Rick's Notebook

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Rick's Notebook

I will post my monthly magazine articles here for your convenience. As other topics come up, they will be posted here as well. Visit the archive to see earlier articles.
Regards, Rick Stadelman - Executive Director.

Your Input to WTA Is Requested

            Wisconsin Towns Association (WTA) is requesting five minutes of your time to assist the WTA Board of Directors in a strategic planning process for the future of the Association. More on how you can give your input later in this article, but some background to help explain why this process is being taken on.

            As a voluntary association of towns and villages, WTA was organized over 60 years ago for two principal functions: to provide information, education, and training to local officials and to promote the interests of town and village government at the state and federal level.  We have done that in a variety of methods over the years. Currently we have five full time employees, two part-time employees and two contract lobbyists hired on a part-time basis.

            Over the years we have expanded the number of meetings, training sessions, and other venues to provide training to you as member town and village officers.  We have partnered with other organizations to reach out to every part of the state. One of the most valuable methods of providing information and promoting local government interests have been the county unit meetings held periodically in each county.

            Our association has tried to place information and educational material along with lobbying information in each member officer each month through the WTA magazine (published monthly and mailed to every individual member officer). The association has expanded the legal staff from a part-time attorney to two full time attorneys available every week day from 8:00 a.m. to 4:00 p.m. at the headquarters in Shawano. These attorneys answer telephone calls, emails, faxes, and letters.  {We would prefer telephone calls or emails, because it gives us an opportunity to clarify the facts and circumstances surrounding your individual questions.}

            While our staff believes that we have come a long ways from the first part-time Executive Director/Lobbyist of the early 1950’s to the present, it is it is valuable from time for association staff and leaders to step back and ask some basic questions. Are we meeting the needs of our members?  What could we do better to serve the members? What future issues and needs do the members want the association to address? And more….

            The WTA Board of Directors has approved using an outside facilitator to assist in addressing these and other issues of importance to the members. We will use the services of Lighthouse Leadership to go through this strategic planning process. Mike Krutza and Jodi Wiff of  Lighthouse Leadership will guide our board and staff through this process.

            Now comes how you as member town and village officers can both be a part of this process and give your ideas and input into the future direction of the association. A thirteen question survey that can be answered on-line will give the board and staff your opinions. You can link to the survey (on-line) at the WTA website: www.wisctowns.com

 The entire survey will take about five minutes to complete on-line.

            The thirteen questions of the survey (for which ten questions you will only need to check one or more options)  are as follows:
  1. What WTA District are you in? (See inside cover of this magazine for the WTA district map.)
  2. What are the biggest challenges in your town? (check all that apply)
  3. What do you feel is the most effective way to get answers or information on issues affecting your town? (check top 3)
  4. As a town board what do you spend the largest percent of your time dealing with? (check two)
  5. What do you look to the WTA for? (check all that apply)
  6. The WTA education programs are: (check all that apply)
  7. We view the WTA lobbying effort as: (check all that apply)
  8. The WTA legal staff and resources are: (check all that apply)
  9. In the past 12 months our town has contacted the WTA via phone, fax, email, or in person? (check one)
  10. Rate the value of the membership in WTA? (check one)
  11. I would like to see the WTA do more of? (e.g. are there any other services WTA should provide or training topics WTA should cover?)
  12. What is a current frustration of your local town board?
  13. If you were to project five years out—what will be the key challenges for your town board?
Please complete by Monday, Sept. 15, 2008!

As you can see ten of the questions ask you only to check one or two answers or in some cases all that apply from options available. The last three questions will allow (if you want) to offer up to 500 words of ideas and comments for each question. Several people have already taken the survey and found it very easy to complete and generally takes about five minutes.

            The survey results will be reported back to the association membership at the 2008 WTA Convention on Tuesday, October 7, 2008. In fact we will have a workshop at 1:00 p.m. on that day that you will be able to not only hear the results of the survey but give additional information to the representatives from Lighthouse Leadership.

            The WTA Board of Directors will be meeting in late October, 2008 for a two day session with Lighthouse Leadership to review the survey and discuss the future direction of the Association. This may include future staffing needs, educational programming, and other services to meet the needs of the member towns and villages. This planning process is intended to continue those services that you as member town and village officers find the most useful and at the same time improve and increase those services that will meet your needs for years to come. The Board will be looking at these issues in terms of both short term and for the long term future.

            Again, your input by answering the survey (on-line) will be a key part in this planning process.  Please go to the link to the survey at the WTA website at www.wisctowns.com and complete the survey in about five minutes. If you have never taken an on-line survey before, ask someone (such as a high school student) to help you access the survey. You will find the experience very easy to complete and may be your first step to the world of the world wide web. If you do not have computer/internet access, we will send you a paper copy of the survey that you can complete and mail to Lighthouse Leadership for inclusion in the final tabulations. Every town and village officer’s opinion is important to us!  Please complete by Monday, September 15, 2008.
            Thank you to all who answer the survey on-line or by mail. Attend the 2008 WTA Convention to hear more about the survey results and give your personal input with your ideas and comments. With your help Wisconsin Towns Association can be even stronger in the future!
2008 Fall Budget and Finance Workshops

            We  want to remind everyone of the  2008 Fall Budget and Finance Workshops noticed in  last  month’s  magazine and  again this month later in this magazine.  There will be day-long sessions  at  nine locations throughout  Wisconsin from  Sept. 11th to  Sept.  26th.   These sessions  have two  tracks.  One track focuses  on “Basic Finance”  including such topics as  Financial Administration,  Federal Payroll Responsibilities,  Budgeting and Auditing  Basics.  The  second track  includes  new topics  such as ideas on  how to meet tight budgets by  costing cutting methods and raising new  funds other than property taxes;  the details of the current levy limits;  using GREAT  (Graphing Revenues, Expenditures, and Taxes)  to  compare your town or village with other communities;  tips on hiring professional services (such as architects, engineers,  planners,  assessors, and  building inspectors);  along with  several current fire department issues.

            The  presenters  include  Tom Harnisch,  WTA Education Director,  or Rick Stadelman, Executive Director  along with  Kate  Lawton of  University of Wisconsin Extension—Local Government Center;  Carol Doran  of the Wis. Dept. of Revenue;  and  Ruthann Watts of the IRS.   All of these presenters are  experienced  in their  areas of expertise and  deal with town and village issues  every  day.

            These types of  one day sessions are presented around the state at  nine locations to  reduce the  travel time for  you as  town and village officers.  We  encourage you   and your fellow officers to attend one of the  sessions in your  area.  With tight budgets and  levy limits,  it is all the more important to  have a  good  handle on your  financial administration  issues in your  town or village.  The cost of registration and  time you  spend will be well worth it to  your  community.  Register  now!
2008 WTA  Annual Convention

            The  tentative agenda for the  2008 WTA  Annual Convention  at  the  Radisson Paper Valley Hotel & Convention Center  in  Appleton, Wis. from  Sunday, October 5th through  Wednesday,  October 8th  was  included in both the  July and August WTA magazines and  is available on-line at the  WTA  website (which is given on the front cover of this magazine). 

            On  Monday, October 6th, the  convention program includes the following valuable training opportunities:

(a)  Local Roads Improvement Prog. (TRIP)

(b) Wind Turbine Siting and possible legislative changes

(c) Working Lands---Preservation of agricultural and  forest lands

(d)  Timely filing of Workers Compensation Claim Report

(e)  Federal Labor Standards for municipal employees

(f)  Town  Roles in Land Divisions/Plats

(g)  Invasive species  and  best management practices for  highway corridors

(h)   Safety at Recycling and Solid Waste drop off  Facilities

(i)  Municipal Intergovernmental agreements

(j)   Storm water utility district formation

            On  Tuesday,  October 7th,  the  program includes the following:

(a) An introduction to Performance Management for towns and villages

(b)   CDARS Program—Municipal Deposits

(c)   Municipal Constitutional Takings

(d)   Clerks Workshop on Elections  presented by the State Elections Staff

(e)   Wis. Deferred Compensation Program

(f)  Cluster Wastewater Systems—for small unsewered developments

(g)  Treasurers Cracker Barrel

(h)  Wis. Energy Independent Communities

            See the  WTA website or  the last two monthly magazines for more details.  A  registration form is provided later in this magazine along with hotel information.

 

Health Insurance Program--August, 2008

Over the years we have received many calls from town and village officers on the possibility of health insurance options for employees and even officers. In the fall of 2007, our association sent out a survey to member towns and villages to determine the member interest in health insurance for town employees and officers. 638 responses were received from the 1255 member towns and 17 member villages. More on these survey results later in this article. First, some general background on health insurance costs.

 

Despite slowing, increases in the cost of health insurance premiums continue to be greater than those of inflation and wages, the Kaiser Family Foundation reports. Premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007, less than the 7.7 percent increase reported last year but still higher than the increase in workers’ wages (3.7 percent) or the overall inflation rate (2.6 percent), according to the 2007 Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The 6.1 percent average increase this year was the slowest rate of premium growth since 1999, when premiums rose 5.3 percent, according to the summary of findings. Yet premiums for family coverage have increased 78 percent since 2001, while wages have gone up 19 percent and inflation has gone up 17 percent.

            The total average annual cost for family coverage premiums rose this year to $12,106, and workers on average now pay $3,281 out of their paychecks to cover their share of the cost of a family policy. Sixty percent of employers offer health benefits, including nearly all large companies with 200 or more workers. Fewer than half of small businesses with three to nine employees do so, the survey found. See table #1 at top of next page.

            Health insurance benefits are an important part of recruitment and retention and necessary to compete for well-trained employees. Without a quality health plan available an employer (including a town or village) is at a distinct disadvantage. How does a small employer deal with the rising costs while still being able to even offer benefits?

Initially there had been the hope of putting together an association group health plan, however based on the make up and composition of the different members we were unable to create an association group plan. While the Wisconsin Town’s association met most of the guidelines to become a bona fide association, a minimum of 500 enrolled lives is also required. Based on the results of the survey (discussed below), we were unable to ensure 500 enrolled lives and therefore are unable to secure a bona fide association plan at this time.

 

WTA 2007 Survey Results

Of the 1255 towns and 17 village WTA members, we received 638 responses.

Status of current Health Insurance:
480 of these responses (with a total of 308 full time employees) do not currently offer insurance. 133 units (with a combined total of 591 total full time employees of which 549 are insured) offer health insurance. 25 responses did not indicate the whether they offer insurance.
Satisfaction of those with insurance:
95 towns/villages that responded (with 465 insured employees) indicated they were satisfied with their current plan. 31 units (with 81 insured employees) were not satisfied with their current plan. 6 units did not respond to this question.
 
Type of Health Plans currently in place:

42 towns/villages (with a combined 166 insured employees) are under an HMO plan.

46 units (with a combined 198 insured employees) are under a PPO plan. 15 responses (with 118 insured employees) are under a plan classified as “other.” 9 units (with 20 insured employees) are under a POS plan. 21 responses (with a combined 47 insured employees) did not respond to this question.
 
Ranking of Price, Service, Benefits, and Providers the most important factors:

79 responses (with combined 379 insured employees) regard Price as the highest

priority item. 28 groups (with combined 103 total insured employees) regard Benefits as the highest priority. 20 responses (with combined 81 total insured employees) regard Service as the highest priority.
17 towns/villages (with combined 115 insured employees) regard Providers as the highest priority.  **Note some surveys were not completed as requested and some ranked more than one item as the highest priority.
Group Sizes of Units Responding:
Zero Full Time employees--      155 responses
1 Full time employee--  210 responses
2 Full time employees--            79 responses
3 Full time employees--            24 responses
4 Full time employees--            11 responses
5 Full time employees--            8 responses
6 Full time employees--            6 responses
7 Full time employees--            5 responses
8 Full time employees--            1 response
9 Full time employees--            1 response
10 to 15 Full time employees—12 responses
16 to 23 Full time employees—13 responses
92 Full time employees--          1 response
122 responses did not indicate employee #’s
            As indicated above, based upon these survey results we were unable to ensure 500 minimum enrolled lives and therefore are unable to secure a bona fide association plan at this time. Through creative brainstorming another solution was brought to the table.

Association Endorsement Announced
            The Wisconsin Towns Association is pleased to announce the endorsement of The Phoenix Group as their representative agency. The Phoenix Group has a long standing commitment to servicing their insurance clients over the past 50 plus years. Their innovative approaches for containing health care premiums and experience in creative benefit plan deigns impressed the board. They have multiple locations in the state and technology to help support your day to day employee benefits delivery and administration.
            In conjunction with The Phoenix Group the Wisconsin Towns Association has chosen to endorse Anthem Blue Cross and Blue Shield as the carrier of choice. Why the choice of Anthem?
 

As part of the WellPoint, Inc. family which covers over 34 million members nationwide, Anthem offers the unparalleled strength of the Blue Cross and Blue Shield brand through a full range and choice of quality branded health benefits and financial services designed to meet the changing expectations of individuals, families and their sponsors through a lifelong relationship.

 
A trusted household name, Anthem Blue Cross and Blue Shield’s mission is to improve the lives of the people they serve and the health of our communities. Anthem Blue Cross and Blue Shield offers network-based managed care plans to the large and small employer, individual, Medicaid and senior markets.
 
Why Anthem Blue Cross and Blue Shield group products?
  • A full portfolio of managed care plans including preferred provider organizations, point-of-service plans, Lumenos consumer driven health plans(HSAs) and hospital surgical plans.
  • A full portfolio of specialty products including life, dental, disability, vision and behavioral health benefits.
  • Dual choicing – groups can offer two plan design options to employees
  • Preventative care and wellness – Lumenos HSA, 100% no dollar limit
  • Anthem Care Comparison, a tool which represents initial steps towards health care price disclosures.
  • 360° Health which is designed to surround our members and their families with 360 degrees of preventive care resources, wellness information, savings and incentives and care management services.
  • Expansive networks – http://www.anthem.com/home-visitors.html
  • BlueCard – includes international coverage at over 200 hospitals worldwide
  • Discount packaging – 5% discount on dental rates if medical/dental sold together (2-50 group size only)
  • Full complement of online tools for both employer and employee
 Why Anthem Blue Cross and Blue Shield individual products?
  • Robust product portfolio including a full suite of Lumenos Consumer Driven Health Plans
  • Optional life and dental insurance products
  • Preventative care and wellness benefits subject to plan design
  • 24 hour coverage
  • Unmarried children can remain on the plan to the end of the calendar month in which they turn 25 - no student requirement
  • Domestic partner coverage
  • No riders
  • Maternity coverage benefit option available
  • Underwriting opinion forms
  • Expansive networks - http://www.anthem.com/home-visitors.html
  • BlueCard – includes international coverage at over 200 hospitals worldwide
  • Online tools available

With Anthem, you get the best of two worlds – the financial stability and innovation of a widely recognized company such as Wellpoint along with the local and personalized service of Anthem.

 

Rollout of Program

            Starting at the 2008 WTA Annual Convention at the Paper Valley Radisson Hotel, October 5-8, 2008 town and village officers will begin to hear more information regarding the health plans we will be rolling out. These options will be flexible for group or individual coverage. All plans once underwritten are scheduled to go into effect
 December 1, 2008. (The timing of this is to assist with towns and villages in being prudent and fiscally responsible in their budgeting for any costs should the town or village take a plan with employer contributions, although this is not required.)
            The standard underwriting process will be used for group coverage. The State of Wisconsin 9 page employee application will be required for all benefit eligible employees. Applications will be available for pick up and explanation at the October meetings. The Phoenix Group and Anthem Blue Cross and Blue Shield will be manning a booth at the WTA Annual Convention.  In addition to the attendance at the Convention, there will also be Field Underwriting Days. Dedicated underwriters, priority attention to groups, and one predetermined week for group sizes 2-50 enrolled.
In addition to the traditional group plans available, Anthem Blue Cross and Blue Shield also has individual plan designs available to elected officials, part time employees and other individuals not eligible for group coverage. Individual coverage is not mandated by the state and rates are dependent on your individual risk factors. You may complete an Underwriting opinion form (at no obligation) to see if Anthem Blue Cross and Blue Shield will be a good fit for you.             Once groups are underwritten and enrolled, there will be prompt issuance of ID cards to employees and Welcome Kit to employers.
            Each group (town or village) will be renewed individually with underwriting consideration of all Wisconsin Towns Association groups subject to state law. Based on your membership with the Wisconsin Towns Association, you will receive Priority Account Manager attention at renewal.
 

Health Savings Accounts

            One of the options available to towns and villages to control health costs will be the use of Health Savings Accounts. Here is information on how this tool may be used to control such costs for the employers, insured employees and individual health plan participants.
 
Consumer Driven Health - Invest in Your Future: Health Savings Accounts
 

How is it possible to keep control of unused health dollars for future use? There is an investment tool people are taking advantage of in increasing numbers—the health savings account (HSA).

HSAs serve as a pre-tax and pre-FICA fund that can be used to save for the day medical expenses are actually incurred. The account is consumer-controlled. If the funds are not used, the money will continue to grow over time. One of the most attractive features of the HSA is that these funds grow through the accrual of tax-free interest.

The HSA is proving itself to be a wise investment tool, not only for health care needs, but also for long-term retirement planning. The HSA fund is tax-deductible, compounds tax-free interest, and is tax-free to withdraw for medical bills, in comparison to IRA distributions that are always taxable. Also, people ages 55 to 64 can make additional contributions called “catch-up payments” to their accounts to accelerate the rate of savings.

Statistically, Americans spend less than $500 per year on health care, so for most people any money over about $500 that can be put away in the HSA becomes a powerful investment tool for the future. Maximum allowable contributions enhance this opportunity further, particularly for those investing at a younger age.

And since any HSA can be invested in the market just like a 401(k), with tax-free interest, the opportunity for long-term growth is exponential.

Consumer-driven financial tools like HSAs encourage the development of families and communities that are incentivized to better manage health expenditures. This in turn facilitates a focus on healthier lifestyle choices, which ultimately takes some of the burden off the health care system. It only works because individuals and families have something to gain financially that also leads to living a longer, healthier life.

At any income level, a savings account that simultaneously drives participants to save money, live a healthier lifestyle, and make better health care decisions is a truly valuable resource. HSAs are wise investment tools that effectively fund health care needs now and in the future. It’s a win-win for consumers and the community.

For more information now on the Wisconsin Town’s Association plan enrollment or consumer driven health, please contact The Phoenix Group at:
The Phoenix Group of Wisconsin
39 S. Marr Street    PO Box 950     Fond du Lac WI 54935
Toll Free: (800) 236-1204
Fax: (866) 218-6850

 

Penny Koehler, Account Executive/Sales Service and Support

Email: pkoehler@thephoenixgrp.com

Ext. 1219  or

Tracy Breister, Assistant Vice President

Email: tbreister@thephoenixgrp.com

Ext. 1123

 

 

2008 WTA Annual Convention Announcement--July, 2008

            Following this page is the 2008 WTA Annual Convention Announcement with tentative agenda for workshops and activities scheduled at this year’s convention at the Radisson Paper Valley Hotel & Convention Center in Appleton, Wis. Sunday, October 5th through Wednesday noon on October 8, 2008. Over 25 different workshop topics will be presented over the two and one half days. Additional topics will also be announced in the August WTA magazine (next month’s) including the assessor’s workshops for Monday and Tuesday of that week. Exhibitor space is limited at the Paper Valley Hotel, but nearly 70 different exhibits will be on display.

            We encourage spouses and guests to register and join in the general assemblies, workshops, and/or spouse/guest optional events. See the Convention Highlights on the following pages for more details.

            If you are a new official or have never attended a WTA Annual Convention we urge you to consider attending. It is an opportunity to hear some of the best speakers on individual topics (both at the general assemblies and workshops). The convention mixes the business of education and training with the pleasure of social time with fellow town and village officers. We would encourage you to invite your town administrators, plan commission members, and any other interested town or village personnel. One day registration rates are available (see registration form). 

            Note that music for your dancing pleasure and musical entertainment will be offered only on Monday evening (8:00 p.m. to 11:30 p.m.) at no charge to registered attendees by the Charles Justmann Band.

            On Tuesday evening the Annual Awards Banquet features a humorist speaker (C.Willi Myles, see more details in Convention Highlights) As a part of the Awards banquet we will be recognizing officers who have served in one or more offices for more than 30 years. For those individuals recognized in 2007 for over 30 years service in elected office, we will still be recognizing those at plateaus of 35, 40, 45, 50, 55, or 60 years. Please mark the registration form appropriately to assist in receiving the recognition.

            See our WTA website at wisctowns.com for more information.
 

Fall Budget and Finance Workshops

            Later in this magazine we have a one page announcement of the agenda and dates/locations for the 2008 Fall Budget and Finance Workshops. These one day sessions will be held in nine locations statewide in the second, third and fourth week of September around the state. Mark your calendar now for the date and location most convenient for you. A complete registration form will appear in the August magazine and will be available on our WTA website (in the next week or so). These sessions are focused on budgeting and financial administration for all towns and villages.

WTA/UTC Cracker Barrels

& Listening Sessions

As in past years we will be conducting cracker barrel sessions on legislative updates and developing our Legislative Agenda for the next two years at locations around the state. See the one page announcement later in this magazine. Please bring your thoughts and ideas! No pre-registration is required!  Just show  up!

 

State Budget Repair Bill – June 2008

             On Monday, May 12, 2008, the State legislative leaders announced the details of a conference committee report to the Assembly Bill #1 in the March 2008 Special Session (known as the State Budget Repair Bill). As reported in the WTA April Report this bill was required due re-estimates of projected state revenues and expenditures for the balance of this biennium. The latest legislative estimates projected a $525 million deficit as of June 30, 2009, unless legislative action was taken.  

            Each house acted on the conference committee report. Legislators cannot amend a conference committee report. They can only vote for or against the report. On Tuesday, May 13, 2008, the State Senate voted 17 in favor and 16 against the report. On Wednesday, May 14, 2008, the State Assembly voted 51 in favor and 46 against with two members not voting. The bill as passed by the legislature then went to the Governor who exercised his veto pen and signed the bill with vetoes on Friday, May 16, 2008. This article will describe some of the most significant provisions of the budget repair bill as passed by the legislature and then modified by the Governor’s vetoes. 

            The budget repair bill as passed by the legislature provided the Secretary of the Dept. of Administration (DOA) was directed to lapse or transfer $69 million for the remainder of the biennium (before June 30, 2009) to the general fund which was to be in addition to the lapses or transfers of $200 million required under the State Budget Act (2007 Wis. Act 20) adopted last October. The budget repair bill specifically limited the transfers from the Transportation Fund to no more than $50 million which was to be replaced by $50 million of General Purpose Obligation Bonds. However, Governor Doyle through the use of his veto power, eliminated the $50 million limit on transfers from the Transportation Fund. The Governor stated he would direct the Secretary of DOA to transfer $103 million from the Transportation Fund to the General Purpose Fund to cover the projected deficit. The total amount of lapses or transfers to the General Purpose Fund will require a total of lapses and transfers to be $270 million of which this $103 million from the Transportation Fund will be a part of. More about the impact of this transfer from the Transportation Fund later. 

            The legislature had proposed in the budget repair bill several other measures to balance the state budget. For example, the budget repair bill presented to the Governor proposed delaying an additional $125 million of school equalization aids from the third week of June to the first week of July beginning in 2008. This delay would be in addition to an existing $75 million of school aid payments already delayed by past legislative action from June to July. Another provision in the budget repair bill proposed delaying the April quarterly county general transportation aid payment to July. Both of these provisions did not actually reduce the state’s obligation to make the payments, but by pushing the payment date past June 30, 2009, the amounts under both of these obligations would not be due in this biennium ending June 30, 2009, thus on paper reducing the projected state deficit as of that date.  

            The Governor vetoed the $125 million delay in the school equalization aid payment (however remember past legislative action still provides for a delay of $75 million from June to July). The Governor did not veto the delay of the county general transportation aid payment from April to July. Therefore, starting in this year (2008) counties will not receive an April payment and must wait until July for that payment. This is a statewide delay of $24.85 million that must be absorbed by counties across the state.  

            Many criticized these two delays in payments as accounting gimmicks to reduce the state deficit on paper only as of June 30, 2009, because the amounts were still due in the next month (July), which in 2009 will be a new state fiscal year. While schools are protected at least as to the veto of the $125 million delay, counties will have to carry the burden of a delay in very important payments to meet highway expenditures at the county level.  

            The state legislature’s budget repair bill would have increased the amount of funds generated by refinancing future tobacco settlement payments to generate payments in this biennium from $50 million (as established in the state budget Act 20 last year) to $309 million. For your reference, the tobacco settlement payments are payments to states from the tobacco companies in settlement of national lawsuits several years ago. For several state budgets the state has been selling off proceeds from future tobacco settlement payments to generate dollars in the short term.  As proposed in the budget repair bill and based upon past legislative action, tobacco settlement payments projected out to nearly 2030 will be sold off. The budget repair bill would authorize selling off no more than $1.7 billion in payments which would generate only $309 million in this biennium.  The Governor vetoed this provision in part, but did not change the amounts of future tobacco settlements that could be sold off (the $1.7 billion) but only changed the method by which the Secretary of DOA could sell of the future payments to generate the $309 million.  Many individuals have criticized the legislature and the Governor for using these tobacco settlement payments to balance the state budget, and in particular for such an extended period of time of future payments. 

            While local government may criticize both the legislature and the Governor for his vetoes of some of these provisions, a particular veto by the Governor should be commended. The legislature proposed in the budget repair bill a property tax exemption for low-income housing by tax exempt organizations, typically exempt under Federal Tax Code IRS Sec. 501 (c)(3).   This provision would not have had any effect on the state deficit situation, but would only have created a property tax exemption for the type of low-income housing as described, which would have shifted the property tax burden to other classes of real property, such as single family residences.  Governor Doyle vetoed this provision because it was major nonfiscal policy (at least as to the state deficit) which he indicated should not be included in the budget repair bill. Local government can commend the Governor for this veto.  

            In  general, while the budget repair bill was necessary to address the projected state deficit of $525 million as of June 30, 2009,  the end result after the Governor’s vetoes is that  the State Transportation Fund will be balancing the General Purpose Fund to the tune of $103 million or more.  These transfers are in addition to over $1.1 billion in the 2003-05 state budget and 2005-07 state budget. While past budgets have included (as does this budget repair bill includes) payments back filling in part to repay the Transportation Fund from State General Obligation Bonds, the loss of Transportation Funds not being repaid will exceed over $400 million over the last five years.  While the state legislature has recognized the need to fund transportation to some extent through vehicle registration increases in the last two state budgets, these funds have actually been used as a result of the Governor’s vetoes to balance the State General Purpose Fund.  

The transfers that are not covered by general fund obligation bonds (the over $400 million figure) will be forever lost to fund transportation purposes.  These holes in transportation funding will mean transportation needs will continue to grow. 

            Many legislators have expressed that they can not support raising transportation revenues if in the end the increases are not used for transportation but are transferred to balance the state budget.  Our Association believes that a state constitutional amendment needs to be passed by two successive legislative sessions and voted on in statewide referendum to prohibit the transfer from “segregated funds” to balance the General Purpose Budget.  

            Another issue is that the authorizing of both General Obligation Bonds and the increase of Transportation Revenue Bonds in the past budget has increased the state debt load to the extent that the amount of principal and interest that must be repaid from both general obligation bonds and revenue bonds (which are supported by the vehicle registration fees) have increased to the point that our future state capacity to meet current financial needs is jeopardized for many years.  In addition, the Legislative Fiscal Bureau had estimated that had the budget repair bill been signed without any vetoes, our state would have faced a state structural deficit (which means projected committed expenditures for the next biennium July, 2009 through June 2011 over projected revenues) would have exceeded $1.7 billion as of July 1, 2009. While the Governor’s vetoes are in part expected to reduce this projection, many are expecting that the structural deficit could still exceed $1.5 billion next July, 2009.   

            As I indicated at the WTA district meetings this year, there are also three possible contingencies (the failure of the Ho-Chunk Tribe to make compact payments; the possible Menasha Corporation sales tax refund case; and the possible Patients Compensation transfer lawsuit) that could  result in even this budget repair bill being another $500 million short by next June 30, 2009.  Add in the fact that the current economic projections could become even worse over the next 13 months, resulting in less income and sales tax collections, there may be a need for the state legislature and Governor to take action in another budget repair bill in January, 2009 before even addressing the biennial state budget for 2009-2011.  

            While there are many opinions on how this budget repair bill was handled or could have been better handled, we would encourage all town and village officers to question all legislative candidates how they intend to meet the states needs in the future, and in particular transportation needs.  Our Association would argue that the state should not continue to balance the state General Purpose Budget on transfers from the Transportation Fund. Either general purpose programs need to be cut or other funds (such as increased general purpose taxes) must be raised. Our state transportation system is too important to carry the burden that has been placed on it in the last three state budgets and the current budget repair bill.  Ask your legislators and legislative candidates what they would do to meet the state general purpose needs and the needs of transportation.

            If you wish to see more on the budget repair bill or the Governor’s veto message, you can link to some of this information on our Association website. We urge you to become informed and ask the legislators and legislative candidates to respond to your questions on these issues! 

Invasive Species  

            Although the state legislature will not be in session for the rest of 2008, there are always issues being developed and worked on in Madison, particularly at the state agency level.  One of the issues that our Association has been asked to participate in is developing “best management practices” to identify, eradicate if possible, control or manage invasive species of all types. The state legislature has given the Dept. of Natural Resources the authority and directive in Sec. 23.22 of Wis. Statutes to develop rules to achieve this goal.  While invasive species is defined in this section as “an nonindigenous species whose introduction causes or likely to cause economic environmental harm or harm to human health,” it should be understood that the term invasive species covers plants, insects, and animals. Some of the most publicized invasive species in recent times have been the “emerald ash borer” which has devastated ash trees in Michigan and other states and has been identified to be moving north from Illinois (actually having been sited just 75 miles south of the Wisconsin/Illinois state line). An animal disease example is the “VHS virus” which has been identified in fish in Lake Winnebago and adjacent waters and is a threat to fresh water fish across the state.  

            Invasive species includes plants and although our state has currently only three noxious weeds listed under state law,  the Dept. of Natural Resources is in the process of identifying and listing as many as thirty or more plant species that could be harmful to the environment or human health.  This is why a very specific advisory committee has been created by the Department to address the identification of invasive species, eradication, control and management of such plant species on “right of way corridors” in our state. These corridors include highway rights of way, railroad rights of way, utility (both electric and pipeline) rights of way, and any other possible linear rights of way.   

            The advisory committee (of which I have been asked to serve as a member on behalf of towns)  will oversee the development of “best management practices” which can be used by those responsible for management of these corridors to prevent the spread of invasive species wherever possible. For example, the concept is to develop reasonable and practical methods that highway employees can use to both identify possible invasive plant species and take appropriate action to prevent the spread of these invasive plants, or even take appropriate steps to eradicate or at least avoid the spread of these plants. One of the most basic practices that may be used would be to limit at certain times of the year the mowing of highway rights of way to prevent the spread of the seeds from some of these invasive plants.  

            The problem for town, village, and county highway employees will be how to learn to identify these invasive species. Many of the possible thirty invasive plant species are not currently in Wisconsin, and many others have very similar looking related species. I have openly expressed to the Department and other committee members that town and county highway employees are not trained “botanists” and towns can not afford to hire botanists to “scout” the over 61,000 miles of town highway rights of way to search for up to thirty possible invasive species.  In addition, while some invasive plants should not be mowed at certain times of the year, others can not be mowed at other times. Learning which invasive plant species are spread by seed or which are spread by moving earth and thus tracked regardless of the time of the year will be a very real challenge to develop in “best management practices.”  It is my hope that whatever recommendations the advisory committee on corridor “best management practices” develops that they are reasonable and practical for local highway employees to implement without extreme costs and time. Our main priority should always remain to provide the safest and most efficient highway system across the state. More on this issue as the year goes on.

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