These provisions modify the eligibility requirements for both students and schools in the Milwaukee Parental Choice Program (MPCP). Specifically, these provisions delete the cap on the number of pupils that may participate in the program, delete the prior year attendance requirements for pupils entering the program, allow students to continue in the program even if family income rises above the program's income criteria and allows schools located throughout Milwaukee County to participate. Under current law, participation is capped at 15 percent of Milwaukee Public Schools (MPS) membership; pupils may no longer participate in the program if family income exceeds 175 percent of the federal poverty level; and students must have been enrolled in MPS, the choice program or grades kindergarten through three in a private school in the city of Milwaukee or have not been enrolled in school in the prior school year to join the program. Also under current law, only schools located in the city of Milwaukee may participate.
I am vetoing these provisions because I object to this expansion of the Milwaukee Parental Choice Program, and I believe that policy changes of this significance should be addressed through separate legislation, where a full and open debate can occur. First, while the cap on MPCP participation may become binding at some point, enrollment in Choice schools remains below the cap and is anticipated to remain below the cap throughout the biennium. As such, a larger discussion on this issue can occur before enrollment approaches the cap. Second, the program was created to provide educational options to low-income children and families in the city of Milwaukee. An expansion of the program to include private schools throughout Milwaukee County is well beyond the scope of this original intent. Finally, it makes little sense to completely eliminate income tests for families once they have a child in the program. It is worth noting that, in other income-based programs for low-income families, such as BadgerCare (health care) and Wisconsin Shares (child care), the state does not eliminate the income ceiling for enrolled families whose economic circumstances improve. The original, and still valid, intent for the Choice Program was to give options to low-income families living in the city of Milwaukee that they could not otherwise afford, not to provide a lifetime guarantee to a free private school education regardless of future income.
5. Charter Schools
Sections 2020g, 2020k and 2042k
These sections include several provisions pertaining to the Milwaukee Charter Schools Program and transportation of pupils to charter schools. These sections allow pupils residing outside of the Milwaukee Public Schools (MPS) System's boundaries to attend a Milwaukee charter school. They also delete the prior year enrollment requirements for participation in the Milwaukee Charter Schools Program. In addition, these sections allow school districts, including MPS, to transport pupils to and from a charter school. Under current law, to participate in the Milwaukee Charter Schools Program, a pupil in the previous school year must have been enrolled in MPS, attended a Milwaukee Choice school, been enrolled in a nonchoice private school in Milwaukee in grades kindergarten through three, not have been enrolled in school, or have been enrolled in a school in the Milwaukee or Racine Charter School Programs.
I am vetoing these sections because I am concerned about the expansion of the scope of charter schools at this time, and because policy changes of this significance should be addressed through separate legislation where a full and open debate can occur. I am also vetoing these sections because the Milwaukee Charter Schools Program should continue to be focused on providing additional educational opportunities for city of Milwaukee children. Opening up the program to students living outside of MPS's boundaries may diminish the ability of Milwaukee students to participate in the program.
6. Racine Charter School Program
Sections 2020m and 2021f
These sections eliminate the current 400-pupil cap on the number of students that may attend the Racine charter school. These sections also cap at 400 the number of pupils previously enrolled in the Racine Unified School District for which the school district may receive payments equal to the amount of school aid per pupil the district is eligible for in the current school year.
I am vetoing these sections because I object to the expansion of this pilot program at this time. In addition, since the Racine Unified School District is only projected to receive payments for 180 pupils during the 2003-05 biennium, application of the 400-pupil cap for payments to the district is unnecessary.
7. Chapter
220 Interdistrict Transfer Aid
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Sections 2032m, 2032n, 2032o, 2042m and 2042r
These sections reduce from 0.75 to 0.65 in the 2004-05 school year and to 0.5 thereafter the fraction of a pupil counted in the sender district's membership count for state aid purposes for students participating in the Chapter
220 Interdistrict Integration Program. These sections also reduce aid to a district receiving a Chapter
220 interdistrict transfer pupil by paying the district the lesser of the average net cost per pupil of the district or $11,000 in the 2004-05 school year, $10,000 in the 2005-06 school year, $9,000 in the 2006-07 school year and $8,000 in any subsequent school year. Under current law, the district receiving the student is paid an amount based on its average net cost per pupil without these caps.
I am vetoing these sections because the state must maintain its commitment to diversity and the provision of public school options for Milwaukee students. The original – and still valid – intent of the Chapter
220 program is to provide educational opportunities to both city and suburban students and to foster an awareness and appreciation of cultural differences among students and school districts that choose to participate. If this commitment is diminished by significantly reducing the incentives to both Milwaukee Public Schools and Milwaukee-area suburban schools to participate in the Chapter
220 program, academic and cultural opportunities will be narrowed at a time when our society is increasingly multicultural. The ability of Wisconsin to benefit from these students' potential contributions to our economy and society will also be harmed.
8. Teacher Licensure Fees
Sections 286 [as it relates to s.
20.255 (2) (hg)], 348m, 351f, 1993g, 1993r, 1995m and 9341 (5f)
These provisions require the Department of Public Instruction to increase fees for teacher and administrator licenses from $100 to $150 as of July 1, 2004. These provisions also require the department to use the revenues generated by the fee increase to distribute grants to all school districts to fund mentoring for new educators.
I am vetoing these provisions because the fee increase represents a tax on teachers at a time when they have already sacrificed salary increases under the provisions of the qualified economic offer. I am also vetoing these provisions because this 50 percent fee increase would cause Wisconsin to have one of the highest licensure fees in the country. Lastly, the department needs the flexibility to adjust licensure fees to meet anticipated expenditures. These provisions would subject all future license fee increases to legislative approval, preventing the department from accurately aligning fees with expenditures.
9. Federal Administrative Funding
Section 1995t
This provision requires the Department of Public Instruction to submit to the Joint Committee on Finance any plans to use federal funding to support the department's general program operations. This provision also requires Joint Committee on Finance approval of such plans through a 14-day passive review process.
I am vetoing this provision because it is important that state agencies have the flexibility to manage their budgets. Given the Legislature's expectation that agencies will be accountable for delivering programs effectively, agencies need to have the operational flexibility to ensure that these expectations are met. Retaining existing flexibility under current law is critical to that process. Furthermore, the department is the only state agency subject to this requirement, and I object to it being singled out in this way.
10. School Finance Commission
These provisions create a school finance commission to study the funding of elementary and secondary education in Wisconsin. These provisions also provide $10,000 GPR in fiscal year 2003-04 for expenses of the commission.
I am vetoing these provisions because creating a school finance commission through law is unnecessary. In my State of the State address, I already indicated that I will create a Governor's Task Force on Education Financing. Consequently, I am vetoing the creation of this commission and returning the $10,000 for its expenses to the general fund. Although there is no language in the budget bill designating funding for the commission's expenses, the purpose of this funding was specified in the Joint Committee on Finance's amendments to the bill. By lining out the Department of Administration's s.
20.505 (4) (ba) appropriation for fiscal year 2003-04 and writing in a smaller amount that deletes the $10,000 GPR, I am vetoing the part of the bill which funds the school finance commission. Furthermore, I am requesting the Department of Administration secretary not to allot these funds.
11. Low-Revenue Ceiling
Section 2043b
This section increases the low-revenue ceiling provision from $6,900 to $7,400 in the 2003-04 school year and to $7,800 in any subsequent school year if a school board adopts a resolution to use this additional authority by a two-thirds vote of the members elect.
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I am partially vetoing this section to eliminate the two-thirds vote requirement because it is an unnecessary intrusion into local affairs. The increase in the low revenue exemption, which I proposed in my original budget, will help reduce spending disparities and increase equity among school districts. However, school boards should be able to make decisions by a majority vote in the same manner as state government and other local governments. Requiring school boards to pass measures on super-majority votes undermines the authority of local government officials and Wisconsin residents when they vote in local elections. As a result of my veto, school boards will be able to use the new $7,400 and $7,800 low-revenue ceiling exemption levels established by the bill through the simple majority vote process that exists under current law. It is anticipated that as many as 98 school districts could benefit from the low-revenue exemption.
12. Sunset of Transportation Fund Dollars for General School Aid
Sections 8m, 173m, 179m, 353m, 852m, 2007m, 2033m, 2034m, 2036m, 2037m, 2038m, 2039m and 9441 (1f)
These sections sunset the use of transportation fund dollars for general school aids after fiscal year 2004-05. Consequently, ongoing funding for general school aids for fiscal year 2005-06 and beyond is $60,000,000 below the fiscal year 2004-05 funding level.
I am vetoing these sections because the rationale for using transportation fund dollars to help support general school aids for the 2003-05 biennium will continue to exist into the future. Pupil transportation expenses play a significant role in overall school costs. Therefore, it is appropriate that the transportation fund continue to contribute toward the support of Wisconsin's schools. As a result of this veto, ongoing funding for general school aids from the transportation fund will be maintained at $60,000,000 for fiscal year 2004-05 and beyond. Given the importance of education, it is essential that school aids not face an immediate $120,000,000 reduction in the 2005-07 biennium. This veto ensures that our commitment to education is maintained and the state's long-term budget is more secure.
13. Public Library System Aid
Sections 354, 2311m, 2311s and 9443 (1qz)
These sections sunset support for public library system aid from the universal service fund as of June 30, 2005. The sections also require telecommunications providers to itemize the total customer assessment related to certain universal service fund programs on customers' bills for telecommunications services.
I am vetoing section 354 to remove the sunset of universal service fund appropriations for public library system aid because adding a sunset could result in a permanent and significant decrease in aid to public library systems. State support for local libraries is critical to educating our children and fostering economic development.
I am also vetoing sections 2311m, 2311s and 9443 requiring the itemization of the total customer assessment related to universal service fund expenditures for non-Public Service Commission programs on customers' bills. I object to this provision because it creates needless paperwork and serves no useful purpose.
14. Educational Technology Courses
Section 1057d
This section deletes the requirement that the Department of Administration work with the Department of Public Instruction (DPI) to develop courses for the instruction of professional employees licensed by DPI in the use of educational technology.
I am partially vetoing this section because DPI, as the state's chief educational agency, should have a major role in developing courses on educational technology for the employees it licenses.
SHARED REVENUE AND TAX RELIEF
15. Levy Limits on Counties, Municipalities and Technical College Districts
Sections 943m and 1532m
These sections limit, for three years, the increase in property taxes that a county, municipality or technical college district may impose. For counties and municipalities, the annual increase is limited to the percentage change in equalized value due to new construction, net of improvements removed. For technical colleges, the annual increase is limited to 2.6 percent. These sections also provide adjustments to the limits for debt service authorized prior to July 1, 2003, and allow for the limits to be exceeded by referenda.
I am vetoing these sections because they restrict economic development, limit local government access to capital markets, endanger public health and safety, hinder educational attainment and job training, and foster inequities among local governments. First, these levy limits endanger economic development. These limits fail to recognize that local government investments must often be made before development can begin. Without the needed infrastructure and ability to finance new projects, economic growth will suffer.
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Second, these levy limits make it all but impossible for most Wisconsin municipalities to issue general obligation bonds. The levy limit language is so flawed that even if a municipality passes a bond issue by a referendum, the bonds cannot be issued. In contrast, the Wisconsin Constitution requires an irrepealable levy for the life of the bonds. Under this provision, any bonds that could be issued must be less than the full faith and credit of the municipality. This would lower credit ratings and carry higher interest rates.
Third, these levy limits endanger public health and safety. Poverty, crime and health problems create greater need for fire, police, elderly care and emergency medical services. The regions of the state that experience slower growth are often the very same areas with residents most in need of these services. This proposal limits the ability of municipalities to fund these necessary services for the elderly, poor and other vulnerable residents of their communities.
Fourth, these levy limits hinder educational attainment and job training. The limits on technical college levies will require students to pay more for classes or reduce the course offerings of the technical colleges. In either case, this diminishes our ability to provide individuals with the skills necessary to improve their earnings and compete for better paying jobs. Further, it hampers funding for many of the functions of municipal government – for example public libraries – that also support our children's education.
Fifth, these levy limits are inequitable. Wisconsin's neediest communities, with little open space for new construction, could have little or no levy growth. In contrast, wealthier municipalities with open land available for development will have substantial capacity to raise revenues. Consider what would have occurred had the proposal been in effect in 2001. In that year, the city of Milwaukee had a 0.9 percent increase in value due to new construction while Germantown had a 5.6 percent increase; Marinette had a 1.4 percent increase while Sun Prairie had a 6.1 percent increase; and Monroe had a 1.2 percent increase while Middleton had a 4.7 percent increase. The proposal will result in limiting the ability of municipalities to provide vital public services and exacerbating the existing discrepancies in economic growth.
Local elected officials are in the best position to make decisions regarding the appropriate level of services to fund and provide for residents of their communities. These officials have continually made difficult decisions regarding these important issues. Local governments and their residents should not be penalized for the state's own fiscal disorder.
The veto of the levy limit on Wisconsin Technical College Districts will have an impact on several of the state's tax relief programs. This impact is discussed under Department of Public Instruction, Item #3. I have not reestimated the spending levels in these programs related to vetoing limits on municipal and county levies. I believe that local elected officials will act responsibly and limit growth in local levies. As such, a reestimate is not necessary.
16. Municipal Shared Revenue Payments
Sections 286 [as it relates to s.
20.835 (1) (dd)], 661m, 662d, 662de, 662e, 663, 665, 1653d, 1653e, 1653f, 1654, 1655, 1656, 1658, 1658d, 1662b, 1662d, 1663b, 1664b, 1666b, 1669d, 1669e, 1669f, 1669g and 9445 (1) (b) and (1m)
These provisions create new formulas for municipal shared revenue payments in 2004 and 2005. Specifically, these provisions create a new equalization formula for larger population municipalities and a proportional reduction formula for smaller population municipalities. Jointly, these formulas reduce municipal shared revenue payments by $50,000,000 compared to current law beginning in 2004. These provisions then repeal the new formulas and eliminate all provisions regarding the distribution of municipal shared revenue for 2006 and beyond.
I am partially vetoing these provisions because these formulas misrepresent the actual allocation, create inequities among municipalities, add needless complexity and create uncertainty for long-term municipal funding.
First, the formula changes do not work as claimed. It is claimed that the new equalization formula aids important public safety needs, such as police and fire. In reality, it actually provides the most aid to those communities with the fewest public safety needs. Municipalities with costs below 50 percent of the state average of larger municipalities will have those costs weighted at 150 percent, while municipalities with above average costs will receive no aid on any dollar spent above the average. In other words, those who live in high-crime areas do not receive the state aid necessary to provide important police and other public safety services.
Second, the formula changes create inequities in aid to municipalities. When all the pieces of municipal budgets are put together, wealthier municipalities would have smaller percent reductions than poorer communities.
Third, the formula changes add unnecessary complexity. They redistribute state aid to mask the simple need for a modest reduction in shared revenue to help address the state's budget deficit.
Fourth, the proposal repeals shared revenues without an alternative. There should be no repeal without a replacement. State revenue sharing is a long-standing progressive feature of Wisconsin state-local finance. Municipalities need certainty regarding their future shared revenue payments.
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As a result of my veto, the $50,000,000 reduction to shared revenue will be accomplished directly. It will be computed on a straightforward per capita basis, equaling an estimated $12.73 per person. It will establish a maximum allowable percentage reduction. No municipality would have more than a 15.7 percent reduction compared to current law payments for 2004. The payment distribution will be settled for all future years.
Under my veto, all municipalities are expected to receive at least as much shared revenue as under my initial budget proposal. Indeed, my veto allocates the entire $20,000,000 that the Legislature added back to shared revenue to fund the minimum guarantee that is implicit in the maximum percentage reduction. As a result, over 1,100 municipalities will be better off, and no municipalities will be worse off, than under my initial budget proposals.
With this action, and the veto of the levy limits, I know and expect local elected officials will continue to make the types of difficult decisions that they have made in the past to hold the line on spending and still fund important services, such as police and fire, for the citizens of their communities.
17. Legislative Joint Committee to Study Municipal Aid
Section 9133 (3m)
This section specifies that the Joint Committee on Legislative Organization may create a joint committee to study the distribution of state aid to municipalities.
I am vetoing this section because it is unnecessary. The Legislature may create such committees without a provision in the budget bill. Moreover, my veto of the municipal shared revenue changes eliminates the primary need for this committee. While the Legislature left future municipal shared revenue distributions completely unspecified, and, consequently, left local officials with little direction in how to plan for future budgets, my veto of the municipal shared revenue changes establishes a distribution that continues into the future.
18. Agricultural Forest Land
Section 1536h
This section establishes agricultural forest land as a new classification of property. It specifies that agricultural forest land is to include land that is producing or capable of producing commercial forest products and that is included in a parcel that has been classified, in part, as agricultural land or is contiguous to a parcel, owned by the same person, that has been classified in whole or in part as agricultural land. The bill requires that agricultural forest land be assessed at 50 percent of market value for both property taxation and equalization purposes.
I am partially vetoing this section because its focus should be on forest land owned by farmers. As a result of my veto, only land that is producing or capable of producing commercial forest products that is contiguous to a parcel owned by the same person that is classified "in whole" as agricultural land will be included in this new category. As affected by this veto, land that is on a parcel that is "in part" agricultural land and land contiguous to a parcel that is "in part" agricultural land will be excluded from the definition.
This partial veto to narrow the classification is necessary because the Legislature's definition of agricultural forest land is too broad. It neither requires that a minimum percentage of a parcel be agricultural nor requires a minimum amount of agricultural acreage. Such a broad definition could also be subject to abuse and encourage nonfarmers to convert forest lands to receive tax benefits.
By limiting the land that may be classified as agricultural forest to land contiguous to a parcel that is fully devoted to agriculture and owned by the same person, my veto provides significant tax relief by targeting the property classification to those whose livelihood is farming without creating a greater shift of property taxes to nonagricultural land.
While I understand that this veto may exclude some land for which a legitimate claim for a tax break could be made, any additional expansion of the agricultural forest classification should not occur without further research into its effects on other properties. Absent such research, application of this new classification beyond its intended target could undermine farm tax relief efforts as property tax rates rise in response to lower overall valuations. This result would undercut not only this effort to assist farmers, but also efforts to assist farmers through use value and the new classification for undeveloped land that I am also signing into law in this budget bill.
Separately, I am acting to save an existing tax relief program for farmers by vetoing the elimination of the farmland preservation tax credit (see Agriculture, Trade and Consumer Protection, Item #1). Taken together, my actions provide a very substantial benefit for the agricultural industry by vetoing a $23 million income tax increase for farmers and retaining provisions that reduce property taxes on wetlands and certain forest lands that are part of a farm.
19. Property Classifications Within State Assessment Guidelines
Section 1536b
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This section divides a group of properties into separate components for the purpose of determining the types of property in a municipality that are subject to Department of Revenue assessment oversight. This oversight ensures that certain types of property be assessed within ten percent of full value at least once every four years. Under current law, the value of swamp and waste, forest land and other property is summed to determine if they are at least five percent of a municipality's total value and thus subject to Department of Revenue oversight. Under this section, swamp and waste (renamed "undeveloped land" under the bill), agricultural forest, productive forest and other are all considered separately rather than as a whole for this purpose.
I am partially vetoing this section because it unnecessarily weakens assessment standards. Maintaining property assessments within specified criteria is an essential step in ensuring fair and equitable property taxation. As a result of my veto, the current law treatment of property classifications for Department of Revenue oversight is restored.
20. Use Value of Agricultural Land
Section 1536m
This section requires that any modification to the procedures used by the Department of Revenue in implementing the use value of agricultural land be approved under the administrative rule process.
I am vetoing this section because this requirement is unduly cumbersome and results in unacceptable delays. The determination of use values of agricultural land will always be a complex process requiring many steps and modifications as changes to the farm economy and farm laws continue to unfold. To allow use values to reflect the Legislature's intent, it is essential that the department be able to update its data sources and make adjustments in a timely manner. The rigidity of the rule-making process would not allow this to occur. Administrative rules are also an inappropriate means to enact the level of detail that is needed to calculate use values across the state. Moreover, if he ordinary rule-making process is followed to comply with this provision, no change in the use value formula will likely be in place in time to avoid negative agricultural land values that will occur in 2004. Since this outcome from the current formula is unworkable, the department needs to act rapidly to ensure agricultural values are fairly calculated.
Rather than use the cumbersome administrative rule process for procedural changes, existing means to change the use value formulas should be employed. Many modifications to use value procedures can be put in place through revisions to the department's assessment manual. This approach allows timely action and ensures statewide uniformity and equity in property tax administration. To the extent that major changes in the formula are needed, current law provides that these be made through the rule-making process. In addition, I request that the department provide the Legislature and other interested parties with complete information on any changes to the use value determination process.
21. County and Municipal Fees
Section 1532p
This section requires that any fee imposed by a county or municipality bear a reasonable relationship to the service for which the fee is imposed. It further requires that when a fee is first imposed, the county or municipality shall issue a written finding that the fee is reasonably related to the service for which the fee is imposed.
