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
These sections:
· Delete the current limitation that common school fund, normal school fund, University fund and agricultural college funds are controlled and invested only by the Board of Commissioners of Public Lands (BCPL), and instead authorize the delegation of investment of the assets of each fund to the State of Wisconsin Investment Board (SWIB).
· Require that if the BCPL delegates the investment of the assets of these funds to SWIB, SWIB could invest those assets in any manner authorized for the investment of any of the types of funds under the control of SWIB.
· Require SWIB to assign an investment professional to assist the BCPL in establishing and maintaining its investment objectives.
· Authorize SWIB to deduct the costs of such services from the gross receipts of the fund to which the monies invested belong.
· Direct SWIB to deduct its investment management expenses from the gross receipts of the BCPL funds to which the interest and income of the investment will be added.
· Clarify that SWIB would credit all of these investment management expense payments for BCPL investments to SWIB’s general program operations appropriation account.
I am vetoing these sections entirely for three reasons. First, I am not confident that the revised investment authority corresponds to the fiduciary role of the Board of Commissioners of Public Lands. Second, these provisions were not debated thoroughly enough to understand the consequences of delegating this investment authority. Third, the fiscal effects of these changes were not considered. While I may support some revisions to the investment authority of SWIB and BCPL, I believe these issues should not be included in the state budget and instead should be considered as separate legislation.
REAL ESTATE TRANSFER TAX
30. Real Estate Transfer Forms and Filing Requirements
Sections 1810hm and 9143 (3b)
Section 1810hm would direct the Department of Revenue (DOR), by January 1, 2000, to identify any nonessential items that could be made optional on the real estate transfer return form (RETR), develop a simplified form, and submit it for review by the Joint Committee on Finance under the 14-day passive review process.
I am vetoing this provision because DOR has revised the RETR twice in the last three years, each time reducing the complexity of the form. In addition, a new smaller form will replace the current form effective January 1, 2000. The efforts of the department in this recent revision were specifically intended to eliminate unnecessary items from the form. To this end, DOR discussed each line on the form with representatives of other agencies, local and county officials, private sector practitioners, and department staff.
Section 9143 (3b) would specify that a RETR not be required in the case of a conveyance that is executed for nominal, inadequate or no consideration to conform, correct or reform a conveyance previously recorded. I am vetoing this provision because, if no filing were required, DOR audit staff would be unable to discern if an exemption was improperly claimed for cases in which a transfer fee should have been paid. For example, DOR audit staff have found that filers confuse the language of "for or nominal consideration" and use the exemption when there is no money exchanged for the real estate; in reality, however, a transfer fee is due in this type of situation.
SALES AND USE TAX
31. Exemption for Maintenance of Railroad Tracks and Rights-of-Way
Sections 1812t and 9443 (8c)
These sections provide a sales and use tax exemption for the gross receipts from the sale of and storage, use, or other consumption of materials in the maintenance of railroad tracks and rights-of-way.
I am vetoing these sections because the delayed effective date of the provision, January 1, 2001, extends the full fiscal impact of the program beyond the scope of the current biennium, and because I am concerned about creating additional sales tax exemptions. The fiscal effect of this veto is to increase GPR revenue by $470,000 in fiscal year 2000-2001.
SHARED REVENUE AND TAX RELIEF
32. Tax Exemption Reporting Fee
Section 1655p