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May 27, 2005

The State Legislature’s floor periods which were scheduled for next week will not occur in order to allow the Joint Committee on Finance to conclude its work on the proposed state budget. Even if Joint Finance wraps up its version of the 2005-07 budget next week, significant differences are likely to persist between the two Houses. Some of the differences could be diminished by next week’s action, but disagreements on key issues will require further negotiation or perhaps even a conference committee once the measure is forwarded to the full Legislature. Despite the existence of differences between the Houses, observers believe that legislative leadership cannot afford, politically, to allow the process to run past July 1.

In the meantime, we wish everyone a safe and happy weekend as we all pause to celebrate Memorial Day - which will actually be celebrated on Memorial Day this year!

Policy Developments

Joint Finance Action on Commerce Budget
On Wednesday, the Joint Committee on Finance (JFC) adopted the following provisions relating to the Department of Commerce Economic Development Programs:

• Maintained the current level of funding for the Manufacturing Extension Center Grants and maintained the program in Commerce. (The Governor had recommended a $650,000 annual increase and transfer of the Program to the Technical College System.)

• Rejected the Governor’s proposal for “Super Employment & Economic Development Zone Grants” aimed at extremely depressed areas. The Governor’s proposal called for a $5 million GPR expenditure in 2006-07.

• Rejected the Governor’s “Training Assistance Grant” program which would have targeted “high paying” jobs and would have appropriated $2.5 million per year.

• Adopted the provisions of AB 241/SB 129 which transfers the Business Employees’ Skills Training Program (BEST) from Commerce to the Tech College System and: changes its name to the Jobs Advantage Training program; imposes small business and other criteria; provides an additional $1 million annually

• Maintained the current level of funding ($320,000) for Forward Wisconsin in both years of the biennium. The Governor had recommended an increase in the second year.

• Modified current law regarding Enterprise Development Zones (EDZ’s) to: authorize 4 additional EDZ’s; allow more than one business in a zone to be eligible for tax credits; require that one-half of the businesses that receive credits in new zones have les than 100 employees; and, allow Commerce to create EDZ’s within Development Zones.

• Modified current law regarding the Wisconsin Development Fund (WDF) to: require that 50% of total WDF funding be awarded to small businesses (less than 100 employees or $10 million or less in gross receipts); require 35% of total WDF funding be located in “distressed areas”; and, incorporates the current technology commercialization grant and loan program and $2.6 million annually in the WDF technology grant and loan program and require that a $2.5 million grant from the program in 2005-06 go to UWM to establish a Biomedical Technology Alliance in SE Wisconsin. The Committee also set aside $100,000 per year from the WDF for the Wisconsin Procurement Institute.

• Adopted a provision that requires repayment of economic development grants, loans or tax credits if the recipient moves the project within 5 years.

Brownfields Grant Program Funding Source Preserved
On Tuesday, JFC voted to extend the sunset of the vehicle environmental impact fee from Dec. 31, 2005 to Dec. 31, 2007. This action, which was also included in the Governor’s recommendations, preserves the viability of the Department of Commerce Brownfields grant program. Since 1998 Commerce has provided $42.6 million in grants and leveraged $569 million in private sector investment that have reclaimed 100 sites; created 3,800 jobs; and, allowed the retention of another 831 jobs.

Other JFC Action this week:
The Joint Finance Committee approved unanimously a plan proposed by Gov. Doyle that would allow Medicaid patients to be treated in residential facilities rather than nursing homes. The Department of Health and Family Services expects the program will save more than $11 million by allowing more than 1,400 people to make the transition.

JFC also adopted a proposed budget amendment would include reducing the recycling tipping fee for waste disposed in Wisconsin landfills. The amendment would cut the fees from $3 per ton to $2.25 after Jan. 1, 2007. [LFB Budget paper]

Joint Committee on Finance to Hold Executive Sessions (May 31, June 1) – Schedule.

DNR to Hold Hearings on Shoreline Zoning
The Natural Resources Board, at its May 25 meeting in Black River Falls, authorized public hearings on a draft proposal that updates 35-year-old rules governing waterfront development. In an effort to balance landowners' rights with environmental protection, many of the proposed changes are designed to give landowners more flexibility with projects on their land.

Where the current rule limits alterations, additions or major repairs to 50 percent of the structure's current equalized assessed value over the life of the structure, the proposal eliminates that 50 percent rule.

Democrats Propose Plan for Tax Relief
State Democrats are touting a new plan they say will restore tax fairness because “corporations are no longer paying their share.” The Democrats' plan would exempt the first $60,000 of a home's value from the school portion of the property tax bill. Homeowners would then receive a credit on their property tax bills, which Democrats estimate would total $771 million.

The state would pay for the plan by reviewing some $3 billion in sales tax exemptions as well as corporate and franchise taxes. Some would be eliminated to pay for the credit.

Republicans called the Democrats' Homeowner's Property Exemption a "tax shift" that would hurt business and cost jobs.

Federal Developments

Compromise Allows Judicial Confirmations/Averts Divisive Debate
A filibuster crisis in the U.S. Senate was resolved this week when seven Republican and seven Democratic Senators reached an agreement that allowed a vote on three of President Bush’s controversial judicial nominees.

The Senate confirmed Priscilla Owen to the Fifth U.S. Circuit Court of Appeals by a vote of 55-43. Owen, nominated to a seat on the 5th U.S. Circuit Court of Appeals, has been blocked four times by Democratic filibusters in the four years since Bush first nominated her early in his first term.

The deal came a day before Senate Majority Leader Bill Frist was expected to invoke nuclear option to preclude a Democratic filibuster on Owen's nomination. Nuclear option is a parliamentary maneuver to get around filibusters. A bill requires 51 votes to pass, but to end debate requires 60. By nuclear option the President of the Senate (VP Cheney) can rule that filibuster violates the constitutional duty of the Senate to advise and rule on nominations. If the ruling is upheld by a simply majority, any nominee can be brought to the floor for a yes or no vote.

In reaching the compromise to allow confirmation votes on the three judges, Republicans agreed to preserve the ability of Democrats to invoke the filibuster against judicial nominees in unspecified "extraordinary circumstances." Still facing possible filibuster or withdrawal are nominees William Myers and Henry Saad.

Prior to the compromise, Democrats were accusing Republicans of threatening over 200 years of balance of power traditions while Republicans were suggesting that Senate Democrats had forgotten that the role of the minority and the tools provided via filibuster also carry a responsibility and are not to be used simply to thwart the will of the majority. The compromise averted what surely would have been a very divisive debate—at least for the present.

U.S. Senate Committee Approves Asbestos Bill
After weeks of debate, the Senate Judiciary Committee overwhelmingly (13-5) approved passage of legislation to create a $140 billion asbestos disease fund. The proposed fund would cap the liability of companies and their insurers facing asbestos litigation. Victims would no longer be able to sue, but would go to the fund for payment. The fund created by the legislation would be financed by asbestos makers, other companies that used the substance, and their insurers.

The bill, S 852, was supported by 10 Republican members of the Committee and 3 Democrats, including Wisconsin Senator Herb Kohl, and opposed by five Democrats, including Wisconsin Senator Russ Feingold. The bill could reach the floor of the Senate for a vote as early as next month.

After more than three years of bipartisan negotiations, Sens. Arlen Specter, (R-Pa.) and Patrick Leahy (D-Vt.) introduced the comprehensive asbestos litigation bill that would create the national trust fund intended to fairly compensate victims suffering from asbestos-related disease. The bill, co-sponsored by Sens. Dianne Feinstein (D-Calif.), Orrin Hatch (R-Utah), Mike DeWine (R-Ohio), Max Baucus (D-Mont.), and George Voinovich (R-Ohio), is the culmination of years of bipartisan discussion led by Specter, the chairman of the Senate Judiciary Committee, and Leahy, the ranking Democratic member of the panel and former Chair of the committee.

Some 75 companies (over ½ since 2000) have filed for bankruptcy related to asbestos litigation which has often sought and received compensation for persons who had been “exposed” but had no signs of illness. Numerous companies which had no role in manufacturing or installing asbestos were brought into lawsuits under the joint and several liability theory in the hope of attaching some liability from a deep pocket.

Despite the strong committee vote, some proponents (some companies and insurers) of legislation to curb litigation believe that significant changes to the bill are still needed, while the organized plaintiff’s bar will continue to oppose any restrictions on litigation.

Political News

Panel OKs photo ID amendment: Milwaukee Journal Sentinel, May 27, 2005.

Lawmaker would cut Legislature to save money: Appleton Post-Crescent, May 27, 2005.

Follow U.S. Senate’s example (opinion): Green Bay Press-Gazette, May 27, 2005.

Committee approves Medicaid plan: Milwaukee Journal Sentinel, May 26, 2005.

Economic power is pushed for women: Manitowoc Herald Times, May 27, 2005.

Unemployment drops in all Wisconsin metro areas: Janesville Gazette, May 26, 2005.

DNR tackles waterfront rules: Milwaukee Journal Sentinel, May 26, 2005.

State Supreme Court agrees to hear airline tax break case: Appleton Post-Crescent, May 26, 2005.

Committee rejects Doyle's download tax: Milwaukee Journal Sentinel, May 25, 2005.

End to gas law sought: Milwaukee Journal Sentinel, May 25, 2005.

Wisconsin vote splits on party lines: Milwaukee Journal Sentinel, May 25, 2005.

Gundersen Lutheran midwives celebrate 30 years: La Crosse Tribune, May 24, 2005.

Big companies fill BadgerCare rolls: Milwaukee Journal Sentinel, May 24, 2005.

Democrats propose tax cut for homeowners: Green Bay Press-Gazette, May 24, 2005.

Legislators dump domestic partners: Milwaukee Journal Sentinel, May 24, 2005.

Bill would lower drinking age for Wisconsin service members: Milwaukee Journal Sentinel, May 24, 2005.

Lawmaker says legislation could keep power plant on track: Milwaukee Journal Sentinel, May 24, 2005.

Alliant Energy plans to shed 200 jobs by July: Milwaukee Journal Sentinel, May 24, 2005.

DNR land purchases may depend on towns' approval: Madison Capital Times, May 24, 2005.

Wisconsin aims to keep up in changing stem-cell world: Wisconsin Technology Network, May 23, 2005.

Lakeshore area should be hot tourist spot: Manitowoc Herald Times, May 22, 2005.

‘Click It or Ticket’ promotes buckling up: Manitowoc Herald Times, May 21, 2005.

Enforcing seat belt law goal at start of summer travel: Marshfield News Herald, May 21, 2005.

Group aims to grow economy through technology: Ashland Daily Press, May 18, 2005.

Upcoming Fundraisers

Tuesday, May 31

• Rep. Mark Gundrum (R-New Berlin)

Thursday, June 2

• U.S. Rep. Tom Petri (R), Sheboygan

• U.S. Rep. Tammy Baldwin (D), Madison