To begin this transformation toward financial stability, I have used my veto power to eliminate the $115 million school aid payment delay, and I have increased the statutory ending balance to 1.2 percent of appropriations and compensation reserves. We must live within our means. Just as a family cannot delay a mortgage payment without risking foreclosure, the state cannot continue to ignore today's obligations with promises to pay tomorrow.
In this budget, I remain committed to controlling school property taxes through the school district allowable revenue formula and to meeting the state's commitment to fund two-thirds of school costs. These goals must be accomplished honestly by paying the bills, as they come due, not by further shifts in paying school aids. We cannot responsibly meet these goals at the expense of the state's fiscal health and by extension threatening the stability of local government finances. While I cannot use my veto authority to restore the full 2002-03 school year payment, by law the Joint Committee on Finance must meet in June 2002 to review estimated school costs and set the school aid funding level.
I remain confident that our economy will show renewed vigor in the next two years, providing additional revenues for schools without the need to resort to budget gimmicks. However, even without further growth in revenues, I have aggressively vetoed spending increases and prudently built up the required general fund balance to ensure that the state's two-thirds school funding commitment will be met in full as it comes due.
In addition to vetoing the school aid payment delay and restoring the required general fund balance, I am acting to further improve the state's fiscal situation by directing the secretary of the Department of Administration to monitor the need for the $100 million in debt restructuring authorized by the Legislature. We cannot afford to borrow money instead of making difficult decisions on budget priorities. In the event revenues grow faster than expected, the secretary of the Department of Administration will decide whether the issuance of these bonds is necessary.
I have also used my veto power to restore a four percent budget reduction for the Department of Public Instruction and a five percent reduction for the State Public Defender. When all state agencies, the Legislature and the courts are making budget reductions, we should not shield any administrative operations appropriations from sharing the burden. The reduction for the Department of Public Instruction exempts the state residential schools to reflect their direct service responsibilities.
The budget, as passed by the Legislature, also tapped questionable funding sources to support certain programs. For instance, use of growth in revenues from fines and forfeitures retained by counties is neither a stable nor realistic funding source for new district attorney positions. District attorneys face real world work load issues that are not addressed through unreliable funding sources. I support an increase in district attorney positions to address critical work load needs, but cannot agree to the funding source proposed by the Legislature. I urge the Joint Committee on Finance to consider meeting this need from a different source of funding through its authority under s.
13.10.
My third major concern is the amount of bonding authorized in this budget. My proposed budget authorized $522 million in new GPR-supported general obligation bonding in the 2001-03 biennium, a level calculated specifically to ensure that debt service payments would remain at 3.5 percent of total GPR revenue over the next decade. The budget passed by the Legislature contains $564 million in new GPR-supported bonding authorizations for the 2001-03 biennium. This level of bonding means that debt service will increase as a percentage of total revenue. We should not incur new long-term debt of this magnitude. Debt service payments will increase by 9.4 percent in fiscal year 2002-03, while our GPR revenue will increase less than 4.5 percent. Therefore, my vetoes have reduced the total new bonding authorization amount by $9 million to reduce the new debt we will incur to a more affordable level.
To improve the ending balance, I vetoed a total of $62 million in additional GPR spending items approved by the Legislature. This is the largest amount of GPR budget savings ever realized in a biennial budget through gubernatorial vetoes and reflects the critical need to restore fiscal responsibility and stability. I also exercised a veto to increase the size of the balance we are required to maintain from 0.7 percent to 1.2 percent of GPR spending. Since many states maintain balances of at least five percent, we must continue toward the current law goal of 2 percent. The required balance is scheduled to grow to 1.6 percent as we enter the next biennium and we need to honor this commitment. Meeting this responsibility will require fiscal discipline and prudent management of resources. Therefore, I am very pleased that the budget I am signing takes a step in this direction by including a meaningful budget stabilization fund that will set-aside fifty percent of unanticipated revenues to help us avoid future budget crises.
From general purpose revenue, net spending will be $11.4 billion in fiscal year 2001-02 and $11.6 billion in fiscal year 2002-03, for a biennial total of $23.0 billion. These figures represent annual spending increases of 3.0 percent and 1.7 percent, primarily due to increases in spending to meet our commitment to fund two-thirds of school costs, to reduce class sizes in early grades, to return inmates housed in out-of-state prisons to Wisconsin facilities, to implement a new prescription drug subsidy for seniors, to pay for increased child care and medical assistance costs for our low-income citizens, and to make investments in our higher education system. Total spending under the 2001-03 budget, as passed, is $23.3 billion in fiscal year 2001-02 and $23.5 billion in fiscal year 2002-03, for a biennial total of $46.8 billion.
I am signing this budget with a total of 315 vetoes. Many of these vetoes were needed to reduce spending by a total of $62 million GPR. These vetoes will also reduce the structural deficit confronting the state in the next biennium. A number of these vetoes are technical in nature and were required to make provisions workable. A number of these vetoes curb the Legislature's involvement in the day-to-day management of state agencies by eliminating the most burdensome new reporting requirements. The Legislature has a legitimate interest in knowing how state programs are working, but it should not micromanage agencies or dictate agency work load through the budget bill.
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The budget I introduced in February, and the Legislature passed, keeps Wisconsin moving ahead: growing our economy through lower taxes and targeted investments, improving educational quality through innovative programs, and ensuring all citizens can access jobs, education and health care. Among the highlights are the following items:
Tax and Local Government Finance
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Eliminates the state income tax on military pensions and reduces the estate tax in fiscal year 2002-03. These changes reduce taxes by over $37 million.
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Provides a property tax exemption for air carrier hub facilities.
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Increases the state cigarette tax by 18 cents to provide prescription drug benefits for eligible lower-income seniors.
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Provides an exemption from the sales tax for electricity sold to utilities by merchant power plants to encourage the development of adequate energy supplies in Wisconsin.
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Holds the total property tax burden per $1,000 of personal income to 14 percent below December 1993 rates.
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Increases shared revenues, expenditure restraint payments, county mandate relief payments and small municipalities shared revenues by one percent annually in fiscal year 2002-03 and fiscal year 2003-04.
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Restores the municipal shared revenue formula in 2004 to ensure that state aid is delivered to communities with the greatest needs.
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Provides $5.6 million in fiscal year 2001-02 and $7.4 million in fiscal year 2002-03 to fully fund the personal property tax exemption for computer equipment. Business taxes are reduced by retaining exemptions for automated teller machines and expanding exemptions to copier and fax machines.
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Establishes a state spending cap to limit annual noneducation GPR spending increases to the increase in state personal income.
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Requires that fifty percent of unanticipated revenues be set aside in the state's budget stabilization fund to help avoid future budget crises and reduce Wisconsin's deficit under generally accepted accounting principles.
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Maintains the state's budgetary balance at 1.2 percent of spending instead of reducing the balance to a sixteen-year low of $90 million.
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Creates a permanent endowment fund from tobacco securitization proceeds to support tobacco cessation and prevention efforts, provide interest earnings to the general fund and provide an offset to the state's $1.2 billion deficit under generally accepted accounting principles.
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Implements full disclosure in budgeting by requiring state budget documents to state the impact of the proposed budget on future state finances and to report the estimated budget balance under generally accepted accounting principles.
Economic Development and Transportation
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Protects state residents from unwanted telephone sales calls by prohibiting telephone solicitors from calling those listed in a statewide no-call database.
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Preserves the application of the Wisconsin Consumer Act to rental purchase agreements.
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Improves highway safety and enhances economic development by increasing state and federal support for highway construction projects and local transportation aids by over $300 million over the biennium.
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Enumerates three new major highway projects: STH 17 in Oneida County; I-39/USH51 in Marathon County (Wausau Beltline); and STH 26 in Rock, Jefferson and Dodge counties.
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Provides over $160 million over the biennium for reconstruction of the Marquette Interchange in the city of Milwaukee.
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Increases the basic allocations for local road improvement funding by providing a six percent annual increase for critical transportation infrastructure projects.
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Increases local transportation aids by four percent in calendar year 2002 and three percent in calendar year 2003 to meet rehabilitation and maintenance costs and to limit growth in property taxes.
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Increases state assistance to local transit systems by four percent in calendar year 2002 and two percent in calendar year 2003.
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Provides $14 million over the biennium for brownfields assessment, remediation and redevelopment efforts.
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Creates technology development zones to enhance investment in high technology and create high-skill, high-wage jobs by providing credits against income, sales and property taxes for qualified businesses.
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Authorizes $25 million in bonding for a biomedical technology research incubator at the Medical College of Wisconsin.
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Protects Wisconsin's critical animal agriculture industry by providing a 150 percent increase for the Johne's disease control program.
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Promotes economic development in the city of Beloit by designating a development opportunity zone and allocating $4.7 million in tax credits to reward job creation and capital investment.
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Protects Wisconsin's agricultural and biotechnology industries by providing felony penalties for the intentional introduction of contagious disease into livestock or the intentional destruction of plants grown for commercial or research purposes.
Environmental Protection and Resource Management
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Supports efforts to protect children from pesticide exposure in schools by increasing notification requirements, ensuring pesticides are applied by licensed individuals and providing 1.0 FTE SEG position to continue and expand the Integrated Pest Management training program for school districts.
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Creates a Fox River Navigational System Authority governed by a nine-member board to repair and manage the system of locks on the Fox River.
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Enhances protection of Wisconsin's pristine natural resources by increasing bonding authorization for the Warren Knowles-Gaylord Nelson Stewardship 2000 Program by $112 million.
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Increases funding and positions for forestry operation and private forest landowner assistance by approximately $4.5 million SEG and 15.0 FTE SEG positions in fiscal year 2001-02 and designates a chief state forester.
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Enhances control of invasive aquatic plants and animals by providing stronger enforcement authority and additional funding to the Department of Natural Resources.
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Enhances wetland protection efforts by providing $196,900 SEG and 2.5 FTE positions over the biennium to implement the Wetlands Compensatory Mitigation program.
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Enhances local land use planning by providing additional funding for land information systems.
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Prohibits oil and gas drilling beneath the Great Lakes.
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Creates an Adopt-a-River program to encourage volunteers to oversee a section of a lake, river, wetland or ravine; conduct annual clean-ups; and ensure the long-term environmental health of the area.
Education and Training
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Provides $380 million over the biennium to increase state aid to Wisconsin's elementary and secondary schools.
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Eliminates the delayed payment of $115 million in general equalization aid to help restore sound fiscal practices to the state.
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Provides $53.5 million GPR in additional funding to support full implementation of the Student Achievement Guarantee in Education (SAGE) program, which reduces class size in grades kindergarten through three, bringing the total funding of SAGE to $95 million.
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Maintains existing level of state support for four-year-old kindergarten programs in public and choice schools.
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Provides an 18 percent increase in funding for the school breakfast program, which will allow for a significant expansion of participation rates.
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Provides a 10 percent increase in funding for the minority precollege scholarship program for middle and high school students to participate in challenging academic programs at Wisconsin's public and private colleges and universities.
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Creates a revenue limit adjustment for low enrollment districts with large geographical areas, which are experiencing declining enrollments.
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Provides $195,000 GPR to support student organizations related to career and technical education.
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Authorizes the University of Wisconsin-Parkside to create a charter school in the Racine school district.
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Provides $77.5 million in new GPR funding to the University of Wisconsin System, including $38 million GPR to support initiatives for the Madison and Milwaukee campuses and to make systemwide investments that will expand enrollments in information technology and biotechnology.
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Authorizes a BioStar initiative and $317 million in general fund supported borrowing over a ten-year period to attract federal and private funds for construction of biological sciences education and research activities at the University of Wisconsin-Madison.
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Provides $6.4 million GPR to the Higher Educational Aids Board and the University of Wisconsin System to increase need-based financial aid programs.
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Provides $500,000 to the University of Wisconsin Medical School for the purchase of a digital mammography machine.
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Authorizes the board of regents to use base funding to create GPR-funded faculty and academic staff positions.
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Provides an additional $500,000 GPR over the biennium to the Wisconsin Technical College System to increase the availability of high demand courses.
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Increases funding for vocational rehabilitation services by $2 million over the biennium, which will enable more of Wisconsin's disabled citizens to become part of Wisconsin's work force.
Human Resources
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Provides $2 million GPR in fiscal year 2001-02 and $49.9 million GPR in fiscal year 2002-03 to implement the new Senior Care program, beginning September 1, 2002. Senior Care is the new prescription drug assistance program for Wisconsin residents who are 65 years of age or older and who meet certain eligibility criteria. An estimated 260,000 individuals will be eligible, making the program one of the most generous in the country.
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Provides a $218 million increase to fully fund child care for both W-2 clients and for low-income working families.
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Provides $17.3 million GPR over the biennium to increase funding for the Community Option Program (COP) and Community Integration Program (CIP).
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Provides a $5 million GPR increase over the biennium for the Family Support and Birth to Three programs, which serve disabled children and their families.
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Provides an additional $32 million GPR over the biennium to fully fund the BadgerCare program, which is available to all low-income children and their parents not covered by Medical Assistance.
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Provides an additional $53 million SEG in fiscal year 2001-02 and $70 million SEG in fiscal year 2002-03 to nursing homes due in large part to their efforts to enhance the amount of federal intergovernmental transfer (IGT) funds received by the state.
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Provides an additional $13.4 million SEG for hospitals and $12.3 million SEG for noninstitutional providers over the biennium as a result of the receipt of the new IGT funds.
Justice
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Provides funding to staff the following new and expanded correctional facilities: Stanley, New Lisbon, an expansion at Taycheedah, two inmate workhouses (located at Winnebago and Sturtevant), an addition to the Oshkosh segregation unit and the new Sturtevant Probation and Parole Holding Facility.
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Provides $4.6 million GPR to increase purchase of services for offenders in the community.
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Provides $4.2 million GPR to add 56.5 FTE probation and parole agents. The additional agents will provide an average agent to offender ratio of one agent to supervise 47 offenders.
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Provides additional resources for inmate health care needs including: the new Highview geriatric facility for male inmates, a new mental health unit for female inmates at the Taycheedah Facility, twenty additional nursing positions and staffing for 24-hour nursing coverage at the Columbia, Oakhill and Taycheedah facilities.
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Provides $3 million GPR to increase funding for Youth Aids payments to counties. Youth Aids fund the cost of placements to juvenile correctional facilities and other juvenile delinquency related services.
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Provides $3.5 million to improve the state's Automated Fingerprint Identification System (AFIS).
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Provides $450,000 GPR to increase reimbursement to counties for court interpreter services.
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Provides $1.2 million of federal Byrne grant funds for a diversion program to encourage criminal justice agencies to collaboratively develop alternatives to incarceration for certain types of offenders.
State Government Operations
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Creates a new agency, the Department of Electronic Government, to strengthen the state's ability to plan and manage its information technology resources.
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Provides $180 million to the general fund through eliminating vacancies, realizing savings from recent changes to the state retirement system and implementing five percent reductions in state operations appropriations to ensure a balanced budget.
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Enhances recruitment and retention in the Wisconsin National Guard by retaining a 100 percent tuition reimbursement program through a partial veto.
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Adds funding and positions to improve veterans benefits counseling.
