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Bills aim to change WI's constitution

By   /   February 21, 2012  /   No Comments

By Ryan Ekvall | Wisconsin Reporter
  
MADISON — The Wisconsin Legislature on Tuesday took up two bills aimed at changing the state's constitution, an amendment that would strike at the heart of President Barack Obama's health-care initiative and another demanding a balanced budget under generally accepted accounting principles.

UPDATED: 2/22 – Corrected version
 
 SJR 21 is a response to the federal Patient Protection and Affordable Care Act, slated to go into effect in 2014. The bill calls for a state constitutional amendment that would allow residents to opt out of purchasing or participating in a health-care plan.
 
“What this simply says is that if you want to purchase private health care, you can,” said state Sen. Frank Lasee, R-De Pere. “Wow, what a concept for an American.”
 
Senate Democrats blasted the proposed amendment, arguing it places profits over people.
 
“You are giving constitutional protections to private insurance companies who do not have to cover anybody they choose not to cover,” said state Sen. Jon Erpanbach, D-Middleton, in opposition to the resolution.
 
State Sen. Lena Taylor, D-Milwaukee, said health care shouldn't be denied because of an illness that cannot be cured or controlled.
 
"We must value people. We must value life over profits for health care," Taylor said.

The U.S. Supreme Court next month is expected to address the question of the constitutional limits of the federal government's power, through the implementation of Obama's health-care overhaul.

"No initiative has exemplified Obama's progressive domestic agenda or inflamed his conservative opponents" like the health-care act, the Washington Post reported in a January story on the high court's rare, extended schedule to hear arguments.
 
The state resolution, which passed on a 17-16 vote, moves into the murky waters of unsettled questions. If the Supreme Court upholds the health-care act, the state constitution could be moot. If it doesn't, it may be unnecessary.

Amendment

The Assembly approved, on 69-25 vote, Assembly Joint Resolution 100, a constitutional amendment to require the state to use Generally Accepted Accounting Principles, or GAAP, when the state spends or receives funds. Five lawmakers did not vote.

 
The proposed amendment, however, does not require the state to draw down the deficit over a defined period of time. That differs from the original language of the resolution, which marked at least one-tenth of tax revenue increases in the fund for deficit reduction.
 
Currently, Wisconsin, like most other states, uses Government Accounting Standards Board, or GASB, principles to determine its budget situation.

Under GAAP, revenue and expenditures must be counted in the year they occur, rather than when cash transfers hands. The different accounting methods result in billions of dollars' difference when looking at the state budget: a $2.99 billion deficit using GAAP versus an $86 million surplus using GASB.

 
Essentially, drawing down the deficit would be left up to the discretion of the Legislature, dependent on the will of the lawmakers at the time. They can't increase the deficit, but there is nothing that says they have to pay it down.

Dale Knapp, research director for the nonpartisan Wisconsin Taxpayers Alliance, said about a dozen states take GAAP into account when they do their budgeting.

Knapp pointed to Connecticut as a model in GAAP budgeting, designed to be implemented over many years.

Connecticut also has a constitutional amendment requiring a balanced budget, something lawmakers skirted around using GASB principles. 

 
Knapp said to get to a balanced budget in GAAP terms, given where Wisconsin is now, about $3 billion in the hole, is something that will take a long time.

"It probably will have to be done over 10 to 15 years, because it will require additional revenues — tax hikes are off the table in a lot of cases — or spending cuts to resolve a lot of this," Knapp said. "It will take some fiscal fortitude and patience in order to bring budget to balance."

There are a number of ways to attack the GAAP deficit, Knapp said. Paying the $200 million-plus that had been taken from the state's patient compensation fund is a good start in drawing down the deficit, Knapp said. And some basic changes can be made to income-tax withholding that would have an immediate impact.

 
The proposed amendments have a long way to go before they could become part of the state’s constitution.
 
First, the Assembly also must pass the legislation without amendments. Next, the bill would have to be picked up again in the next legislative session. Both houses would again have to pass the legislation without changes. At that point, the amendment would be placed on the next general election ballot for Wisconsin voters to decide whether to ratify the amendment to the constitution.
 
“I hope over the next three years, as this plays out, we have a good, robust discussion talking about the resolution…and then in the end the citizens have the right to go and vote,” said state Sen. Joe Leibham, R-Sheboygan, a co-author of the bill on the health-care act.
 
Correction: An earlier version of this story noted an incorrect annual draw down percentage of the deficit under GAAP accounting.

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