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Increases the cigarette tax by $1.00 to $1.77 per pack and creates a weight-based tobacco products tax, increasing state revenue by $163 million in fiscal year 2007-08 and $247.9 million in fiscal year 2008-09.
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Expands the income tax deduction for health insurance premiums paid by employees who pay part of their premiums. This expansion will be phased-in over four years beginning in tax year 2008, reducing income taxes by $11.8 million in fiscal year 2008-09.
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Supports investment in Wisconsin's dairy industry through a dairy manufacturing facility investment tax credit in the 2007-09 biennium.
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Cuts taxes for Wisconsin's seniors by excluding a portion of retirement income from state income taxes.
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Provides additional targeted tax relief and credits for families, individuals and businesses for college tuition, child and dependent care expenses, E-health care investment, biodiesel production, and community rehabilitation.
This budget embraces many of the key goals I set forth back in February. Unfortunately, several key initiatives were dropped from my budget as part of the Legislature's efforts to reach compromise. Those items include:
Insurance mandate for autism services: My budget included a requirement that insurance companies cover autism services. Having an autistic child presents many challenges for parents. Families living with autism should not face needless hurdles in getting the services their children need to thrive. That is what insurance is meant to do – meet the health care needs of those who own the insurance. I will continue to work tirelessly to secure passage of legislation that makes sure insurance companies treat autistic children and their families with fairness and dignity.
Additional federal Medicaid revenues for hospital rate increases: My budget proposed securing over $400 million in new federal Medicaid revenues through adoption of an assessment of less than 1 percent on hospital revenues. Used by at least 17 states and approved by the federal government for implementation in Wisconsin, the hospital assessment would have increased Medicaid rate payments to hospitals by over 20 percent. Hospitals, in turn, could have used this revenue to reduce health care costs for individuals, insurance companies and businesses. Opposition to this proven financing mechanism is shortsighted and shortchanges Wisconsin. Our state ranks near the bottom nationally in the amount of federal dollars returned to the state. I will continue to push for this proposal – new federal dollars help to reduce the tax burden on Wisconsin citizens.
Shared revenue and homestead tax relief: My budget included a $15 million increase in shared revenue payments to local governments. This would have been the first increase in five years. I will continue to seek an increase in shared revenue and have partially vetoed the municipal levy limits for calendar year 2008 to provide some limited relief to local governments in the absence of a shared revenue increase. My budget also included $26 million to begin indexing the homestead tax credit to inflation. This tax credit helps low income home owners, primarily seniors, by reducing income taxes to offset property taxes paid by an individual. Income levels in the homestead tax credit program have not been increased in eight years. I will continue to seek an indexing factor in the formula for this program as a means of reducing the property tax burden on Wisconsin's seniors.
In addition to the items removed from my original budget, there was one item that I could not veto that warrants discussion. This budget expands the amount of tax credits available to angel and early stage seed capital investors. The intent of the provision was to make it easier for companies to raise funds from angel investors. There may need to be corrective legislation to ensure these tax credits are as effective as possible at stimulating investment in high-growth companies.
While this budget includes many positive elements, it was forged in a process that left much to be desired. Wisconsin is ill-served by legislators who believe that a better deal can be achieved simply by waiting one more day or that operating without a budget is a realistic alternative. A budget is a financial plan. It needs to get done and get done on time.
I signed my first two budgets by the third week of July. Signing the budget in the third month after July is unacceptable. Wisconsin has always prided itself on the effective operation of its government services compared to other states. I was four days away from starting to shut down those services of government not directly related to health and safety so that we would not exhaust our revenues before the end of the fiscal year.
This should never happen again. Ultimately, the timetable for adopting a budget is up to the Legislature. I urge its leaders to establish the measures necessary to avoid this situation in the future.
Creating opportunity and strengthening our fiscal management. Those were my simple goals when I introduced the budget, and the goals that have been met through my vetoes in signing the budget. This budget continues to deliver property tax relief, invests in our schools and university system, expands health care, protects the environment and our citizens, and promotes economic growth.
This is the third budget I have signed into law. I witnessed the darkest fiscal crisis in the state's history in my first budget. Today, in my third budget, we have made great progress. Our fiscal house is in the strongest shape in years. For the first time, our rainy day fund has a meaningful balance – over $55 million. We will finish the biennium with $120 million in the bank.
Wisconsin has always been a great state. This budget takes great strides toward making it great for every citizen. We all share in Wisconsin's future. The budget I sign today, after vetoes, creates that opportunity for everyone.
On Wisconsin.
Respectfully submitted,
Jim Doyle
Governor
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VETO MESSAGE
TABLE OF CONTENTS
A. EDUCATION AND WORKFORCE DEVELOPMENT
HIGHER EDUCATIONAL AIDS BOARD AND DEPARTMENT OF ADMINISTRATION
1. The Wisconsin Covenant Scholars Program
UNIVERSITY OF WISCONSiN HOSPITAL AND CLINICS AUTHORITY
2. Modify Board Membership, Eliminate Limit on Bonding and Other Changes
S378
UNIVERSITY OF WISCONSIN SYSTEM
3. Independent Purchase of Telecommunications Services
4. Information on Instructors
WISCONSIN TECHNICAL COLLEGE SYSTEM
5. Levy Limits on Technical College Districts
6. Limitations on Workforce Advancement Training Grants to Small Businesses
B. ENVIRONMENTAL AND COMMERCIAL RESOURCES
Commerce
1. Loans for Pulp and Paper Mill
2. Petroleum Environmental Cleanup Fund Award (PECFA) Program Sunset
NATURAL RESOURCES
3. Chronic Wasting Disease (CWD) and Wildlife Damage Funding
4. Stewardship Review
5. Muskellunge Fishing Season and Catch and Release Bass Fishing
STATE FAIR PARK BOARD
6. Quarterly and Annual Reports
C. GENERAL GOVERNMENT AND JUSTICE
ADMINISTRATION AND UNIVERSITY OF WISCONSIN SYSTEM
1. Information Technology Requirements
CIRCUIT COURTS
2. Technical Modification to Kenosha County Circuit Court Branch 8
CORRECTIONS
3. Juvenile Correctional Services Deficit
D. HEALTH AND FAMILY SERVICES AND INSURANCE
HEALTH AND FAMILY SERVICES
1. Demonstration Waiver for Health Opportunity Accounts Under BadgerCare
2. Disease Management Program
3. Dispensing Fee Increase for Certain Generic Prescriptions
4. Report on FoodShare Employment and Training Program Participation
5. Reducing Fetal and Infant Mortality and Morbidity
6. Council on Developmental Disabilities
E. STATE GOVERNMENT OPERATIONS
EMPLOYMENT RELATIONS COMMISSION
1. Disciplinary Procedures for Law Enforcement Officers and Firefighters
F. TAX, LOCAL GOVERNMENT AND TRANSPORTATION
REVENUE
1. Three-Tier Liquor Distribution System
2. Inventory Tax for Moist Snuff
SHARED REVENUE AND PROPERTY TAX RELIEF
3. Levy Limit
TRANSPORTATION
4. Reports and Approvals
5. State Bicycle and Pedestrian Facilities Program
6. Value Engineering for Highway Improvement Projects
7. Division of Motor Vehicles Service Centers
8. Department of Transportation Permits for Activities Along State Trunk Highways Within Municipal Limits
9. Vehicle Immobilization and Impoundment for Repeated Parking Violations
10. Construction Schedule for STH 23 Major Highway Development Project
11. Kenosha-Racine-Milwaukee Commuter Rail Extension Project
A.
EDUCATION AND WORKFORCE DEVELOPMENT
HIGHER EDUCATIONAL AIDS BOARD AND DEPARTMENT OF ADMINISTRATION
1.
The Wisconsin Covenant Scholars Program
Section 748 creates the Wisconsin Covenant Scholars Program. The language also establishes eligibility criteria that students must meet to receive Wisconsin Covenant Scholars grants, including a determination of financial need. I am partially vetoing section 748 to remove references to eligibility criteria related to financial need because I object to establishing specific financial need eligibility criteria at this time.
The Covenant program is intended to encourage all Wisconsin eighth graders to make a commitment to good grades, good behavior and public service in return for a guarantee that there will be an affordable place for them within Wisconsin's public or private higher education system. The first class of Covenant scholars will be entering college in the fall of 2011. I support the provisions established in section 748 requiring that Covenant grant recipients be Wisconsin residents, enroll at least half-time at an eligible campus, are not in default on child support payments and receive a grant for no more than ten semesters of undergraduate education.
I also agree that financial need must be factored into grant decisions. However, it is premature to establish explicit financial eligibility criteria four years before the first class of Covenant scholars enters college. These criteria will depend on a number of factors, such as the level of federal aid available. It is more appropriate and realistic to wait until the 2009-11 biennium to determine what financial need criteria will best serve the Covenant program. Over the next 20 months, I will work with the Legislature to develop financial need criteria that reflect the level of Covenant program participation, the status of existing need-based financial aid programs and the condition of state revenues.
S379
Section 78 provides for the coordination of promotional services related to the Covenant program between the Department of Administration and the Wisconsin Covenant Foundation, Incorporated. Sections 177 [as it relates to s.
20.505 (4) (bm)] and 520 create a new annual GPR appropriation, s.
20.505 (4) (bm) which provides aid to the foundation to help pay for promotional activities once the foundation is operational. I support the coordination of state and private efforts related to the Wisconsin Covenant. However, as drafted, these sections do not reflect the original intent of supporting operation of the Covenant program. While the new appropriation includes funding and positions to address the department's administrative responsibilities for the Covenant program, the language only authorizes payments to the foundation for promotional activities.
I am partially vetoing these sections to allow the department to pay the costs of operating the Office of the Wisconsin Covenant. Furthermore, I direct the Department of Administration secretary to request annual reports from the Wisconsin Covenant Foundation on its activities.
UNIVERSITY OF WISCONSiN HOSPITAL AND CLINICS AUTHORITY
2.
Modify Board Membership, Eliminate Limit on Bonding and Other Changes
Sections 3w, 28e, 28m, 30c, 30g, 68k, 68L, 68m, 68n, 235m, 1799m, 2710e, 2710m, 2710s, 2875e, 2898g, 2898r, 3023a, 3023b, 3023c, 3023d, 3023e, 3023f, 3023g, 3023h, 3023i, 3023j, 3023k, 3023L, 3023m, 3023n, 3023o, 3023p, 3023q, 3023r, 3023s,3023t, 3023u, 3036m, 9150, 9151, 9350, 9351 and 9451
