June 7, 2005 - Introduced by Representatives Ziegelbauer and Nass, cosponsored
by Senator A. Lasee. Referred to Committee on Ways and Means.
AB462,1,10 1An Act to repeal 111.70 (1) (dm), 111.70 (1) (fm), 111.70 (1) (nc), 111.70 (4) (cm)
25s., 111.70 (4) (cm) 8m. b., 111.70 (4) (cm) 8p., 111.70 (4) (cm) 8s. and 118.245;
3to consolidate, renumber and amend 111.70 (4) (cm) 8m. a. and c.; to amend
4111.70 (1) (b), 111.70 (4) (cm) 6. a., 111.70 (4) (cm) 6. am., 111.70 (4) (cm) 6. b.,
5111.70 (4) (cm) 7., 111.70 (4) (cm) 7r. d., 111.70 (4) (cm) 7r. e., 111.70 (4) (cm) 7r.
6f., 111.70 (4) (cm) 7r. h., 111.70 (4) (d) 2. a., 119.04 (1) and 121.91 (2m) (e) 2.; and
7to create 65.95, 111.70 (4) (c) 2m., 111.70 (4) (jm) 4m. and 111.77 (6) (dm) of the
8statutes; relating to: spending limits for cities, villages, towns, counties,
9school districts, and technical college districts; school district revenue limits;
10and 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 1Section 1. 65.95 of the statutes is created to read:
AB462,3,2 265.95 Spending and levy limits. (1) In this section:
AB462,3,43 (a) "Excess levy" means the amount by which a local governmental unit's levy
4exceeds its previous levy without approval at a referendum under sub. (5).
AB462,3,65 (b) "Excess spending" means the amount by which a local governmental unit's
6spending exceeds its spending limit under this section.
AB462,3,87 (c) "Local governmental unit" means any city, village, town, county, or technical
8college district.
AB462,4,3
1(2) Except as provided in sub. (3) and subject to sub. (4), a local governmental
2unit may not spend in any fiscal year more than the amount it spent the previous
3fiscal year increased by all of the following:
AB462,4,54 (a) The average percentage increase in the consumer price index for
5Milwaukee-Racine or its successor for the 3 previous fiscal years, plus 1 percent.
AB462,4,86 (b) For cities, villages, towns, and counties, the percentage increase over the
7previous fiscal year in the population of the city, village, town, or county, as estimated
8by the department of administration under s. 16.96.
AB462,4,109 (c) For technical college districts, the percentage increase over the previous
10fiscal year in the enrollment of the district.
AB462,4,20 11(3) (a) If a local governmental unit wishes to exceed the limit otherwise
12applicable to the local governmental unit under sub. (2) in any fiscal year, it shall
13promptly adopt a resolution supporting inclusion in its final budget of an amount
14equal to the proposed excess spending. The resolution shall be filed as provided in
15s. 8.37. The local governmental unit shall call a special referendum for the purpose
16of submitting the resolution to the electors for approval or rejection. In lieu of a
17special referendum, the local governmental unit may specify that the referendum be
18held at the next succeeding spring primary or election or September primary or
19general election, if such election is to be held not sooner than 42 days after the filing
20of the resolution.
AB462,4,2521 (b) The local governmental unit shall publish type A, B, C, D, and E notices of
22the referendum under s. 10.01 (2). Notwithstanding s. 10.01 (2) (a), the type A notice
23shall include a statement of the amount of the excess spending specified in par. (a)
24and a copy of the resolution under par. (a). Section 5.01 (1) applies in the event of
25failure to comply with the notice requirements of this paragraph.
AB462,5,8
1(c) The referendum shall be held in accordance with chs. 5 to 12. The local
2governmental unit shall provide the election officials with all necessary election
3supplies. The form of the ballot shall correspond substantially with the standard
4form for referendum ballots prescribed by the elections board under ss. 5.64 (2) and
57.08 (1) (a). The question submitted shall be whether the limit under sub. (2) may
6be exceeded by a specified amount. The limit otherwise applicable to the local
7governmental unit under sub. (2) is increased by the amount approved by a majority
8of those voting on the question.
AB462,5,10 9(4) In the case of a city, village, town, or county, the spending limit under sub.
10(2) does not apply to any of the following amounts:
AB462,5,1211 (a) Any amount contributed to a proprietary fund under s. 65.90 (3) (b) 5. that
12is not property tax revenues.
AB462,5,1513 (b) Any amount spent as a matching contribution that is related to a federal
14grant that is received by the city, village, town, or county that is not property tax
15revenues.
AB462,5,1616 (c) Any amount of spending that derived from a federal grant.
AB462, s. 2 17Section 2. 111.70 (1) (b) of the statutes is amended to read:
AB462,5,2118 111.70 (1) (b) "Collective bargaining unit" means a the unit consisting of
19municipal employees who are school district professional employees or of municipal
20employees who are not school district professional employees
that is determined by
21the commission to be appropriate for the purpose of collective bargaining.
AB462, s. 3 22Section 3. 111.70 (1) (dm) of the statutes is repealed.
AB462, s. 4 23Section 4. 111.70 (1) (fm) of the statutes is repealed.
AB462, s. 5 24Section 5. 111.70 (1) (nc) of the statutes is repealed.
AB462, s. 6 25Section 6. 111.70 (4) (c) 2m. of the statutes is created to read:
AB462,6,8
1111.70 (4) (c) 2m. `Factors used in arbitration to settle disputes.' If the parties
2to a dispute agree to have the commission or any other appropriate agency serve as
3arbitrator to resolve the dispute and if the commission or any other appropriate
4agency compares the wages, hours, and conditions of employment of the municipal
5employees involved in the arbitration proceedings with the wages, hours, and
6conditions of employment of any other employees, the commission or other
7appropriate agency shall compare the wages, hours, and conditions of employment
8as a whole, rather than as individual elements.
AB462, s. 7 9Section 7. 111.70 (4) (cm) 5s. of the statutes is repealed.
AB462, s. 8 10Section 8. 111.70 (4) (cm) 6. a. of the statutes is amended to read:
AB462,7,211 111.70 (4) (cm) 6. a. If in any collective bargaining unit a dispute relating to one
12or more issues, qualifying for interest arbitration under subd. 5s. in a collective
13bargaining unit to which subd. 5s. applies,
has not been settled after a reasonable
14period of negotiation and after mediation by the commission under subd. 3. and other
15settlement procedures, if any, established by the parties have been exhausted, and
16the parties are deadlocked with respect to any dispute between them over wages,
17hours and conditions of employment to be included in a new collective bargaining
18agreement, either party, or the parties jointly, may petition the commission, in
19writing, to initiate compulsory, final and binding arbitration, as provided in this
20paragraph. At the time the petition is filed, the petitioning party shall submit in
21writing to the other party and the commission its preliminary final offer containing
22its latest proposals on all issues in dispute. Within 14 calendar days after the date
23of that submission, the other party shall submit in writing its preliminary final offer
24on all disputed issues to the petitioning party and the commission. If a petition is

1filed jointly, both parties shall exchange their preliminary final offers in writing and
2submit copies to the commission at the time the petition is filed.
AB462, s. 9 3Section 9. 111.70 (4) (cm) 6. am. of the statutes is amended to read:
AB462,8,244 111.70 (4) (cm) 6. am. Upon receipt of a petition to initiate arbitration, the
5commission shall make an investigation, with or without a formal hearing, to
6determine whether arbitration should be commenced. If in determining whether an
7impasse exists the commission finds that the procedures set forth in this paragraph
8have not been complied with and such compliance would tend to result in a
9settlement, it may order such compliance before ordering arbitration. The validity
10of any arbitration award or collective bargaining agreement shall not be affected by
11failure to comply with such procedures. Prior to the close of the investigation each
12party shall submit in writing to the commission its single final offer containing its
13final proposals on all issues in dispute that are subject to interest arbitration under
14this subdivision or under subd. 5s. in collective bargaining units to which subd. 5s.
15applies
. A final offer may not propose to expend more than the amount spent under
16the previous agreement increased by the percentage change in the consumer price
17index plus 2 percent, as determined by the commission
. If a party fails to submit a
18single, ultimate final offer, the commission shall close the investigation based on the
19last written position of the party. The municipal employer may not submit a qualified
20economic offer under subd. 5s. after the close of the investigation.
Such final offers
21may include only mandatory subjects of bargaining, except that a permissive subject
22of bargaining may be included by a party if the other party does not object and shall
23then be treated as a mandatory subject. No later than such time, the parties shall
24also submit to the commission a stipulation, in writing, with respect to all matters
25which are agreed upon for inclusion in the new or amended collective bargaining

1agreement. The commission, after receiving a report from its investigator and
2determining that arbitration should be commenced, shall issue an order requiring
3arbitration and immediately submit to the parties a list of 7 arbitrators. Upon
4receipt of such list, the parties shall alternately strike names until a single name is
5left, who shall be appointed as arbitrator. The petitioning party shall notify the
6commission in writing of the identity of the arbitrator selected. Upon receipt of such
7notice, the commission shall formally appoint the arbitrator and submit to him or her
8the final offers of the parties. The final offers shall be considered public documents
9and shall be available from the commission. In lieu of a single arbitrator and upon
10request of both parties, the commission shall appoint a tripartite arbitration panel
11consisting of one member selected by each of the parties and a neutral person
12designated by the commission who shall serve as a chairperson. An arbitration panel
13has the same powers and duties as provided in this section for any other appointed
14arbitrator, and all arbitration decisions by such panel shall be determined by
15majority vote. In lieu of selection of the arbitrator by the parties and upon request
16of both parties, the commission shall establish a procedure for randomly selecting
17names of arbitrators. Under the procedure, the commission shall submit a list of 7
18arbitrators to the parties. Each party shall strike one name from the list. From the
19remaining 5 names, the commission shall randomly appoint an arbitrator. Unless
20both parties to an arbitration proceeding otherwise agree in writing, every
21individual whose name is submitted by the commission for appointment as an
22arbitrator shall be a resident of this state at the time of submission and every
23individual who is designated as an arbitration panel chairperson shall be a resident
24of this state at the time of designation.
AB462, s. 10 25Section 10. 111.70 (4) (cm) 6. b. of the statutes is amended to read:
AB462,9,12
1111.70 (4) (cm) 6. b. The arbitrator shall, within 10 days of his or her
2appointment, establish a date and place for the conduct of the arbitration hearing.
3Upon petition of at least 5 citizens of the jurisdiction served by the municipal
4employer, filed within 10 days after the date on which the arbitrator is appointed, the
5arbitrator shall hold a public hearing in the jurisdiction for the purpose of providing
6the opportunity to both parties to explain or present supporting arguments for their
7positions and to members of the public to offer their comments and suggestions. The
8final offers of the parties, as transmitted by the commission to the arbitrator, shall
9serve as the basis for continued negotiations, if any, between the parties with respect
10to the issues in dispute. At any time prior to the arbitration hearing, either party,
11with the consent of the other party and subject to the expenditure limit in subd. 6.
12am.
, may modify its final offer in writing.
AB462, s. 11 13Section 11. 111.70 (4) (cm) 7. of the statutes is amended to read:
AB462,9,2114 111.70 (4) (cm) 7. `Factor Factors given greatest weight.' In making any
15decision under the arbitration procedures authorized by this paragraph, the
16arbitrator or arbitration panel shall consider and shall give the greatest weight to
17the expenditure limit in subd. 6. am. and any state law or directive lawfully issued
18by a state legislative or administrative officer, body or agency which places
19limitations on expenditures that may be made or revenues that may be collected by
20a municipal employer. The arbitrator or arbitration panel shall give an accounting
21of the consideration of this factor these factors in the arbitrator's or panel's decision.
AB462, s. 12 22Section 12. 111.70 (4) (cm) 7r. d. of the statutes is amended to read:
AB462,9,2523 111.70 (4) (cm) 7r. d. Comparison of wages, hours and conditions of employment
24of the municipal employees involved in the arbitration proceedings with the wages,
25hours and conditions of employment of other employees performing similar services.

1In making this comparison, the arbitrator or arbitration panel shall consider wages,
2hours, and conditions of employment as a whole, rather than as individual elements.
AB462, s. 13 3Section 13. 111.70 (4) (cm) 7r. e. of the statutes is amended to read:
AB462,10,94 111.70 (4) (cm) 7r. e. Comparison of the wages, hours and conditions of
5employment of the municipal employees involved in the arbitration proceedings with
6the wages, hours and conditions of employment of other employees generally in
7public employment in the same community and in comparable communities. In
8making this comparison, the arbitrator or arbitration panel shall consider wages,
9hours, and conditions of employment as a whole, rather than as individual elements.
AB462, s. 14 10Section 14. 111.70 (4) (cm) 7r. f. of the statutes is amended to read:
AB462,10,1611 111.70 (4) (cm) 7r. f. Comparison of the wages, hours and conditions of
12employment of the municipal employees involved in the arbitration proceedings with
13the wages, hours and conditions of employment of other employees in private
14employment in the same community and in comparable communities. In making
15this comparison, the arbitrator or arbitration panel shall consider wages, hours, and
16conditions of employment as a whole, rather than as individual elements.
AB462, s. 15 17Section 15. 111.70 (4) (cm) 7r. h. of the statutes is amended to read:
AB462,10,2318 111.70 (4) (cm) 7r. h. The overall compensation presently received by the
19municipal employees, including direct wage compensation, vacation, holidays and
20excused time, insurance and pensions, medical and hospitalization benefits, the
21continuity and stability of employment, and all other benefits received. In making
22this comparison, the arbitrator or arbitration panel shall consider wages, hours, and
23conditions of employment as a whole, rather than as individual elements.
AB462, s. 16 24Section 16. 111.70 (4) (cm) 8m. a. and c. of the statutes are consolidated,
25renumbered 111.70 (4) (cm) 8m. and amended to read:
AB462,11,14
1111.70 (4) (cm) 8m. `Term of agreement; reopening of negotiations.' Except for
2the initial collective bargaining agreement between the parties and, except as the
3parties otherwise agree, and except as provided in par. (cn), every collective
4bargaining agreement covering municipal employees subject to this paragraph other
5than school district professional employees
shall be for a term of 2 years. No, but in
6no case may a
collective bargaining agreement for any collective bargaining unit
7consisting of municipal employees subject to this paragraph other than school
8district professional employees shall
be for a term exceeding 3 years. c. No
9arbitration award may contain a provision for reopening of negotiations during the
10term of a collective bargaining agreement, unless both parties agree to such a
11provision. The requirement for agreement by both parties does not apply to a
12provision for reopening of negotiations with respect to any portion of an agreement
13that is declared invalid by a court or administrative agency or rendered invalid by
14the enactment of a law or promulgation of a federal regulation.
AB462, s. 17 15Section 17. 111.70 (4) (cm) 8m. b. of the statutes is repealed.
AB462, s. 18 16Section 18. 111.70 (4) (cm) 8p. of the statutes is repealed.
AB462, s. 19 17Section 19. 111.70 (4) (cm) 8s. of the statutes is repealed.
AB462, s. 20 18Section 20. 111.70 (4) (d) 2. a. of the statutes is amended to read:
AB462,12,2219 111.70 (4) (d) 2. a. The commission shall determine the appropriate collective
20bargaining unit for the purpose of collective bargaining and shall whenever possible,
21unless otherwise required under this subchapter, avoid fragmentation by
22maintaining as few collective bargaining units as practicable in keeping with the size
23of the total municipal work force. In making such a determination, the commission
24may decide whether, in a particular case, the municipal employees in the same or
25several departments, divisions, institutions, crafts, professions, or other

1occupational groupings constitute a collective bargaining unit. Before making its
2determination, the commission may provide an opportunity for the municipal
3employees concerned to determine, by secret ballot, whether or not they desire to be
4established as a separate collective bargaining unit. The commission shall not
5decide, however, that any group of municipal employees constitutes an appropriate
6collective bargaining unit if the group includes both municipal employees who are
7school district professional employees and municipal employees who are not school
8district professional employees.
The commission shall not decide , however, that any
9other group of municipal employees constitutes an appropriate collective bargaining
10unit if the group includes both professional employees and nonprofessional
11employees, unless a majority of the professional employees vote for inclusion in the
12unit. The commission shall not decide that any group of municipal employees
13constitutes an appropriate collective bargaining unit if the group includes both craft
14employees and noncraft employees unless a majority of the craft employees vote for
15inclusion in the unit. The commission shall place the professional employees who are
16assigned to perform any services at a charter school, as defined in s. 115.001 (1), in
17a separate collective bargaining unit from a unit that includes any other professional
18employees whenever at least 30% of those professional employees request an election
19to be held to determine that issue and a majority of the professional employees at the
20charter school who cast votes in the election decide to be represented in a separate
21collective bargaining unit. Any vote taken under this subsection shall be by secret
22ballot.
AB462, s. 21 23Section 21. 111.70 (4) (jm) 4m. of the statutes is created to read:
AB462,13,424 111.70 (4) (jm) 4m. For the purpose of setting wages and determining hours and
25conditions of employment under subd. 4., if the arbitrator compares the wages,

1hours, and conditions of employment with the wages, hours, and conditions of
2employment of other employees performing similar services or in the same
3community or comparable communities, the arbitrator shall consider wages, hours,
4and conditions of employment as a whole, rather than as individual elements.
AB462, s. 22 5Section 22. 111.77 (6) (dm) of the statutes is created to read:
AB462,13,86 111.77 (6) (dm) In making the comparison of wages, hours, and conditions of
7employment under par (d), the arbitrator shall consider wages, hours, and conditions
8of employment as a whole, rather than as individual elements.
AB462, s. 23 9Section 23. 118.245 of the statutes is repealed.
AB462, s. 24 10Section 24. 119.04 (1) of the statutes is amended to read:
AB462,13,1811 119.04 (1) Subchapters IV, V and VII of ch. 115, ch. 121 and ss. 66.0235 (3) (c),
12115.01 (1) and (2), 115.28, 115.31, 115.33, 115.34, 115.343, 115.345, 115.361, 115.38
13(2), 115.45, 118.001 to 118.04, 118.045, 118.06, 118.07, 118.10, 118.12, 118.125 to
14118.14, 118.145 (4), 118.15, 118.153, 118.16, 118.162, 118.163, 118.164, 118.18,
15118.19, 118.20, 118.24 (1), (2) (c) to (f), (6) and (8), 118.245, 118.255, 118.258, 118.291,
16118.30 to 118.43, 118.51, 118.52, 118.55, 120.12 (5) and (15) to (26), 120.125, 120.13
17(1), (2) (b) to (g), (3), (14), (17) to (19), (26), (34), (35) and (37), 120.14 and 120.25 are
18applicable to a 1st class city school district and board.
AB462, s. 25 19Section 25. 121.91 (2m) (e) 2. of the statutes is amended to read:
AB462,13,2220 121.91 (2m) (e) 2. Multiply the amount of the revenue increase per pupil
21allowed under this subsection for the previous school year by the sum of 1.0 1.01 plus
22the allowable rate of increase under s. 73.0305 expressed as a decimal.
AB462, s. 26 23Section 26. Nonstatutory provisions.
AB462,14,224 (1) Notwithstanding section 65.95 (2) of the statutes, as created by this act, in
25the first fiscal year in which the spending limit established under this act applies,

1the base for determining the spending limit is the fiscal year that began in 2004, not
22005.
AB462, s. 27 3Section 27. Initial applicability.
AB462,14,54 (1) The treatment of section 65.95 of the statutes first applies to the fiscal year
5of a local governmental unit that begins in 2006.
AB462,14,116 (2) The treatment of section 111.70 (1) (b), (dm), (fm), and (nc) and (4) (cm) 5s.
7and 6. a., am., and b., 8m. a., b., and c., 8p., and 8s. and (d) 2. a. of the statutes first
8applies to petitions for arbitration that relate to collective bargaining agreements
9that cover periods beginning on or after July 1, 2005, and that are filed under section
10111.70 (4) (cm) 6. of the statutes, as affected by this act, on the effective date of this
11subsection.
AB462,14,1512 (3) The treatment of sections 111.70 (4) (c) 2m., (cm) 7. and 7r. d., e., f., and h.,
13and (jm) 4m. and 111.77 (6) (dm) of the statutes first applies to an arbitration decision
14that results from a petition for arbitration submitted on the effective date of this
15subsection.
AB462,14,1716 (4) The treatment of section 121.91 (2m) (e) 2. of the statutes first applies to the
17calculation of a school district's revenue limit for the 2006-07 school year.
AB462,14,1818 (End)
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