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The Chair, with unanimous consent, asked that the Senate recess for the purpose of awaiting the Governor's Budget Address in Joint Convention in the Assembly Chambers at 7:00 P.M.
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The Senate proceeded in a body to the Assembly Chamber to meet in Joint Convention to receive the Governor's Budget Message.
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The President of the Senate in the Chair.
The committee to await upon the Governor appeared with his excellency the Governor, who delivered his message as follows:
Speaker Gard, Majority Leader Schultz, President Lasee, Speaker Pro Tem Freese, Members of the Legislature, Lieutenant Governor Lawton, Constitutional Officers, Supreme Court Justices, Members of the Cabinet, Tribal Leaders, and fellow citizens of Wisconsin.
Three weeks ago, I came before you to report that, although we still face significant challenges, the State of Wisconsin is on the move …
…on the move in education……on the move creating innovative health care solutions……and on the move with the largest manufacturing job growth anywhere in the country.
But we are just getting started. Tonight, I fulfill one of the most important responsibilities I have as Governor: presenting a budget that embodies the values of the people of Wisconsin – one that meets our needs, upholds our principles, balances our books, and most importantly, keeps Wisconsin on the move.
Just two years ago, we confronted the largest budget deficit in our history, and answered not only with dramatic cuts but a clear set of priorities.
We cut overhead but saved health care for seniors ……eliminated departments but protected child care
……and reduced the number of state employees so we wouldn't have to reduce the number of teachers in our classrooms.
We stayed true to basic Wisconsin values, and we didn't raise taxes.
Since then, we've sold seven state planes and put 1,000 cars on the auction block. We've cut contracts, consolidated services, eliminated 1,500 cell phones, and negotiated lower prices for prescription drugs.
As a result, we now have the opportunity to invest in Wisconsin's priorities – improving education, preserving health care, creating jobs, and yes, protecting property taxpayers.
Our economy is growing faster than any of our neighbors, not only producing new jobs but helping the state pay its bills – generating an extra billion dollars over the next two years.
As I did two years ago, I've based my budget on the conservative estimates of the Legislative Fiscal Bureau – even though there is good reason to believe the state revenue will be even higher. In fact, if you split the difference between the Fiscal Bureau and Wisconsin Department of Revenue projections on sales taxes, we'd have over $100 million more than I assume in my budget.
The budget I present to you tonight is balanced. It cuts state overhead. It reduces the state payroll. It further eliminates waste. It consolidates more services. And it reforms the way government does business so that we will have the resources to invest in the priorities of Wisconsin's families.
This budget, like the last one, is not just about cutting. It's about setting priorities. And, keeping true to my promise, we will eliminate this $1.6 billion deficit without raising taxes.
To do that, my budget cuts state operations spending by more than $270 million – holding the growth in spending to less than four percent each year.
My budget rethinks and restructures the way government does business, to make it more efficient, less cumbersome, and less expensive.
We're saving taxpayers money by streamlining and consolidating back office services in state government. We're going from 220 computer servers to just 19. We're negotiating bulk discounts for computers, software, office equipment, and more. We're consolidating human resources staff from 17 agencies.
This initiative will save us more than $35 million in the next two years … and even more in the years to come.
We'll sell property the state no longer needs, generating another $36 million that will go straight into our budget stabilization fund.
We'll consolidate attorneys from 17 different agencies and put them under one roof. And we'll develop a team specializing in contracting – so we can negotiate the best deals for taxpayers.
And this budget continues to reduce the size and cost of the state workforce – trimming the payroll by 1800 positions.
Cutting state jobs is one of the most difficult responsibilities we have. That's why we are doing everything humanly possible to minimize the effect on people's lives. We've already been holding positions vacant, and we'll make as many cuts as possible through attrition and retirements so fewer workers are faced with finding new jobs.
I also want you to know that we are not just cutting for the sake of cutting. Where it makes sense, we're adding employees …
…15 new positions at DNR to protect our groundwater, rivers and streams……20 new state troopers……50 corrections staff to expand alcohol and drug treatment……141 new nursing home positions to care for Wisconsin's veterans.…And 125 new faculty at the University of Wisconsin.
As I said, this budget is about priorities. And let me be clear: my priority is education.
How we get our kids prepared for life will have a more profound effect on the long-term strength of Wisconsin than anything else we do. So, if we want good jobs – it's education. If we want a growing economy – it's education. If we want to reduce the number of inmates – it's education. If we want to find cures to disease – it's education.
And the people of Wisconsin should hold accountable anyone who plays politics with this core building block for our future.
The budget I'm presenting today will advance more than fifteen of the recommendations made by the bipartisan Task Force on Educational Excellence, from helping school districts cope with declining enrollment to providing mentors for new teachers.
First, we will expand the SAGE program, reducing class sizes in our communities … because smaller classes mean more learning.
Second, we'll provide grants to help communities start up four-year-old kindergarten.
Third, to help schools reduce the cost of health care … and to guarantee the best teachers for our children … my budget will repeal the outdated, inflexible QEO.
Next, my budget reforms school transportation. The morning bus ride may seem inconsequential to some, but understand that some rural communities spend more than $1,000 a year on each student's transportation. $1,000.
And while the state's transportation fund helps pay the cost of an adult who rides the bus to work, not a penny is available for helping get kids on the bus to school.
That's why tonight, I propose using the transportation fund to support school transportation. And we'll provide a $16 million increase targeted at districts that must take students the longest distances between their homes and schools.
It's time to ease the burden on property taxpayers, and let schools focus on what they do best-–educating our kids.
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I think there's one thing every Republican and Democrat can agree on – it is time the federal government fulfilled its promise to fund its 40 percent share of special education costs.
Every day President Bush and Congress refuse to fulfill their obligation to special ed is another day Wisconsin property taxpayers are stuck with the bill. It's unfair, irresponsible and must stop.
Wisconsin's kids shouldn't be allowed to fail just because Washington is failing them.
And so tonight, I propose a $15 million investment in special education, with a particular focus on school districts that have individual students with exceptionally high costs.
These reforms and investments are significant. But the fundamental issue is whether our schools have the resources to provide quality education to every child. Across Wisconsin, communities have been forced to close schools, increase class sizes, and eliminate courses like advanced math, music, art, and physical education.
And there is growing tension between property taxpayers and the education system.
Instead of communities uniting to build and fund the best schools for their children and grandchildren, education has become a divisive issue, too frequently pitting families with young kids against those struggling to afford higher property taxes.
We need to resolve this tension. But the answer is not to simply cut education.
In Wisconsin, we've set a goal for the state to fund two-thirds of the cost of every child's education. Because of fiscal mismanagement and overspending by previous administrations and legislatures, two years ago there was not enough money.
But because revenues have grown, and because of savings we've achieved, in my budget we will meet this goal – and provide two-thirds funding for local schools.
Doing so will mean an historic commitment to public education – an additional $850 million investment in Wisconsin's future.
Not only will it hold property taxes down, but it will mean stronger schools for our children.
There's another commitment we have to keep, and that's shared revenue.
Two years ago, I inherited a $3.2 billion deficit. I also inherited a budget that gutted shared revenue. But I provided almost two billion dollars to fund shared revenue last time around, and tonight, I am proud to announce that my budget fully funds shared revenue.
This is a huge commitment to local communities … but it is a commitment we must keep if we are serious about holding the line on property taxes.
In the 1990's property taxes in Wisconsin went up by two billion dollars. By going on a state spending spree and auctioning off the tobacco settlement for pennies on the dollar, the Legislature only made the problem worse.
But now, with dramatic cuts in state government … with two-thirds funding for local education … with a strong commitment to shared revenue … we are poised to deliver historic relief to Wisconsin property taxpayers.
With my budget, we will freeze property taxes.
My property tax freeze will prevent $900 million of property tax increases and save the average homeowner more than $330 in the next two years.
My property tax freeze treats local communities as partners, not enemies. Through investments in schools and local governments, new incentives and bonuses, and tough limits in the law, my plan will achieve the same goal as the Republican plan … freezing property taxes.
But not only that, my property tax freeze is responsible. It protects education, promotes economic development, and preserves vital services like police and firefighters.
Here's how it works:
Under my budget, the state will live up to its commitments – fully fund shared revenue, provide two-thirds funding for education, and hold the line on state taxes. In return, we'll ask local governments and schools to do the same – hold the levy to the same overall level as the Republican plan without harming schools and services.
My freeze strictly limits the amount a community can raise taxes to just inflation and a percentage of their new growth. Communities will be able to maintain quality services while dealing with rising prices and growing populations, but they will have to set priorities just like we're doing at the state level.
Not only does my freeze set firm limits on property taxes, but it also provides more than $100 million worth of incentives for communities that hold property taxes even lower.
As part of this plan, we're reforming the Expenditure Restraint Program and expanding it so counties can participate. While the old program gave communities rewards for limiting spending, the new program will reward them for doing what actually matters to taxpayers – and that's limiting taxes.
My plan also encourages cooperation between communities, because it recognizes the reality that economic growth is regional. Communities should work together to promote economic development, not compete to see who can raise taxes more because a new business opens within their boundaries. And urban centers must expand and improve their services to support growing suburban areas.
We'll also protect technical colleges, which are vital to economic development. They provide young workers with the training to get that first job, and they help older workers who've lost their job get the skills to find a new one. Technical colleges account for a small percentage of property tax bills, and they already have limits on the amount their levies can increase. My plan requires them to continue to abide by those limits – without imposing new ones that could end up costing our workers and hurting our economy.
The state budget lasts for two years. Therefore, it's only responsible that the freeze should also last for two years – because we should not put a freeze on communities longer than we can guarantee our funding commitment to them.
Last session, the Legislature sent me a property tax freeze. But it wasn't a responsible freeze. It would have meant a $400 million cut to our schools alone.
This is a moment of truth for the Legislature. The choice is up to you.
If you send me another bill that freezes out our schools, our police and our firefighters, you will force me to take out my veto pen and make you start over. But if you pass a responsible property tax freeze – one that protects taxpayers and their priorities – we can find common ground.
Let's show the people of this state that property tax relief is more than just a campaign slogan.
Democrats, Republicans – we have a job to do. Let's work together and get it done.
In the past year, we've created almost 70,000 jobs in Wisconsin. We've emerged as the national leader in creating new manufacturing jobs.
The economic news is just another sign that smart investments and not raising taxes were the right choices two years ago … and they are the right choices again today.
We also know that some areas of our state are still struggling. My budget will create a new $5 million grant program to attract businesses to communities that haven't done as well. For individuals still looking for work, we're providing $2 million to improve placement services that help them find new jobs.
It is a fundamental Wisconsin value: every person who is willing to work should have access to a job and the means to support a family.
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To help workers and businesses become more competitive, we're also creating a new $5 million job training initiative. We'll pay the training costs for businesses that create significant numbers of new jobs, invest in new equipment, or provide higher wages. Because building and maintaining our infrastructure is vital to our economy, my budget includes a robust transportation program – about $4.4 billion over the next two years.
That represents a 16 percent increase over the last budget, and the largest overall investment in transportation in Wisconsin history.
My budget transfers $250 million from the transportation fund to support our investment in schools and other key priorities. With such a large transportation budget, and so many pressing needs in our state, it's the only responsible thing to do.
But make no mistake: our investments are comprehensive – air, rail, harbors, highways, and mass transit. And we'll provide a $6 million increase to serve elderly and disabled citizens.
Under my Administration, we've permanently protected more than 42,000 acres of pristine natural areas
– including land in almost every county in Wisconsin.
My budget includes new funding to protect our groundwater from agricultural runoff, provides stronger oversight of stormwater discharges into our lakes and streams, ensures that Aztalan State Park will remain open, combats the rise of invasive aquatic species, and reverses cuts to our parks, trails and visitor centers.
It also invests in new information technology to continue the progress we've made in regulatory reform
– proving that you can be both pro-environment and pro-jobs.
