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June 27, 2003

As June 2003 draws to a close, a very difficult State Budget Session is also nearing conclusion. The State Legislature has completed its work (see below) and now the Governor needs to address some tough choices as he exercises his line item veto powers. The Governor is expected to act fairly quickly since the new fiscal year actually begins on July 1 and new savings initiatives cannot be realized until the budget is signed and goes into effect. These are, however, very critical fiscal and political decisions and the Governor will have the latitude of adequate time to weigh all of his options. Technically, the Governor has until mid-August to act, but we expect a mid-July date is more likely this year. 

The Legislature has concluded its regular session work (with one exception noted below) until the fall, at which time the Legislature will turn its full attention to jobs and economic development. In the meantime, the summer months will be extremely busy as the Legislature and the Administration prepare and refine their respective and joint proposals aimed at jump-starting Wisconsin's economy and providing growth opportunities that will help to avoid a recurrence of the recent budget deficit. With the adoption of Single Sales Factor and Plant Siting legislation (more below), the Legislature and Governor have gotten a head start on the economic development session. The Fall Session should be interesting and exciting.

Wisconsin Politics

Extraordinary Session on Lowering Blood Alcohol Level Expected
When the two houses of the Wisconsin Legislature finished business on Wednesday, June 25, they adjourned their sessions until September 23^rd. Before adjourning, however, the State Senate failed to act on Assembly Bill 88 which lowers the legal blood alcohol level for drivers in Wisconsin from 0.10 to 0.08. Failure to pass 0.08 jeopardizes almost $3 million in federal highway incentive dollars, already allocated in the 2003-05 budget for road-making improvements aimed primarily at assisting older drivers. These incentive dollars would be forfeited if the Governor does not sign a 0.08 bill by July 15. In addition to the aforementioned incentive grants, another $27 million, already counted on in the State Budget, is at risk if 0.08 is not effective by Oct. 1, 2003.

On Thursday, June 26, Senate Majority Leader Mary Panzer announced that she is prepared to call an Extraordinary Session (where the legislature calls itself back into a non-scheduled session for a specific purpose) if she can be assured that enough Democrats will vote for the bill to make it a truly bi-partisan action. Governor Doyle, a consistent supporter of 0.08, has publicly urged the Extraordinary Session and has committed to helping obtain Senate Democrat votes. Democrat Senators Erpenbach and Jauch have publicly supported the call for an Extraordinary Session, with Senator Jauch indicating that he will support the bill even though he is not a strong believer in 0.08. (The Assembly passed the bill on a vote of 72 to 23 on May 29^th of this year.)

(See related news stories below, under Political News.) 

Legislature Concludes Work on Budget
On Tuesday, June 24, the Senate adopted Assembly Amendment 55 to SB 44 (the budget bill) by a voice vote. Additionally, the budget trailer bill SB 206., relating to levy limits language in three areas of SB 44, was passed 22-11. 

Following Tuesday’s completion of legislative work on the budget, the Governor announced he was pleased that the bill as adopted does not raise taxes, true to his budget goal. The Governor expressed concern, however, over several remaining provisions adopted by Joint Finance and the legislature. The Governor announced his intent to make extensive use of his line-item veto power to recraft the bill as much as possible in the spirit of his original bill. (For more on the final budget passed by the legislature, see the Hamilton Group’s Budget Update.) 

Special Election Primary Results
On June 24, Special Election Primaries were held for two vacant Assembly seats. For Assembly District 21 (South Milwaukee/Oak Creek), Republican Mark Honadel (businessman) and Democrat Al Foeckler (Oak Creek alderperson and attorney) won their respective primaries. For Assembly District 71 (Stevens Point area), Republican Jackie Szehner (small business owner) and Democrat Louis John Molepske Jr. (special prosecutor for Stevens Point) will face off in the general election. 

The general elections will take place on July 22, 2003. 

Governor Introduces Economic Growth Council
On June 25, Gov. Doyle announced the formation of his Economic Growth Council. The Council will be co-chaired by Tom Hefty (from the law firm of Reinhart Boemer Van Deuren in Milwaukee) and John Noel (a Stevens Point entrepreneur). The Governor called the Council “a partnership between my administration and Wisconsin businesses, labor, education, and economic development leaders,” with a goal of helping to improve Wisconsin’s economy. For a full list of council members named so far, see the Governor’s release.

Key Cabinet Secretaries Confirmed by Senate
On Tuesday, the Senate unanimously voted to confirm the following appointments: 

• Cory Nettles, Secretary of Commerce

• Frank Busalacchi, Secretary of Transportation

• Michael Morgan, Secretary of Revenue

• Matthew Frank, Secretary of Corrections

• Helene Nelson, Secretary of Health and Family Services

Policy Developments

Mercury Rule Adopted
On June 25, the Natural Resources Board voted unanimously to adopt the DNR proposed rule to upgrade controls on mercury emissions in the state. The rule directs a phased mercury emission reduction for utilities, and creates emission caps on other emission sources. The four largest utilities in Wisconsin -- We Energies, Milwaukee; Alliant Energy, Madison; Wisconsin Public Service, Green Bay; and Dairyland Poser, La Crosse -- would be required to reduce mercury emissions 40 percent by 2010 and 80 percent by 2015.

State High Court Upholds Stray Voltage Award
On Wednesday, June 25, the Wisconsin Supreme Court upheld a $1.2 million “stray voltage” jury award against Wisconsin Electric Power Company (WEPCO). The Court ruled that there was ample evidence to support the jury’s finding that WEPCO’s deteriorated electrical distribution cable was a cause of damage to the plaintiffs’ dairy herd. The jury verdict relied on “expert testimony” saying that “non-traditional stray voltage” was a cause of the damages. In upholding the jury award, the Court reiterated that in cases where there is conflicting expert testimony it is up to the jury, as the trier of fact, to determine weight and credibility. (While affirming the overall jury decision, the Court did remand the specific abatement order to the circuit court for consideration of additional factors necessary for the proper exercise of the court’s discretion in ordering specific abatement.)

(See Wednesday’s opinion in Hoffmann v. Wisconsin Electric Power Company.)

Single Sales Factor
Early Wednesday morning, July 25, the Senate passed SB 197, relating to single sales factor apportionment of income for corporate income, and franchise tax purposes. The bill passed by a vote of 24-9. Previous to the Senate vote, the Assembly voted to adopt this bill on Tuesday, June 24. Some minor amendments were added this week (see the bill history for details). See June 13 Tidbits for more on this legislation.

Incentive Payments to Local Governments for Public Utilities
On June 24, AB 378 was given final legislative approval. (The bill was enrolled in lieu of SB 180, its Senate counterpart.) The legislation passed with a few minor changes, including amendments to increase payments to the City of Madison and the Town of Caledonia. See the Hamilton Group’s Special Update on this legislation.

Identity Theft Bill Goes to Governor, Amended
On June 24, AB 288, addressing identity theft, was given final approval. The bill is aimed at persons engaged in identity theft and expands the definition of “personal identification document” to include several new types of documents under the prohibition. The bill also creates a new crime, prohibiting the unauthorized use of identification documents or information relating to a corporation, partnership, association, government, or government agency. The adopted amendment made only technical changes.

Voter ID Bill Goes to Governor
On June 24, AB 111, relating to photo identification at the polls, was given final legislative approval. The bill’s primary author, Rep. Stone, announced Tuesday that he was very pleased with the final passage of the bill. (See previous Tidbits for more.)

Federal Developments

Supreme Court Speaks on Affirmative Action
On June 23 the Supreme Court handed down its long-awaited decision in Grutter v. Bollinger, the case involving the consideration of race in admissions decisions at the University of Michigan. This is the first time in over 25 years that the High Court has spoken on the issue of affirmative action. In a one-vote majority, the Supreme Court affirmed the University of Michigan Law School’s admission practice – considering race as a possible ‘plus’ among several other factors during the admission process. The decision, authored by Justice O’Connor, affirmed that the Law School’s policy of considering ‘pluses’ along with grades and LSAT scores was narrowly tailored enough to achieve the goal of achieving diversity as a permissible ‘compelling state interest.’

The University’s undergraduate admission policy, however, was sent back to the drawing board when the Supreme Court reiterated its disapproval of using a point system to quantify race considerations in admissions.

Later the same day, the University of Wisconsin announced its support of the Supreme Court’s decision.

Asbestos Bill Nearing a Consensus
During two mark-up sessions this week, the Senate Judiciary Committee agreed upon several major amendments to the asbestos litigation reform bill, a bill that establishes a $108 billion trust fund to compensate the victims of illnesses caused by asbestos exposure. This week’s amendments are likely to move the Committee closer to a vote.

If adopted, agreed to amendments would change the original Hatch bill as follows:

• Codify a ‘breakthrough’ agreement on the medical criteria that will determine who will be eligible for compensation for asbestos-related illnesses;
• Create a total of 10 categories of asbestos-related diseases, encompassing five kinds of cancer, some of which were not in the original bill;
• Eliminate the separate court system that the original Hatch bill called for to hear asbestos cases; and

• Create a statutory contingency plan to ensure that the trust fund does not go bankrupt.

Although these amendments show signs of a positive vote coming soon, there are still some contentious bill provisions remaining. Importantly, the Committee has yet to agree upon the amount of compensation that may be awarded to victims of asbestos-related illnesses.

Political News

Governor won’t delay budget action: Appleton Post-Crescent, June 26, 2003.

Area leaders torch levy freeze: Appleton Post-Crescent, June 26, 2003.

Single factor corporate tax only half the package (opinion): Appleton Post-Crescent, June 26, 2003.

Doyle introduces Economic Growth Council: Green Bay Press-Gazette, June 26, 2003.

Jobs numbers slow to rise despite economic recovery: Milwaukee Journal Sentinel, June 26, 2003.

Utility liable for stray voltage, high court says: Milwaukee Journal Sentinel, June 26, 2003.

DNR votes to require tougher mercury rules: Milwaukee Journal Sentinel, June 26, 2003.

Paper firm committed to cleanup: Appleton Post-Crescent, June 26, 2003.

State could lose highway money: Wisconsin State Journal, June 26, 2003.

DUI limit holds state purse strings: Appleton Post-Crescent, June 26, 2003.

Tougher mercury rules approved: Green Bay Press-Gazette, June 25, 2003.

State high court upholds stray voltage damages: Appleton Post-Crescent, June 25, 2003.

State Senate doesn't pass blood-alcohol bill: Milwaukee Journal Sentinel, June 25, 2003.

Latest rate cut may finally jump-start economy: Green Bay Press-Gazette, June 25, 2003.

State flexes biotech muscle: Green Bay Press-Gazette, June 25, 2003.

Business tax break OK'd: Madison Capital Times, June 25, 2003

State Republicans push tax cut for businesses: Milwaukee Journal Sentinel, June 25, 2003.

State budget will miss mark again (opinion): Wisconsin State Journal, June 25, 2003.

Doyle uncaps veto pen as GOP approves budget: Milwaukee Journal Sentinel, June 25, 2003.

Legislature completes work on the budget: Wisconsin State Journal, June 25, 2003.

Wisconsin budget sent to Doyle: Appleton Post-Crescent, June 25, 2003.

State budget plan touches most everyone: Appleton Post-Crescent, June 25, 2003.

Senate OKs changes to budget: Manitowoc Herald Times, June 25, 2003

State veto power mighty: Appleton Post-Crescent, June 22, 2003.

Ziegelbauer jumps party line on budget vote: Appleton Post-Crescent, June 22, 2003.

Veto the budget, write a new plan (opinion): Madison Capital Times, June 22, 2003.

Corporate tax law needs no more holes: Milwaukee Journal Sentinel, June 22, 2003.

State could soon lose the rank of No. 1 in paper: Milwaukee Journal Sentinel, June 22, 2003.

The Paper Report: In a fair fight, Wisconsin’s paper industry ‘the greatest’: Appleton Post-Crescent, June 22, 2003

Paper Debate: Cheap labor in other countries steals paper-manufacturing jobs: Green Bay Press-Gazette, June 22, 2003.

Plan will cap mercury output: Appleton Post-Crescent, June 22, 2003.

Land purchases face scrutiny: Green Bay Press-Gazette, June 22, 2003

DNR aims to slash mercury emissions: Green Bay Press-Gazette, June 22, 2003

DNR takes lead on mercury: Green Bay Press-Gazette, June 22, 2003.

State budget snafu removes Amber Alert: Appleton Post-Crescent, June 21, 2003.

State budget nearly finished?: Manitowoc Herald Times, June 21, 2003.

Upcoming Fundraisers

Monday, June 30:

• State Sen. Tom Reynolds (R-5), Waukesha, 5:00 p.m.

• State Rep. Terry Van Akkeren (D-26), Sheboygan, 5:30 p.m.

• Assembly Candidate Jeff Wood, Chippewa Falls, 6:00 p.m.

• U.S. Congressman Paul Ryan, Milwaukee, 5:00 p.m.

• State Rep. Becky Weber (R-5), Green Bay, 5:30 p.m.

• State Rep. Jon Richards (D-19), Milwaukee, 5:00 p.m.

• Reception for Tom Petri, Manitowoc, 5:00 p.m.

• State Rep. Terri McCormick (R-56), Oshkosh

• U.S. Congressman Jerry Kleczka, Milwaukee, 5:00 p.m.

Tuesday, July 1:

• State Sen. Ted Kanavas (R-33), Chicago, 5:30 p.m.