Posted on 05/24/2013 6:13:58 AM PDT by afraidfortherepublic
MADISON – When the co-chair of the Legislature’s powerful Committee on Joint Finance says it might be best if you stepped down, you know you and your agency are in for a long, hard day.
“I can’t believe Kevin Reilly is still there,” Sen. Alberta Darling, R-River Hills said of the beleaguered president of the University of Wisconsin System, under the political microscope for building up hundreds of millions of dollars in reserves during difficult fiscal times.
“In the best interest of the state, Kevin Reilly should not be in this position,” Darling said.
The finance committee voted to slash $ 183.8 million in general program revenue from Gov. Scott Walker’s originally proposed $181 million budget increase for the UW System. That’s an actual cut of $2.5 million from current GPR and reduces permanent program revenue funding about $33 million a year.
The “harsh” move, according to Darling, follows the release of a report last month that showed the system had reserve accounts of more than $1 billion, including $648 million in unrestricted cash and more than $400 million in tuition balance.
Most legislators on the committee jumped on system management for failing to provide accountability and transparency.
“Where we find ourselves because of the lack of honesty and openness, we find ourselves with a motion before us that is going to establish a process where we have more oversight of the university,” said Sen. Sheila Harsdorf, R-River Falls.
The Legislature’s Joint Finance Committee muscled through a stack of budget items Thursday, cutting the University of Wisconsin System’s budget, approving expanded DNA testing and killing a rent-to-own provision along the way. The finance committee went further than the governor’s proposal and also moved to freeze tuition over the next two years.
Walker earlier this month scaled back his proposed increase to $87 million, and has joined the bipartisan chorus of lawmakers who have called for a two-year tuition freeze system-wide.
Democrats said some of the discovered reserve balance should go toward reducing student costs.
The University of Wisconsin Board of Regents increased base resident undergraduate tuition by 5.5 percent each year from 2007-08 to 2012-13.
“Given that the tuition appropriation balance increased in each of those years, one could argue that the tuition increases approved by the Board of Regents were higher than were necessary to fund the UW System’s ongoing operations,” the nonpartisan Legislative Fiscal Bureau wrote in a guidance report to the finance committee.
“Not a nickel from the majority to increase student aid,” said Rep. Cory Mason, D-Racine. “When I talked to people who are upset about this, they’re upset that the UW overcharged them for tuition for the surplus.”
Reilly defended the balance – in total about a 25 percent reserve ratio – saying it is in line with other public universities. He conceded the system didn’t have a policy for appropriate reserve balances. The JFC also proposed the UW System develop such a policy.
“We need to look out for the long term, what is the health of the university going to be for that student,” Reilly said. “We need to have a sufficient reserve so that we can say to that student four years from now, ‘You’ll be getting a quality education here.’”
Reilly received some sympathy from Democratic lawmakers, but generally speaking, legislators haven’t been impressed with the president’s explanation.
“We have a rainy day fund also, but this is a cloud burst,” said Sen. Mike Ellis, R-Neenah, scolding university officials when they testified on the reserves.
Reilly and the Board of Regents was hounded in the press and by the legislature for weeks after the finding, leading up to Walker’s support of freezing tuition and taking back some of the funding he set aside for the system.
Mason said to overlook student debt, college affordability and accessibility “would be a far greater mistake than the identification of the surplus itself.”
The committee, however, voted against his proposal to provide $40 million in student grants over the next two years.
The vote on the budget reduction and tuition freeze was 14-2, with Mason and Sen. Jon Richards, R-Milwaukee, voting against.
Police power
The committee approved a motion that would vastly expand police authority to order DNA test from citizens arrested on any felony charge or convicted of a misdemeanor.
“There’s a national effort that’s focused on getting this passed in every state,” Harsdorf said. “This is something, as I become more familiar with, I’m convinced this is going to be beneficial in catching career criminals, in saving lives, and actually in saving dollars.”
Harsdorf listed off cases in other states where DNA samples taken of rapists and murderers helped connect them to other crimes.
“DNA solved the crime that my parents were killed in,” said Sen. Jennifer Schilling, D-La Crosse. She said investigators took a piece of chicken from the crime scene and tested the DNA repeatedly as technology improved over the years. Finally they were able to match DNA with a swab taken from the perpetrators.
She noted the JFC amendment to delay implementation six months allows the U.S. Supreme Court to decide on the constitutionality of expanded DNA collection in a pending case before it.
Walker had proposed $6.1 million for 16 positions next fiscal year and 26 positions in 2014-15, staff to collect DNA samples at arrest or conviction from juveniles and adults on felony charges or certain misdemeanor convictions.
The Legislative Fiscal Bureau wrote the state Department of Justice projects another $6 million in collections from the $266 worth of fees it will charge suspects and convicts for taking their blood. The proposal would also add a $250 DNA fee to every felony conviction and $200 to every misdemeanor conviction.
The fiscal bureau notes the administration projects the state will take in an extra $4.5 million over the next two fiscal years due to that change.
The provision removes current law that says the Department of Justice must delete DNA records if a conviction is overturned. Under Walker’s proposal, DNA data still is permissible in court cases even when police take DNA when they aren’t supposed to or if they fail to follow other rules or procedures.
American Civil Liberties Union of Wisconsin sees such DNA collection as a slippery slope into the abyss of a police state.
“It turns the presumption of innocence on its head, if you thought Americans were innocent until proven guilty,” said Christopher Ahmuty, executive director of ACLU of Wisconsin earlier told Wisconsin Reporter.
Democrats on the JFC expressed similar concerns.
“This issue raises major constitutional questions that should not be dealt with as a tag along at the end of a long, hard day. It deserves a public hearing. There is plenty of time to deal with this issue in the fall session,” said Sen. Robert Wirch, D-Pleasant Prairie.
The motion passed 13-3, with Sen. Glenn Grothman, R-West Bend, Richards, and Mason voting against.
GPS tracking
The committee also approved expanding GPS tracking to people with restraining orders for domestic abuse or harassment, but not to the extent Walker had requested.
Walker wanted $3 million over the next two years to fully implement the proposal.
The JFC instead ordered a legislative study and $250,000 to match local funds for a pilot program in counties selected by the Department of Justice. The committee budgeted another $750,000 a year in grants for domestic abuse shelters.
The finance committee approved a measure to reduce the handgun purchaser record check fee from $13 to $10, along with a $1.8 million lapse to the general fund.
Democrats proposed to move the fees down to $8, but Rep. John Nygren, R-Marinette, co-chair of the committee, said he didn’t think the demand for guns would remain as high as it has been recently, so future program revenue might fall. He also argued it would be worse to have to raise the price later.
Rent To Own
The budget committee rejected Walker’s motion to remove rent-to-own companies from the Wisconsin Consumer Act. Under his proposal, new rules would not require a rent-to-own company to disclose an annual percentage rate on a rental-purchase agreement.
Grothman, who has called rent-to-own operators “usurious vipers,” led the charge in Republican opposition, but did not speak on the issue at the budget hearing.
According to the Legislative Fiscal Bureau, “The Department (of Financial Institutions) has found that the cost of purchasing an item through a rental-purchase agreement can result in the consumer paying between 200% and 500% more than if the consumer had purchased the item from a department store or other retailer outright.”
The finance committee motion to delete the non-disclosure measure passed 10-6, with Assembly Republicans voting against deleting the provision from the budget.
“I, on behalf of the Assembly, want to make a brief comment that we will be voting no on voting this out of the budget,” Nygren said. “This isn’t an interest product. This isn’t a credit product. This is a legal business that could potentially add another 20 stores in Wisconsin.”
He said the issue would come up for debate in the Assembly.
Richard May, spokesman for the Association of Progressive Rental Organizations, previously told Wisconsin Reporter the changes to current law effectively open the door for his industry to operate in Wisconsin. Roughly 50 rent-to-own places are registered to operate in Wisconsin.
The bulk of rent-to-own customers generally cannot get traditional credit, arguably making the industry to consumers what the Wisconsin Economic Development Corp. is to start-up businesses.
The $11 million rent-to-own industry in Wisconsin argues it offers lease purchases, not credit. The main distinction being that the customer can cancel his lease and return the TV or couch or whatever at any time.
About 25 percent of the industry’s customers end up owning the product, May said.
A similar bill passed the Assembly last legislative session, but the Senate did not pick it up before the session ended.
Transportation
The committee approved an omnibus motion on transportation that when unpacked would, according to the Legislative Fiscal Bureau, turn the projected $54 million transportation fund deficit at the end of the biennium into a $5 million balance.
“I think it does a lot to help make our department more cost-effective and efficient,” said Darling. “It’s meeting another one of our goals to create jobs in this economy.”
Contact Ekvall at rekvall@wisconsinreporter.com
Wisconsin Budget revisions: it’s not nice to try to fool the legislature. UW gets thumped.
FReep Mail me if you want on, or off, this Wisconsin interest ping list.
Our state is FINALLY doing so many right and good things, it makes my head spin - and Liberal heads explode, LOL!
We’re obviously on the right track! :)
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