I believe this budget accomplishes these goals.
My proposal to cap state spending increases at the rate of growth in personal income will get state spending under control. And . . . if you're wondering . . . the spending increase in this budget would come in well under the cap . . . if it were in place today.
My proposal to return half of all future surplus funds to state taxpayers provides a mechanism for additional tax relief.
My proposal to direct half of any future budget surpluses to the Budget Stabilization Fund will help avoid a repeat of the deficit challenge we faced in putting this budget together.
However . . . I also know that others here have been at work on these same issues . . . fighting for the same sound approach to spending and taxes.
When the last biennial budget was passed . . . I expressed my personal concern about the rate of spending growth in that budget.
We have now seen where excessive spending takes us.
We began this budget planning process with a structural deficit estimated to be $475 million in the current fiscal year.
However, the nation's economic slowdown over the past few months has forced us to revise our revenue figures downward . . . and these lower revenue projections pushed the deficit up to $557 million in each year of the upcoming biennium.
That means we have to use $557 million of revenue growth in the first year of the upcoming biennium . . . and another $557 million of growth in the second year just to sustain our current levels of spending.
And . . . as you all know . . . this $1.1 billion structural deficit . . . the largest in state history . . . must be covered before a single dime is allocated for a single new program.
My friends . . . let us vow . . . right here . . . right now . . . to work together to make sure that no future governor . . . regardless of party . . . will be forced to begin a biennial budget cycle with a deficit of this magnitude.
Furthermore . . . and let me say this in unambiguous words . . . as long as I am governor . . . . I will do all I can to make sure the state of Wisconsin does not face a deficit of this magnitude again.
You also need to know that part of the equation for balancing this budget is my proposal to "securitize" the stream of payments Wisconsin is slated to receive from tobacco companies as part of the recent national settlement.
By selling the state's right to receive these payments to bond investors and by turning the bulk of their immediate payment over to the Wisconsin Investment Board to invest . . . Wisconsin can turn an expected $5.6 billion in payments over the next 30 years into about $6.8 billion over that same period of time.
I am proposing that $350 million of the amount we initially receive be used to offset the current structural deficit and that the balance be assigned to a permanent endowment fund. The earnings on the endowment fund will be used to support anti-smoking efforts and other health-related programs.
This is sound fiscal management which will yield both short and long-term financial and health benefits for Wisconsin's citizens . . . but only if we act responsibly in managing the proceeds of this settlement.
As we work together to come to agreement on this budget . . . I would ask that you not jeopardize the state's bond rating . . . or mortgage our children's future . . . by dipping further into this fund.
This is just one example of how this has been a daunting budget process . . . perhaps the most difficult budget in many years . . . but it's also provided us with some great opportunities.
And it's those opportunities I am most excited to talk about today.
The opportunity to focus on performance and productivity . . . rather than spending.
The opportunity to look for ways to further streamline government . . . at all levels.
The opportunity to provide more efficient and more effective services at a lower cost.
The opportunity to re-focus our priorities on those things which most need our attention and our resources.
Call it . . . the re-making of Wisconsin.
That is the opportunity this budget has presented to us . . and . . together . . we must accept the challenge.
The budget I present to you today does not shift the state's financial shortfall to other units of government . . . it does not raise taxes . . . and it does not rely on accounting tricks to balance the books.
This is a budget built on the same principles we all learned in Accounting 101 . . . you don't spend more than you take in and you don't rob Peter to pay Paul.
It's common sense.
It's sound fiscal management.
It's our sacred obligation as public servants.
Despite the challenging budget picture . . . I am recommending major new financial investments in the following areas:
$540 million more for public schools . . . to help fund school costs and continue to provide much-needed property tax relief.
$206 million more for corrections . . . for a more compassionate and effective approach to rehabilitation and making sure that our citizens are more secure.
$201 million more for medical assistance . . . to provide more medical services to the neediest in our state.
There is also new money to grow and build Wisconsin's economy and to help create more high-skill . . . high-wage jobs. In other words . . . more opportunities for our citizens to improve their lives by moving up the economic ladder.
⋅ Twenty technology development zones will be created to help develop high-tech . . . high-skill . . . high-wage jobs.
⋅ An airport hub property tax incentive will be provided to encourage airlines to create high-paying jobs in Wisconsin.
⋅ The single sales factor approach to apportionment of corporate taxes will be phased in . . . so that Wisconsin is more competitive with our neighboring states when it comes to locating new plants and creating new jobs.
⋅ A "Rural Initiative" to reinvigorate Wisconsin's historic commitment to small towns and farms by providing grants and start-up assistance to small business owners and family farmers.
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⋅ Funding for the TechStar program . . . which will provide grants to a consortium of southeastern Wisconsin universities to help turn their research efforts into marketable products.
⋅ Funding for the "Milwaukee Idea" . . . which will increase the number of faculty and students enrolled at the University of Wisconsin-Milwaukee in high-demand occupational areas. This money will also provide for creation of the "Academy of Excellence" honors program on the Milwaukee campus . . . which is an initiative aimed at keeping Wisconsin's best and brightest students learning . . . and, hopefully, working . . right here at home . . . in Wisconsin.
⋅ Another $11.8 million for the "Madison Idea" . . . which focuses on increasing educational options for students at the University of Wisconsin-Madison and for enhancing economic development.
⋅ Funding will be provided to the Wisconsin Technical College System to create a 17th campus. But this one will be a virtual technical campus . . . on-line.
⋅ The gross receipts tax on wholesale power transactions will be cut in half to help increase the supply of energy and reduce the cost.
⋅ We will begin the process of reconstructing the Marquette Interchange in Milwaukee. This is a crucial . . . indeed indispensable . . . link for commerce flowing throughout the entire state of Wisconsin.
⋅ Ten million dollars will be earmarked for the Canal Street project in Milwaukee to help facilitate redevelopment in the Menomonee Valley.
⋅ $9.1 million will be provided for infrastructure improvements around the soon-to-be-refurbished Lambeau Field in Green Bay.
Technological changes are also having a big effect on state government . . . and in defining the way we provide services to the people of Wisconsin.
That is why I am proposing creation of a new Wisconsin Department of Electronic Government . . . to be headed by a state Chief Information Officer . . . and which will be responsible for technology planning and project implementation.
This new department . . . which will be formed from existing divisions within DOA . . . will help incorporate emerging technologies into the workplace . . . and will help us provide better and more efficient services . . . and at a lower cost.
And when we speak of "efficiency" . . . we must take a moment to speak of Don Kettl . . . one of Wisconsin's most valuable resources.
In January . . the Kettl Commission presented its report on State-Local Partnerships and this budget includes the commission's recommendations on municipal shared revenue.
These recommendations seek to eliminate incentives to spend money and . . . instead . . . put in place incentives to encourage more cooperation and efficiency. As additional savings are realized through a move to regionalized "economies of scale" . . . taxpayers can look forward to lower tax burdens.
This is not the first time Don Kettl has stepped forward to take on a difficult assignment and I know it won't be the last. Don . . . please stand up . . . and let a grateful state say "Thank you!"
We must also reaffirm our commitment to public education. Not just in terms of the state's funding responsibility . . . but also by endorsing initiatives to improve performance. Education is the most critically important component in building a successful and comfortable life . . . regardless of whatever endeavor one may chose to pursue . . . and the state has a responsibility to ensure that all of our children are reaching their highest potential.
That's why this budget provides funds for . . .
⋅ Promoting site-based management.
⋅ New school improvement teams.
⋅ Restructuring under-performing schools.
⋅ An independent Board of Educational Accountability to manage assessment programs and provide information to parents and taxpayers on how schools are performing.
⋅ A pay-for-performance initiative for teachers who excel.
⋅ More charter schools.
⋅ Smaller class sizes in the elementary grades.
⋅ Alternative certification options for qualified teachers.
In building academic programs around the needs of students . . giving parents and policy makers better information . . improving subject area knowledge and student outcomes . . our schools will be better able to focus on performance rather than on compliance.
The author George Eliot wrote . . . "What do we live for . . . if it is not to make life less difficult for each other?"
The budget I present to you today makes life less difficult for the neediest in Wisconsin in these ways.
⋅ New funding to maintain Early Childhood Excellence Centers . . . which will provide high quality childcare to low-income families.
⋅ An additional $84 million for direct child care . . . to significantly improve access for families who need this help.
⋅ Creation of a "Kids Cabinet" to ensure better coordination of programs for children.
⋅ Maintenance of funding for the Community Options Program.
⋅ Additional funds to address caseload needs in the Division of Vocational Rehabilitation.
⋅ Funds to expand the Women's Health Program . . . and for treatment of breast and cervical cancer.
⋅ More money for BadgerCare . . . which will help add approximately 20,000 families to the program.
⋅ A Prescription Drug Assistance Program which could cover over 80,000 of Wisconsin's senior citizens who currently do not have any prescription drug benefits.
It's my hope . . . as we come to some agreement on what the state can afford to do in extending prescription drug benefits . . . that we don't lose sight of the fact we all want more of our senior citizens covered. On that point . . . there is no disagreement.
We must also reaffirm our commitment to environmental protection and wise use of our natural resources.
Commenting on the prediction that the world's population could double in the next 30 years, the Archbishop of Canterbury recently said . . . "We will have to learn to live more simply so that others may simply live."
We must not take more from this world than we need and we must make sure we preserve as much of God's beauty for those who will follow us.
We are all custodians of the land . . . the water . . . our state and national forests . . . our beautiful state parks . . . the shorelines . . . the natural habitat . . . the wildlife . . . and . . . the wetlands.
This is a part of Wisconsin's heritage I will not allow to be un-made.
In my proposed budget, you will find:
⋅ A Green Tier Initiative which will strengthen the partnerships between businesses and the Department of Natural Resources . . . and provide for a more effective level of environmental management.
⋅ An additional $130 million in bonding authority to invest in water quality improvement.
⋅ Three million dollars for ethanol production to help the environment and to help Wisconsin farmers.
⋅ Two million dollars for "brownfield" clean-up in the Menomonee Valley.
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⋅ Nearly two million dollars will be directed towards the Agricultural Stewardship Initiative to fund research which will help reduce agricultural pollution.
⋅ Creation of the Fox River Navigational System Authority to rehabilitate, repair, operate and maintain the lock system on the Fox River.
