Last week, we provided an overview of key legal provisions within the State's Biennial Budget impacting local government and school district operations. On Sunday, July 12, 2015, Governor Walker exercised his gubernatorial partial veto authority with respect to the Budget Bill. Following the partial vetoes, the Budget Bill has been adopted as 2015 Wisconsin Act 55 and will take effect on July 14, 2015.

The following changes reflect modifications to items discussed in the previous Government Law Group update based upon the governor's partial vetoes:

1. High Deductible Health Plan (HDHP) Alternative for City of Milwaukee
The Budget Bill contained a measure indicating that if the City of Milwaukee changed to a HDHP, that it also offer its public safety employees a HDHP option that is identical to the state plan's HDHP option. Governor Walker vetoed the language, in part, such that Wis. Stat. § 66.0137(4t) reads as follows in 2015 Wisconsin Act 55:

HEALTH INSURANCE FOR PROTECTIVE SERVICES EMPLOYEES. If a 1st class city offers health care insurance to employees who are police officers, fire fighters, or emergency medical technicians, the 1st class city shall also offer to the employees who are police officers, fire fighters, or emergency medical technicians a high-deductible health plan.

In his veto message, the governor indicated that he partially vetoed the section because he believes "that the city of Milwaukee should be able to choose the specific design features of its high-deductible plan to best suit its overall benefit structure rather than being required to use the design of the state's high-deductible plan."

2. County and Municipal Levy Limit Adjustment for Transferred Services
The Budget Bill contained a provision that would have allowed a municipality or county to increase its levy limit as a result of savings achieved following a service transfer or consolidation. The proposed statute would have read as follows:

66.0602 (3) (bm) Beginning with taxes levied in 2015, if a political subdivision transfers to another political subdivision any service that the transferor political subdivision provided in the preceding year, the amount of the decrease under par. (a) exceeds the amount of the increase under par. (b), and the transferor political subdivision and the transferee political subdivision agree on a division of a levy adjustment under this paragraph, one-half of the difference between the decrease under par. (a) and the increase under par. (b) may be used to increase the allowable levy of the transferor and transferee political subdivisions as provided in the levy adjustment agreement.

The Governor vetoed this provision in its entirety because of his objection "to allowing counties and municipalities to turn savings from service consolidation into a property tax increase."

The balance of the Budget Bill provisions discussed previously were not vetoed and became law by virtue of 2015 Wisconsin Act 55.