JFC Actions: Week 6

Long Term Care, Building Commission, Transfers in DOA, Office of Marketing, Worker’s Compensation, Room Tax, UW System, DNR

 

Wednesday May 27

Continuing to vote on large omnibus motions that cover multiple items, Joint Finance Committee (JFC) took up two of these packaged motions on May 27. One consisted of Medical Assistance- Long Term Care and the other included the Building Commission, Department of Administration transfers, the Office of Marketing, Worker’s Compensation and Unemployment Insurance. Both passed on a 12-4 party line vote.

Long Term Care

JFC continued to take up one of the governor’s most controversial budget proposals: the expansion of FamilyCare statewide and the elimination of the IRIS program. After contentious public hearings across the state and numerous constituent contacts, JFC made changes, which required spending additional revenue in an already tight budget.

Governor Walker also faced quick opposition to his proposal to expand FamilyCare statewide and eliminate the IRIS program. While the governor’s budget did suggest there would be a self-directed care option in FamilyCare, he was criticized for eliminating the current program, IRIS. JFC agreed to expand FamilyCare statewide upon approval by the Center for Medicare and Medicaid Services (CMS), but made changes to the concept. JFC included additional items for the waiver to CMS including a request to increase geographic regions currently served by managed care entities, a requirement there be no less than five regions, a request that multiple health agencies serve each region and the availability of a consumer-directed option under the long-term care program.

Building Commission

Since the introduction of his budget, Governor Walker’s budget office issued revised estimates that decreased the GPR debt service requirements by $12.2 million in 2015-16 and $10.6 million in 2016-17 to $619.8 million and $590.4 million. JFC adopted the revised estimate into the governor’s budget and changed the governor’s numbers to reflect the projected lapses from GPR debt service appropriations in the biennium, thus postponing expenditures on outstanding debts.

Also included in the omnibus motion, JFC approved several Building Program projects to be funded by GPR-supported bonding, under the oversight of the Building Commission.

The approved capital projects included two non-state projects for the Wisconsin Agricultural Education Center, Inc., and Carroll University Science Laboratory Facility. $5 million in GPR-supported bonding and $6 million in gifts grants and other receipts was approved for the Wisconsin Agricultural Education Center. The Carroll University Science Laboratory Facility project was approved with $3 million in GPR-supported bonding and $23 million in gifts, grants and other receipts.

In addition, JFC also provided financing for the UW-Madison Chemistry Building and the Eau Claire Confluence Center Project. The UW-Madison Chemistry Building was approved with $86 million of GPR-supported bonding and $21 million in gifts, grants and other funds.

In a surprise move, JFC reinstated the Eau Claire Confluence Center Project with $15 million in GPR-supported bonding in 2015-16. $1 million of GPR was appropriated for 2016-17 for the debt service payments associated with the project. This comes after JFC voted down the measure to finance the project from GPR, stating that it needed to preserve GPR in order to restore the cuts to public K-12 education.

Department of Administration – Transfers

Also included in the omnibus motion were various proposals to transfer services and programs within and outside of the Department of Administration (DOA). Items included were the consolidation of agency IT services, transferring the State Energy Office and Relocation Assistance Program to the PSC and deleting the governor’s proposal for an Office of Government Continuity.

The governor’s budget proposed a large plan that would have consolidated the IT services various state agencies into one office within DOA. This office would handle all back office services relating to human resources, payroll, finance, budgeting, procurement and information technology. JFC voted to remove this proposal from the budget, but have DOA develop a plan to assume these functions in the future.  JFC also voted for DOA to proceed with the internal reorganization that transfers the Office State Employment Relations into the new Division of Personnel Management. Under this reorganization, 5.37 GPR positions and the associated funding are eliminated.

While the governor’s budget proposed moving the State Energy Office and Relocation Assistance Program to the PSC, JFC decided to against the transfer. Instead, the office will remain in DOA.

The governor’s budget proposed creating an Office of Government of Continuity in DOA, which would be provided $314,000 PR in 2015-2016 and $362,500 PR in 2016-2017 for three PR positions. The governor proposed that this office would provide coordination of state government operations during a disaster. In the omnibus motion, JFC voted to delete this proposal.

Office of Marketing

The governor’s big proposal for the Department of Tourism in his 2015-2017 proposed budget included moving all marketing positions in each state agency to the Office of Marketing in the Department of Tourism. JFC voted to greatly reduce the governor’s proposal in an omnibus motion that also included items relating to the State Building Commission, worker’s compensation, unemployment insurance and DOA.

The governor’s proposal established eight positions to staff the Office of Marketing and provided $734,700 PR in 2015-2016 and $693,000 PR in 2016-2017. In addition, his proposal deleted 29.8 marketing positons in other agencies and reallocated funding from salary and benefits to supplies and services for agency payments. JFC voted to cut the governor’s new funding in half, therefore only creating four new positions for the new Office of Marketing. JFC maintained the governor’s proposal to delete the 29.8 positions in other agencies.

Worker’s Compensation

Also included in the omnibus motion, JFC deleted the governor’s proposal to move the worker’s compensation division in the Department of Workforce Development (DWD) to the Office of the Commissioner of Insurance (OCI). JFC did include, however, the governor’s proposal to transfer most adjudicatory functions relating to disputed worker’s compensation claims to the Division of Hearings and Appeals (DHA) in the Department of Administration (DOA). To address concerns by worker’s compensation practitioners over retention of expertise, the motion requires the 18 administrative law judges to be transferred allocate a minimum of 80% of their time to worker’s compensation issues.

In addition, JFC approved the governor’s recommendation to terminate reimbursements for self-insured employers for supplemental benefits paid by self-insured employers and to terminate reimbursements to insurers for supplemental benefits paid by insurers from the work injury supplemental benefits fund. Insurers paid supplemental benefits will instead be entitled to annual reimbursement from the worker’s compensation operation fund. 

Room Tax Changes

After the two omnibus motions for the day, Sen. Darling and Rep. Nygren introduced a separate motion to modify the state’s room tax structure. Under current law, municipalities are authorized to impose a room tax on establishments providing rooms or short-term lodging. In 1993, the room tax law was changed. Municipalities were allowed to implement a maximum tax rate of up to eight percent and directed at least 70% of revenues from the room tax towards tourism promotion and development. The remaining 30% of local room tax revenue can be used for purposes unrelated to tourism promotion and development under the municipalities’ discretion.

The motion changes current law to require 70% of the room tax revenue be passed on to a tourism commission or entity to use the revenue on tourism promotion and development. The tourism commission or entity would be in charge of spending the funds on tourism and development instead of the municipality. Municipalities subject to the eight percent room tax rate that currently retain more than 30 percent of local room tax revenue for non-tourism purposes could potentially face a phase-in process for right-sizing the appropriate revenue retention. These municipalities would face a 5-year phase-in to reduce these amounts to the greater of 30 percent or by 2020, the dollar amount that was retained in 2009.

The motion passed JFC 9-7, with three members of the majority party joining the minority members.

 

Friday May 29

UW System

Governor Walker’s budget proposal for the University of Wisconsin System was one of the most talked about provisions of his 2015-2017 state budget. On Friday, JFC voted to reduce the $300 million GPR cut to the UW by $50 million and remove the provision that would turn UW into a public authority with almost total autonomy. JFC adopted the governor’s proposal to freeze tuition for the biennium.

The budget committee also removed the governor’s proposal to end the Minnesota-Wisconsin tuition reciprocity agreement, costing the state a payment of $6.4 million GPR to Minnesota annually. JFC did approve the governor’s proposal to remove the definition of “tenure” from state statute. However, the UW Board of Regents have stated they would meet quickly to put tenure into Board policies. Among other changes, JFC also approved statutory changes to the use of shared governance. Shared governance, a policy that requires students, faculty and staff have an office say in university decisions, were changed so that those groups had input in how policies affect their specific group, but ultimately the decision-making is left to the chancellor at each university.

Under the JFC motion, a new authorizer of independent charter schools would be created within the UW System. In addition, under the motion the County Executive of Waukesha County, tribal colleges and Gateway Technical College, could also authorize “2r” charter schools. 

JFC approved the motion pertaining to the UW System 12-4 along party lines. 

Department of Natural Resources – Departmentwide

JFC members debated various budget items in the Department of Natural Resources, including changes to the state’s stewardship program.

For the stewardship program, the governor proposed to prohibit DNR from obligating amounts under the land acquisition subprogram beginning in FY 2016. The moratorium on the Stewardship program land purchases will continue until the level of debt service is reduced to $1 per $8 of total costs for land purchases acquired since the program inception. Based on the administration projections, this would institute a moratorium until 2028. JFC deleted the governor’s proposal and instead specified that DNR may not obligate more than $33.3 million in each year from 2015-15 through 2019-20 under the stewardship program as determined by certain program allocations. In addition, JFC reduced the bonding authority for the program by $88.2 million and appropriated $1 million GPR for debt service payments over the biennium.

Much of Friday’s debate on the DNR budget was on the governor’s proposal to delete 29 positions and $5.4 million (biannually) for DNR educators and scientists. JFC adopted the governor’s proposal. JFC passed the DNR motion 12-4.

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