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Legislative Alert: Proposed School Funding Provision in State Budget

Education, Employee Benefits

On Wednesday, February 8th, Wisconsin Governor Scott Walker released his proposed 2017-19 Executive Budget.  This proposal is the first step in the state budget process, which includes public input and approval from the state legislature.

School districts in Wisconsin likely have a keen interest in this budget, as there is a proposed expansion of Per Pupil Aid.  Within the draft, that expansion is directly tied to employee health insurance contributions as per this line on page 452 of the budget:

“The Governor also recommends increasing transparency by requiring school districts to certify compliance with 2011 Wisconsin Act 10 prior to receiving per pupil aid.”

Moving forward, this proposal appears to call for school districts to adhere to the state standard of paying a maximum of 88% of the premium costs towards their offer of employer-based health insurance.

The important thing to note is that this is the first draft of the budget.  Keep in mind that the budget process in Wisconsin traditionally includes the following steps:

  • Public Hearings: Members of the legislature hold public hearings to solicit input from the general public.
  • Lobbying: Interest groups often contact the legislature and the Governor with input on the drafted budget.
  • Joint Finance Committee (JFC): The JFC, a bi-partisan legislative finance committee, debates and ultimately makes alterations to the proposed budget. Once they approve an altered budget, they send the new draft to the legislature.
  • Legislature: Both the Assembly and Senate, have the opportunity to debate and potentially alter the budget draft.  Once both legislative bodies approve the same draft of the budget, the document is sent to the Governor for approval.
  • Governor: The Governor can either approve or reject the budget sent to him by the legislature.  Keep in mind that the Governor of Wisconsin can utilize a function called a “Line Item Veto.”  This power allows the Governor the ability to strike any word or number from the budget that they do not approve, while still approving the overall document.

This process must statutorily be finalized by July 1st of an odd-numbered year and provisions are normally implemented as law once passed.

Key Takeaway

The Governor’s first draft of the budget includes the proposal which could affect a school district’s funding. Districts should be aware of the budget process, logistics of this process and understand how this potential change could affect their legal requirements.

If your district is currently not in compliance with 2011 Wisconsin Act 10, please work with your M3 Account Team to create options in the event that this provision is approved.

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