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Recently Passed Legislation

Congratulations ... It's a Budget!
Governor Signs 1997-99 State Budget Bill

By Jennifer Boese

Running three months over schedule, undergoing thousands of votes and hundreds of changes, the State Legislature finally has completed its work

Income Tax Changes in Budget Bill Income tax rate reduced by 1 percent beginning 1998; Standard deductions/tax brackets indexed for inflation starting 1999; Married couple tax credit increased; Working families tax cut - couples making less than $18,000; Long-term care tax cut - insurance premiums to be 100 percent deductible starting 1998.

on the budget bill. That budget, born Feb. 12 when introduced by Gov. Thompson, was scheduled for completion by July 1. But the budget bill was not signed into law until Oct. 11.

The final budget document differs in part from the governor's proposed budget. Notably absent are "truth in sentencing" and child support reforms. Viewed as substantive policy issues, these two items were removed from the budget early on with the intent of introducing them as separate pieces of legislation. While these and other initiatives failed to "make the cut," hundreds of other items did.

The 1997-99 Biennial Budget focuses on education, health care and transportation, but the cornerstone issue is income tax reduction. The income tax changes include indexing for inflation, eliminating the marriage tax penalty and a working families tax reduction. Tax changes also include adopting federal "check-the-box" regulations regarding the taxability of single-owner entities, and extending the Manufacturer's Sales Tax Credit for fuel and electricity to all business entities (that is, LLCs, LLPs and SCs), not just regular corporations.

Education reforms also play a significant role as the state will continue its two-thirds funding commitment for public education. Also provided is $204 million in grants and loans to purchase education technology equipment and training under the TEACH initiative. A Public School Choice component allows parents to send their children to any public school in the state, and academic learning standards will be implemented for K-12 in English, language arts, math, science and social studies.

New health-care reforms for low-income families are created under "Badger-Care," a state/federally funded insurance program offering Medicaid benefits. Nearly 50,000 low-income families will be eligible for this program. A Women's Health initiative will provide health information and services to targeted women and their children.

This budget contains a state transportation budget. The issue has engendered significant debate in the past, but this Legislature agreed on funding mechanisms. A $5 increase for vehicle registrations, a one cent increase in the gas tax and a temporary license plate requirement are all included. In addition, the state highway rehabilitation program, local road improvement, general transportation aids and elderly and disabled transportation each will receive at least a 10 percent funding increase.

Sandwiched between all the major items are many others of interest. Here is a sampling:

• eliminates Legislative Reference Bureau drafting privileges for 11 organizations, including the State Bar, that have drafting privileges but that are not a part of state government;
• allows chiropractors to establish a lien for services to any person sustaining personal injuries as a result of negligence, wrongful act or tort of any other person. Vetoed by the governor;
• provides additional $15 million for 1,000 prison beds;
• requires the Director of State Courts to complete a prison impact statement to determine what fiscal effect new legislation will have on the corrections system. Vetoed by the governor;
• revives Drug Tax Stamp Law, bringing Wisconsin law in line with recent U.S. Supreme Court ruling;
• provides funding for 14 assistant district attorney positions throughout Wisconsin;
• allots an additional judge for Oconto County;
• establishes criminal background and abuse checks on caregivers;
• provides that custodians of public records are not required to notify individuals before their records are supplied to a requester. Vetoed by the governor;
• increases justice information assistance fee from $5 to $7;
• reforms W2 child care copayments based on income and number of children, and increases cash grants for W2 participants;
• restores lottery tax credit that was ruled unconstitutional;
• increases cigarette tax by 15 cents;
• establishes brownfields grant program to help clean up abandoned and contaminated properties;
• retains state-funded recycling program through 2000; business recycling tax will sunset April 1, 1999, with state commitment to fund through 2004;
• provides post-adoption funding;
• approves state's takeover of the Milwaukee Child Welfare System;
• modifies federal Health Insurance Portability and Accountability Act of 1996;
• requires increase to salary component of qualified economic offer by amount of fringe benefits realized by school district employer. Vetoed by governor; and
• keeps prevailing wage responsibility in Department of Transportation for DOT projects.

Jennifer Boese is a State Bar government relations coordinator. For more information, she can be reached at (800) 444-9404, ext. 6045.