June 30, 2009 – Gov. Jim Doyle signed the 2009-11 biennial state budget into law Monday, June 29, days after the Senate and the Assembly passed the compromise spending plan on largely party-line votes the previous week.

Despite the state’s fiscal crisis, the final budget plan has several provisions supported by the State Bar of Wisconsin, although unfortunately the governor vetoed two noteworthy initiatives - expanded financial eligibility for a public defender and pay progression for assistant district attorneys and SPD staff attorneys.

The Senate first passed the compromise budget early on the morning of Friday, June 26 on a 17-15 vote, hours after a Senate-Assembly conference committee approved the compromise plan. All but one Democratic senator voted for the budget and all Republican senators voted against it. One Republican missed the vote due to a family illness.

The Assembly took up the budget later on Friday, passing it on a narrow 51-46 vote. The Legislature’s lone Independent voted with 50 Democrats for the budget, while two Democrats joined 44 Republicans in voting against it. Two Republicans did not vote.

Legislative leaders and the governor had said repeatedly that they wanted to complete action on the budget by June 30, and in the end they achieved their goal. It is the first time since 1977 that the state budget has been enacted into law by the July 1 start of the fiscal biennium.

Initiatives supported by the State Bar

Noteworthy initiatives included in the final state budget as approved by the governor include:

• A welcome and significant increase in funding for civil legal services to indigent persons; funding would be increased by adding $2.38 million to the $1.25 million increase proposed by Gov. Doyle. As enacted, state funding for indigent civil legal services will increase $3.63 million for a total of $4.63 during the biennium starting July 1. The Legislature first appropriated state money to fund civil legal services for low-income individuals in the 2007-2009 state budget, a move long-supported by the State Bar. Under the final version of the next state budget, the money would be used to provide grant funding for civil legal services through the Wisconsin Trust Account Foundation, Inc. (WisTAF);
  
• Increased biennial funding to reimburse counties for court interpreter services and mileage reimbursement paid to interpreters;
  
• Continued funding of one staff person for the Judicial Council (the Legislature restored funding for this position two years ago, for the first time since 1995).

The final budget also includes several other noteworthy policy items that the State Bar supports, including restoring the ability of insureds to stack coverage of auto liability insurance policies, an option that the Legislature eliminated in 1995.

The new state budget also codifies the current collateral source rule set forth in Leitinger v. Van Buren Management, 2007 WI 84, which states that a tortfeasor cannot introduce evidence of the amount actually paid by collateral sources such as reimbursement by a victim’s health insurance company for medical treatment in order to prove the reasonable value of the medical treatment. (The State Bar supports the collateral source rule, which bars reduction of awards by payments from collateral sources that do not have subrogation rights.) The budget creates sec. 908.03 (6m) (bm), which states a presumption that “Billing statements or invoices that are patient health care records are presumed to state the reasonable value of the health care services provided and the health care services provided are presumed to be reasonable and necessary to the care of the patient. Any party attempting to rebut the presumption of the reasonable value of the health care services provided may not present evidence of payments made or benefits conferred by collateral sources.”

Noteworthy vetoes

Despite these budget victories, Gov. Doyle vetoed two praiseworthy provisions which the State Bar supported. The governor also vetoed one budget provision that the State Bar joins him in opposing, a proposed $5 increase in the fee collected by clerks of court for judgments, writs, executions, liens, warrants, awards and certificates.

The governor made a total of 81 vetoes, which unfortunately included both a plan to expand financial eligibility for SPD appointments and a proposed $1 million appropriation in the Department of Justice (DOJ) that would have provided annual raises of about $1700 to approximately 600 assistant public defenders and assistant district attorneys.

As originally passed by the Senate and Assembly – but vetoed by the governor – the next state budget would have expanded state financial eligibility for public defender representation from the antiquated 1987 AFDC limits to current W-2 limits, which generally are 115 percent of the federal poverty level. The State Bar has a long-standing position in favor of using federal poverty guidelines as minimum financial criteria for determining indigence and eligibility for constitutionally mandated appointment of counsel.

The increased eligibility levels would have taken effect at the end of the next biennium, on June 30, 2011.

As part of that now-vetoed plan, the Legislature had approved hiring 32 new SPD staff attorneys and 17 support positions to accommodate the anticipated increase in the State Public Defender’s caseload. Because the changes would not have been effective until the last day of the next biennium, they would have had no fiscal effect on the 2009-11 state biennial budget.

In his veto message regarding the SPD eligibility, the governor said, “I am vetoing these provisions because of the additional cost and positions associated with implementing the higher standard. This veto returns the indigency standard to current law and deletes the positions associated with the increase. I remain committed to ensuring adequate representation of individuals with limited income.”

In addition to vetoing expanded SPD eligibility, the governor also vetoed a plan to provide so-called pay progression to assistant district attorneys and non-management SPD staff attorneys. As passed by the Senate and the Assembly, the state budget included a proposed $1 million appropriation in the Department of Justice to provide annual raises of about $1700 to approximately 600 assistant public defenders and assistant district attorneys. The raises would have ranged from about 3.5 percent for new staff attorneys to 1.5 percent for senior non-management staff.

In July 2008, State Bar President Diane Diel wrote to Gov. Doyle, urging him to take steps to improve compensation for assistant district attorneys and defense attorneys to boost retention of qualified personnel.

In vetoing this proposed pay progression plan – which would have been funded by existing revenue sources in the DOJ budget – the governor stated he objected to it “because it not only circumvents the collective bargaining process, under which most compensation increases are allocated, but also specifies these compensation payments cannot be considered during negotiations. I object to making one department shoulder the burden of providing salary increases to employees in other agencies.”

What was not in the final state budget

Several controversial budget provisions proposed over the last four months were not in the final budget because the Legislature eventually removed them before the budget got to the governor’s desk for his signature.

Both the Assembly and the Senate adopted amendments completely removing budget provisions that would have modified rules governing contributory negligence and joint and several liability – thereby retaining current law. The budget as originally introduced by the governor would have generally restored the common law rules of contributory negligence and joint and several liability as they existed prior to revisions by 1995 Wisconsin Act 17. Restoring the pre-1995 law in this regard has been a long-standing position of the State Bar.

In addition, the final budget restored $5.4 million in cuts that the Joint Finance Committee had proposed for the Wisconsin Department of Justice budget. The Assembly first restored these cuts when it passed its initial version of the budget on June 13, but the Senate did not follow suit when it gave initial passage to the budget on June 17. Fortunately, the final conference committee version approved by both houses on Friday, June 26 restored the cuts, and Governor Doyle did not veto the restoration. The State Bar’s Board of Governors has adopted a public policy position supporting adequate funding for the Department of Justice to ensure that it can meet its responsibilities to support the legal community and the justice system in order to ensure the protection of Wisconsin’s citizens.

The final version of the state budget also restores funding for six administrative law judge (ALJ) positions in the Department of Workforce Development’s Equal Rights Division. As introduced by the governor, the budget would have eliminated these positions and associated funding. The State Bar’s Board of Governors supports the restoration of both the positions and the funding for them. In February, the Board of Governors had also voted to oppose the proposed elimination of no probable cause hearings for many types of complaints made to the Equal Rights Division, including allegations of discrimination in employment, housing, and public accommodations.  The Joint Finance Committee subsequently removed that provision from the budget, preserving the no probable cause hearings, and later restored the ALJ positions and associated funding.  Therefore, both the hearings and the ALJ positions have been preserved.

Fortunately, the final state budget as passed by the Legislature did not include an expansion of the sales tax to legal or other professional services, a measure some legislators had recently advocated publicly. Although the 2009-11 budget process is now concluded, the State Bar’s government relations staff will continue to work with legislators to head off any efforts to impose such a tax through future legislation. The State Bar has joined with other professional associations to resist any plans to expand the sales tax to include various services, including legal services. State Bar President Diane Diel has also expressed the State Bar’s opposition to such a step.

The Legislative Fiscal Bureau’s comparison of the changes made by each legislative house and the conference committee can be found online, and the governor’s veto message can be found here. A complete history of the legislation can be found on the Wisconsin Legislature’s Web site.

Continue to monitor WisBar.org and visit the State Bar’s Government Relations page for updated legislative information.

Adam Korbitz is the Government Relations coordinator for the State Bar of Wisconsin.

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Joint Finance completes budget: the good, the bad and the ugly – June 1, 2009
Joint Finance expands SPD eligibility, boosts indigent civil legal services – May 27, 2009
Governor and legislative leaders outline new deficit reduction plan – May 22, 2009
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Joint Finance Committee Approves Budget for Courts, Related Agencies – April 22, 2009
State Bar update on 2009-11 state budget – April 8, 2009
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State Bar of Wisconsin responds to Governor Doyle’s budget – February 25, 2009
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