These provisions allow a taxpayer to elect to attribute the receipts from a service received in the state, in proportion to the direct cost of performing such a service.
I am vetoing these provisions because they were part of the proposal to base income apportionment solely on sales, instead of the current method which considers payroll, property and sales. As the single sales factor apportionment was not adopted, these sections should not be enacted.
10. Dividends Received Deductions
Sections 1740n and 9343 (22t) [as it relates to s. 71.26 (3) (L)]
This section further defines "wholly exempt income" for corporations subject to franchise or income taxes to include interest, dividends or capital gains that are not subject to taxes under this chapter. In an attempt to clarify the intent, the bill removes additional descriptive information from the section regarding the meaning of "wholly exempt income."
I am vetoing this provision to maintain current law to avoid further complications in understanding the intent of the provision.
FINANCIAL INSTITUTIONS
11. Access Fees for Computer Databases
Section 2353
This section authorizes the department to develop an administrative rule that establishes fees for public access or use of the department’s databases or computer systems. This section also requires that the fees be based on the reasonable costs of the services including a reasonable share of the costs of associated development and infrastructure.
I object to the requirement that these fees be developed in administrative rule. The section clearly specifies a detailed recipe for developing the fees. This requirement is sufficient to ensure that fees will be fair and equitable. To also require that these fees be done in administrative rule will delay and add cost to the fee-setting process. This administrative rule requirement may even conflict with the "reasonable cost" requirement because the length of the administrative rules process may prevent the department from adjusting fees when changes in the underlying costs become known. Thus I am vetoing the administrative rule requirement.
12. Required General Fund Balance – Increase to 1.2%
Section 169
This provision increases the required general fund balance from 1% to 2% in increments of 0.2% annually beginning in fiscal year 2001-2002. Under this provision, the required reserve reaches 2% in fiscal year 2005-2006 and remains at that level for all future fiscal years. The provision leaves the current 1% reserve in place for both fiscal years 1999-2000 and 2000-2001. The reserve is calculated as the required percentage of general purpose revenue appropriations for the fiscal year (including any amount from general purpose revenue designated as compensation reserves). Wisconsin’s required balance is smaller than the balance required in most other states.
I am partially vetoing this section to increase the required reserve for fiscal year 2000-2001 from 1% to 1.2%. I am partially vetoing this provision to accelerate the increase to 1.2% because Wisconsin should use the opportunity provided by the current strength in the economy to better position itself for tight budgets in the future. This veto will also help to preserve savings made available from my budget vetoes for future state needs if the economy should falter.
INCOME TAXES
13. Income Tax Exclusion for Mass Transit Fringe Benefits
Sections 1688h and 9343 (7c)
These provisions remove the limit on the amount that a taxpayer may deduct from income for employer-provided transit passes.
I object to the removal of this limit because this removal is unnecessary and because it would increase the complexity of our tax system for very little, if any, benefit. Currently, the cost of a monthly transit pass for any public bus system in the state is less than the $65 limit. Now, the state limit is tied to the federal Internal Revenue Code and that code will increase the limit to $100 in tax year 2002.
14. Individual Income Tax Credit for Military Income
Sections 1719g and 9343 (20ty)
These sections provide that a new income tax credit for certain military income is not to be subtracted from regular tax for purposes of determining if the Wisconsin alternative minimum tax applies.
I object to these sections because they contradict another section of the bill and this contradiction may muffle legislative intent. Section 1719j provides that this new credit is to be subtracted from regular tax before the alternative minimum tax is determined. I do not believe that the Legislature intended for these contradictory provisions to subject individuals who receive this very modest tax credit to the alternative minimum tax. This veto ensures that this new credit will not increase alternative minimum tax payments.
15. Miscellaneous Itemized Deductions
Section 1711
This section generally eliminates miscellaneous deductions from the itemized deduction credit, but specifically retains dues paid to a professional society or a labor union, to travel expenses or to home office expenses as allowable miscellaneous itemized deductions under that credit.
I object to this section because it will greatly complicate the computation of the itemized deduction credit. My budget proposed eliminating miscellaneous deductions from the itemized deduction credit to simplify the tax code and filing process. This veto restores my original proposal.
16. School Property Tax Rent Credit
Section 1716m and 1716p
These sections institute a revised School Property Tax Rent Credit (SPTRC) in tax year 2000 and end the credit after 2000. The current SPTRC is calculated at 10% of property taxes or rent constituting property taxes to a maximum of $2,000 in taxes or rent. The maximum SPTRC is $200. The revised SPTRC would be calculated at 6.4% of property taxes or rent constituting property taxes to a maximum of $2,000 in taxes or rent. Under the revised SPTRC, the maximum credit would be $128.
I am partially vetoing these sections to increase property tax relief. The lottery credit proposal contained in this bill is unconstitutional. To ensure that the money originally allocated to the lottery is still used for targeted property tax relief, as intended, these partial vetoes will increase the tax year 1999 school property tax rent credit to 16.4% and the tax year 2000 credit to 10%. This will dramatically increase property tax relief for homeowners and renters. In tax year 1999, the boost in the credit rate to 16.4% is equivalent to an income tax reduction of 3.1%. Middle-income filers receive the bulk of the tax cuts under this alternative – 63% of the reduction goes to persons whose income is between $25,000 and $75,000. Those with lower incomes receive 19% of the cuts. For those 1.5 million taxpayers receiving the credit, this tax relief will average $136.
INDIAN GAMING
17. Legislative Approval of Tribal Gaming Compacts
Sections 7m, 7n, 7q and 9301 (1d)
These sections would require the Governor, prior to entering into any compact with the tribes, to submit proposed compacts to the Legislature for approval by joint resolution. These sections further provide that the Governor may not concur with the determination of the U.S. Secretary of the Interior that an Indian gaming establishment proposed to be located on trust lands would not be detrimental to the surrounding community unless the Legislature approves the proposed gaming establishment by joint resolution, with the exception of the Indian gaming establishment proposed to be located at Dairyland Greyhound Park.
I am vetoing these provisions because of the extensive delays that could be expected in entering into compact agreements with the tribes if legislative approval is required.
18. Office of Justice Assistance Tribal Law Enforcement Assistance Grant Program
Sections 110k and 544
These sections provides funding under the tribal law enforcement assistance grant program to specific tribes for law enforcement and public safety initiatives on the reservation and trust lands of the tribes, including the Stockbridge-Munsee ($175,000 in each fiscal year), the St. Croix Chippewa ($150,000 in each fiscal year) and the Lac Courte Oreilles Chippewa ($125,000 in each fiscal year).
I am vetoing these sections to allow the Office of Justice Assistance full discretion in making grant awards under the new program. In addition, because of concerns about compliance with compact agreements and lack of progress in negotiations with local governments, I am reluctant to return any Indian gaming compact revenue directly to the tribes.
19. Department of Health and Family Services Grant Program for Tribal Health Centers
Sections 172 [as it relates to s. 20.865 (4) (g)], 2241c and 9123 (6tu)
These sections authorize a new tribal health program that would provide Indian gaming compact revenues to tribal health centers. Funding for this program would be $450,000 in each fiscal year, with funds first placed in the supplemental appropriation of the Joint Committee on Finance for approval of the proposed grant distribution method.
I am vetoing these provisions because tribal health centers are already eligible for $920,000 per year in state health grant programs for tribes only, and tribal health centers also qualify for Medicaid funding as federally qualified health centers. With this veto I am requesting the Department of Administration secretary to not allot $450,000 in fiscal year 1999-2000 or fiscal year 2000-2001.
20. Department of Veterans Affairs Services to American Indian Veterans
Section 172 [as it relates to s. 20.485 (2) (km)]
This section provides funding of $27,500 in each fiscal year to provide per tribe grants of $2,500 to any tribal governing body that enters into an agreement with the Department of Veterans Affairs (DVA) regarding the creation, goals and objectives of a tribal veterans services officer, similar to the county veterans service officer.
I am writing down the funding for these grants to $15,000 in fiscal year 1999-2000 and $10,000 in fiscal year 2000-2001 so that the tribes will have to compete for grant awards. I am also concerned about the prudence of providing funding to ensure a per tribe grant of $2,500 if not all of the tribal governing bodies have agreements with the DVA regarding the creation, goals and objectives of a tribal veterans services officer. Because this veto will reduce the appropriation under s. 20.485 (2) (km), I am requesting the Department of Administration secretary to not allot $12,500 in the appropriation in fiscal year 1999-2000 and $17,500 in fiscal year 2000-2001.
21. Tourism Marketing Grant Program
Sections 343 and 9149 (1to), (2c), (2tw) and (3e)
These sections provide funding to specific entities under the tourism marketing grant program. I object to these provisions because they unnecessarily restrict the use of funds for the tourism marketing grant program and limit the extent to which the Department of Tourism can award grants on a competitive basis.
Section 343 provides funding of $200,000 in each year to the Milwaukee Public Museum for Native American exhibits and activities. Section 9149 (2c) provides $100,000 in each year to the Burnett County Historical Society for educational programming, marketing and advertising costs for Fort Folle Avoine. Section 9149 (2tw) provides $75,000 in each year to both Polk and Burnett counties for tourism promotion in northwestern Wisconsin. I am partially vetoing these provisions so that funding will be provided on a one-time basis. In addition, section 9149 (3e) provides $50,000 in fiscal year 1999-2000 to the St. Croix Valley Tourism Alliance. I am vetoing this provision so more funding will be available to potential grantees of the tourism marketing grant program. The St. Croix Valley Tourism Alliance can apply for funding.
Section 9149 (1to) provides $75,000 in fiscal year 1999-2000 to the Department of Natural Resources (DNR) for completing the upgrading of Aztalan State Park. I am vetoing this provision so that more funding will be available for the purposes intended in the tourism marketing grant program. Through another veto, I am restoring $1,000,000 in revenues to the parks account in the segregated conservation fund that would have otherwise been transferred to the general fund. In light of that veto, I request that DNR provide funding for this purpose under the state parks SEG appropriation.
22. Department of Natural Resources Drinking Water Study
Section 172 [as it relates to s. 20.370 (6) (ck)]
This section provides funding of $230,000 in fiscal year 1999-2000 and $300,000 in fiscal year 2000-2001 for the Town of Swiss in Burnett County and the St. Croix Band of Chippewa for a study to determine the best technological approaches to addressing water quality problems threatening drinking water and overall water quality problems of the St. Croix, Namekagon and Yellow rivers.
I am partially vetoing the amount of funding provided in fiscal year 1999-2000 by writing the appropriation down to $100,000. I am writing down this amount to reflect the late passage of the budget and the likelihood that the full $230,000 would not be spent by the end of fiscal year 1999-2000. I am requesting the Department of Administration secretary to not allot $130,000 in the appropriation in fiscal year 1999-2000.
23. Department of Natural Resources Elk Management
Sections 172 [as it relates to s. 20.370 (1) (hk)] and 9436 (6)
This section provides funding of $50,000 in fiscal year 1999-2000 and $200,000 in fiscal year 2000-2001 for 1.0 FTE wildlife biologist position to manage the elk reintroduction program in the state. Funding would also be used for continued elk studies, elk herd monitoring and management, and transporting additional elk into the state.
I am partially vetoing the amount of funding provided by writing in a smaller amount that deletes $22,400 in fiscal year 1999-2000 and $27,600 in fiscal year 2000-2001. Because I want to limit the number of new positions created, my veto reduces funding for 1.0 FTE wildlife biologist position, and instead provides funding for only 0.5 FTE wildlife biologist position. I am requesting the Department of Administration secretary to not allot these funds and to authorize a 0.5 FTE wildlife biologist position rather than the 1.0 FTE wildlife biologist position.
Section 9436 (6) includes a technical error that provides that s. 20.370 (1) (hk) not take effect until July 1, 2000. I have deleted this provision so that the appropriation will be created upon the effective date of the bill and funding provided in fiscal year 1999-2000.
24. Department of Natural Resources Crane Management
Section 172 [as it relates to s. 20.370 (1) (Lk)]
This section provides funding of $130,300 in fiscal year 1999-2000 and $147,000 in fiscal year 2000-2001 for a one-time study of crop damage caused by cranes, and a 1.0 FTE wildlife biologist position related to the reintroduction of whooping cranes into Wisconsin.
I am partially vetoing the amount of funding provided by writing in a smaller amount that deletes $37,650 in fiscal year 1999-2000 and $43,500 in fiscal year 2000-2001. Because I want to limit the number of new positions created, my veto reduces funding for 1.0 FTE wildlife biologist position and, instead, provides funding for only 0.5 FTE wildlife biologist position. I am requesting the Department of Administration secretary to not allot these funds and to authorize a 0.5 FTE wildlife biologist position rather than the 1.0 FTE wildlife biologist position. This is an important study, but it can be conducted with the staff and dollar resources that are being provided in the bill as vetoed.
25. Commerce – Gaming Economic Development and Diversification Grant Programs
Sections 172 [as it relates to s. 20.445 (7) (kd)], 478 [as it relates to s. 20.445 (7) (kd)], 2017j, 2023m, 2953g, 2953h and 2953i
These sections provide funding under the gaming economic development and diversification grant programs for two specific projects and one additional grant program. Sections 2953g, 2953h and 2953i provide annual funding of $900,000 for remediation and economic redevelopment projects in the Menomonee Valley, and also annual funding of $150,000 for the Northwest Regional Planning Commission to establish a community-based venture fund.
I object to the extent to which gaming economic development and diversification program funding is absorbed by these projects. I am partially vetoing these provisions so the funding amounts will be provided on a one-time basis so more funding will be available for spending at the discretion of the Department of Commerce. These organizations can compete for additional grants from the Department of Commerce.
The other sections provide annual funding of $600,000 for grants to tribal colleges under the Governor's work-based learning board, for work-based learning programs. I am partially vetoing these sections so that the Department of Workforce Development will be less restricted in administering grants under the work-based learning program.
26. University of Wisconsin System Aquaculture Demonstration Facility
Sections 887, 9107 (7x) and 9154 (3x)
These provisions would require the Board of Regents to submit a plan to the Joint Committee on Finance for its approval for the construction and operation of the aquaculture demonstration facility. The provisions specify that the Building Commission not authorize public debt to be contracted for the purpose of financing construction of the aquaculture demonstration facility unless the Joint Committee on Finance has first approved the report. The provisions also require the Board of Regents to make certain assurances regarding the applied research and training to be conducted at the facility.
I am vetoing these provisions because they impose unnecessary burdens on the Board of Regents. The board will still be required to obtain approval from the Building Commission prior to their authorization of public debt for the purpose of financing construction of the aquaculture demonstration facility. I am also directing the Department of Agriculture, Trade and Consumer Protection to work with Wisconsin’s aquaculture industry to develop a management plan that ensures research at the facility is applied and is in the interest of growing and promoting aquaculture in the state.
STATE OF WISCONSIN INVESTMENT BOARD
27. Bonus Compensation
Sections 694c, 694r and 694w
These provisions determine how compensation is provided to employes of the investment board, including bonus compensation.
I object to the elimination of merit-based compensation for board employes. I am partially vetoing these provisions so that employes of the State of Wisconsin Investment Board (SWIB) who are members of the unclassified service may still receive bonus compensation, as long as the cost may be financed under the new method of determining the board's operating budget. The bill shifts the SWIB’s operating budget from a fixed appropriation to an amount that is indexed to the level of assets under management. The purpose of this new authority is to provide the resources necessary to effectively manage $60 billion in assets under management. To most effectively use the new budget authority to manage resources, the authority to award performance bonuses should be maintained.
28. Information Technology Initiatives
Section 172 [as it relates to s. 20.507 (1) (h)]
Section 172 [as it relates to s. 20.507 (1) (h)] increases the salary and fringe benefits component of the Board of Commissioners of Public Lands’ (BCPL) appropriation by $43,600 in fiscal year 1999-2000 and by $50,400 in fiscal year 2000-2001 and makes an offsetting reduction of $47,000 annually provided in the supplies and services component of the BCPL’s appropriation to delete funds budgeted for general information technology (IT) support consultant services to perform these same system development and administration functions. This reallocation of funds is intended to fund a new 1.0 FTE information technology position for IT system development and administration. Although there is no language in the budget bill that authorizes this position or funding reallocation, the purpose of these changes was included in a Conference Committee amendment to the bill.
I am vetoing the part of the bill which funds this new 1.0 FTE PR-S position by lining out the Board of Commissioners of Public Lands' s. 20.507 (1) (h) appropriation and writing in a smaller amount that deletes $100 PR-S provided for this purpose in fiscal year 1999-2000 and in fiscal year 2000-2001. My original budget request included funding for IT consulting services and I believe the board will have more flexibility to define and meet its IT support needs by purchasing consulting services. Therefore, I am also requesting the Department of Administration secretary not to allot these funds. Furthermore, I am requesting the secretary not to authorize 1.0 FTE PR-S positions.
29. Revised Investment Authority for Certain Board Investments
Sections 593e, 689b, 689d, 689fh, 689j, 689L, 694s, 695b, 695m, 698c, 699g and 699s
