voice to growing opposition on a proposal that would
tax oil revenue. And it’s not alone, according to Council President Dan
Olson, who joined Council Vice President Bob Finsland in presenting a
resolution to oppose the proposed state tax.
State gas tax debated: Eau Claire Leader-Telegram, May 1, 2009. Critics
of the plan say that efforts to ban suppliers from passing on the tax to
consumers will not stand up in court.
A reasonable solution (opinion): Milwaukee Journal Sentinel, May 5,
2009. The Joint Finance Committee has rescued Wisconsin's film incentives
program. Gov. Jim Doyle should get on board.
A bitter end (opinion): Milwaukee Journal Sentinel, May 6, 2009.
Chrysler, bailed out yet again by Uncle Sam, wrung concessions from the
union at its Kenosha plant only to stiff the workers there anyway.
'Reform' that helps no one (opinion): Milwaukee Journal Sentinel, May 5,
2009. When the Wisconsin Legislature last week voted to let employees sue
not merely to be made whole but to punish, too, did lawmakers actually help
victims of discrimination?
No more hasty hearings at the Capitol (opinion): Wisconsin State
Journal, May 5, 2009. Barely following the letter of Wisconsin's open
meetings law isn't good enough. Public officials need to follow the spirit
of this important good-government law as well.
Call for prevailing wage labor gathers little county panel backing:
Kenosha News, Apr. 30, 2009. While labor unions support the change, local
governments — particularly smaller towns and villages — have argued the
requirement would be unworkable.
Upcoming Fundraisers
May 11
May 14
For
details, go to
Hamilton Consulting Fundraiser Calendar.
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