Summary
of Gov. Doyle's 2003-05 budget plan
Biennial Budget Sets Important Priorities in a Fiscal Crisis
The details provided in this initial summary reflect information in
the governor's budget speech and budget summary documents. The full
version of these documents are available online at the State
of Wisconsin Web site. The statutory language of the 2003-05 budget
was not analyzed for this summary.
The 2003-05 biennial budget has been introduced as 2003 Senate Bill
44. In addition, there are a number of items of potential interest to
WEAC in the governor's budget proposal that have not yet been fully
analyzed. Stay tuned to OnWEAC at www.weac.org for additional information
on the state budget as it becomes available.
Budget Timeline – Best-Guess Scenario for Review by the Joint
Finance Committee
The budget bill moves to the Joint Finance Committee first. The possible
timeline for passage by that committee is:
- Legislative Fiscal Bureau information papers on the budget completed
by March 17.
- Agency briefings immediately after the Fiscal Bureau papers are
released.
- Joint Finance Committee public hearings near the end of March and
into April.
- The JFC public hearing locations are: Milwaukee, Madison, Rhinelander,
Platteville, River Falls and Neenah/Menasha. It was also announced
that JFC would have video conferencing at three sites, connecting
the panel to other locations, expanding public access to the hearings.
Actual JFC hearing dates, times and places will be announced at a later
date. Stay tuned for future budget strategy and lobbying updates. WEAC
will rely on its members to deliver a strong message to the Republican-controlled
Legislature to keep education a top priority in the state budget.
Core Talking Points for Governor Doyle's Budget
- Governor Doyle made it clear in this budget speech that his number
one priority is education. He strongly believes that every kid deserves
a great school. Even during these tough fiscal times, he made room
in this budget for a modest increase in aid for K-12 schools.
- Governor Doyle made the case that our kids shouldn't have to pay
for Madison's mistakes with their futures and that he will fight to
make sure schools receive this funding. The governor found a way to
balance the budget and distribute reductions fairly while protecting
the education of children, who are our most precious resource.
- The budget ends a decade of unfair treatment of educators by repealing
the Qualified Economic Offer law. Ending the QEO will enable educators
to be part of the solution to the state's financial troubles. School
district professional employees will once again be able to work with
school boards to develop innovative contract language on educational
initiatives.
- The budget is only part of the school funding solution proposed
by the governor. A Governor's Task Force on School Finance will also
provide Wisconsin's citizens and decision-makers with a forum for
a broader public discussion on how the school finance system should
be restructured. WEAC will be a key player in this effort, making
sure that important issues such as the revenue caps and the creation
of a fairer system for distributing funds to schools are addressed.
- Training the workforce for jobs that provide good living wages in
high-needs areas is another key answer to solving the state fiscal
crisis. The governor agrees that classrooms of the Wisconsin Technical
College System (WTCS) are doing an excellent job of preparing people
for the new economy of the 21st century.
- The budget will boost the economy by helping to fill high-needs
jobs. It maintains funding for general state aid to the WTCS and increases
funding for grants to technical colleges to expand enrollments in
health care programs. There are also no additional cuts to other WTCS
categorical aid programs.
- WEAC will continue supporting budget solutions that balance the
need to eliminate the deficit with the need to preserve essential
state services to school districts and communities. The governor's
budget makes substantial cuts in state government. These are going
to be difficult and painful cuts affecting many people's lives.
- The governor recognizes and respects the crucial work that state
employees do, and has shown this by fully funding the state worker
contracts in the budget. WEAC believes that the state employee contracts
were negotiated in good faith and provide fair compensation. WEAC
agrees that the state employee contracts should be funded and approved
by the Legislature.
- The budget presented by Gov. Jim Doyle prescribes strong medicine
to cure Wisconsin's financial ills. Wisconsin is facing an unprecedented
budget shortfall. WEAC is committed to working with the governor and
Legislature to ensure the state continues its commitment to great
schools, classrooms that work, and great teachers and staff.
Overview of State Fiscal Crisis
The state of Wisconsin is $454 million in the hole this year and faces
a $3.2 billion shortfall over the next two. These summary points prepared
by the Doyle administration outline the severity of Wisconsin's fiscal
crisis:
- The FY04 and FY05 biennial budget represents Wisconsin's worst fiscal
crisis in more than 20 years.
- Assuming approval by the Legislature of the Governor's FY03 Deficit
Reduction Bill, the 2003-05 biennium will open with a carry-over deficit
of $292 million.
- The state has a "structural deficit" of $507 million
in FY03, the second year of the current biennium.
- This means that spending in FY04 exceeds taxes and other revenues
collected in FY03 by $507 million.
- As a result, the first $507 million of revenue growth in each
year of the next biennium is needed just to maintain base-level
spending.
- In order to maintain commitments made to local governments for 2003-04,
the budget must also find new funding to replace $598 million in one-time
tobacco securitization revenues used to fund shared revenue in 2002-03.
- An additional $300 million in other one-time measures and adjustments
(e.g., sick leave conversion payment holiday, debt restructuring,
etc.) used in balancing the 2001-03 budget must also be accommodated
in balancing the 2003-05 budget.
- The state faces substantial spending commitments and pressures which
will require large funding increases in other areas (e.g., corrections,
Medical Assistance, debt service payments, employee compensation reserves).
Fiscal Goals Established in Governor's Budget
The governor's budget blueprint establishes five priorities:
- Not to raise taxes – because Wisconsin taxpayers already pay
their fair share.
- To distribute budget cuts fairly – because we're all in this
together.
- To protect education, health care, key local services and the environment
– because no matter how deep this crisis is, we have to protect
what's most important.
- To reduce spending and make government more efficient – because
if we're going to ask the people of Wisconsin to accept less, we have
to do more with less.
- To do it once and do it right – because we need to get on with
Wisconsin's future, not return again and again to the problems of
the past.
Budget Highlights
Repeal the Qualified Economic Offer Law
The budget ends a decade of unfair treatment of educators by repealing
the Qualified Economic Offer law.
- The QEO has inflicted harm upon public schools and school employees
for the last ten years. Its repeal is long overdue. The QEO singles
out and penalizes one group of public employees. Teacher compensation
has lost ground to inflation over the last ten years, making it even
more difficult for districts to attract and retain the best and the
brightest.
- Ending the QEO will enable educators to be part of the solution
to the state's financial troubles. School district employees will
once again be able to work with school boards to develop innovative
contract language on educational initiatives.
- The governor's budget proposal restores fairness by eliminating
the QEO and will restore true collective bargaining at the local level.
- Repeal of the QEO will not diminish the goal of providing property
tax relief in the budget. Governor Doyle's budget fully funds the
property tax levy credit for a total of $938 million in property tax
relief for the biennium.
K-12 Education and School Aid Funding
Elementary and secondary school aids, including the school levy tax
credit, remain the single largest expenditure of state and general fund
resources, composing almost 49 percent of general fund revenues, more
than four times the next largest expenditure. The budget would:
- Provide $100 million increase over the biennium for school aids.
The additional aid is obtained through a transfer of revenue from
the Transportation Fund.
- School districts spend more than $300 million annually on pupil
transportation, which results in more than $200 million added
to the equalization aid appropriation for these expenditures.
Therefore, it is reasonable to make use of the Transportation
Fund to help subsidize the state's commitment to public education.
The additional $100 million represents a one percent increase
in equalization aid in fiscal year 2003-04 and a one-half percent
increase in fiscal year 2004-05.
- Provide a revenue cap exemption for up to 98 low-spending school
districts
- To assist low-spending school districts, increase the low revenue
exemption, above which school boards can increase per pupil expenditures
only by obtaining voter approval in a referendum, from the current
$6,900 per pupil to $7,400 per pupil in fiscal year 2003-04 and
$7,800 in fiscal year 2004-05.
- Maintain current law per-pupil increases in revenue caps.
- The governor's budget maintains current law per-pupil allowable
increases under revenue caps. This is expected to provide an allowable
per-pupil increase of approximately. $236 in FY '04 and $242 in
FY '05.
- Repeal the hold-harmless provision for equalization aid paid on
the first $1,000 of per- pupil spending.
- Under current law, all school districts with per-pupil property
values under $1,930,000, which is more than five times the statewide
average of $353,000, cannot lose any of the state aid received
on the first $1,000 they spend per-pupil. This provision was originally
implemented to ensure that all school districts, including those
with the highest property values per pupil, receive some aid under
the equalization aid formula. Without the hold harmless provision,
districts with very high property values would have been ineligible
to receive aid under the formula.
- Repeal the statutory commitment to fund two-thirds of local school
district operations costs.
- The governor has taken the first steps toward establishing a
fairer system for funding schools. The QEO will be repealed and
the new School Finance Task Force will finish what the governor
has started by addressing the overall question of how to better
distribute funds to local schools and work toward the eventual
elimination of revenue caps.
- Repeal the unfunded requirement for the state to develop and implement
a high school graduation test
- Maintain existing funding levels for all major categorical aid programs.
- This will maintain current level funding for programs including
the Student Achievement Guarantee in Education (SAGE) class-size
reduction, special education and bilingual education.
Wisconsin Technical College System
Wisconsin's technical colleges benefit everyone in the state. They are
the backbone of Wisconsin's economy, providing a great return on taxpayers'
investment. They provide classrooms that work for hundreds of thousands
of Wisconsin residents seeking education and training for new jobs;
or re-training for career advancement. The budget would:
- Maintain funding for general state aids for the WTCS at the 2002-03
base level of $118,415,000 GPR in each year of the 2003-05 biennium.
- Create a new categorical aid program through which the WTCS Board
would award grants to technical college districts to expand enrollments
in health care programs. This program would be funded at $4,340,000
GPR in 2003-04 and $5,450,000 GPR in 2004-05.
- In order to fund this initiative, the governor proposes the
elimination of two existing WTCS grant programs: capacity building
grants ($2,000,000 GPR in base funding) and additional course
section grants ($2,450,000 GPR in base funding) and a reduction
in Incentive Grants of $1,000,000 annually. While the bulk of
these eliminated dollars ($4,340,000 GPR) will be used to fund
the new Health Care Education Grants in the first year of the
biennium, $1,110,000 will revert to the general fund. In the second
year of the biennium, all of these eliminated dollars will fund
the Health Care Education Grants appropriation. Therefore, while
this proposal targets funds for health care initiatives, it reduces
total grant dollars available to the WTCS districts by $1,110,000
over the biennium.
- Increased funding of $200,000 PR in each year of the biennium for
firefighter training services. This amount would be equally divided
between the WTCS Board's appropriations for local assistance and state
operations. Revenue for this increase comes from fees assessed on
premiums on property insurance.
- Make no other changes to the base funding levels of all other WTCS
categorical aid programs.
- Eliminate the Higher Educational Aids Board and transfer its functions
to the UW Systems.
- Transfer the Governor's Work-Based Learning Board funding and staff
to the Department of Workforce Development Division of Workforce Solutions.
The Board itself will be re-named the Governor's Work-Based Learning
Council.
- Reduce WTCS office GPR operating budget by approximately 10% in
each year of the biennium. This amounts to a $350,000 annual reduction.
In addition, the System Office will lose 3.0 GPR FTE positions and
3.0 non-GPR FTE positions. Under the Governor's attorney consolidation
initiative, the System's currently vacant general counsel FTE position
will be eliminated as one of the three GPR FTE positions.
State Agency and Government Workforce Reductions
It will take some time to determine the total impact of budget reductions
on state agency employees. WEAC will work closely with Council #1 SPEIC
units to monitor how each state agency will implement requested cuts
in general operation budgets. WEAC will continue supporting budget solutions
that balance the need to eliminate the deficit with the need to preserve
essential state services to school districts and communities provided
by state government employees. The budget would:
- Set aside funding in the compensation reserves to fully fund the
anticipated 2003-05 cost of pay increases in the 2001-03 biennium
for represented state employees even though the state faces the largest
fiscal deficit in 20 years.
- Cut GPR state agency administrative operations spending, excluding
the University of Wisconsin System, by an average of almost ten percent
each year ($128 million GPR over the biennium).
- Reduce the overall size of the state government work force, excluding
certain University of Wisconsin System activities and the University
of Wisconsin Hospitals and Clinics Authority, by eliminating 2,900
state positions. Reduce administrative overhead, improve services
to the public and increase efficiency by eliminating eight agencies,
offices, boards and commissions and consolidating other functions
throughout state government.
During his budget address to the Legislature, Governor Doyle said that
while it may be politically easy to blame our problems on those who
draw their paychecks for serving our state, it's also dead wrong. He
highlighted the fact that state employees are dedicated, decent public
servants who love their state and care for its people. These are the
men and women who watch over troubled kids, protect our seniors, care
for our sick, keep our communities safe, and more. The fact that we
now employ more people than we can afford does not diminish the service
they provide.
For More Information
If you have comments or questions about this initial budget summary,
please contact Bob Burke, WEAC Legislative Coordinator, at burkeb@weac.org
or by phone at 800-362-98034 ext 254.
Posted February 20, 2003
