As a result of my veto, an estimated $38 million of revenue limit authority will be restored annually to the school districts that provide four-year-old kindergarten.
When the Legislature adopted these provisions, it also reduced estimated costs for the Milwaukee Choice and Milwaukee Charter programs because these programs count four-year-old pupils in the same manner as for regular public schools. Therefore, I am making the following reestimates:
Choice payments are increased by $1,764,600 GPR in fiscal year 2003-04 and by $1,782,900 GPR in fiscal year 2004-05.
The estimated lapse from general school aids related to Choice payments is increased by $794,100 in fiscal year 2003-04 and $802,300 in fiscal year 2004-05.
Charter payments are increased by $564,000 GPR in fiscal year 2003-04 and by $568,900 GPR in fiscal year 2004-05.
The lapse from general school aids related to Charter payments is increased by the same amount as the Charter payment estimates are increased.
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When the Legislature adopted these provisions, it also reduced the estimated cost of certain tax credits and the cost of computer aid payments. The impact of this veto on these programs is addressed under my veto message regarding revenue limits. (See Public Instruction, Item #3.)
2. Student Achievement Guarantee in Education (SAGE)
Sections 286 [as it relates to s.
20.255 (2) (bb)], 351b, 1998m, 1998n, 1998no, 1999c, 1999n, 2009m, 2021m, 2021n, 2021no, 2021nr and 9441 (1z)
These provisions allow school districts currently participating in the SAGE program to opt out of reducing class sizes in grades two or three, or both. School districts choosing this option would have state aid reduced by the amount that would have been received for continuing participation in grades two and three. Any SAGE funding that remains unexpended due to these provisions will be used to increase special education funding, beginning in fiscal year 2004-05.
I am vetoing these provisions because the original intent of the program was to reduce class sizes in grades kindergarten through three. Allowing school districts to opt out of the program in grades two or three would significantly reduce the benefit of this program on students' future academic achievement. Research continues to show the benefits of smaller class sizes, especially in the early elementary school grades and for economically disadvantaged students.
Further, I object to any plan that would pit economically disadvantaged students who benefit from smaller class sizes in the early grades against children with disabilities. These provisions tie SAGE funding to special education. Both special education and SAGE are critical educational programs that deserve adequate funding. Both programs should be promoted, not weakened, and should not be at odds with each other. To that end, my budget not only maintains the current SAGE program, but also increases special education aid by $5,875,700 GPR.
3. School Revenue Limits
Sections 2043d, 2043h, 2043s, 2043u, 2043w and 2043y
These sections reduce the allowable increase in school district revenue per pupil under the school revenue limits to $120 for the 2003-04 school year and to $100 for the 2004-05 school year and every year thereafter. Under current law, the allowable increase in school district revenue per pupil under the revenue limits is estimated to be $236 in 2003-04 and $241 in 2004-05.
I am vetoing these sections because they will greatly reduce educational resources in our state and will limit the responsibilities and accountability of our locally elected school boards. For nearly ten years, the state has subjected school districts to the most stringent revenue controls imposed on any unit of government in order to slow the growth of property taxes. While I believe that it is fiscally prudent to keep current law, revenue limits in place at this time, the provisions passed by the Legislature would reduce school spending to levels below inflation and would force districts to make deep cuts in the classroom.
These provisions would also forever cap per-pupil increases at $100 per year. Based on inflation estimates made by the Congressional Budget Office, school districts would be forced to reduce their spending per pupil by ten percent over the next decade alone, as measured in current dollar terms, if these sections are not vetoed. School districts are already struggling under current law revenue caps to provide our children the quality education they deserve while keeping pace with increasing costs, particularly for employee health care. Denying our schools access to the revenue they are allowed under current caps will seriously impair the ability of our school districts to ensure that every child in Wisconsin receives a high-quality education and that Wisconsin's future workforce is properly trained. As a result of my veto, current law revenue limits will be retained.
This action should in no way be interpreted as encouraging school districts to spend up to the maximum allowed under the current revenue limits. It does, however, recognize that locally elected government officials, rather than state officials, are charged with the responsibility of managing their local units of government and are ultimately the ones who should be held accountable for the cost and quality of local services, including education. It is essential that school boards be able to work with administrators, principals, parents and local citizens to determine appropriate educational opportunities and spending levels for their local school district. Local school officials know their school districts best, including what their schools need and how much their local citizens are willing to spend to educate their children. These officials should be entrusted with the jobs that they were elected to perform, including budgeting and determining appropriate levies, and be held accountable by the local citizens they represent if they overstep their bounds.
When the Legislature adopted these provisions, it also reduced the estimated cost of certain tax credits and the cost of computer aid payments. Therefore, as a result of this veto, the restoration of the pupil count for four-year-old kindergarten (see Department of Public Instruction, Item #1) and the restoration of current law levy rate limits on technical colleges (see Shared Revenue and Tax Relief, Item #15), I am reestimating the cost of several tax relief programs as follows:
Property tax rent credit claims are estimated to decrease GPR revenues by an additional $3,000,000 in fiscal year 2003-04 and by an additional $6,200,000 in fiscal year 2004-05.
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Homestead credit costs are estimated to increase by $1,000,000 GPR in fiscal year 2003-04 and by $1,900,000 GPR in fiscal year 2004-05.
Farmland preservation credit costs are estimated to increase by $500,000 GPR in fiscal year 2003-04 and by $700,000 GPR in fiscal year 2004-05.
Exempt computer aid payments to local governments are estimated to increase by $1,700,000 GPR in fiscal year 2003-04 and by $3,300,000 GPR in fiscal year 2004-05.
4. Milwaukee Parental Choice Program Eligibility
Sections 2022d, 2022h, 2022p, 2022t and 9341 (4m)
These provisions modify the eligibility requirements for both students and schools in the Milwaukee Parental Choice Program (MPCP). Specifically, these provisions delete the cap on the number of pupils that may participate in the program, delete the prior year attendance requirements for pupils entering the program, allow students to continue in the program even if family income rises above the program's income criteria and allows schools located throughout Milwaukee County to participate. Under current law, participation is capped at 15 percent of Milwaukee Public Schools (MPS) membership; pupils may no longer participate in the program if family income exceeds 175 percent of the federal poverty level; and students must have been enrolled in MPS, the choice program or grades kindergarten through three in a private school in the city of Milwaukee or have not been enrolled in school in the prior school year to join the program. Also under current law, only schools located in the city of Milwaukee may participate.
I am vetoing these provisions because I object to this expansion of the Milwaukee Parental Choice Program, and I believe that policy changes of this significance should be addressed through separate legislation, where a full and open debate can occur. First, while the cap on MPCP participation may become binding at some point, enrollment in Choice schools remains below the cap and is anticipated to remain below the cap throughout the biennium. As such, a larger discussion on this issue can occur before enrollment approaches the cap. Second, the program was created to provide educational options to low-income children and families in the city of Milwaukee. An expansion of the program to include private schools throughout Milwaukee County is well beyond the scope of this original intent. Finally, it makes little sense to completely eliminate income tests for families once they have a child in the program. It is worth noting that, in other income-based programs for low-income families, such as BadgerCare (health care) and Wisconsin Shares (child care), the state does not eliminate the income ceiling for enrolled families whose economic circumstances improve. The original, and still valid, intent for the Choice Program was to give options to low-income families living in the city of Milwaukee that they could not otherwise afford, not to provide a lifetime guarantee to a free private school education regardless of future income.
5. Charter Schools
Sections 2020g, 2020k and 2042k
These sections include several provisions pertaining to the Milwaukee Charter Schools Program and transportation of pupils to charter schools. These sections allow pupils residing outside of the Milwaukee Public Schools (MPS) System's boundaries to attend a Milwaukee charter school. They also delete the prior year enrollment requirements for participation in the Milwaukee Charter Schools Program. In addition, these sections allow school districts, including MPS, to transport pupils to and from a charter school. Under current law, to participate in the Milwaukee Charter Schools Program, a pupil in the previous school year must have been enrolled in MPS, attended a Milwaukee Choice school, been enrolled in a nonchoice private school in Milwaukee in grades kindergarten through three, not have been enrolled in school, or have been enrolled in a school in the Milwaukee or Racine Charter School Programs.
I am vetoing these sections because I am concerned about the expansion of the scope of charter schools at this time, and because policy changes of this significance should be addressed through separate legislation where a full and open debate can occur. I am also vetoing these sections because the Milwaukee Charter Schools Program should continue to be focused on providing additional educational opportunities for city of Milwaukee children. Opening up the program to students living outside of MPS's boundaries may diminish the ability of Milwaukee students to participate in the program.
6. Racine Charter School Program
Sections 2020m and 2021f
These sections eliminate the current 400-pupil cap on the number of students that may attend the Racine charter school. These sections also cap at 400 the number of pupils previously enrolled in the Racine Unified School District for which the school district may receive payments equal to the amount of school aid per pupil the district is eligible for in the current school year.
I am vetoing these sections because I object to the expansion of this pilot program at this time. In addition, since the Racine Unified School District is only projected to receive payments for 180 pupils during the 2003-05 biennium, application of the 400-pupil cap for payments to the district is unnecessary.
7. Chapter
220 Interdistrict Transfer Aid
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Sections 2032m, 2032n, 2032o, 2042m and 2042r
These sections reduce from 0.75 to 0.65 in the 2004-05 school year and to 0.5 thereafter the fraction of a pupil counted in the sender district's membership count for state aid purposes for students participating in the Chapter
220 Interdistrict Integration Program. These sections also reduce aid to a district receiving a Chapter
220 interdistrict transfer pupil by paying the district the lesser of the average net cost per pupil of the district or $11,000 in the 2004-05 school year, $10,000 in the 2005-06 school year, $9,000 in the 2006-07 school year and $8,000 in any subsequent school year. Under current law, the district receiving the student is paid an amount based on its average net cost per pupil without these caps.
I am vetoing these sections because the state must maintain its commitment to diversity and the provision of public school options for Milwaukee students. The original – and still valid – intent of the Chapter
220 program is to provide educational opportunities to both city and suburban students and to foster an awareness and appreciation of cultural differences among students and school districts that choose to participate. If this commitment is diminished by significantly reducing the incentives to both Milwaukee Public Schools and Milwaukee-area suburban schools to participate in the Chapter
220 program, academic and cultural opportunities will be narrowed at a time when our society is increasingly multicultural. The ability of Wisconsin to benefit from these students' potential contributions to our economy and society will also be harmed.
8. Teacher Licensure Fees
Sections 286 [as it relates to s.
20.255 (2) (hg)], 348m, 351f, 1993g, 1993r, 1995m and 9341 (5f)
These provisions require the Department of Public Instruction to increase fees for teacher and administrator licenses from $100 to $150 as of July 1, 2004. These provisions also require the department to use the revenues generated by the fee increase to distribute grants to all school districts to fund mentoring for new educators.
I am vetoing these provisions because the fee increase represents a tax on teachers at a time when they have already sacrificed salary increases under the provisions of the qualified economic offer. I am also vetoing these provisions because this 50 percent fee increase would cause Wisconsin to have one of the highest licensure fees in the country. Lastly, the department needs the flexibility to adjust licensure fees to meet anticipated expenditures. These provisions would subject all future license fee increases to legislative approval, preventing the department from accurately aligning fees with expenditures.
9. Federal Administrative Funding
Section 1995t
This provision requires the Department of Public Instruction to submit to the Joint Committee on Finance any plans to use federal funding to support the department's general program operations. This provision also requires Joint Committee on Finance approval of such plans through a 14-day passive review process.
I am vetoing this provision because it is important that state agencies have the flexibility to manage their budgets. Given the Legislature's expectation that agencies will be accountable for delivering programs effectively, agencies need to have the operational flexibility to ensure that these expectations are met. Retaining existing flexibility under current law is critical to that process. Furthermore, the department is the only state agency subject to this requirement, and I object to it being singled out in this way.
10. School Finance Commission
These provisions create a school finance commission to study the funding of elementary and secondary education in Wisconsin. These provisions also provide $10,000 GPR in fiscal year 2003-04 for expenses of the commission.
I am vetoing these provisions because creating a school finance commission through law is unnecessary. In my State of the State address, I already indicated that I will create a Governor's Task Force on Education Financing. Consequently, I am vetoing the creation of this commission and returning the $10,000 for its expenses to the general fund. Although there is no language in the budget bill designating funding for the commission's expenses, the purpose of this funding was specified in the Joint Committee on Finance's amendments to the bill. By lining out the Department of Administration's s.
20.505 (4) (ba) appropriation for fiscal year 2003-04 and writing in a smaller amount that deletes the $10,000 GPR, I am vetoing the part of the bill which funds the school finance commission. Furthermore, I am requesting the Department of Administration secretary not to allot these funds.
11. Low-Revenue Ceiling
Section 2043b
This section increases the low-revenue ceiling provision from $6,900 to $7,400 in the 2003-04 school year and to $7,800 in any subsequent school year if a school board adopts a resolution to use this additional authority by a two-thirds vote of the members elect.
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I am partially vetoing this section to eliminate the two-thirds vote requirement because it is an unnecessary intrusion into local affairs. The increase in the low revenue exemption, which I proposed in my original budget, will help reduce spending disparities and increase equity among school districts. However, school boards should be able to make decisions by a majority vote in the same manner as state government and other local governments. Requiring school boards to pass measures on super-majority votes undermines the authority of local government officials and Wisconsin residents when they vote in local elections. As a result of my veto, school boards will be able to use the new $7,400 and $7,800 low-revenue ceiling exemption levels established by the bill through the simple majority vote process that exists under current law. It is anticipated that as many as 98 school districts could benefit from the low-revenue exemption.
12. Sunset of Transportation Fund Dollars for General School Aid
Sections 8m, 173m, 179m, 353m, 852m, 2007m, 2033m, 2034m, 2036m, 2037m, 2038m, 2039m and 9441 (1f)
These sections sunset the use of transportation fund dollars for general school aids after fiscal year 2004-05. Consequently, ongoing funding for general school aids for fiscal year 2005-06 and beyond is $60,000,000 below the fiscal year 2004-05 funding level.
I am vetoing these sections because the rationale for using transportation fund dollars to help support general school aids for the 2003-05 biennium will continue to exist into the future. Pupil transportation expenses play a significant role in overall school costs. Therefore, it is appropriate that the transportation fund continue to contribute toward the support of Wisconsin's schools. As a result of this veto, ongoing funding for general school aids from the transportation fund will be maintained at $60,000,000 for fiscal year 2004-05 and beyond. Given the importance of education, it is essential that school aids not face an immediate $120,000,000 reduction in the 2005-07 biennium. This veto ensures that our commitment to education is maintained and the state's long-term budget is more secure.
13. Public Library System Aid
Sections 354, 2311m, 2311s and 9443 (1qz)
These sections sunset support for public library system aid from the universal service fund as of June 30, 2005. The sections also require telecommunications providers to itemize the total customer assessment related to certain universal service fund programs on customers' bills for telecommunications services.
I am vetoing section 354 to remove the sunset of universal service fund appropriations for public library system aid because adding a sunset could result in a permanent and significant decrease in aid to public library systems. State support for local libraries is critical to educating our children and fostering economic development.
I am also vetoing sections 2311m, 2311s and 9443 requiring the itemization of the total customer assessment related to universal service fund expenditures for non-Public Service Commission programs on customers' bills. I object to this provision because it creates needless paperwork and serves no useful purpose.
14. Educational Technology Courses
Section 1057d
This section deletes the requirement that the Department of Administration work with the Department of Public Instruction (DPI) to develop courses for the instruction of professional employees licensed by DPI in the use of educational technology.
I am partially vetoing this section because DPI, as the state's chief educational agency, should have a major role in developing courses on educational technology for the employees it licenses.
SHARED REVENUE AND TAX RELIEF
15. Levy Limits on Counties, Municipalities and Technical College Districts
Sections 943m and 1532m
These sections limit, for three years, the increase in property taxes that a county, municipality or technical college district may impose. For counties and municipalities, the annual increase is limited to the percentage change in equalized value due to new construction, net of improvements removed. For technical colleges, the annual increase is limited to 2.6 percent. These sections also provide adjustments to the limits for debt service authorized prior to July 1, 2003, and allow for the limits to be exceeded by referenda.
I am vetoing these sections because they restrict economic development, limit local government access to capital markets, endanger public health and safety, hinder educational attainment and job training, and foster inequities among local governments. First, these levy limits endanger economic development. These limits fail to recognize that local government investments must often be made before development can begin. Without the needed infrastructure and ability to finance new projects, economic growth will suffer.
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Second, these levy limits make it all but impossible for most Wisconsin municipalities to issue general obligation bonds. The levy limit language is so flawed that even if a municipality passes a bond issue by a referendum, the bonds cannot be issued. In contrast, the Wisconsin Constitution requires an irrepealable levy for the life of the bonds. Under this provision, any bonds that could be issued must be less than the full faith and credit of the municipality. This would lower credit ratings and carry higher interest rates.
Third, these levy limits endanger public health and safety. Poverty, crime and health problems create greater need for fire, police, elderly care and emergency medical services. The regions of the state that experience slower growth are often the very same areas with residents most in need of these services. This proposal limits the ability of municipalities to fund these necessary services for the elderly, poor and other vulnerable residents of their communities.
Fourth, these levy limits hinder educational attainment and job training. The limits on technical college levies will require students to pay more for classes or reduce the course offerings of the technical colleges. In either case, this diminishes our ability to provide individuals with the skills necessary to improve their earnings and compete for better paying jobs. Further, it hampers funding for many of the functions of municipal government – for example public libraries – that also support our children's education.
Fifth, these levy limits are inequitable. Wisconsin's neediest communities, with little open space for new construction, could have little or no levy growth. In contrast, wealthier municipalities with open land available for development will have substantial capacity to raise revenues. Consider what would have occurred had the proposal been in effect in 2001. In that year, the city of Milwaukee had a 0.9 percent increase in value due to new construction while Germantown had a 5.6 percent increase; Marinette had a 1.4 percent increase while Sun Prairie had a 6.1 percent increase; and Monroe had a 1.2 percent increase while Middleton had a 4.7 percent increase. The proposal will result in limiting the ability of municipalities to provide vital public services and exacerbating the existing discrepancies in economic growth.
Local elected officials are in the best position to make decisions regarding the appropriate level of services to fund and provide for residents of their communities. These officials have continually made difficult decisions regarding these important issues. Local governments and their residents should not be penalized for the state's own fiscal disorder.
The veto of the levy limit on Wisconsin Technical College Districts will have an impact on several of the state's tax relief programs. This impact is discussed under Department of Public Instruction, Item #3. I have not reestimated the spending levels in these programs related to vetoing limits on municipal and county levies. I believe that local elected officials will act responsibly and limit growth in local levies. As such, a reestimate is not necessary.
16. Municipal Shared Revenue Payments
Sections 286 [as it relates to s.
20.835 (1) (dd)], 661m, 662d, 662de, 662e, 663, 665, 1653d, 1653e, 1653f, 1654, 1655, 1656, 1658, 1658d, 1662b, 1662d, 1663b, 1664b, 1666b, 1669d, 1669e, 1669f, 1669g and 9445 (1) (b) and (1m)
These provisions create new formulas for municipal shared revenue payments in 2004 and 2005. Specifically, these provisions create a new equalization formula for larger population municipalities and a proportional reduction formula for smaller population municipalities. Jointly, these formulas reduce municipal shared revenue payments by $50,000,000 compared to current law beginning in 2004. These provisions then repeal the new formulas and eliminate all provisions regarding the distribution of municipal shared revenue for 2006 and beyond.
I am partially vetoing these provisions because these formulas misrepresent the actual allocation, create inequities among municipalities, add needless complexity and create uncertainty for long-term municipal funding.
First, the formula changes do not work as claimed. It is claimed that the new equalization formula aids important public safety needs, such as police and fire. In reality, it actually provides the most aid to those communities with the fewest public safety needs. Municipalities with costs below 50 percent of the state average of larger municipalities will have those costs weighted at 150 percent, while municipalities with above average costs will receive no aid on any dollar spent above the average. In other words, those who live in high-crime areas do not receive the state aid necessary to provide important police and other public safety services.
Second, the formula changes create inequities in aid to municipalities. When all the pieces of municipal budgets are put together, wealthier municipalities would have smaller percent reductions than poorer communities.
Third, the formula changes add unnecessary complexity. They redistribute state aid to mask the simple need for a modest reduction in shared revenue to help address the state's budget deficit.
Fourth, the proposal repeals shared revenues without an alternative. There should be no repeal without a replacement. State revenue sharing is a long-standing progressive feature of Wisconsin state-local finance. Municipalities need certainty regarding their future shared revenue payments.
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As a result of my veto, the $50,000,000 reduction to shared revenue will be accomplished directly. It will be computed on a straightforward per capita basis, equaling an estimated $12.73 per person. It will establish a maximum allowable percentage reduction. No municipality would have more than a 15.7 percent reduction compared to current law payments for 2004. The payment distribution will be settled for all future years.
Under my veto, all municipalities are expected to receive at least as much shared revenue as under my initial budget proposal. Indeed, my veto allocates the entire $20,000,000 that the Legislature added back to shared revenue to fund the minimum guarantee that is implicit in the maximum percentage reduction. As a result, over 1,100 municipalities will be better off, and no municipalities will be worse off, than under my initial budget proposals.
