Section 1694f limits the use of bonding for the Marquette Interchange by not allowing repayment of principal and interest past June 30, 2009, and requires that all SEG and FED funds allocated to the Marquette Interchange project be expended prior to issuance of any general obligation bonds; section 1672c requires the Department of Transportation to allocate at least $49,350,000 in each fiscal year to projects for the rehabilitation of Southeast Wisconsin freeways other than the Marquette Interchange; sections 1672g and 1672h require the department to maximize the use of SEG and FED funds for the payment of bonds; and section 1672i allows the department to request that the Joint Committee on Finance reallocate funds from the State Highway Rehabilitation or Major Highway Development program SEG appropriations to support debt service on bonds issued for the Marquette Interchange. I object to the Legislature's infringement on executive branch authority to manage programs. I am vetoing sections 1672c, 1672g, 1672h and 1672i to provide the department with the necessary flexibility to manage the rehabilitation of the Marquette Interchange to maximize the benefit to the state and its taxpayers. I am partially vetoing section 1694f to allow general obligation bonding to be authorized for the Marquette Interchange, as well as the State Highway Rehabilitation program, but to remove unduly restrictive conditions established by the Legislature.
Section 9153 (3r) requires the department to provide a report as part of its 2005-07 biennial budget request that includes a funding plan for the remainder of the Marquette Interchange project which maximizes the use of SEG and FED funds and minimizes the use of bonding. In addition, the report may not include issuance of bonds for which principal and interest payments extend beyond June 30, 2009. I am vetoing this section because it is unnecessary and limits the department's options for future funding of the Marquette Interchange and other statewide projects. The department will continue to plan for the most cost-effective manner in which to complete this and other highway projects.
Section 9153 (1r) requires the department to increase the base for highway programs in its 2005-07 biennial budget request to the Department of Administration. I am partially vetoing this section to remove the new base provision for the Major Highway Development program SEG and transportation revenue bond appropriations because it s unnecessary to modify the base for this program. However, I am not vetoing the new base for the State Highway Rehabilitation and Southeast Wisconsin Freeway Rehabilitation programs to reflect my intent to reduce or eliminate the use of general obligation bonding in the 2005-07 biennium by increasing the use of SEG funds.
Section 9253 (1) provides for a transfer from the transportation fund to the general fund of $30,000,000 in fiscal year 2004-05. Section 9253 (1x) requires the secretary of the Department of Transportation to ensure a lapse of $175,000 in each fiscal year of the biennium from vehicle inspection and department operations appropriations to the transportation fund. I am partially vetoing these sections to eliminate the lapse requirement and to provide for a transfer from the transportation fund to the general fund of $175,000,000 because during tight fiscal times it is necessary to use all of the resources of the state to fund vital programs. The partial veto will result in no effective date being specified for the transfer. Under s.
16.52 (12), because no date is specified for when the transfer is to be made, the Department of Administration shall determine a date on which the transfer shall be made or provide for partial transfers to be made on different dates. It is my intent that the transfer be comprised of $100,000,000 in fiscal year 2003-04 and $75,000,000 in fiscal year 2004-05. I am requesting the Department of Administration secretary to make the transfer in this manner.
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As a result of the partial vetoes outlined above, the general fund will not support any new general obligation bonding for transportation. All bonding will be supported by transportation-related revenues. In addition, while my vetoes will result in $100 million less spending on highway projects, the highway improvement program is sufficiently funded to meet the needs of the state. The State Highway Rehabilitation program will be provided funding from all sources of $540,708,700 in fiscal year 2003-04 and $554,661,300 in fiscal year 2004-05. The Southeast Wisconsin Freeway Rehabilitation program will be provided funding from all sources of $87,241,800 in fiscal year 2003-04 and $173,741,800 in fiscal year 2004-05. The appropriation schedule under s.
20.395 will reflect funding for the Major Highway Development program of $164,900,400 in fiscal year 2003-04 and $191,193,900 in fiscal year 2004-05. However, these amounts do not reflect my intent to use federal funds made available by reducing the State Highway Rehabilitation FED appropriation to increase funding for the Major Highway Development program by a corresponding amount. I am requesting the Department of Transportation secretary to make this increase through existing administrative authority. As a result, the Major Highway Development program will be provided funding from all sources of $239,700,000 in fiscal year 2003-04 and $238,970,500 in fiscal year 2004-05.
The partial vetoes will also result in an additional $145,000,000 being transferred to the general fund. This transfer, and other reductions to the Legislature's spending increases, will help create a $205 million general fund balance to help guard against future budget deficits. These reductions to highway spending and the subsequent transfer to the general fund would not have been necessary if the Legislature had acted responsibly regarding funding of health care for our seniors, disabled individuals and working families.
34. Joint Committee on Finance Authority to Supplement State Highway
Programs
This provision requires the Department of Transportation to submit a report to the Joint Committee on Finance by January 1, 2004, that includes the department's response to the Legislative Audit Bureau's performance audit of the state highway program, various cost reduction measures and allocation of savings from cost reduction measures. Subsequent to receipt of the report, the committee may supplement the Major Highway Development program by $4,833,000 SEG and the State Highway Rehabilitation program by $11,120,500 SEG in fiscal year 2004-05 from the committee's supplemental appropriation under s.
20.865 (4) (u).
I am vetoing this provision because I object to this infringement on executive branch authority to manage programs and because it is unnecessary. Under the current practice of Legislative Audit Bureau's performance audits, the department's response will be included in the final report. In addition, the department continuously seeks cost reductions in the state highway program. By lining out the committee's supplemental appropriation under s.
20.865 (4) (u) and leaving $0 to delete $15,953,500 SEG in fiscal year 2004-05, I am reestimating the appropriation to reflect the removal of the department's authority to request funding under this provision.
35. Sales Tax Transfer from the Sale of Automobiles
This provision requires the Department of Revenue to determine on each July 1, beginning in 2005, the total taxes imposed under ss.
77.52 and
77.53 that are paid to the Department of Revenue and to the Department of Transportation in the immediately preceding calendar year on the sale or use of new motor vehicles. Annually, on July 1, ten percent of the total amount determined shall be transferred from the general fund to the transportation fund.
I am vetoing this provision because I object to the earmarking of sales and use tax revenues for specific purposes. This provision sets a bad precedent that would erode revenues to the general fund by an estimated $24,000,000 in fiscal year 2005-06 and $25,000,000 in fiscal year 2006-07. The loss of these revenues to the general fund would add to the state's structural deficit and severely limit the state's ability to meet its future needs, especially during times of tight fiscal constraints.
36. Surplus Land Sale
Section 9153 (1z)
This provision requires the Department of Transportation to sell sufficient surplus land to deposit to the transportation fund not less than $4,000,000 in each fiscal year of the biennium.
I am vetoing this provision because I object to this infringement on executive branch authority to manage programs and because it is unnecessary. The department determines when it is cost-effective to buy and sell land and will continue to do so to maximize the benefit to the state.
37. Commuter Rail Transit System Development
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These provisions create a new commuter rail transit system development grant program and amend the current rail passenger service federal appropriation to include funding for commuter rail transit projects.
I am partially vetoing section 1703 to remove the restrictions on the program related to light rail systems and preliminary engineering because I object to limiting the flexibility of the Department of Transportation to administer the grant program.
I am partially vetoing section 286 [as it relates to s.
20.395 (2) (cx)] and vetoing section 420e because the provision is unnecessary. If awarded, federal funds for these commuter rail projects would be given directly to the local government developing the project.
38. Position Reduction Plan
Section 9153 (1y)
This provision allows the Department of Transportation to submit a plan by the third quarterly meeting of the Joint Committee on Finance under s.
13.10 of the statutes in each fiscal year to reallocate position reductions and associated funding adjustments. The plans would be subject to a 14-day passive review process.
I am vetoing this provision because it is an unnecessary infringement on executive branch authority to manage programs.
39. Traffic Signals
Section 9153 (1j)
This provision requires the Department of Transportation to install traffic control signals at the intersection of Inman Parkway and USH 51 in the town of Beloit in Rock County by June 30, 2004.
I am vetoing this provision because I object to this earmark that circumvents the normal approval process. The department evaluates traffic signal needs throughout the state, including the town of Beloit.
C. HEALTH AND PUBLIC SAFETY
CORRECTIONS
1. New Lisbon Reimbursement of Costs
Section 9110 (1x)
This provision allows the city of New Lisbon to apply to the Department of Corrections for reimbursement of costs associated with extending utility service to the New Lisbon Correctional Institution for costs incurred between May 1, 2002, and March 31, 2004. Under the provision, the Department of Corrections is required to pay at least $215,000 of those costs no later than June 30, 2004.
I am vetoing this provision because it is unnecessary. The department already has an agreement to reimburse the city for costs associated with extending utility service to the prison. Since the facility is scheduled to open in April 2004, payments for water and sewer will begin at that time.
2. Highview Correctional Institution Alternative to Revocation Beds
Section 2490d
This provision converts Highview to a minimum security correctional institution and requires the Department of Corrections to designate 50 beds for programming for offenders in prison as an alternative to revocation.
I am partially vetoing this provision because I object to the limitations it imposes on the department's use of prison beds. The effect of the veto is to eliminate the requirement that the department designate a specific number of beds for alternative to revocation placements in order to maintain flexibility in the use of prison beds. I am also requesting that the department use some beds at Highview for alternative to revocation placements, as well as continue to use beds for this purpose at other institutions.
3. Pilot Program for Nonviolent Offender Community Reintegration
Section 2485g
This section requires the Department of Corrections to request proposals for the establishment of two 25-bed halfway houses for nonviolent offenders, one located in an urban area and one located in a rural area, and specifies that a proposal may not be accepted unless the daily cost is less than or equal to the highest daily cost of out-of-state contract beds. It also requires a study to be submitted to the Governor and the Legislature by January 1, 2007, evaluating the cost effectiveness, administration, public opinion and success of the program in accomplishing community reintegration of nonviolent offenders.
I am partially vetoing this section because I object to the limits it imposes on the department's ability to provide effective offender treatment and community protection. I am vetoing the provision that would require establishment of one rural and one urban halfway house because it would limit the department's ability to find suitable locations for halfway house beds. I am vetoing the provision that would require the cost to be less than or equal to the highest daily rate provided for out-of-state contract beds because it would limit the department's ability to provide appropriate treatment to offenders and provide community protection. I am vetoing the reporting requirement because it imposes a burdensome work load at a time when agency budgets are limited.
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The effect of this veto will be to require the Department of Corrections to request proposals to create a pilot program for nonviolent offenders to spend the last six months of incarceration at one of two 25-bed halfway houses. The pilot program will sunset July 1, 2008.
4. Contracting with County Sheriffs for Beds
Section 2491g
This provision requires the Department of Corrections to accept proposals from county sheriffs to place state inmates in county jails by July 1 of each year if there is an existing contract with a private provider for placement of inmates in out-of-state facilities. The department must evaluate the proposals by October 1 of each year and notify a county if state inmates can be placed in the county's jail beginning the following January 1. The department must also give such counties priority over out-of-state contractors if the department determines that inmates may be placed in a county's jail.
The provision specifies that the daily cost for placing an inmate in a county jail must be determined by the Department of Corrections and the county, but requires the daily cost to be no higher than the highest daily rate provided to out-of-state contractors.
I am vetoing this provision because I object to the limits it places on the department's ability to negotiate contracts with county sheriffs. I support working with counties to house state inmates and the department is already pursuing agreements with counties to reduce reliance on out-of-state contract beds. Given the department's current authority in this area, this provision is unnecessary.
5. Juvenile Correctional Services Program Revenue Deficit
Sections 441d, 2493m, 9130 (2f) and 9430 (2f)
These provisions require the Department of Corrections to do all of the following:
Estimate unexpended revenues, less encumbrances, on or before March 15 of each odd-numbered year, that will remain in the juvenile correctional services appropriation on June 30 of that year, and provide the estimate to the Department of Administration and the Joint Committee on Finance.
Require that 50 percent of any deficit projected by the Joint Committee on Finance be included in the cost basis for calculation of secured correctional facility daily rates for each year of the subsequent biennium, and require that the share of daily rate revenue proportionate to the share of the increased cost basis be reserved for retiring the deficit. Any revenue reserved for this purpose that exceeds the amount of the deficit must be reimbursed to the counties and the state in a manner proportionate to the total number of days of juvenile placements at the facilities for each county and the state. Specify that $569,300 be added to the cost basis for the calculation of daily rates in the 2003-05 biennium.
Submit quarterly reports to the Joint Committee on Finance detailing year-to-date revenues and expenditures and projecting the unexpended revenues, less encumbrances, that will remain in the appropriation on June 30 of that year. Require the department to report on efforts to reduce operating costs to minimize any potential deficit.
I am partially vetoing section 441d as it relates to the juvenile correctional services deficit and the other sections entirely to maintain the department's flexibility to effectively manage juvenile programs. I object to the reporting requirements and deadlines because they impose a burdensome work load at a time when agency budgets are limited. Further, these provisions would place an undue burden on counties by requiring the Department of Corrections to charge counties to recover deficits in the appropriation.
DISTRICT ATTORNEYS
6. Byrne and Penalty Assessment Funded Assistant District Attorneys
This provision allocates $165,000 PR-O annually in penalty assessment matching funds and associated Byrne funding of $495,000 PR-F annually to fund 11.0 FTE PR-O assistant district attorney positions. To provide the remaining match funding necessary to fully fund 11.0 FTE PR-O assistant district attorney positions, the provision directs the Office of Justice Assistance to determine a reduction in penalty assessment matching funds of $22,300 PR-O annually and associated Byrne funds of $66,900 PR-F annually from among the following programs: (a) antidrug task forces; (b) Governor's Law Enforcement and Crime Commission special projects; (c) truancy and supervision programs; (d) Wisconsin Incident Based Reporting System program; and (e) children's community grants.
I am vetoing this provision because I object to exempting the district attorneys from spending reductions. I am lining out the appropriation under s.
20.475 (1) (h) and writing in a smaller amount that deletes $660,000 PR-O funding in each fiscal year. I am also requesting the Department of Administration secretary not to allot these funds. The effect of this veto will be to delete the funding increase and position authority added by the Legislature and instead implement my recommendation to reduce the district attorneys GPR salaries and fringe benefits appropriation by $900,000 GPR and 15.0 FTE GPR positions annually.
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Further, I object to the allocation of scarce penalty assessment and Byrne funds for assistant district attorney positions. Diverting these funds to assistant district attorney positions reduces the ability of the state to fund a variety of programs and does not provide a long-term solution for funding the positions. During fiscal year 2002-03, my administration facilitated the Joint Committee on Finance approval of 11.0 FTE PR-F assistant district attorney positions. As more federal funding is made available in the future, the State Prosecutors Office will forward similar position requests to the Department of Administration.
Since federal requirements mandate that Byrne funding for assistant district attorney positions be limited to four years, the Legislature's proposal would have created a long-term GPR commitment for the state. Vetoing this provision will give the Office of Justice Assistance more flexibility to use these penalty assessment matching funds and associated Byrne funding for other crime prevention and law enforcement programs and initiatives.
HEALTH AND FAMILY SERVICES
7. Medical Assistance – Revenue Report
Sections 9124 (10f) and 9124 (11f)
These sections require the Department of Administration secretary to submit to the Joint Committee on Finance by December 1, 2003, a report detailing projected expenditures in the Medical Assistance program, federal funding available to the state and recommendations for reductions to the Medical Assistance program if expenditures are projected to outpace revenues. These sections also create session law requiring the Department of Health and Family Services to submit a proposal to the Legislature to fund expanded services or increase rates for home- and community-based waiver services, programs to reduce the use of nursing homes, increased rates for noninstitutional providers, and expansion of Family Care or additional services under the Community Support program, if there are sufficient federal Medical Assistance program revenues available.
I am vetoing these sections because they are unnecessary. I strongly support the concept of expanding the availability of community-based care, but the expenditure eporting requirement is unneeded. Under current law, the Department of Health and Family Services has the authority to reallocate Medical Assistance resources and could, if funding is available, create new slots administratively. I also object to this provision because it imposes an unnecessary and burdensome reporting requirement and interferes with agency discretion regarding the submittal of proposals to the Legislature.
8. Graduate Medical Education
These provisions, compared to my original budget, partially restore funding for supplemental payments to hospitals for graduate medical education and specify that, of the GPR funding allocated for these payments, $2,000,000 per year shall be expended on indirect graduate medical education.
I am partially vetoing section 286 [as it relates to s.
20.435 (4) (b)] because the Medical Assistance program cannot afford this level of payment. I am lining out the s.
20.435 (4) (b) appropriation and writing in a smaller amount that deletes $3,033,700 in fiscal year 2003-04. I am also requesting the Department of Administration secretary not to allot these funds. With this veto I am reflecting my intent to eliminate all but $1,000,000 GPR in fiscal year 2003-04 funding for graduate medical education, while maintaining the fiscal year 2004-05 funding level of $4,037,900. I am also vetoing section 9124 (12q) because limited resources should be focused on direct medical education. The state cannot afford the level of payment included in the Legislature's budget due to the failure of the Legislature to transfer funding from the Patients Compensation Fund, leaving a deficit in excess of $200 million in the Medical Assistance program.
I support reviewing the funding level for these payments in the 2005-07 biennium. Our teaching hospitals play an important role in preparing and training Wisconsin's future physicians, and I am committed to maintaining this support now and in the future.
9. Nursing Home Bed Assessment
Sections 286 [as it relates to s.
20.435 (4) (b)], 1333d, 9124 (11k), 9124 (11p) and 9424 (7)
These sections make three changes to my proposal to provide a 3.3 percent rate increase for nursing home providers under the Medical Assistance program through increasing the assessment on nursing home beds from $32 per occupied bed per month to $116 per licensed bed per month. First, the sections provide for a 3.2 percent rate increase by appropriating $2,729,500 GPR in fiscal year 2003-04 and $5,229,700 GPR in fiscal year 2004-05, supplementing revenue generated from the Legislature's assessment level of $75 per licensed bed per month. Second, the provision alters the formula for nursing home reimbursement under Medical Assistance by specifying that the same proportionate share of funding allocated for direct care services in fiscal year 2002-03 will be maintained in all future fiscal year nursing home allocations. Third, the sections require the Department of Health and Family Services to submit a waiver to exempt facilities with a high proportion of private-pay residents from the assessment, as well as to report to the Joint Committee on Finance on the feasibility of exempting all private-pay beds from the bed assessment.
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I am lining out the appropriation under s.
20.435 (4) (b) and am writing in a smaller amount that deletes $2,729,500 GPR in fiscal year 2003-04 and $5,229,700 GP in fiscal year 2004-05 because I object to using GPR funds to pay for rate increases to nursing homes, when the Legislature deleted funding for rate increases to community-based, long-term care providers. In my budget proposal, I identified a mechanism to provide the rate increase for nursing homes by leveraging additional federal dollars through the $116 per bed assessment instead of using GPR funds. While I support a rate increase for nursing homes, the deficit in the Medical Assistance program included in the budget passed by the Legislature makes this rate increase unaffordable. By lining out the appropriation under s.
20.435 (4) (b) and writing in a smaller amount, I am vetoing the additional GPR in the bill that was added by the Legislature. I am also requesting the Department of Administration secretary not to allot these funds. This veto will effectively reduce the rate increase for nursing homes to an estimated 2.6 percent per year.
I am also vetoing section 1333d because it constrains the Department of Health and Family Services' authority to administer reimbursement for nursing homes through earmarked allocations of Medical Assistance resources. The department currently uses a formula that allocates nursing home funding between six cost centers. This section arbitrarily freezes the proportion of nursing home funding that would be used for the direct care cost center at the level provided in fiscal year 2002-03, which fails to recognize that in future years, a different allocation of resources may be needed to address changing conditions in the nursing home marketplace.
Finally, I am vetoing sections 9124 (11k) and 9124 (11p) and partially vetoing section 9424 (7) because waivers and proposals to exempt private-pay beds and facilities with high proportions of private-pay beds from the bed assessment would by definition reduce the amount of revenue that would be collected through the bed assessment. These provisions provide no mechanism to offset the lost revenue. If implemented, these sections would either require the department to reduce funding for all other nursing homes or to fund nursing homes at the same level, thus creating a larger deficit in the Medical Assistance program.
10. Nursing Home Bed Assessment Credit
Sections 286 [as it relates to s.
20.835 (2) (e)], 666m, 1580r, 1580s, 1580w, 9345 (4f) and 9445 (3f)
These provisions create a sum sufficient appropriation to provide a refundable income tax credit for nursing home residents who pay an assessment levied by the Department of Health and Family Services on licensed nursing home beds that generates revenue for the Medical Assistance program. The tax credit would be in an amount up to $43 for each month the assessment is paid by the individual, which is equal to the new $75 assessment on licensed nursing home beds less the existing $32 assessment.
I am partially vetoing section 286 to delete the appropriation under s.
20.835 (2) (e) and am vetoing sections 666m, 1580r, 1580s, 1580w, 9345 (4f) and 9445 (3f) because this tax credit is likely in violation of federal Medicaid regulations. States may implement assessments on providers as a financing mechanism for Medical Assistance programs, but federal rules require that the assessment be uniform, broad based and that it not contain provisions that hold the payers of the assessment harmless. The federal rule under
42 CFR 433.68 (f) indicates that provider assessments violate the hold harmless provision if ". . . the tax provides, directly or indirectly, for any payment, offset, or waiver that guarantees to hold taxpayers harmless for all or a portion of the tax." A tax credit which reduces the impact of the assessment on an individual clearly could be challenged on this premise. I also object to spending additional GPR given the state's fiscal condition.
11. Prescription Drug Reimbursement Rates
This provision partially restores funding for reimbursement to pharmacies for prescription drugs purchased under the Medical Assistance, BadgerCare and SeniorCare programs. This additional funding provides for a reimbursement rate for brand name drugs at the average wholesale price (AWP) minus 12 percent. I originally recommended a rate of AWP minus 15 percent as a form of cost containment in these programs and as a measure to avoid large across-the-board cuts in provider rates and participant eligibility.
