Budget Bill Is Special Interest Protection Plan

Legislators’ plan squanders one-time money for temporary fix
rather than derailing special interest gravy train

July 9, 2002

Madison - A legislative budget plan now on Gov. Scott McCallum’s desk plugs the state’s $1.1 billion deficit mostly by squandering one-time money rather than going after the perks and breaks worth millions of dollars to powerful special interests, a Wisconsin Democracy Campaign analysis shows.

The plan crafted by an eight-member committee of legislative leaders uses the remaining $825 million in tobacco settlement funds to temporarily balance the budget rather than cut spending or repeal breaks that special interests get for their large campaign contributions.

Last year, legislators and the governor put the 2001-03 state budget on the auction block, stuffing it with at least $493 million worth of items that benefited special interests - equivalent to $127 for every Wisconsin taxpayer - and received $4.6 million in large individual and political action committee contributions for their effort.

A year later with the state economy in shambles, it seemed likely that they would have had little choice but to make deep spending cuts and/or review sales and property tax exemptions and other special interest breaks as part of the budget deficit solution.

But lawmakers appeased the state’s largest teachers’ union and business lobbying groups by refusing to consider cuts in education spending and flatly rejecting a suggestion by the counties association to review hundreds of millions of dollars in sales tax exemptions that well-heeled contributors have received over the years as a result of large campaign contributions.

Lawmakers also left untouched all of the special interest items they approved in the 2001-03 budget, including $292 million in new roads, a $45 million high-tech zone program and $8.6 million in breaks for ethanol producers, cable television operators, business, dog tracks and banks.

"Legislators could have saved over half of the remaining tobacco settlement money they used to balance the budget for its intended purpose of smoking prevention if they could have said no to their campaign donors," WDC executive director Mike McCabe said.

Instead, lawmakers again used the budget to draw more election-year contributions by stuffing it with several dozen non-fiscal policy and spending items. Many of those items were "local pork" to impress voting constituents, but several items were pork for cash constituents. Some of those items that survived the budget process and await Gov. McCallum’s veto or approval include:

McCallum’s campaign also has benefited from the new program. Prior to proposing the subsidy program in his 2001-03 state budget early last year, the governor had not seen a dime in campaign contributions from ethanol producers. But in the last six months of 2001 McCallum received $1,720 in campaign contributions from executives of one producer, most of it after he participated in their plant’s groundbreaking.

  • Continued funding of a program that provides $3 million a year to ethanol producers. Assembly Republicans opposed cuts, saying the plants may eventually improve corn prices for struggling farmers. But the agriculture industry is one of its staunchest supporters, contributing $231,792 to the Assembly GOP since 1993, the most to any of the four caucuses.
  • Spending $850,000 to create an affordable insurance plan for small business owners and their employees. However, one portion of it - rate control - was axed amid long-standing opposition by the insurance industry. Insurance executives and their company PACs are one of the most powerful special interests at the State Capitol and one of the largest contributors to the current legislature - $921,070 since 1993.
  • An exemption for Ashley Furniture in Arcadia from certain environmental laws that would let the company fill in 13 acres of wetlands to expand their plant. The proposal tucked into the budget by Senate Democrats has received bipartisan support in the Senate and in the Assembly where it was approved as a separate bill during the regular legislative session. A similar proposal was included in the 1999-2001 budget but was later struck down in a legal challenge by environmental groups. Ashley Furniture executives have contributed $68,650 to candidates for statewide office and the legislature since 1993, including $18,600 to current legislators. McCallum has received $11,550 in contributions from Ashley executives including $9,550 in late August 2001 when an Assembly bill for the exemption was in the works.
  • Senate Democrats resurrected a bill that died in the regular session and put it in the budget that gives police and firefighters more appeals options when they are the subject of disciplinary action. The measure could make disciplining a police officer or a firefighter a collective bargaining issue rather than a matter between officers and their employer. Large individual and PAC contributions by police and firefighter unions totaled $102,826 to Senate Democrats since 1993, the most to any of the four caucuses.

Beyond this budget, it is likely that things will not get better in the near future.

Although Senate and Assembly leaders included comprehensive campaign finance reform in the budget repair bill before McCallum, it is not scheduled to take effect until July 2003. The delay allows big-money interests rather than voters and candidates to call the shots in the upcoming November elections. The delay also will allow lawmakers to use the 2003-05 budget, which may see a deficit as large as $1.3 billion, as an auction block to draw campaign contributions from special interests.

"Political corruption is a big reason why we had a billion-dollar budget deficit and why our elected representatives cannot bring themselves to address the budget crisis in a fiscally responsible manner," McCabe said.