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Sept. 24, 2007
Political Tidbits has been on summer vacation awaiting significant state
budget developments. We welcome fall 2007 with, perhaps, some light at the
end of the state budget tunnel.
The so-called “budget summit” involving Gov. Jim Doyle, Assembly Speaker
Mike Huebsch and Senate Majority Leader Judy Robson began in earnest this
morning as the three met at the Governor’s residence to discuss possible
resolution to the 2007-09 Wisconsin State Budget. This development has led
to speculation that some progress may be in the offing.
The Hamilton Consulting Group’s
Pat Osborne has provided an analysis of major budget issues, the current
status, and the potential future of negotiations, below.
Under Wisconsin law, the attorney general has responsibility for the
implementation, enforcement and clarification of the Wisconsin Open Meetings
and Public Records law. As part of that responsibility, Attorney General Van
Hollen is conducting seminars around the state to educate those impacted on
the compliance with Wisconsin law.
In a related matter, the Wisconsin Supreme Court has a very significant
case pending before it relating to the law’s applicability to non-profit
local economic development corporations. (Please see coverage of both
below.)
Former Senate Majority Leader David Helbach recently announced his
retirement from Alliant Energy. We wish David, a consensus builder and one
of the most respected people to have held legislative leadership, our best
wishes for whatever his future may hold.
Policy Developments
Budget Progress? — An Analysis by
Hamilton’s Pat Osborne
After months of little or no progress on the state budget,
there are good reasons to suggest a budget deal will be
completed within the next couple of weeks: (1) the deadline for
certifying state aid to school districts is looming; (2) the
Senate has essentially pulled its Healthy Wisconsin proposal off
the table, and; (3) Gov. Doyle has become more directly involved
in negotiating a final deal.
School Aid Certification
By October 15, the Superintendent of Public Instruction is required to
certify to school districts the amount of state aid they will receive so
they can determine their revenues and associated property tax levels.
When budgets have stalled out in the past, this deadline has been the
impetus for resolution. Neither party wants to be held responsible for
increasing property taxes for failure to timely pass biennial increases in
state school aids.
To meet the October 15 deadline, Superintendent Burmaster reported that DPI
needs a two-week processing time and, therefore, needs to have a state aid
number by September 28. If the budget is not resolved in the
next couple of weeks the Superintendent would likely have to certify the
current law cost-to-continue level of state aids which, compared to the
Governor’s proposed increase in school aids, would constitute an estimated
$600 million increase in statewide property taxes; therein lays the urgency.
While both parties share the urgency, they have yet to agree on how to beat
the deadline. The Republican-controlled Assembly adopted its answer on
September 18 by passing separate legislation (AB
506), which provides the Governor’s requested level of school aid
funding, and sending it to the Senate on a strong 70-27 bi-partisan vote.
The Democrat-controlled Senate maintains it is not interested in adopting a
piece-meal budget and that serious budget negotiation can still yield a
comprehensive budget bill in time to beat the certification deadline.
Healthy Wisconsin
The Senate health care initiative referred to as Healthy Wisconsin has
been one of the primary budget differences between the two houses. The
Senate plan would create a universal coverage system supported by an
estimated $15.2 billion per year in new payroll taxes.
Most budget observers agreed that a budget deal could not be reached as long
as the $15 billion “gorilla” was sitting in the room. On Friday, September
2, the Senate took the first step towards serious negotiation by taking
Healthy Wisconsin “mostly” off the table.
“Mostly” because, technically, the Senate agreed to drop Healthy Wisconsin
in exchange for their position on a proposed hospital tax, $1.25 increase in
the cigarette tax, transfer of funds from the Patients Compensation Fund,
the Governor’s BadgerCare Plus initiative, and several other health related
provisions --- but the exchange was more symbolic than a true bottom-line
trade position.
In pulling the initiative out of the budget, Sen. Robson made it clear that
Senate Democrats would pursue Healthy Wisconsin as separate legislation this
session.
The Assembly leader recognized the concession as very productive and agreed
to review the Senate health package, but made it clear that the assembly was
not agreeing to any element of the Senate proposal, especially the more than
$1 billion in health-related tax increases in exchange for dropping Healthy
Wisconsin.
Governor Calls for Budget Summit
The same day the Senate signaled the end of Healthy Wisconsin (as part
of the budget), Gov. Doyle called for a budget summit with legislative
leaders to expedite negotiations.
The first meeting was set for Monday morning, Sept. 24, at the Executive
Residence with Senate Majority Leader Robson and Assembly Speaker Huebsch.
Several days of meetings are envisioned and the conference committee is not
expected to meet again pending those summit discussions.
The Governor’s direct involvement responds to Assembly concerns regarding
veto assurances as part of an overall deal and raises the stakes for all
parties to reach a comprehensive compromise.
Not Necessarily a Done Deal
Despite the school aid deadline and the positive developments outlined
above, there is still a real question whether the remaining sizeable
differences between the Senate and Assembly budgets can be worked out in a
matter of days.
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The Assembly has already passed its response
to providing an increase in school aids and may not feel compelled to
cut a hasty budget deal, particularly since budget delay at this point
arguably puts pressure on the Senate to pass the separate Assembly bill.
Under that scenario, a final budget deal could be weeks in the making
with the pressure off on school funding and a cost-to-continue budget in
place under current law.
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Even with Healthy Wisconsin off the table,
the two houses are still billions of dollars apart on new taxes. The
bulk of those taxes was included in the Governor’s original budget,
endorsed and enhanced by the Senate and completely rejected by the
Assembly. To date, neither side has moved from its original position on
taxes.
Ultimately, the tradition of working out a state budget together with recent
positive developments suggest a budget deal is likely to happen over the
next couple of weeks. However, there are still some wildcards in play that
may put budget negotiations past the first week in October. Should that
occur, the budget process enters uncharted waters. It should be an
interesting two weeks.
Tax Revenues Increase Allows Transfer to Rainy Day Fund
According to the Department of Revenue, tax collections were $22.1
million higher than last June, an increase of 4.9 percent, allowing Gov.
Doyle to transfer $50 million to the state’s rainy day fund – the first
transfer of its kind in state history.
Individual income tax collections were $18.8 million higher, and estate tax
revenues were $4.1 million higher than estimated. General sales and use tax
revenues were $5.6 million lower than projected. Revenues from most of the
remaining tax sources were slightly more than the estimates.
The final accounting of revenues and expenditures for fiscal year 2006-07,
will be included in the state Annual Fiscal Report which will be issued on
October 15, 2007. Figures in that report are not expected to deviate
significantly from these preliminary estimates.
Under state law, actual tax collections in a fiscal year must be compared
with the estimated tax collections made for that fiscal year in the biennial
budget act. If actual collections exceed estimates and the required general
fund ending balance is fully funded for that fiscal year, then 50 percent of
the excess revenues must be transferred to the rainy day fund. Since this
law was first enacted in 2001, excess revenues have not been sufficient to
make a transfer to the rainy day fund.
Attorney General Holding Seminars on Open Meetings Law
Attorney General J.B. Van Hollen is hosting six free seminars across the
state of Wisconsin to promote public awareness of and compliance with the
state's open meetings and public records law.
The first seminar took place in Stevens Point on September 18, with the
remaining seminars to be held at Rhinelander (October 8), La Crosse (October
10), Madison (October 29), Green Bay (November 6), and Milwaukee (November
8).
Each seminar is free and open to the public.
Oral Arguments Scheduled on Open Meetings/Records Applicability to
Local Economic Development Corporations
The Wisconsin Supreme Court has scheduled oral arguments for November 6
of this year in the case of State of Wisconsin v. Beaver Dam Area
Development Corporation, involving the application of Wisconsin Open
Meetings and Public Records Law to local economic development corporations.
The Beaver Dam Area Development Corporation (BDADC) is a private corporation
that promotes economic development in Beaver Dam. The city of Beaver Dam is
a client of the BDADC and receives proposals and suggestions to promote
economic development in the city.
Former Attorney General Peg Lautenschlager, on behalf of the State of
Wisconsin, brought a suit against the Beaver Dam Area Development
Corporation seeking a declaration that the BDADC was subject to both public
record and open meetings laws under Wis. Stats. §19.31and §19.81,
respectively. The trial court ruled that the BDADC is neither a governmental
nor a quasi-governmental corporation and that the BDADC is not subject to
either the public records law or the open meetings law.
The State appealed the trial court’s ruling and the court of appeals then
certified the question to the Wisconsin Supreme Court. The State argues that
the BDADC’s work for the city makes it a quasi-governmental corporation and
that the work produced by the BDADC must be made available to the public.
The BDADC argues that having common goals with the city and acting
cooperatively to achieve those goals does not make the BDADC a
quasi-governmental corporation. The State has also asserted claims against
the individual members of the board of directors for the BDADC, seeking
forfeitures for the alleged violations of the open meetings law.
On August 13, the Wisconsin Economic Development Association, Wisconsin
Realtors Association, Wisconsin Association of Manufacturers & Commerce and
the National Association of Industrial and Office Properties, Wisconsin
Chapter, with the support of the Wisconsin Builders Association, filed an
Amicus Curiae (friends of the court) Brief with the Wisconsin Supreme
Court supporting the trial court’s conclusion.
Transparency Code for Government Contracts with Private Attorneys
In a commentary published in the National
Law Journal, the American Tort Reform Association has
proposed new voluntary standards designed to improve government transparency
and accountability when states (and other government entities) hire outside
counsel to litigate on behalf of state residents.
“With increasing regularity, states are hiring personal injury lawyers from
the private sector to perform legal work for the state, and hundreds of
millions of dollars in contingency fees are sometimes at stake,” explained
ATRA President Tiger Joyce. “Yet some states award such lucrative contracts
to their political supporters without competitive bidding and with little or
no oversight from the public or state legislatures.
“Wisconsin deserves credit
for its statutory requirements for special counsel contracts. Room for
improvement remains, however. Too often these arrangements are governed by
non-competitive contracts that are negotiated behind closed doors,” Joyce
said. “In Wisconsin, these contracts originate in the governor’s office, but
the transparency principles would further Wisconsin’s heritage for openness
in the development of such contracts, whoever represents the state.”
In Wisconsin, the most high
profile case involving outside counsel related to the fees paid in the
tobacco litigation of the late 1990s. The recent lead paint litigation in
Milwaukee also involved a private attorney hired by the city on a contingent
fee basis. (The jury did, however, find against the city at the trial court
level.)
Seven states have enacted legislation that aligns closely with the proposed
code. The key ingredients of the code are: disclosure, value, oversight and
reporting. “We hope state policy-makers will closely examine these
principles and begin a constructive dialogue about the merits of a uniform
process for hiring outside counsel,” Joyce said. “If states are to be
successful in pursuing and protecting the public interest, they must have
the full confidence of the citizenry. Transparency and accountability are
the foundation of such confidence.”
In April, ATRA released results of a survey in that showed a strong majority
of Wisconsinites favor posting outside lawyer contracts on the Internet for
public inspection and requiring those outside lawyers to keep detailed
records of their hours and specific work performed, among other things.
Full results of that survey and the detailed Transparency Code are posted on
ATRA’s AGAgendaWatch Web site at
www.agwatch.org.
PSC Approves Sale of Point Beach Nuclear Power Plant with Conditions
The Public Service Commission of Wisconsin (PSC) on Tuesday, Sept. 18,
approved the sale of Point Beach Nuclear Power Plant from Wisconsin Electric
Power Company (WEPCO) to Florida Power and Light Energy (FPL Energy).
The Commission made substantial changes to the transaction aimed at
improving its value to ratepayers, and solidifying the state’s ongoing role
in important subsequent decisions related to the plant.
The PSC improved the potential value of carbon dioxide credits, restricted
nuclear waste storage and ensured future decommissioning of the plant meets
strict environmental guidelines. Additionally, the parties agreed to the
Commission’s ongoing role in important future decisions at the plant,
including any potential sale to other companies and the decommissioning of
the facility.
Wisconsin
Politics
Former Senate Majority Leader
David Helbach Retiring from Alliant Energy
Director of public affairs for Alliant Energy and former
legislator, David Helbach, has announced he is retiring from
Alliant after 12 years with the company.
Helbach was elected to the Assembly in 1978 as a Democrat from Stevens Point
and was elected to the Senate in 1983, where he served until 1995. He was
elected Senate Majority Leader in 1991. He has been with Alliant Energy
since leaving the Senate.
Elections Board Names New Chair
The state Elections Board selected Robert Kasieta chairman to replace
Sherwin Hughes, who resigned. Kasieta, a Verona attorney, is the Democratic
Party of Wisconsin’s appointment to the board. Dan Hellman, who was
appointed by Assembly Speaker Mike Huebsch, remains the vice chair.
Political News
Losing The Center (opinion): Wisconsin State Journal, Sept. 16, 2007.
Why The State Budgert Impasse Was Totally Predictable.
emocrats willing to drop health plan: Milwaukee Journal Sentinel,
Sept. 21, 2007.
Don't come out without a deal (opinion): Beloit Daily News, Sept. 20,
2007.
Oshkosh lawmakers split on budget impasse: Oshkosh Northwestern,
Sept. 21, 2007.
Separate,
inadequate (opinion): Milwaukee Journal Sentinel, Sept. 19, 2007.
Point Beach Nuclear Power Plant sold for $1B: Green Bay
Press-Gazette, Sept. 19, 2007.
Assembly passes spending bills, but Senate balks: Ashland Daily Press,
Sept. 20, 2007.
Be open, AG tells officials (opinion): Wausau Daily Herald, Sept. 20,
2007.
Assembly breaks
up budget: Milwaukee Journal Sentinel, Sept. 18, 2007.
Senate should accept Assembly's budget overture (opinion): Eau Claire
Leader-Telegram, Sept. 18, 2007.
Republican compromise should pave way for budget agreement: Tomah
Journal, Sept. 17, 2007.
Van Hollen Shines Light On Openness (opinion): Wisconsin State Journal,
Sept. 12, 2007.
AG continues push for 'Open Government' awareness (opinion): Oshkosh
Northwestern, Sept. 12, 2007.
Upcoming Fundraisers
Sept. 25
Sept. 26
Oct. 1
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Rep. Jim Soletski (D-Green Bay), Green Bay
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Rep. Gordon Hintz (D-Oshkosh), Oshkosh
Oct. 2
Oct. 8
For
details, go to
Hamilton Consulting Fundraiser Calendar.
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