On Friday, May 26, the Governor released his "Major Budget Policies
2007-09".  A highlight of the most important information is shown
below.  Time will be set aside to discuss the  instructions at the
Administrative Staff meeting on Friday.

Ten themes were listed as core concepts for constructing the biennial
budget:

 1. Reduce the Tax Burden
 2. Invest in Education
 3. Reform Health Care
 4. Grow Wisconsin
 5. Energy Efficiency
 6. Care for Wisconsin Kids
 7. Protect Wisconsin's Citizens
 8. Enhance Wisconsin's Natural Resources
 9. Secure Fair Share of Federal Dollars
10. Streamline State Government

Note:  Under "Invest in Education" the Governor mentions improving
Wisconsin's education system and notes that his Wisconsin Covenant will
be a top priority.

The instructions call for agencies to prepare 2007-09 biennial budget
requests based on 100 percent of their fiscal year 2006-07 adjusted base
level excluding cost to continue items (page 3 of "Major Budget Policies
2007-09" document).  Further exceptions are provided including an
exemption for University of Wisconsin System instruction and research
activities that are focused on economic growth.

The instructions further call for state agencies to prepare plans to
absorb a ten percent permanent base cut on non-FED sum certain state
operations administrative appropriations (also on page 3).  The
University of Wisconsin System should prepare this plan based on ten
percent of its administrative activities.  Reduced base budget plans are
due Monday, November 13, 2006.  The instructions ask agencies to look
beyond across the board cuts and consider fundamentally reviewing the
agency's missions and priorities, exploring opportunities to reallocate
resources, integrate programs and consolidate functions.  They further
suggest that agencies should plan to accomplish this reduction without
layoffs.   Note:  Two years ago, 10% of administrative activities,
translated to mean 10% of Institutional Support, was equal to $14.1
million GPR/Fee on an ongoing basis ($28.2 million biennially).

As in previous biennia, one third of state agencies must prepare a base
budget review.  Since the UW System participated in this review last
biennium, we will not be required to do this for two more biennia.

Agencies will be required to continue to report on performance measurers
they identified in prior biennia.

The major policies document can be found at
http://www.doa.state.wi.us/docs_view2.asp?docid=5716

Freda