WASB weighs in on extraordinary session legislation relating to settlement proceeds and the common school fund

The WASB sent a memo to the Joint Finance Committee in advance of their public hearing on extraordinary session legislation on Dec. 3.  The WASB has strong concerns about provisions that would require that the Wisconsin Department of Justice (DOJ) must deposit all settlement funds into the general fund and further, that all unencumbered settlement funds that are currently in the DOJ appropriation would lapse into the general fund.

These concerns are based on the recognition that these provisions would formalize a process which, in our view, may violate Article X, Section 2 of the Wisconsin Constitution. That section requires that:

“… all moneys and the clear proceeds of all property that may accrue to the state by forfeiture or escheat shall be set apart as a separate fund to be called “the school fund,” the interest of which and all other revenues derived from the school lands shall be exclusively applied to the following objects, to wit:

(1) To the support and maintenance of common schools, in each school district, and the purchase of suitable libraries and apparatus therefor.
(2) The residue shall be appropriated to the support and maintenance of academies and normal schools, and suitable libraries and apparatus therefor.”

For too long, in our view, stakeholders and policy makers have deferred to the practices of the DOJ and Attorneys General of both parties that have ignored Article X, Section 2, and have placed settlement funds into discretionary accounts.

The time to end that practice and deference to it is long overdue. Discretionary settlement funds are substantively equivalent to fines and forfeitures and should be going into the Common School Fund according to constitutional provisions in Article X, Section 2 of the Wisconsin Constitution.

The WASB asks that this legislation be amended to instead require the deposit of
discretionary settlement funds into the Common School Fund rather than the general fund.  This would bring the state’s handling of settlement funds into alignment with our state constitution.

WASB members have adopted a resolution stating:

“The WASB opposes any legislation to repeal, modify, or jeopardize the constitutional provision of fines and forfeitures as a source of income for the common school fund.”