Strategies Newsletter 02/17/2017
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Governor Walker Unveils 2017-2019 Biennial Budget
On Wednesday, February 8, 2017, Governor Scott Walker delivered his fourth budget address and unveiled his proposed state spending plan for the 2017-2019 biennium. Governor Walker’s proposed budget spends $76 billion over the next two years – a 4.2% increase from the previous biennium. Some of the highlights of the governor’s budget include a $650 million increase for K-12 schools, numerous changes to state welfare programs, a 5% tuition cut for in-state students at UW campuses, a move to self-insurance for state employees, elimination of prevailing wage on state-funded projects, a tax cut for the two lowest income brackets, and $500 million in bonding for transportation projects.
A Closer Look at the Governor’s Budget
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K-12 Education Funding and Policy
The budget bill proposes a $649 million spending increase for K-12 education, as well as a handful of other policy changes related to public schools, private schools that participate in the choice voucher program, and charter schools. This amount includes an additional $30 million over the biennium, targeted to rural schools. If approved by the legislature, the total state funding for K-12 education proposed by the governor would be the most in state history.
Higher Education Funding and Policy
The budget proposes to increase state spending on the University of Wisconsin System by $105.2 million. In addition, the bill freezes resident undergraduate tuition in 2017-18 and would provide $35 million in state money to facilitate a 5% reduction in resident undergraduate tuition in 2018-19. In total, state spending on the UW System would be $2.2 billion over the biennium
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Administrative Law Changes
Governor Walker’s budget bill contains a number changes to Wisconsin administrative laws, including a version of the federal Regulations from the Executive in Need of Scrutiny Act (REINS Act). Below is a discussion of the specific amendments.
State REINS Act:
Under this proposed law, if an economic analysis indicates that a proposed administrative rule will cost $10 million or more in implementation or compliance costs for businesses, local governments, and individuals over any two-year period, the agency may not work on the rule until is introduced as a bill, passes the legislature, and signed into law by the Governor.
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Economic and Workforce Development
The governor’s budget message leaned heavily on the theme of workforce development and “rewarding work.” The governor highlighted Wisconsin’s improving unemployment rate and recent, albeit modest, increases in manufacturing jobs. Other recent analyses have demonstrated that Wisconsin’s rate of business closures outpaced its rate of new business starts, with only Eau Claire and Madison bucking this trend.
Rental Weatherization and Renewable Energy Program
The governor’s budget would repeal a program in place since 1985 that requires most rental housing units in Wisconsin to meet weatherization and energy efficiency standards established by the Department of Safety and Professional Services. The budget also repeals the weatherization inspector certification program, which is anticipated to reduce revenue to DSPS by approximately $121,000 in each year of the biennium.
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Not surprisingly, Governor Walker’s budget did not include tax or fee increases to pay for transportation projects, but he is proposing $500 million in new borrowing. Other transportation provisions in the budget include:
- $6.1 billion total investment in the state’s transportation network
- General transportation aids to counties and municipalities will increase by $40 million, or 9%, in 2018 for a total of $459 million
- State funding for Local Improvement Aids will increase by $7 million annually
- $6 million in new funding over the biennium for local bridge improvements
Updates from Strategies
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Understanding Administrative Rulemaking
In 2011, the Wisconsin legislature passed and Governor Walker signed 2011 Wisconsin Act 21. In short, Act 21 changed administrative rulemaking in three important and predominant ways:
- First, Act 21 empowered the governor to approve an agency’s preliminary administrative rule plans, i.e., scope statements, and gave the governor authority to approve or reject final rules.
- Second, agencies must have explicit statutory authority to promulgate a rule whereas in the past, agencies have relied upon statutory provisions that conveyed general powers and duties to even promulgate specific rules.
- Third, Act 21 significantly expanded the role of Economic Impact Analysis that state agencies must utilize.
President Trump Signs Executive Order Addressing Regulatory Reform
On January 30, 2017, President Trump signed a new executive order aimed at reducing regulation and controlling regulatory costs.
This executive order states that whenever a federal department or agency publicly proposes or promulgates a new regulation, it “shall identify at least two existing regulations to be repealed” and, additionally, that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.”
The executive order also directs the White House Office of Management and Budget, as part of the annual budget process, to identify “a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations for the next fiscal year.”
Focus on Water
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Water Policy important issue for WI
Water policy continues to be an important issue in Wisconsin, ranging from safe drinking water concerns to management of agricultural run-off and storm water run-off to use of water in manufacturing and agriculture. This week’s Focus on Water looks at the problem of lead in drinking water. In Wisconsin, tens of thousands of homes and many schools are served by aging lead water supply lines. These lead pipes pose a threat to human health when they begin to fail. The estimated cost of replacing these lines can be approximately $5,000 per home or more and much of this failing infrastructure is located in the poorest communities in the state, making the challenge of fixing the problem even more difficult. It is also possible that other solutions, short of pipe replacement, may exist or be developed that could be deployed at a lesser cost.
State Senate confirms Wisconsin Department of Health Services Secretary Linda Seemeyer.
Scott Walker’s Wisconsin: A Labor Model for Trump?
Wisconsin Gov. Scott Walker is working with Vice President Mike Pence on how they could model parts of Walker’s collective bargaining law and civil service reforms in Wisconsin to apply at the national level, in President Trump’s plans to overhaul the federal workforce. Pay would be based on performance and hire/fire decisions would be made on merit.
Read more on CBS News
Priebus Crafts Checklist for Rollout of New Initiatives: Report
Stemming from the recent outrage on President Trump’s executive orders, that were signed without being shared with government agencies, White House Chief of Staff Reince Priebus rolled out a 10-point communication checklist for signing off on all future orders.
Read more on The Hill
ACA Repeal Seen Thwarting State Addiction Efforts
Congress and President Trump discuss replacing the Affordable Care Act by cutting health care funding for low-income individuals and replacing the burden on the state level, potentially saving the federal government $1 trillion over a 10 year span. As the opioid epidemic still troubles the nation, governors and healthcare professionals caution the risks for doing so, potentially reversing states’ efforts of reducing the number of people addicted to opioids and at risk of drug overdose.
Read more on The PEW Charitable Trusts
Jackson County Landowners Look to Courts to Block Frac Sand Mining
A Canadian mining company proposes opening two sand mines with processing and loading facilities in Jackson County, Wis., covering up to 735 acres, laying down over 10 miles of railroad tracks, and infringing on the rights of six families’ properties. A handful of residents of Jackson County are pushing back with the help of Tom Lister, the attorney representing the plaintiffs. Lister is hoping to convince the court that the sand mines would be a hardship for the residents, and that they are unnecessary given the large number of mines across Wisconsin.
Read more on Lacrosse Tribune