AB462: Bill Text

LRB-2830/1

PG/MES/CMH:lmk&wlj:jf

2005 - 2006 LEGISLATURE

2005 Assembly BILL 462

June 7, 2005 - Introduced by Representatives Ziegelbauer and Nass, cosponsored by Senator A. Lasee. Referred to Committee on Ways and Means.

AB462,1,10 An Act to repeal 111.70 (1) (dm), 111.70 (1) (fm), 111.70 (1) (nc), 111.70 (4) (cm) 5s., 111.70 (4) (cm) 8m. b., 111.70 (4) (cm) 8p., 111.70 (4) (cm) 8s. and 118.245; to consolidate, renumber and amend 111.70 (4) (cm) 8m. a. and c.; to amend 111.70 (1) (b), 111.70 (4) (cm) 6. a., 111.70 (4) (cm) 6. am., 111.70 (4) (cm) 6. b., 111.70 (4) (cm) 7., 111.70 (4) (cm) 7r. d., 111.70 (4) (cm) 7r. e., 111.70 (4) (cm) 7r. f., 111.70 (4) (cm) 7r. h., 111.70 (4) (d) 2. a., 119.04 (1) and 121.91 (2m) (e) 2.; and to create 65.95, 111.70 (4) (c) 2m., 111.70 (4) (jm) 4m. and 111.77 (6) (dm) of the statutes; relating to: spending limits for cities, villages, towns, counties, school districts, and technical college districts; school district revenue limits; and qualified economic offers under the Municipal Employment Relations Act.

Analysis by the Legislative Reference Bureau

This bill establishes spending limits for cities, villages, towns, counties, and technical college districts beginning in 2006. The limit is the amount spent in the previous fiscal year plus the average percentage increase in the consumer price index (CPI) over the three previous fiscal years plus 1 percent. The limit for a city, village, town, or county is also increased by the percentage increase over the previous fiscal year in its population; the limit for a technical college district is also increased by the percentage increase over the previous fiscal year in its enrollment.

An entity may exceed its spending limit in any fiscal year if a referendum approves the amount of the proposed excess.

Current law generally limits the increase in the total amount that a school district may receive from general school aids and property taxes in a school year to the amount of revenue increase allowed per pupil in the previous school year increased by the percentage change in the CPI. Beginning with the revenue limit calculated for the 2006-07 school year, this bill indexes the per pupil increase allowed to the percentage increase in the CPI plus 1 percent.

Under current law, in local government employment other than law enforcement and fire fighting employment, if a dispute relating to the terms of a proposed collective bargaining agreement has not been settled after a reasonable period of negotiation and after mediation by the Wisconsin Employment Relations Commission (WERC), either party, or the parties jointly, may petition WERC to initiate compulsory, final, and binding arbitration with respect to any dispute relating to wages, hours, and conditions of employment. If WERC determines, after investigation, that an impasse exists and that arbitration is required, WERC must submit to the parties a list of seven arbitrators, from which the parties alternately strike names until one arbitrator is left. As an alternative to a single arbitrator, WERC may provide for an arbitration panel that consists of one person selected by each party and one person selected by WERC. As a further alternative, WERC may also provide a process that allows for a random selection of a single arbitrator from a list of seven names submitted by WERC. Under current law, an arbitrator or arbitration panel must adopt the final offer of one of the parties on all disputed issues, which is then incorporated into the collective bargaining agreement.

Under current law, however, this process does not apply to a dispute over economic issues involving a collective bargaining unit consisting of school district professional employees if WERC determines, subsequent to an investigation, that the employer has submitted a qualified economic offer (QEO). Under current law, a QEO consists of a proposal to maintain the percentage contribution by the employer to the employees' existing fringe benefit costs and the employees' existing fringe benefits and to provide for an annual average salary increase having a cost to the employer at least equal to 2.1 percent of the existing total compensation and fringe benefit costs for the employees in the collective bargaining unit plus any fringe benefit savings. Fringe benefit savings is that amount, if any, by which 1.7 percent of the total compensation and fringe benefit costs for all municipal employees in a collective bargaining unit for any 12-month period covered by a proposed collective bargaining agreement exceeds the increased cost required to maintain the percentage contribution by the municipal employer to the municipal employees' existing fringe benefit costs and to maintain all fringe benefits provided to the municipal employees.

This bill eliminates the QEO exception from the compulsory, final, and binding arbitration process.

The Municipal Employment Relations Act (MERA) does not limit collective bargaining agreements to any specific maximum expenditures or increases in expenditures. This bill prohibits any final offer that is submitted to WERC for interest arbitration from proposing to expend more than the amount spent under the previous agreement increased by the percentage change in the CPI, plus 2 percent. WERC will determine the maximum increase in expenditure using this formula.

Under MERA, for labor disputes that go to arbitration, the arbitrator or arbitration panel must consider a variety of factors, some of which are given "greatest weight"; some of which are given "greater weight"; and some of which must simply be considered. Among the factors that must simply be considered are the wages, hours, and conditions of employment of employees providing similar services and of employees in public and in private employment in the same and comparable communities. This bill provides that the arbitrator or arbitration panel must consider the wages, hours, and conditions of employment of the employees as a whole and not in isolation.

Under current law, school district professional employees are required to be placed in a collective bargaining unit that is separate from the units of other school district employees. This bill eliminates this requirement.

Finally, the bill eliminates a 3.8 percent cap imposed on salary and fringe benefit annual cost increases for all nonrepresented professional school district employees.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB462, s. 1 Section 1. 65.95 of the statutes is created to read:

AB462,3,2 65.95 Spending and levy limits. (1) In this section:

AB462,3,4 (a) "Excess levy" means the amount by which a local governmental unit's levy exceeds its previous levy without approval at a referendum under sub. (5).

AB462,3,6 (b) "Excess spending" means the amount by which a local governmental unit's spending exceeds its spending limit under this section.

AB462,3,8 (c) "Local governmental unit" means any city, village, town, county, or technical college district.

AB462,4,3 (2) Except as provided in sub. (3) and subject to sub. (4), a local governmental unit may not spend in any fiscal year more than the amount it spent the previous fiscal year increased by all of the following:

AB462,4,5 (a) The average percentage increase in the consumer price index for Milwaukee-Racine or its successor for the 3 previous fiscal years, plus 1 percent.

AB462,4,8 (b) For cities, villages, towns, and counties, the percentage increase over the previous fiscal year in the population of the city, village, town, or county, as estimated by the department of administration under s. 16.96.

AB462,4,10 (c) For technical college districts, the percentage increase over the previous fiscal year in the enrollment of the district.

AB462,4,20 (3) (a) If a local governmental unit wishes to exceed the limit otherwise applicable to the local governmental unit under sub. (2) in any fiscal year, it shall promptly adopt a resolution supporting inclusion in its final budget of an amount equal to the proposed excess spending. The resolution shall be filed as provided in s. 8.37. The local governmental unit shall call a special referendum for the purpose of submitting the resolution to the electors for approval or rejection. In lieu of a special referendum, the local governmental unit may specify that the referendum be held at the next succeeding spring primary or election or September primary or general election, if such election is to be held not sooner than 42 days after the filing of the resolution.

AB462,4,25 (b) The local governmental unit shall publish type A, B, C, D, and E notices of the referendum under s. 10.01 (2). Notwithstanding s. 10.01 (2) (a), the type A notice shall include a statement of the amount of the excess spending specified in par. (a) and a copy of the resolution under par. (a). Section 5.01 (1) applies in the event of failure to comply with the notice requirements of this paragraph.

AB462,5,8 (c) The referendum shall be held in accordance with chs. 5 to 12. The local governmental unit shall provide the election officials with all necessary election supplies. The form of the ballot shall correspond substantially with the standard form for referendum ballots prescribed by the elections board under ss. 5.64 (2) and 7.08 (1) (a). The question submitted shall be whether the limit under sub. (2) may be exceeded by a specified amount. The limit otherwise applicable to the local governmental unit under sub. (2) is increased by the amount approved by a majority of those voting on the question.

AB462,5,10 (4) In the case of a city, village, town, or county, the spending limit under sub. (2) does not apply to any of the following amounts:

AB462,5,12 (a) Any amount contributed to a proprietary fund under s. 65.90 (3) (b) 5. that is not property tax revenues.

AB462,5,15 (b) Any amount spent as a matching contribution that is related to a federal grant that is received by the city, village, town, or county that is not property tax revenues.

AB462,5,16 (c) Any amount of spending that derived from a federal grant.

AB462, s. 2 Section 2. 111.70 (1) (b) of the statutes is amended to read:

AB462,5,21 111.70 (1) (b) "Collective bargaining unit" means a the unit consisting of municipal employees who are school district professional employees or of municipal employees who are not school district professional employees that is determined by the commission to be appropriate for the purpose of collective bargaining.

AB462, s. 3 Section 3. 111.70 (1) (dm) of the statutes is repealed.

AB462, s. 4 Section 4. 111.70 (1) (fm) of the statutes is repealed.

AB462, s. 5 Section 5. 111.70 (1) (nc) of the statutes is repealed.

AB462, s. 6 Section 6. 111.70 (4) (c) 2m. of the statutes is created to read:

AB462,6,8 111.70 (4) (c) 2m. `Factors used in arbitration to settle disputes.' If the parties to a dispute agree to have the commission or any other appropriate agency serve as arbitrator to resolve the dispute and if the commission or any other appropriate agency compares the wages, hours, and conditions of employment of the municipal employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of any other employees, the commission or other appropriate agency shall compare the wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB462, s. 7 Section 7. 111.70 (4) (cm) 5s. of the statutes is repealed.

AB462, s. 8 Section 8. 111.70 (4) (cm) 6. a. of the statutes is amended to read:

AB462,7,2 111.70 (4) (cm) 6. a. If in any collective bargaining unit a dispute relating to one or more issues, qualifying for interest arbitration under subd. 5s. in a collective bargaining unit to which subd. 5s. applies, has not been settled after a reasonable period of negotiation and after mediation by the commission under subd. 3. and other settlement procedures, if any, established by the parties have been exhausted, and the parties are deadlocked with respect to any dispute between them over wages, hours and conditions of employment to be included in a new collective bargaining agreement, either party, or the parties jointly, may petition the commission, in writing, to initiate compulsory, final and binding arbitration, as provided in this paragraph. At the time the petition is filed, the petitioning party shall submit in writing to the other party and the commission its preliminary final offer containing its latest proposals on all issues in dispute. Within 14 calendar days after the date of that submission, the other party shall submit in writing its preliminary final offer on all disputed issues to the petitioning party and the commission. If a petition is filed jointly, both parties shall exchange their preliminary final offers in writing and submit copies to the commission at the time the petition is filed.

AB462, s. 9 Section 9. 111.70 (4) (cm) 6. am. of the statutes is amended to read:

AB462,8,24 111.70 (4) (cm) 6. am. Upon receipt of a petition to initiate arbitration, the commission shall make an investigation, with or without a formal hearing, to determine whether arbitration should be commenced. If in determining whether an impasse exists the commission finds that the procedures set forth in this paragraph have not been complied with and such compliance would tend to result in a settlement, it may order such compliance before ordering arbitration. The validity of any arbitration award or collective bargaining agreement shall not be affected by failure to comply with such procedures. Prior to the close of the investigation each party shall submit in writing to the commission its single final offer containing its final proposals on all issues in dispute that are subject to interest arbitration under this subdivision or under subd. 5s. in collective bargaining units to which subd. 5s. applies. A final offer may not propose to expend more than the amount spent under the previous agreement increased by the percentage change in the consumer price index plus 2 percent, as determined by the commission. If a party fails to submit a single, ultimate final offer, the commission shall close the investigation based on the last written position of the party. The municipal employer may not submit a qualified economic offer under subd. 5s. after the close of the investigation. Such final offers may include only mandatory subjects of bargaining, except that a permissive subject of bargaining may be included by a party if the other party does not object and shall then be treated as a mandatory subject. No later than such time, the parties shall also submit to the commission a stipulation, in writing, with respect to all matters which are agreed upon for inclusion in the new or amended collective bargaining agreement. The commission, after receiving a report from its investigator and determining that arbitration should be commenced, shall issue an order requiring arbitration and immediately submit to the parties a list of 7 arbitrators. Upon receipt of such list, the parties shall alternately strike names until a single name is left, who shall be appointed as arbitrator. The petitioning party shall notify the commission in writing of the identity of the arbitrator selected. Upon receipt of such notice, the commission shall formally appoint the arbitrator and submit to him or her the final offers of the parties. The final offers shall be considered public documents and shall be available from the commission. In lieu of a single arbitrator and upon request of both parties, the commission shall appoint a tripartite arbitration panel consisting of one member selected by each of the parties and a neutral person designated by the commission who shall serve as a chairperson. An arbitration panel has the same powers and duties as provided in this section for any other appointed arbitrator, and all arbitration decisions by such panel shall be determined by majority vote. In lieu of selection of the arbitrator by the parties and upon request of both parties, the commission shall establish a procedure for randomly selecting names of arbitrators. Under the procedure, the commission shall submit a list of 7 arbitrators to the parties. Each party shall strike one name from the list. From the remaining 5 names, the commission shall randomly appoint an arbitrator. Unless both parties to an arbitration proceeding otherwise agree in writing, every individual whose name is submitted by the commission for appointment as an arbitrator shall be a resident of this state at the time of submission and every individual who is designated as an arbitration panel chairperson shall be a resident of this state at the time of designation.

AB462, s. 10 Section 10. 111.70 (4) (cm) 6. b. of the statutes is amended to read:

AB462,9,12 111.70 (4) (cm) 6. b. The arbitrator shall, within 10 days of his or her appointment, establish a date and place for the conduct of the arbitration hearing. Upon petition of at least 5 citizens of the jurisdiction served by the municipal employer, filed within 10 days after the date on which the arbitrator is appointed, the arbitrator shall hold a public hearing in the jurisdiction for the purpose of providing the opportunity to both parties to explain or present supporting arguments for their positions and to members of the public to offer their comments and suggestions. The final offers of the parties, as transmitted by the commission to the arbitrator, shall serve as the basis for continued negotiations, if any, between the parties with respect to the issues in dispute. At any time prior to the arbitration hearing, either party, with the consent of the other party and subject to the expenditure limit in subd. 6. am., may modify its final offer in writing.