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Senator Schultz, with unanimous consent, asked that when the Senate adjourn, it do so in memory of Dennis Huebner of his staff who passed away February 12.
Senator Risser, with unanimous consent, asked that when the Senate adjourn, it do so in honor of Rob Miller of the Senate Chief Clerk's staff who is celebrating his 35th birthday today.
Senator Jauch, with unanimous consent, asked that when the Senate adjourn, it do so in honor of our two guests from the newly formed nation of Palestine the Honorable Hussam M. Khader, a member of the Council and Nabil Isifan, Chief Clerk of the Council of Palestine.
Senator Risser, with unanimous consent, appointed Senators Moore, Plache, Cowles and Panzer to act as escorts to his Excellency the Governor.
Senator Chvala, with unanimous consent, asked that all action be immediately messaged to the Assembly.
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Senator Chvala, with unanimous consent, asked that the Senate recess until 1:50 P.M..
10:44 A.M.
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1:50 P.M.
The Senate reconvened.
Senator Risser in the chair.
Senator Chvala, with unanimous consent, asked that the Senate recess for the purpose of convening in a joint convention to receive the Governor's budget message and adjourn upon the introduction of the budget bill.
1:54 P.M.
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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 budget message as follows:
Speaker Jensen, President Risser, Members of the Legislature, Constitutional Officers, Honorable Justices of the Supreme Court, members of the Cabinet, distinguished guests, ladies and gentlemen.
The past few weeks, we looked to the future. As we took our oaths of office and later celebrated the excellent state of our state, we marked the splendor of the present day, pointed with excitement to the new day that awaits us, and talked about the unwavering Wisconsin spirit that drives us to be the nation's pioneers on the frontiers of possibility of the next century.
Today, the talk about the future ends. It is now time to take our first steps forward into the third millennium. For Wisconsin is where the future begins.
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Ladies and gentlemen, the biennial budget I present to you this afternoon builds the bridge for us to cross from the shining success of the 20
th century into the boundless opportunity of the 21
st century.
My budget is a blueprint for strength. A map for leading a nation forward and building a dynamic new era of prosperity for our families.
Last month in my state of the state address, I gave you bold proposals for stronger children, healthier families, better schools and vibrant communities.
Today, I deliver the remainder of my 1999-2001 budget, featuring a new Stewardship program, innovative initiatives on crime and corrections, a stronger University of Wisconsin System, and the largest middle-class tax cut in state history.
The centerpiece of this budget is a fundamental restructuring of how we tax our citizens and corporations so we fortify our state for the journey into the 21st century.
But as we go forth, we must remind ourselves about the appropriate role of government in our society, for this gets at the heart of balancing the goals of lowering taxes while providing services that our citizens expect.
During the past decade, we worked hard together to change how government works in Wisconsin.
State government no longer plays the role of the domineering big brother, but that of a limited partner – subservient to the people; helping us help ourselves; embracing the belief that the people always know best.
Therefore, as we move forward into the next century, we must remain true to our principles of a limited government and the unlimited potential of our people.
Perhaps these principles were articulated most clearly by our friend, Ronald Reagan, who celebrated his 88th birthday this month. I want to share with you a quote from President Reagan that captures the essence of our government philosophy. It ends with three powerful words we must never forget:
"We who live in free market societies believe that growth, prosperity and ultimately human fulfillment are created from the bottom up, not the government down. … Trust the people."
Indeed, this budget trusts the people – putting more power in their hands and more money in their pockets.
And this budget provides the right balance in meeting our priorities of cutting taxes and government as well as the basic demands for services and protection by our people.
As I hand this budget off to this august body of legislators, keep in mind that striking this balance and governing responsibly means we must acknowledge certain realities. Such as:
•
We cannot call for tax cuts of any sort while advocating for expanding the role of state government and substantially increasing state spending.
•
We cannot pass strong legislation that protects our personal freedoms by taking criminals off our streets and making them serve their full sentences, then criticize the growth of our corrections department and its effect on our state budget.
•
We cannot talk seriously about cutting property taxes, then call for the removal of spending caps and cost controls on public schools.
•
And we cannot talk about further reductions in property taxes – which I remind everyone is a local tax not a state tax – without also talking about further controls on local spending.
We can all take pride that Wisconsin operates one of the leanest, most efficient state governments in America. State government delivers a remarkable bang for the taxpayers buck -- doing more with less through efficient operations and cutting-edge technology.
The numbers speak for themselves:
•
The size of Wisconsin state government is the third smallest in America in terms of total employees and the fourth smallest when you just consider full-time positions. Let me repeat – we have the third smallest bureaucracy in the nation. In fact, we would have to hire nearly 14,000 full-time workers just to hit the national average. This is a dramatic improvement from 1987 when we ranked 18th and were above the national average.
•
When it comes to state spending per capita, we're the 14th smallest government in America – again, well below the national average and an improvement of ten spots from 1987.
•
Of our state spending, most of it goes back to local government for property tax relief and local services. Sixty-one cents on every dollar the state collects is given to local government. In fact, the state only spends 23 cents of every dollar on its own operations.
•
And in the last four years, we cut state agencies by 10 percent when you appropriately exclude the department of corrections and the UW System. The growth in those two agencies comes from meeting two high priorities of our people and this Legislature – keeping our streets safe and our children well-educated.
The budget I present to you today makes permanent those 10 percent reductions to the base of those agencies and improves the fiscal management of state government. To keep our high AA+ bond rating, as well as work toward a AAA rating, we must keep any increases in bonding to 3.5 percent or less. And we should increase the state's 1 percent budget balance to 1.1 percent this biennium and 2 percent by 2002.
Ladies and gentlemen, this is a fiscally conservative and responsible budget that prepares Wisconsin for the 21st century.
And I would gently remind my friends in this chamber that this is the seventh biennial budget I am presenting to the Legislature -- each has included a tax cut and each has come back to me with higher spending than I sent to you.
Wisconsin state government is lean and clean. And it's because of our hard work and determination in transforming Wisconsin into a state that serves its people.
Taxes
Together, in this chamber, we have cut taxes 87 times during the past 12 years, saving taxpayers a remarkable $8 billion.
We reduced income tax rates from 7.9 percent to 6.77 percent, eliminated the gift and inheritance taxes, and remained the only state with a 60 percent capital gains exemption.
We completely eliminated taxes for our poorest citizens, ended the foolish marriage penalty, and indexed our tax brackets.
And thanks to cost controls and two-thirds funding of local schools, we reduced property taxes by $1.2 billion – the only state in America to provide such a dramatic cut without raising other taxes to pay for it.
And last year, we exempted computers and related equipment from the personal property tax – making sure the jobs of tomorrow grow right here in Wisconsin.
Thanks to our aggressive tax-cutting ways, the average Wisconsin family is paying $5,600 less in taxes today. That's real money in the pocketbooks of our families.
Today, the state and local tax burden on our citizens is at its lowest level in 18 years based on ability to pay – since the year President Reagan took the oath of office.
But there is much more work to do. We must build upon our belief that people can spend their money more wisely than government can. The principle that less produces more when it comes to taxes and revenue.
So today, we say loud and clear to the people of Wisconsin: "It's your money. Keep it."
No more backhanded ways at tax relief – taking too much money from the paychecks of our workers then returning a portion in April through a plethora of confusing tax credits and deductions.
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From now on, we're just not going to take it from you in the first place.
We're going to fundamentally change the way we raise revenue in this state through our tax system. It's going to be simpler, fairer and lower. A system that trusts the people.
Here's how our Trust the People Tax Plan works:
Simpler
We start by making our tax system simpler. The average Wisconsin family should be able to do their own taxes without having to hire an accountant.
Therefore, we're going to take the school property tax rent credit, the dependent credit, the working families credit, the elderly credit and an assortment of miscellaneous deductions and roll them into one new personal tax exemption worth $700 for each taxpayer, spouse and dependent. In other words, a family of four would receive a new and simple $2,800 deduction.
Seniors would receive an additional $250 as part of their exemption for a total of $950.
And the Department of Revenue is going to produce a new state income tax form that makes it easier for people to understand and file their returns.
The result will be a much simpler and less confusing system.
Fairer
Next we make the system more fair.
From Washington, D.C., to Washington state, everyone talks about cutting taxes for the middle class. Unfortunately, no one's ever really done it in a simple, constructive manner.
Until today.
Our tax cuts are going right smack to the middle. Here's how:
1.
We create a fourth bracket at $150,000 so that we can redirect most of the money for tax cuts to middle- and lower-income families.
2.
We federalize the standard deduction and raise those eligible for it to $80,150 for couples – pouring money right into the heart of the middle-class.
3.
Then we increase the standard deduction by nearly $4,000 for couples and $2,000 for individuals, further helping the middle-class.
4.
And finally, we raise the maximum married couple credit from $385 to $480 to provide greater assistance to our lower-income couples.
These changes will put in place a more fair and progressive tax structure so that all future tax cuts go directly to the people who need them most.
Lower
And then we cut the rates -- for each and every taxpayer in Wisconsin.
