Budget Bill Promotes WTCS Role in Worker Training

• Governor Doyle Proposes 2007-09 Budget with Largest Increase
  in WTCS Funding Since 2001
• Workforce Advancement Training Grants to Grow by $6 million!
• Technical Colleges Exempted from New Property Tax Limits
• Veterans’ Tuition Remission Costs Are Partially Funded
• Modest Increases Proposed for Financial Aid Programs
• State General Aid Increase Not Included in Initial Budget Bill
• Six Budget Hearings to be Held Around Wisconsin Beginning March 20th

Governor Doyle’s 2007-2009 biennium budget bill, SB-40 has been sent to the Joint Finance Committee (JFC) as SB-40. It includes very positive news for Wisconsin Technical Colleges.

Proposed new funding exceeds the total in any budget bill since 2000-2001.

The WTCS Board’s request for a dramatic expansion of Workforce Advancement Training grants is fully funded in the Governor’s proposal. New funding is also proposed to cover the cost of expanded veterans’ tuition remissions signed into law last year.

The bill preserves important local revenue flexibility for technical colleges but does not provide new general aid support.

The Governor imposed new property tax controls on municipalities, but once again protected technical college levy flexibility by exempting technical colleges from the controls, The Governor exempted technical colleges because he realizes the critical role tech colleges play in training the state’s labor force and because state supported for technical colleges has plummeted by more than 50% since 1990. It will now be up to MATC’s Board and administration to establish next year’s levy. In three of the past years, the Cole administration, intimidated by anti-public education organizations, right wing talk show hosts and legislators, has turned down millions of dollars. All of us have felt the consequences in deteriorating maintenance and the lack of appropriate supplies.

On a less positive note, the WTCS Board’s request for a significant general aid increase was not funded. General aid has not increased since 2001. As absolutely crucial as our property tax levy authority is, the absence of new general aid funding continues to increase pressure on local tax levies and student fees while state investment in the WTCS erodes.

For student aid, the bill provides 2.5% annual increases for Wisconsin Higher Education Grants (WHEG) and for Minority Undergraduate Retention Grants. The WTCS had sought much larger increases for each of these programs.

More detailed proposal highlights are followed below by a summary of the upcoming budget process and details of JFC budget hearings around the state.

Initial Budget Bill Highlights:

Workforce Advancement Training (WAT) Grants Fully Funded!
The Governor proposes increasing Workforce Advancement Training (WAT) Grants from $1 million annually in 2006-07 to $3 million in 2007-08 and $5 million in 2008-09 and annually thereafter. This is $6 million in new funding over the biennium. It results in a five-fold expansion of the program from this year to 2009 and beyond. WAT grants are awarded by the WTCS Board to districts through a competitive process. Funding is provided to district businesses and industry to significantly defray the cost of short term training. Grants may cover 75% of training costs with a 25% private match.

Youth Apprenticeship Restored
The WAT grants above are part of a previously announced “Jobs for the Future” initiative which also includes doubling funding for Youth Apprenticeship from $600,000 to $1.2 million annually. This would restore the Youth Apprenticeship program to its previous level of funding before recent budget cuts.

Veterans Tuition Remission Receives Partial State Funding
The bill proposes $11.6 million over the biennium to partially fund the cost of veterans tuition remissions at technical colleges and the UW. The new funding will by administered by the Higher Education Aids Board. Partial remissions were created over the past few years without state funding, resulting in a shift of costs to other students and/or property taxes. A law passed last year expanded the remissions to cover 100% of veterans’ tuition beginning in Fall, 2007. The new funding is approximately 50% of the total sought by the UW and WTCS. It appears to equal the estimated cost of the new remission becoming effective in 2007 but not the cost of the existing remission program.

Financial Aid Sees Modest Increase
The Governor proposes a much more modest increase in WHEG funding (2.5% annually) for WTCS students than for UW students. The WTCS Board had requested an 8.1% increase to match this year’s increase in tuition and fees.

The Governor also proposes a 2.5% increase in Minority Undergraduate Retention Grants. This aid serves WTCS students and students at private/independent colleges and universities and at tribal colleges. These grants are administered by the Higher Education Aids Board. A separate request to increase funding for WTCS institutional Minority Student Retention Grants to districts was not included in the bill.

Technical Colleges Exempt from New Property Tax Controls
The budget bill creates a new property tax levy limit for counties and municipalities. Those levies could increase by the lesser of 4% or a growth in total valuation due to new construction. A new limit imposed on municipalities and counties in the last budget expires with the biennium on June 30th.

Like the past budget, technical college districts are exempted from new controls. This preservation of our fundamental flexibility is crucial to sustaining access and programming at our technical colleges. Over the past four years, the Governor has repeatedly vetoed levy limits on technical colleges in stand-alone bills and biennium budget initiatives. This represents a major commitment by the Governor to both our flexibility, as well as to preservation of our core funding mechanism.

As this positive trend continues, however, we can expect increasing legislative and public attention to WTCS property tax levies. Absent significant new state funding for general aid, the very welcome preservation of levy authority in SB-40 continues - but does not address - the trend of eroding overall state support while local taxes and student fees increase as relative shares of our funding.

General Aid
The budget bill provides no increase in WTCS general aid. The WTCS requested $31.9 million in new general aid funding over the biennium to stop the erosion of state support as a share of funding relative to property taxes and student fees. General aid has not increased since 2000-01.

The WTCS Board’s budget request, the WTCS Presidents Association “Responsible Funding” initiative, the Wisconsin Student Government’s legislative priorities, and the priorities of other WTCS Coalition partners all focus on significant new general aid as essential to sustaining WTCS access and services for the long-term. Absent new general aid, the state investment in the WTCS continues to fall. It is now smaller than student fees as a revenue source for the first time ever.

Increasing general aid, while challenging, must be a continuing major priority for state investment in the upcoming process.

The Wisconsin Covenant
The budget bill would create and fund two positions in the Department of Administration to coordinate and design the Wisconsin Covenant Program. The WTCS and UW had requested positions for this purpose, which were not provided. Some of the proposed funding may be available for teacher and school administrator training in character education. Under the Covenant, Wisconsin will waive UW and WTCS tuition costs for students who meet the terms of an agreement signed in 8th grade to earn good grades, be good citizens, and stay out of trouble. The program begins with students who are in 8th grade this year.

Resident Tuition for Certain Immigrants
The budget bill would allow an student who is not a permanent resident to pay resident tuition at the UW or WTCS if he/she has been in Wisconsin for one year, graduates from a Wisconsin high school or earns an HSED here, and certifies he/she has or will apply for citizenship or permanent residency.

The Budget Process

After the Governor unveiled his budget proposals Tuesday evening, the 1,700+ page bill was officially introduced as SB-40 on Wednesday. It will be analyzed over the next few weeks. After the Legislative Fiscal Bureau completes its thorough assessment of the bill’s provisions and impact, the JFC will be briefed and have the opportunity to ask questions about the bill. The JFC then holds agency-by-agency briefings with the opportunity to hear from and question state government leaders including WTCS leadership.

This process will be followed by six JFC public budget hearings around the state. Today, JFC Senate Chair Russ Decker (D-Weston) and Assembly Chair Kitty Rhoades (R-Hudson) announced the following hearing schedule with specific locations to be announced later:

Soon after completing public hearings, the JFC begins “executive action,” the line by line revision of the bill over several weeks of often intense discussion and hundreds of votes to accept, modify or reject the Governor’s individual proposals. With the control of the houses now split between Republicans and Democrats, the JFC is also split with 8 members from each party. This means that party-line votes to amend the Governor’s language “tie” and fail. Once JFC completes voting, it sends its version, a “substitute amendment” of SB-40, to the full Legislature.

Because the budget was introduced as a Senate bill, it likely will go there first for consideration before the Assembly. Eventually, an identical version of the bill must pass each house. With the Senate and Assembly split, many major budget issues may remain unsettled until they can be reconciled by a small “conference committee” of leaders from each house.

When the same bill does pass both houses, it goes to the Governor for vetoes and signing. The Wisconsin Governor also has wide line-item veto authority. Nevertheless, the Governor may not veto new provisions or funding “back in” that the Legislature removed from the final bill.

Recent budgets have been signed within a few weeks of the new biennium’s beginning on July 1. However, split houses and conference committees in the past have resulted in budget bills stalled for up to several months into the new biennium.

Wisconsin enters the budget cycle with projections for a continuing structural deficit entering the new biennium and for expanding new revenue to be collected as that biennium unfolds. The Governor projects that the bill he has proposed will balance those commitments and revenue and will reduce unfunded future commitments from more than $3 billion four years ago to approximately $670 million by mid-2009.