3535.
Department of Military Affairs Lapses to the General Fund Section 9231
This section requires the Department of Military Affairs to lapse $8,205 from the regional emergency response grants appropriation under s. 20.465 (3) (df); $116,978 from the mobile field force grants appropriation under s. 20.465 (3) (dm); and $4,911 from the emergency response supplement appropriation under s. 20.465 (3) (dr) in fiscal year 2021‑22. I am vetoing this section because I object to requiring a lapse from these appropriations when the state is in a strong financial position.
EE.
TAX, LOCAL GOVERNMENT AND ECONOMIC DEVELOPMENT 3636.
Withholding Table Update Section 9137
This section requires the Department of Revenue to update individual income tax withholding tables to reflect the tax rates, income brackets, and sliding scale standard deduction that are in effect for taxable year 2022. The adjustments made under this subsection would take effect on January 1, 2022. The withholding table update would therefore reflect the rate reduction included in the 2021-23 biennial budget, rate reductions that took effect in tax years 2019 and 2020, and indexing adjustments to the sliding scale standard deduction and the income thresholds for individual income tax brackets.
I am vetoing this section because I object to requiring the Department of Revenue to make these withholding table adjustments at a cost of approximately $700 million while other critical priorities have not been sufficiently funded by the Legislature. This veto does not increase anyone's tax liability compared to what the Legislature passed. The reduction in the rate of the third individual income tax bracket from 6.27 percent to 5.30 percent starting in tax year 2021 will still occur, and taxpayers will receive approximately $2 billion in individual income tax relief from that reduction in this biennium. The secretary of the Department Revenue has the ability under current law to make these adjustments as appropriate and will assess whether and when these updates should be made within the full context of revenue collection trends and other state priorities.
The estimated fiscal effect of this veto is an increase in general fund tax revenues of $683,700,000 in fiscal year 2021-22 and $21,300,000 in fiscal year 2022-23.
3737.
Transfer to the Budget Stabilization Fund Sections 19 [as it relates to the transfer to the budget stabilization fund] and 9201 (1)
These provisions transfer from the general fund to the budget stabilization fund $550,000,000 in fiscal year 2022-23.
I am partially vetoing section 19 [as it relates to the transfer to the budget stabilization fund] and vetoing section 9201 (1) because I object to making these funds unavailable for supporting the needs of Wisconsinites that the Legislature failed to address. The balance of the budget stabilization fund is reserved for periods of below-normal economic activity when actual state revenues are lower than estimated revenues. This transfer removes $550,000,000 from dollars that can be immediately applied to investments in our kids, small businesses, and our state's continued economic recovery. Instead, this funding should remain in the general fund where it can be directly appropriated to address gaps and shortfalls in the Legislature's budget actions. I request the Legislature work with me to instead invest these funds to address the immediate needs of Wisconsinites.
3838.
Annual Transfer from the General Fund to the Transportation Fund Section 16
This provision increases the annual transfer from the general fund to the transportation fund from 0.25 percent of general fund taxes to 0.50 percent of general fund taxes in fiscal year 2022-23 and in each fiscal year thereafter.
I am partially vetoing this provision to eliminate the increase in the transfer after fiscal year 2022-23 because I object to increasing the general fund's subsidy to the transportation fund on an ongoing basis. As a result of my veto, the transfer will revert to the current law amount of 0.25 percent of general fund taxes for fiscal year 2023-24 and beyond. I have made it a priority to ensure that we have a sustainable, dedicated source of transportation funding to ensure we can repair our roads and fund public transit while also investing in our schools and communities. While enhanced transfers to the transportation fund for the 2021‑23 biennium are reasonable given the impact of the coronavirus pandemic on motor fuel tax collections, these increases should be temporary rather than permanent.
3939.
Interchange with Local Highways on I-41 in Brown County This section directs the Department of Transportation to add an interchange to the I-41 expansion project where I-41 intersects with Southbridge Road/French Road in Brown County.
I am vetoing this section because I object to the Legislature specifying specific design elements that should be determined based on congestion and safety needs assessments by professional highway engineers. Further, this particular item is unnecessary and untimely as it adds a highway element requirement that the Department of Transportation has already included in the scope of the project.
4040.
Lieutenant Governor Security Section 9144 (8)
This section puts a limit on the amount that the Department of Transportation is allowed to spend on the security and safety of the Lieutenant Governor.
I am vetoing this section because I object to limiting cost expenditures in this manner because, as I said last budget, it undercuts the judgment of law enforcement. Security measures continue to be the purview of law enforcement, not the Legislature. Limiting expenditures on security would put the lives of officers, the Lieutenant Governor, staff, and the general public at risk.
4141.
Office of Innovative Program Delivery and Director Sections 10, 290, 293, and 326
These provisions create an Office of Innovative Program Delivery, require the Department of Transportation to appoint a director of the office, and assign duties to the director of the office.
I am vetoing these provisions because I object to the requirement to create an office and director with redundant responsibilities to existing offices, bureaus, and divisions within the Department of Transportation. The department's current organizational structure already oversees billions of dollars of road construction projects in both conventional and innovative ways.
4242.
Office of Innovative Program Delivery Position Source Section 9144 (7)
This section directs the Department of Transportation to populate the Office of Innovative Program Delivery from the current position authority of the department.
I am vetoing this section because I object to forcing the Department of Transportation to reassign positions to functions that are redundant with the responsibilities of existing positions that are already conducting road construction oversight within the department.
4343.
Design-Build Project Contracts, Reporting, and Project Delivery Section 297
This section, in part, establishes requirements on the magnitude of the design-build projects the Department of Transportation is to undertake; specifies a deadline of December 31, 2025, for completion of the projects; and enumerates mandated criteria for the department's written analysis of each design-build project under consideration.
I am partially vetoing this section because I object to the overly restrictive parameters that are established for the size of the projects and the deadline for the projects to be completed. I am further partially vetoing this section because I object to the excessively detailed criteria for the Department of Transportation's written analysis of projects. If not removed by my partial veto, these specifications will cause the program to be unworkable. With my partial vetoes, unnecessarily restrictive statutory governance over the design-build program will be eliminated.
4444.
Design-Build Technical Review Committee Experience Requirements Section 298 [as it relates to employees of the department]
This provision requires that a Department of Transportation employee that sits on the design-build technical review committee must have five years of experience in the transportation construction industry.
I am partially vetoing this provision because I object to such a restrictive requirement as it does not allow for the Department of Transportation to select qualified professionals with extensive design-build contracting experience and sufficient transportation construction industry experience.
4545.
Requirements of the Technical Review Committee in Review of Prior Awarded Design‑Build Bidders Section 301
This section outlines additional criteria that the Technical Review Committee is to review regarding the prior work completed by a design-build bidder.
I am vetoing this section because I object to requirements specifying what the Department of Transportation can and cannot do in evaluating the prior work of a bidder.
4646.
Requirements of Project Delivery for Design-Builders Section 303
This section requires that to be considered a qualified bidder for a design-build contract the design-builder has served as the prime contractor on at least five projects administrated by the Department of Transportation in the last five calendar years.
I am vetoing this section because I object to such a requirement that would limit the available pool of otherwise qualified bidders for available projects.
4747.
Design-Build Noticing Requirements for Request for Qualifications Section 306
This provision requires the Department of Transportation to the advertise the design-build request for qualifications by publication in a class 1 notice in the official state newspaper, and on the department's Internet site.
I am vetoing this provision because I object to additional statutory requirements being placed on the Department of Transportation's bidding process as the department is best situated to determine the place and manner of notices of request for qualifications.
4848.
Design-Build Technical Review Committee Process for Proposals Section 308
This section requires the design-build Technical Review Committee to have a standalone process to review and accept alternative technical concepts and value engineering change proposals.
I am vetoing this section because I object to the creation of processes that are redundant as the entire purpose of design-build bids and the technical review process is to develop and adjudicate alternative technical concepts and weigh the value of engineering changes.
4949.
Design-Build Procurement Manual Committee and Reports Section 319 [as it relates to the preparation of a report establishing program structure and the creation of a design-build manual]
These provisions require the Department of Transportation to prepare a report that establishes a program structure for delivering design-build projects and specifies that the department may not designate a design-build project prior to the completion of this report. These provisions further require that a committee prepare a design-build procurement manual. The committee must include department employees, a person representing a relevant state association nominated by the Governor with the advice and consent of the Senate, and a person representing a relevant national trade association nominated by the Governor with the advice and consent of the Senate.
I am vetoing these provisions because I object to the delays that these provisions will create. Since the initial design-build framework was established in state law by 2019 Wisconsin Act 9, the department has gained substantial expertise in design-build project methodology. The Legislature's approval of bonding in the 2021-23 budget specifically for design-build projects was an acknowledgement of the Department of Transportation's progress. My veto of these provisions will allow the department to proceed in project selection without needless delay and will allow the department to draw on both internal and external expertise as it sees fit to develop a design-build manual.
5050.
Report on Unallocated Business Development Tax Credit Authority Section 365
This section creates a statutory requirement that the Wisconsin Economic Development Corporation submit to the Joint Committee on Finance by January 31 of each year a report identifying the amount of Business Development Tax Credit authority that remains unallocated as of December 31 of the prior year.
I am vetoing this section because I object to creating an extraneous, unnecessary reporting requirement for information that is already available upon request from the Wisconsin Economic Development Corporation. Tax credit awards are also regularly updated under current reporting requirements by the corporation. Further, the Legislative Audit Bureau audits the corporation each biennium, including its administration of the Business Development Credit. As a result, this information is readily available.
_____________
July 8, 2021
To the Honorable Members of the Assembly:
The following bill, originating in the Assembly, has been vetoed in its entirety, and was returned to its house of origin, together with the objections in writing:
Bill Number Date of Veto
Assembly Bill 191 July 8, 2021
hist137831I am vetoing Assembly Bill 191 in its entirety. The bill, as amended, would exempt from property taxation almost all property that is currently classified as personal property. Certain personal property related to buildings and other improvements on leased land would be assessed instead as real property. The result is that no items of personal property would be subject to the property tax beginning with tax assessments as of January 1, 2022. The bill, as amended, would also transfer from the general fund to the transportation fund $20 million in fiscal year 2021-22 and $44 million annually beginning in fiscal year 2022-23 to compensate the transportation fund for expected losses in railroad tax revenue. The bill is linked to a separate provision in the 2021-23 biennial budget, as amended by the Joint Committee on Finance, to provide aid payments to local governments to compensate those governments for the property tax revenues those local governments would lose under the exemption provided by the bill.
I am vetoing this bill because I object to the unusual and haphazard process by which the Legislature pursued the repeal of the personal property tax, which has created potential unintended consequences for railroad and utility taxes as well as the manufacturing and agriculture credit. While there were attempts in the amendments to the bill to address some of these problems, we need a more comprehensive approach. Most concerning is that the Legislature has not directly addressed the possible effect that this bill could have on the state’s utility taxes. As presently drafted, the exemption of all personal property could potentially extend to the state’s ad valorem utility taxes, which are based on the property values of utility property, inclusive of personal property owned by utility companies. Should this treatment be applied by the courts in order to adhere to the Wisconsin constitution’s uniformity clause, the state could easily lose tens of millions in general fund tax revenue, if not more. Additionally, by not providing an immediate link between the compensating aid payments to local units of government and the exemption of personal property, the Legislature has created an unusual arrangement that is at odds with prior exemptions of personal property and such compensating aid.
I have left the funding intact in the budget because I welcome additional legislative action to meaningfully address the above issues. I call upon the Legislature to pass a new bill that comprehensively addresses the unintended impacts of this exemption and provides certainty and stability for local government aid.
Respectfully submitted,
TONY EVERS
Governor
_____________
July 8, 2021
To the Honorable Members of the Assembly:
The following bill, originating in the Assembly, has been vetoed in its entirety, and was returned to its house of origin, together with the objections in writing:
Bill Number Date of Veto
hist137832Assembly Bill 367 July 8, 2021 I am vetoing Assembly Bill 367 in its entirety.
The bill, as amended, would require the Governor to allocate $65,000,000 in federal funds received under the American Rescue Plan Act of 2021 (ARPA) for loans to be made by the Wisconsin Economic Development Corporation (WEDC) to finance the purchases of the Verso Paper Mill in the city of Wisconsin Rapids and the Park Falls Pulp and Paper Mill in the city of Park Falls, allocating $50 million for the Verso Paper Mill and $15 million for the Park Falls Pulp and Paper Mill, respectively. The bill also specifies terms and conditions regarding the loans, including a requirement that WEDC acquire a security interest in the properties.
I am vetoing this bill because I object to using ARPA funding for this purpose when the state has sufficient GPR funding to support the project and ARPA is not a reliable funding source to provide the long-term assistance needed to revive these mills and provide stable jobs to their workers. First, it is not clear that the U.S. Department of Treasury will permit ARPA funds to be used for this purpose. Treasury’s Interim Final Rule governing ARPA eligibility requires that assistance provided to businesses must respond to the negative economic impacts of COVID-19. Because many mills were experiencing significant financial difficulties prior to the COVID-19 pandemic as a result of long-term economic and industrial trends in this sector, the federal government may view the assistance as insufficiently tied to the impacts of the pandemic. Second, ARPA funds are only available for use through December 31, 2024, limiting their flexibility for the type of long-term loans needed by potential purchasers of the mills.
If a project was legislatively mandated and later deemed ineligible, the state would have to return the funds to the federal government. It is inappropriate to use a funding source that presents such risks and challenges when the state is in a strong financial position, sufficient GPR is available, and using state resources would provide greater flexibility on agreement terms and lower risk to the state. I previously called a special session of the Legislature to act on legislation that would have allowed us to invest $1 billion into economic development projects and initiatives across our state. Republicans gaveled out of that special session without deliberation or debate. Shortly thereafter, this bill was introduced, and I worked with the WEDC, legislators from both parties, local elected officials, and workers to reach a bipartisan agreement to amend Assembly Bill 367 and reach a solution without potentially jeopardizing state support for the mills or federal funds. Unfortunately, that amendment was not adopted.
