Wisconsin Legislature: 2015-07-13 Senate Journal

This provision provides a total of $23,503,200 GPR in fiscal year 2015-16 and $34,711,000 GPR in fiscal year 2016-17 to the Joint Committee on Finance's general purpose revenue funds general program supplementation appropriation under s. 20.865 (4) (a). Of this amount, $16,300,000 GPR in fiscal year 2015-16 and $12,400,000 GPR in fiscal year 2016-17 were placed in the appropriation due to actions by the Joint Committee on Finance to reduce the Wisconsin Economic Development Corporation's operations and programs appropriation and place these funds in the Committee's supplemental appropriation.

I object to the placement of these funds in the Committee's supplemental appropriation because this mechanism to hold these funds does not provide the greatest flexibility for the state's financial position or its policy options.

I am partially vetoing section 481 [as it relates to s. 20.865 (4) (a)] to reduce funding for the Committee's supplemental appropriation by $16,300,000 GPR in fiscal year 2015-16 and $12,400,000 GPR in fiscal year 2016-17 to remove those amounts placed in the appropriation by the Committee related to reductions for the Wisconsin Economic Development Corporation and not otherwise allocated for another purpose so that these monies will improve the general fund balance during the biennium. Doing so strengthens the state's fiscal position and still allows these funds to be allocated by the Legislature for future purposes. By lining out the appropriation under s. 20.865 (4) (a) and writing in a smaller amount that deletes these funds, I am vetoing the portion of the bill that holds these funds in the Committee's supplemental appropriation. I am also requesting the secretary of the Department of Administration not to allot these funds.

2. Wisconsin Economic Development Corporation Grants to Various Organizations

Section 9150 (5dc)

This section requires the Wisconsin Economic Development Corporation to make four grants to specified organizations for a total of $750,000 GPR. The Mid-West Energy Research Consortium is to be granted $250,000 GPR to support Wisconsin- headquartered private companies in the energy, power and control industries. Prosperity Southwest Wisconsin is to be granted $250,000 GPR to develop a regional revolving loan fund program in the southwest region for regional development and entrepreneurial start-ups. Northcentral Technical College is to be granted $150,000 GPR for equipment for its culinary arts program and business incubator facilities. Finally, the Marathon County Economic Development Corporation is to be granted $100,000 GPR for a revolving loan fund to support minority-owned businesses in Marathon County.

I am vetoing this section because I object to reducing the flexibility of the Wisconsin Economic Development Corporation to make its own determinations as to which organizations should be given assistance. One of the purposes of the corporation was to have maximum flexibility in funding the most promising economic development opportunities. The funds that would have been used for these specified grants will instead remain with the corporation to be awarded for eligible purposes at its discretion. However, I encourage the Wisconsin Economic Development Corporation to collaborate with the Marathon County Economic Development Corporation and Prosperity Southwest Wisconsin to enhance economic opportunities in these regions.

3. Definition of Bona Fide Angel Investments

Sections 2191 and 9337 (4b)

These sections modify the definition of a "bona fide angel investment" under the angel investment credit program to include the purchase of a note or bond that is convertible into an equity interest beginning with tax year 2016.

I am vetoing these sections because I object to changing the purpose of the angel investment credit to potentially create an incentive for the purchases of secured debt instruments in companies in lieu of equity investments. Under current law, investors in such securities receive the credit when they convert their securities into an equity stake. This treatment is appropriate and should be maintained.

4. Conduit Revenue Bonds

Sections 1067b, 1969ab, 1969am, 1969b, 1969c, 1969e, 1969f, 1969g, 1969h, 1969i, 1961im, 1969j, 1969k, 1969L, 1969m, 1969n, 1969p, 1969pe, 1969q, 1969r, 1969s, 1969t, 1969u, 1969v, 2033b, 2037d, 2237d, 2238b, 2515j and 2524p

This provision modifies current law as it relates to the Public Finance Authority and its ability to issue bonds in an assortment of ways. These changes include broadening the authority's ability to own or operate property; allowing the authority to purchase bonds; and empowering the authority to create one or more nonprofit corporations to carry out, or assist the authority to carry out, all or part of the purposes or powers of the authority. In addition, the provision exempts the authority and related nonprofit corporations from having to pay certain property and sales taxes and extends existing personal liability law exemptions to officers, employees and agents of the authority and related nonprofit corporations.

I am vetoing this provision because I object to broadening the powers of the authority and do not support the decreases in accountability that would result from enacting this provision or the loss of local control and loss of state tax revenue. Such sweeping changes to current law decrease transparency and could create unintended consequences, the full extent of which are unknown.

B. TRANSFORMING EDUCATION

5. Statewide Assessment System

Sections 3248b [as it relates to renumbering s. 118.30 (1) (a)] and 3248c

These sections require the State Superintendent to review and adopt a summative examination system to be administered beginning in the 2015-16 school year to pupils in grades 3 through 10 in the subjects of English, reading, writing, science and mathematics. The State Superintendent must ensure that each examination adopted or approved under the system satisfies the assessment and accountability requirements under federal law. Additionally, the State Superintendent must ensure that the summative examination system adopted or approved meets the following criteria: (a) the system is vertically scaled and standards-based; (b) the system documents pupil progress toward national college and career readiness benchmarks derived from empirical research and state academic standards; (c) the system measures individual pupil performance in the subject areas of English, reading, writing, science and mathematics; (d) the system provides for the administration of examinations primarily in a computer-based format but permits examinations to be administered with pencil and paper in certain limited circumstances; and (e) pupil performance on examinations adopted or approved under the system serves as a predictive measure of pupil performance on college readiness assessments used by institutions of higher education.

I am partially vetoing section 3248b as it relates to renumbering s. 118.30 (1) (a) and vetoing section 3248c in its entirety. This provision is unnecessary and would have codified assessment criteria in state law that are closely aligned with national standards I oppose and which local school districts should not be mandated to adopt. Ultimately, local school boards across Wisconsin should be able to determine what test they administer and what standards they adopt.

6. Participation in Athletics and Extracurricular Activities

Section 3245t [as it relates to school district membership in an athletic association]

This section requires a school board to allow home-based private educational program pupils residing in the school district to participate in interscholastic athletics or extracurricular activities on the same basis and to the same extent as pupils enrolled in a public school in the district. A school district may not be a member of an athletic association unless the association requires member school districts to allow home- based private educational program students to participate in athletics in the district. Home-based private educational program pupils must provide the school board with a written statement that the pupil meets the school board's requirements for participation in interscholastic athletics based on age and academic and disciplinary records. No person may provide a false statement, and the school board may not question the accuracy or validity of the statement or request additional information. A school board may charge participation fees to a home-based private educational program pupil participating in a district activity on the same basis and to the same extent as these fees are charged to pupils enrolled in the district.

I am partially vetoing this section as it relates to the prohibition of school district membership in an athletic association unless the association requires member school districts to permit home-based private educational program pupils residing in the district to participate in interscholastic athletics in the district. I object to this provision because I do not believe state statutes should stipulate the participation and membership requirements of a private athletic association.

7. Read to Lead Fund Deletion

Sections 65b, 568b, 720d, 723d, 1007b, 1031b, 1678m, 1678r, 1678s and 9406 (1q)

These sections sunset the Read to Lead segregated fund and related appropriations, effective June 30, 2017.

I am vetoing the sunset of the segregated fund and related appropriations because it unnecessarily limits the availability of potential resources to improve childhood reading in future biennia. With this veto, the Department of Children and Families and Department of Public Instruction would be able to continue to distribute reading funds, if they become available, beyond the 2015-17 biennium.

8. Independent Financial Audits for Parental Choice Program

Sections 3355c [as it relates to the treatment of long-term fixed assets] and 3382c [as it relates to the treatment of long-term fixed assets]

These sections require an independent financial audit of private schools participating in a parental choice program. Among the requirements of the independent financial audit is the audit must be prepared according to generally accepted accounting principles (GAAP) with allowable modifications for long-term fixed assets acquired before 2014.

I am partially vetoing these sections because the reference to 2014 is inappropriate. Participating private schools are transitioning to GAAP-based financial reporting for the 2015-16 school year. Given this transition timing, the reference to 2014 should be removed.

9. Appointment of Director of Office of Educational Opportunity

Section 9148 (4g)

This section requires the president of the University of Wisconsin System to appoint a special assistant to the president to serve as the director of the Office of Educational Opportunity within 120 days of the effective date of the budget bill.

I am vetoing this section in its entirety to remove the requirement that the special assistant be appointed within 120 days of the effective date of the bill because I object to an arbitrary timeline. I expect the University of Wisconsin System to conduct a thorough search for a dynamic and reform-minded individual to fill the role of director of the Office of Educational Opportunity, and such a search cannot be conducted under artificial deadlines.

10. Director of Office of Educational Opportunity Salary

Section 1207g

This section specifies that the Board of Regents shall set the salary for a newly-created special assistant to the president of the University of Wisconsin System, who shall serve as the director of the new Office of Educational Opportunity.

I am vetoing this section in its entirety because I object to the dissimilar treatment of this special assistant position and other special assistant positions in the system. Under current law, the Board of Regents sets the salaries for the top executive positions at the University of Wisconsin System, such as chancellors and vice presidents. Current law does not provide authority for the Board of Regents to set the salaries of any special assistant positions; these are addressed within personnel systems, and the director of the Office of Educational Opportunity should be treated similarly.

11. Custodian of Records for Opportunity Schools and Partnership Program

Section 3387n [as it relates to commissioner records custodian powers]

This section creates an Opportunity Schools and Partnership Program under the oversight of a commissioner. Among the powers of the commissioner is the power to designate one or more persons to be legal custodians of records on behalf of any authority defined in s. 19.32 (1), including state or local entities.

I am partially vetoing this provision because I object to the broad authority that the commissioner is given to designate the custodian of records for any state or local entity.

12. Contract for Study of Special Needs Scholarship Program

Section 3224m [as it relates to the requirement that the Legislative Audit Bureau contract for a study of the Special Needs Scholarship Program]

This section creates a Special Needs Scholarship Program for students with disabilities. Among the program requirements, the Legislative Audit Bureau must contract for a study of the program with one or more researchers who have experience evaluating school choice programs. The study must evaluate the following: (a) the level of satisfaction with the program expressed by participating pupils and their parents; (b) the percentage of participating pupils who were victimized because of their special needs at their resident school district and the percentage of such pupils at their participating school; (c) the percentage of participating pupils who exhibited behavioral problems at their resident school district and the percentage of such pupils at their participating school; (d) the average class size at participating pupils' resident school districts and at their participating schools; and (e) the fiscal impact of the program on the state and on resident school districts. The contract must require the researchers who conduct the study to do all of the following: (a) apply appropriate analytical and behavioral science methodologies to ensure public confidence in the study; (b) protect the identity of participating schools and pupils; and (c) require that the results of the study be reported to the appropriate standing committees of the Legislature by January 9, 2019.

I am partially vetoing this section to remove the requirement that the Legislative Audit Bureau contract for a study and the related references to the contract. I object to the practice of contracting with outside researchers for this study. The Legislative Audit Bureau possesses the needed expertise to complete the study.

13. Special Needs Scholarship Program Eligibility Requirement

Section 9134 (6q) [as it relates to the child's attendance in public school for the 2015-16 school year]

This section establishes alternative eligibility requirements for a child to be awarded a Special Needs Scholarship in the 2016-17 school year. Under this section, the child must meet the following conditions: (a) the child applied to attend a public school in one or more nonresident school districts under the open enrollment program in one of the previous five school years; (b) the child applied to attend public school in one or more nonresident school districts under the open enrollment program in the same year for which an application for a scholarship was submitted and the application was rejected without a successful appeal; and (c) the child will attend a public school in the state for the entire 2015-16 school year.

I am partially vetoing this section to remove the word "entire" from the requirement that the child attend public school in the state for the 2015-16 school year because I object to the limitation this provision places on families that may move their child to private school for a portion of the school year in order to meet the child's needs.

14. Virtual Marketplace for Digital Educational Resources

Sections 481 [as it relates to s. 20.255 (1) (dt)], 560m and 3193s

These provisions create a virtual marketplace for digital educational resources and appropriate funding for a contract with a vendor or multiple vendors to develop and add educational content to a digital textbook marketplace and resource center. The marketplace would allow authorized personnel from public school districts, independent charter schools, private schools and home based private educational programs to purchase or license digital educational resources, including the following: (a) electronic textbooks; (b) individual sections or chapters from electronic textbooks; (c) supplemental resources, including worksheets, chapter reviews, quizzes or study sheets; and (d) other digital offerings, including videos, available from content providers or publishers. The Department of Public Instruction is required to host the marketplace, and content must be accessible to a range of computing and mobile devices and operating systems. Districts may license the content at a tiered rate for one year, three years or six years, or purchase content under a permanent license.

I am vetoing sections 560m and 3193s and partially vetoing section 481 [as it relates to s. 20.255 (1) (dt)] because I object to duplicative avenues for the provision of electronic educational materials. The digital learning portal being developed and hosted by the department provides access to digital content. In addition, the bill creates and provides funding for a new digital learning collaborative for the delivery of digital content. I believe the provisions under current law and the new digital learning collaborative can be leveraged to adequately address the need for digital resources for schools and educational programs.

15. Performance Funding Formula

Section 1343m

This section specifies that the percentage of state aid distributed by the Technical College System Board under the performance funding formula under s. 38.28 (2) (be) would be 30 percent in fiscal year 2016-17 and each year thereafter.

I am vetoing this section because I object to a cap on the percentage of state aid distributed through the performance funding formula. As a result of this veto, the portion of state funding distributed through the performance funding formula would revert to zero in fiscal year 2017-18. The state should reassess whether 30 percent is an appropriate performance funding level as outcomes related to formula factors become increasingly available. I support a transition from the general aid formula to a performance based formula. This formula should be based upon each technical college district's performance on key state priorities to be achieved by increasing the percentage of state aid distributed through the performance funding formula each year and correspondingly decreasing the percentage of state aid distributed through the general aid formula.

16. Performance Funding Report

Section 9143

This section requires the Wisconsin Technical College System to review the performance-based funding formula and submit a report to the Joint Committee on Finance that includes any potential changes to the formula and additional performance criteria to be included.

I am vetoing this section to remove the reporting requirement because it is administratively burdensome and unnecessary. The system already reviews the funding formula and criteria in preparing its biennial budget request as required under current law.

17. Allocable Student Fees

Sections 1139g and 1142m [as it relates to responsibility for allocable student fees]

These provisions modify current law to specify that students at University of Wisconsin institutions and colleges would have the responsibility for recommending the disposition of student fees subject to the approval of the chancellor and final confirmation of the Board of Regents.

I am vetoing section 1139g and partially vetoing section 1142m [as it relates to responsibility for allocable student fees] because I object to removing the students' role in determining how segregated fees to support student activities and services are allocated. Students should retain the responsibility to decide the disposition of fees that they pay and that support campus student activities. As a result of this veto, the students will continue to work in consultation with the Chancellor, subject to the final confirmation of the Board of Regents, to determine the disposition of fees that support student activities.

18. Annual Financial Audit

Section 9148 (7j)

This section suspends current law requiring the Legislative Audit Bureau to conduct annual financial audits of the University of Wisconsin System during the 2015-17 biennium. Instead, the Board of Regents is required to contract with an independent accounting firm to conduct the annual financial audit. The audit must be provided to the Board of Regents, Joint Legislative Audit Committee, Joint Committee on Finance and the Governor. It also allows the Legislative Audit Bureau to work with the independent accounting firm to conduct the audit.

I am vetoing this section because I object to this limitation of the Legislative Audit Bureau's role in maintaining effective oversight of the University of Wisconsin System. Since the University of Wisconsin System will remain a state agency, continued financial audits and program evaluations from the Legislative Audit Bureau are appropriate to provide the public with continued insight into the financial and management practices of the Board of Regents.

19. Energy Conservation Master Lease Program

Sections 29, 29m, 35m, 41m, 55m, 364m [as it relates to eligible energy conservation projects], 366m [as it relates to eligible energy conservation projects], 375m, 378t, 392g [as it relates to eligible energy conservation projects], 392r [as it relates to eligible energy conservation projects] and 1176m

These sections create a new program through which the University of Wisconsin System may use master lease financing for energy conservation projects. The president of the University of Wisconsin System would select qualified providers outside of current law regarding bidding procedures. In addition, the president would oversee the implementation of these projects without Building Commission or Department of Administration oversight or approval. Eligible projects would be required to meet the following criteria: (a) the estimated cost of a project must be offset by the estimated savings after completion of the project; (b) all savings from the project must be guaranteed by the provider through a performance contract; (c) savings must be realized within 10 years; and (d) estimated savings for each project must be measured and verified in a manner established by the president. The system also would have the ability to continue to participate in the Department of Administration's energy efficiency program for project financing.

I am vetoing sections 29, 29m, 35m, 41m, 55m, 375m, 378t and 1176m in their entirety, and partially vetoing sections 364m, 366m, 392g and 392r [as they relate to eligible energy conservation projects], to eliminate the new master lease program. While I support the concept of using master lease financing to accomplish energy efficiency projects, I object to the lack of accountability in this proposal. The state is responsible for initial financing of any master lease project, and requires assets with bona fide value to secure what essentially is a loan to an agency. Therefore, a measure of accountability is needed for such a program. I am requesting that the system, Legislature and Department of Administration work together to craft a more judicious proposal that provides the system with additional financing opportunities while protecting taxpayers.

20. Investment of Certain Funds

Section 1162r