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May 6, 2009

Insurance Surprises In Governor’s Budget


The Governor’s state budget bill now before the Legislature’s budget writing committee determines taxes and spending over a two-year period.  However, the budget bill includes more than just revenue and expenditure items found in a typical budget.  The Governor also included 80 non-fiscal policy items as identified by the nonpartisan Legislative Fiscal Bureau. 


While it is not uncommon for governors to include non-fiscal policy items in their budget proposals, in recent sessions, the co-chairs of the budget writing committee have agreed to remove them and introduce them as individual legislation.  Unfortunately, this session, the co-chairs removed less than half of these policy items and left in the budget some items that will have significant affect on our everyday lives and have nothing to do with state taxing or spending.


A couple of surprises in the budget would directly impact insurance premiums for cars and liability insurance for organizations like businesses, churches, and charities. 


The first proposal would mandate dramatically higher auto insurance coverage limits, which in turn is estimated to increase auto insurance premiums by as much as 33%.  It would increase minimums of $25,000 for personal injury, $50,000 for each accident, and $10,000 for property damage to $100,000, $300,000, and $25,000 respectively.  Wisconsin has the most affordable auto insurance premiums in the nation, but that would change quickly if this budget provision stays.


The second proposal would redefine who pays liability damages for injury costs.  Current law says a defendant must meet a 51% threshold to be held responsible for up to 100% of the injury cost.  However, the Governor’s budget would say an individual, employer, charity, or church that is even 1% liable could be held responsible for 100% of damages.  It is worthy to note that if one is simply present they are partially liable.    


Regardless of our positions, we should not cower from having a direct vote on these issues.  That is why I have joined with over 30 of my colleagues in asking the Co-Chairs of the budget writing committee to pull these provisions from the budget bill and introduce as separate bills.


What do you think of these non-fiscal budget items?  Please email me at or call 1-800-826-1092.