Budget Stalemate Continues in State Capitol

Thursday, May 8, 2008 10:39 AM CDT

Joan Sanstadt, News Editor

There is still no agreement among Gov. Jim Doyle, the Wisconsin State Senate and the Wisconsin State Assembly on how to come to grips with the state’s $527 million budget shortfall.

It isn’t that the parties haven’t been meeting. They have. At one time it seemed as though Assembly Speaker Mike Huebsch (R-West Salem) and Senate Majority Leader Russ Decker (D-Weston) were very close to an agreement. The word was that they were just waiting for Gov. Jim Doyle’s approval. But the governor returned early last week from a trade mission to Ireland and, although there were meetings, no announcement was forthcoming.

Coming up with a temporary solution is the best we can hope for n and we have to pay careful attention to the word “temporary.”

Whether the ultimate decision is to raid segregated funds (such as the Transportation Fund), or to resort to new taxes (the hospital tax which is supposed to ultimately bring more federal money to the state), or to use an accounting gimmick such as delaying school aid payments into the next budget year n the result will be the same: another shortfall in the next budget year.

The only way another shortfall could be prevented is if the economy were to suddenly improve and somehow more than $500 million would appear in the state’s coffers. No one thinks that is likely to happen.

There’s been another idea “floating” around n but it’s not attributable to any one person. That idea is to somehow combine a vote on the Great Lakes Compact with a vote on a Budget Repair Bill.

Two legislative leaders, State Senators Michael Ellis (R-Neenah) and Robert Cowles (R-Green Bay) are urging Huebsch and Decker to keep the two bills separate.

Cowles and Ellis, in a letter to Huebsch and Decker, said “it appears the primary reason for combining these two bills is to achieve a political objective of obtaining a majority vote in each house by forcing legislators who strongly support and want to vote for one topic n the Compact, for example n to have to also vote for another proposal with which they may disagree. Frankly, that’s a cynical ploy and exactly the type of politics that Wisconsin voters are getting tired of.”

“Forcing legislators to vote for something they oppose because it also contains something they support is unfair to legislators and to their constituents,” Ellis said.

Department of Administration Secretary Michael Morgan wrote to Senator Mark Miller (D-Monona) and State Representative Kitty Rhoades (R-Hudson) about the state’s General Fund Cash Forecast from April 2008 to September 2008. Miller and Rhoades are co-chairs of the Joint Finance Committee.

Morgan emphasized the forecast was preliminary. Here’s what he wrote:

“The General Fund will experience low balances from April 1, 2008, to April 20, 2008, and from June 16, 2008, to September 30, 2008. During these periods it will become necessary to exercise the authority granted under s.20.002(11)(a), Wisconsin Statutes, pertaining to the reallocation of certain eligible surplus moneys.

“Failure to reach a compromise on the budget adjustment legislation will result in a cash deficit in the general fund that exceeds allowable levels by August 2008. If this allowable level is exceeded, state statutes require the Department of Administration, with review and approval of the Joint Committee on Finance, to delay and prorate payments to vendors, schools and local governments.”

The statute mentioned by Morgan allows the for exercise of “reallocation authority” over other funds that include the General Fund, the Dry Cleaner Environmental Response Fund, the Injured Patients and Families Compensation Fund, the Worker’s Compensation Fund, and the Wisconsin Health Education Loan Repayment Fund.

One of the consequences that could result if an agreement on the budget shortfall is not reached would involve bridge and road projects.

Craig Thompson, executive director of the Transportation Development Association (TDA), said in a news release late last week that only 11 days remain for an agreement to be reached “before the Governor could exercise his ‘doomsday option’.”

Thompson went on to say May 13 is the deadline because that is the date of May bid-lettings (for road projects).

“One of the conditions the Governor is holding out for is a transfer of several hundred million dollars from the Transportation Fund to the General Fund. Both Senate Democratic leadership and Assembly Republican leadership have been unwilling to agree to such a transfer,” Thompson pointed out.

The TDA executive said if the “doomsday option” is implemented more than 2,000 Wisconsin workers will be out of a job.

Elected officials n including the governor and legislative leaders n do not have easy jobs. The decisions they make can come back to haunt them and can provide fodder for opponents in the next election cycle.

But the voters who elected them in the last election cycle are expecting them to make those hard decisions NOW!

Paul Zimmerman, executive director of public affairs for the Wisconsin Farm Bureau Federation (WFBF), said farmers can relate to money shortages.

“Not having enough money is no different for the state than for a farmer. Maybe the farmer would like a new tractor, but just can’t afford it this year. So the farmer will wait another year n in some regards, that’s the same position the state is in. If it can’t get enough tax collections in, it may have to forego some of items in the current budget,” Zimmerman said, adding “the amount of money in the shortfall is not a huge percentage of the total state budget.”

Whether or not the economy is turning around won’t be known until the end of the year. “The best guesstimation,” Zimmerman continued, “is the closer all of this gets to the November elections, the more difficult it will be to increase taxes or cut programs. It’s especially difficult for people who are up for re-election, because there are two different viewpoints about the solution.”

DNR faces lawsuit

Last week nine industry groups filed a lawsuit in Dane County Circuit Court to enforce key rulemaking provisions of the Job Creation Act (2003 Wis. Act 118) that went into effect in 2004.

The groups include the Aggregate Producers of Wisconsin, Inc., Midwest Food Processors Association, Inc., Wisconsin Builders’ Association, Wisconsin Cast Metals Association, Inc., Wisconsin Economic Development Association, Inc., Wisconsin Industrial Energy Group, Inc., Wisconsin Manufacturers & Commerce, Inc., Wisconsin Paper Council, Inc., and the Wisconsin Utility Investors, Inc.

These groups are represented by Attorney Dennis Birke, of DeWitt Ross & Stevens, S.C., a Madison law firm.

The groups are asking the judge to direct the Wisconsin Department of Natural Resources (DNR) to temporarily suspend its rulemaking on an electric utility regulation until the DNR complies with key statutory rulemaking procedures.

That Jobs Creation Act included several key public notice requirements to help streamline the permit process and ensure that government regulators allow for meaningful public input and analysis in the process of creating new regulations.

Before a department can begin its rulemaking process it is supposed to issue a scope statement.

Birke told Agri-View the DNR’s 2005 scope statement (on what is sometimes called “the mercury rule”) modified the Wisconsin mercury rules that were then in effect to make them consistent with the federal rule that the Environmental Protection Agency (EPA) had just released.

The scope statement prepared by the DNR at that time was to “establish Wisconsin regulations that would mirror the federal standards,” Birke said.

“Those federal standards were invalidated earlier this year so currently there is no federal mercury standard. The state is now proposing to establish a new state standard that has no ties whatsoever with a federal standard,” he added.

What’s more, Birke said, the DNR proposal establishes rules for reducing nitrogen oxide and sulfur dioxide, which were not even mentioned in the 2005 rule.

“The regulated community relies on publication of scope statements to let them know what rulemaking is being undertaken. This requires adequate notice of the kinds of things that will go into the rule. We think the 2005 scope statement does nothing to put the regulated community on notice.

“The DNR’s action goes beyond the notice issue,” Birke continued. “That’s because the publication of a scope statement triggers other rights from members of the regulated community n such as the right to ask for an economic impact report.”

There’s also a question of timing as to when the request for an economic impact report would have had to be made. “When the DNR proposed new rules on Feb. 29, 2008, one client immediately asked for an economic impact report. The agency said it was too late n the request would have had to have been made within 90 days of the 2005 publication,” Birke related.

“Because this new rule is very different than the one in 2005, we would like an economic impact report so everyone knows what the cost of this will be n before the rule is promulgated. My clients are entitled to that report and the agency should have to provide it. What’s more the legislature will need it before it conducts its review of the proposed rule,” Birke pointed out.

“We believe the DNR, by trying to rely on the 2005 scope statement, is attempting to evade its obligations to provide us with an economic impact report,” Birke said.

While revising a scope statement is not unusual, “dusting off an old scope statement that has been sitting on a shelf” is unusual, the attorney related.

“Had the DNR issued an accurate scope statement for this rule, the affected parties would have had the opportunity to request an economic impact report during the statutory 90-day window. The lack of an accurate scope statement has prevented Wisconsin businesses, lawmakers and electric ratepayers from availing themselves of their due process rights to request preparation of this critical economic report. This suit seeks to compel the DNR to comply with Wisconsin’s statutory rulemaking procedures,” Birke said.

“We are hoping to get a hearing before a judge in the coming week,” Birke said. “We believe the DNR plans to submit rules on this at its June 24-25 meeting.”

Al Shea, the administrator of the DNR’s air and waste management division, is on vacation this week and not available for comment. Agri-View will contact Shea when he returns and ask him for his comments.

Capitol Notes:

- A conservation easement and $12,000 of stewardship monies have been donated by Dairyland Power Company to the Mississippi Valley Conservancy (MVC). The easement and the money will allow MVC to permanently preserve 110 acres of Mississippi River bluffland near Alma in Buffalo County.

- The USS Green Bay is reaching the final stages of its construction in Avondale, La. Designated LPD-20 (Landing Platform Dock), the ship is designed to move and deploy ground troops via sea. The ship is expected to be delivered to Green Bay by Aug. 29

- In case you missed it n the cougar shot by police in Chicago on April 16 is the same animal that visited Milton last January. DNA tests show the animal was the same and probably originated from the Black Hills region in South Dakota.

- Wisconsin’s new toll free hotline the public can use to report alleged incidents of fraud, waste or mismanagement in state government is up and running. Such problems “can’t be fixed if no one knows about it,” said State. Rep. Lee Nerison (R-Westby). By law the identity of callers will be kept confidential. The number is 877-FRAUD-17.

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