Status Update on Senate Bill 713/Assembly Bill 857

Thank you to everyone who took action to oppose Senate Bill 713/Assembly Bill 857, which eliminates the requirement that Common School Fund dollars go to school libraries and ends the BCPL Trust Fund Loan Program. As a result of your advocacy, no action has been taken on this bill since the public hearing was held on January 31.

The 2017-18 legislative session is quickly coming to a close, and if SB713/AB857 does not pass before the legislature adjourns, it will be considered dead. The final floor day is March 22, but the State Assembly is expected to adjourn at the end of the week and the Senate will meet only once in March. 

As you know, the Senate Committee on Government Operations, Technology and Consumer Protection held a public hearing on January 31 on Senate Bill 713. That Committee never scheduled a vote on the bill. 

The Assembly companion bill, Assembly Bill 857, is before the Assembly Committee on State Affairs. That Committee has not taken any action on the bill. 

Representative Hutton (R-Brookfield) did release an amendment to the Assembly Bill, but no action has been taken on that amendment. It is important to note that the amendment does not resolve all of WEMTA's issues with the bill, so it would not change our position on the bill if it were adopted.  Even with the amendment, the bill would still:

Rename the School Library Aids appropriation the School Aids appropriation

Eliminate the requirement that computers and software purchased with CSF dollars be housed in the school library. However, the amendment does keep the current law requirement that CSF dollars be given to school libraries 

Eliminate the BCPL Trust Fund Loan Program

Set the stage to transfer BCPL Trust Fund investments over to SWIB. 

We will know more about the status of this bill by the end of this week, and will update you at that time. 

Act Now: Bill Would Cut Common School Fund By $2 million

The Assembly Committee on Judiciary is voting at 5 p.m. tomorrow night on Assembly Bill 773 which would eliminate the Department of Revenue’s (DOR) ability to conduct third-party audits related to unclaimed property. Proceeds from unclaimed property go into the Common School Fund, and DOR says this bill would result in $1.7 million less going to the Common School Fund in 2018. 

Contact your state representative and ask them to remove the unclaimed property changes from AB 773 because they would hurt the Common School Fund. Let them know that BCPL, which administers the Common School Fund, voted to oppose this change because it would hurt school  libraries. Find out who represents you here: http://legis.wisconsin.gov/ (click on “Who Are My Legislators?”)

BCPL Votes 2-1 to Oppose SB 713

The Board of Commissioners of Public Lands (BCPL) met Tuesday afternoon and formally voted 2-1 to oppose Senate Bill 713/Assembly Bill 857. State Treasurer Matt Adamczyk voted against the motion to oppose the bill.

During discussion on the bill and motion to oppose, BCPL Chair Attorney General Brad Schimel said that he did not think the bill was a good idea and that, from his understanding of the Legislative Fiscal Bureau analysis, SWIB would not be able to do any better than BCPL.

“I would not want us, our Commission, to be characterized as acquiescing…as thinking that this doesn’t…that this is harmless,” said Schimel.  

“These pieces of legislation are a disaster. They basically destroy—and I want this on the record—they would destroy the School Trust Fund program, which has operated for over 100 and some years very effectively,” said Secretary of State Doug La Follette.

Adamczyk said that he didn’t think the bill would pass this session, but that he supports the concept. He again argued that SWIB would do a much better job of managing the trust fund dollars.

The Board also voted 2-0 (with State Treasurer Adamczyk abstaining) to oppose a provision in Assembly Bill 773 and Senate Bill 645 that would prohibit the Department of Revenue from conducting third-party contingency fee audits of the unclaimed property program. The Department of Revenue (DOR) has issued a fiscal estimate on this bill, which indicates that if passed, it would reduce unclaimed property transfers to the Common School Fund by $1.7 million in fiscal year 2018.

The Board voted to narrowly oppose the specific provision of the bill related to unclaimed property.

BCPL Executive Secretary Jonathan Barry said that it “would be unfortunate if this provision were adopted.”

“If this passes, either the way it’s originally proposed or as amended, it’s going to leave a lot of money on the table that doesn’t go to the trust fund,” said Schimel.

You can listen to the full debate here.

Recap of Public Hearing on Senate Bill 713

The Senate Committee on Government Operations, Technology and Consumer Protection held a public hearing last week on Senate Bill 713, which would eliminate the BCPL Trust Fund Loan Program and the requirement that Common School Fund dollars be spent on school library funding. It also gives the State of Wisconsin Investment Board (SWIB) more authority to invest BCPL trust fund dollars. 

The bill authors, Senator Stroebel and Representative Hutton, both testified in support of the bill. State Treasurer Matt Adamczyk was the only other person to formally speak in favor of the bill. 

Senator Stroebel, Representative Hutton and State Treasurer Adamczyk all said they support the bill because SWIB would be able to make even more money for the trust fund accounts than BCPL—they specifically argued that SWIB could double the money.  In regard to the elimination of the Common School Fund language about school libraries, the supporters argued that the bill gives schools local control and flexibility. They said that it is disappointing that the school community does not support this legislation and said it is “disingenuous” for schools to object to taking on more local control after asking for it for so long. 

State Treasurer Adamczyk said that they aren’t going to eliminate school libraries. However, he did acknowledge that moving money over to SWIB would lead to years where the funds won't make any money and years where they would make a lot more. He also voiced his support for taking library funding out of BCPL and just having the legislature fund it separately.

Senator Kapenga (R-Pewaukee) expressed his support for the legislation. Senator Wirch (D-Somers) said that people need to keep in mind that the stock market may be doing well now but that that is not always the case. 

Jonathan Barry, the executive secretary of the BCPL, testified for information only but he responded to several assertions being made, including that if SWIB had invested BCPL trust fund money the same way they manage the Wisconsin Retirement System funds, significantly more money would have gone to public schools. Barry said it is "not a fair analogy" because"SWIB would be subject to the same constitutional limitations as BCPL and therefore would not likely produce any better investment returns" if they managed the funds for real. 

"If SWIB has a down year, it reaches into principal and the retirees still get paid. If BCPL were to have a down year, there would be no money available for school library books, computers and software in most of the school districts throughout Wisconsin," said Barry. 

The Wisconsin Towns Association testified against the bill as did several town officials from across Wisconsin. They spoke about the importance of the BCPL trust fund loan program and how banks often won’t agree to the types of terms towns need—like longer loan periods. They said many of their local infrastructure projects would not have been possible without the BCPL loan program.

The following WEMTA members spoke at the hearing: Mandy Meloy, Kay Benning, Jeannine Ramesy, Lawrence Gillick, and Laura Marusinec. Renee Deschard submitted written testimony. 

Next steps:  the Committee will need to take a vote on the bill. It is not clear when this will happen. The Assembly Committee on State Affairs has the Assembly Companion Bill (AB 857) and would also need to hold a hearing at some point for this bill to pass. 

There are currently 18 organizations registered in opposition to the bill.