WPT Capitol Report, August 29, 2016

News from the Capitol and around Wisconsin

Good evening members, We hope you had a great weekend and that you were able to find some time to relax during these last days of summer. This week, we'll bring you the latest on a decision to allow the new Wisconsin Ethics Commission members to make political contributions, talk about Wisconsin start-ups and how we rank nationally, and share some info on the USDA and cheese surplus, among other topics. We'll also share last week's survey results. As always, we hope you find the WPT Capitol Report to be interesting and informative. If there are any topics you would like to see featured in a future edition, reach out to us directly at any time by e-mailing Have a great week ahead, and a fun Labor Day weekend, WPT, Inc.

Ethics Commission will allow members to contribute to political candidates

We knew the new Wisconsin Ethics and Elections Commissions would be partisan, so it should come as no surprise that the Ethics Commission has made the decision to allow its members, who were selected along party lines by legislative leaders and the governor, to make political contributions to candidates. The commission, which recently replaced the Government Accountability Board as per legislation passed last year, is charged with overseeing ethics and lobbying, campaign finance, and other duties. This is the group to which WPT reports all of its lobbying activity twice per year. The GAB members were barred from making political contributions because of potential conflicts of interest, accusations of favoritism, and the like. One member, David Halbrooks, has no problem with being allowed to give contributions. In an interview with WPR, he said that he has never found somebody that's non-partisan, and that none of the new commission members were appointed in a non-partisan manner, so he sees no issue with giving campaign contributions. In fact, Peg Lautenschalger, who chairs the new commission, and who is a former Democratic Attorney General, said she would have thought differently of her appointment if she had known she'd be restricted in any way. Only two of the six members on the Ethics Commission voted to even consider taking the voluntary ban on giving political contributions. Those two members were former Republican Majority Leader and former State RepPat Strachota, and Robert Kinney, who was appointed by Governor Walker. The item was then tabled, and no final vote to ban was taken, thus permitting the check-writing.

Wisconsin dead last (again) for start-up business activity

This makes year number two which every other of the 25 largest states in the US has more start-up activity than the State of Wisconsin. The report, issued by a respected organization, the Ewing Marion Kauffman Foundation, actually found that start-up activity in the country rose for the second year in a row. The report found that Wisconsin's largest metro area, the statistical area Milwaukee/Waukesha/West Allis, ranked only above Pittsburgh for this type of business activity. Not good news considering a majority of jobs in Wisconsin in 2015 were created by small businesses, a majority being 5-years-old or younger. Governor Walker and Tom Still, president of the Wisconsin Technology Council, don't like the way the study was performed or its methodology. They believe that Wisconsin is at an unfair advantage in these types of studies because our state has a (barely) older population that other states, and it attracts fewer immigrants- who tend to bolster start-up activity in states. Other state business leaders, particularly those active in the start-ups sector, point to state lawmakers taking money from the start-up tax credits, and pursuing cuts to the US System. Joe Kirgues, who heads "gener8tor," and provides training and assistance to start-up businesses doesn't much like the way the legislature has "raided" the Early State Business Tax Credits Program. The money that was taken from this fund, dedicated to small businesses, mainly went to help support more tax incentives for larger companies in Wisconsin. From our view, something needs to be done to bolster Wisconsin's start-up activity and assist our small businesses in expanding and creating more jobs. WPT supports directing WEDC to focus more on small businesses and start-ups, and fully supports repealing burdensome taxes that plague small business growth, namely the personal property tax. It's not a cure-all to the dismal reports that rank our state's start-up activity last, but it's an enormous stride in the right direction.

State shells out $9.7 million in merit bonuses to state workers

Merit-based bonuses, and equity or retention payments just about doubled in 2016, according to the Wisconsin State Journal analysis. Though, to be fair, it was just about half of what was given a mere three years ago in the state. Wisconsin's agencies and departments granted pay bumps and one-time bonuses totaling $9.7 million for 4,648 state employees, which equals roughly 15 percent of the state's workforce. This year was also the first that the UW System employees were removed from the civil service system, which now has its own merit system. The UW System, at the time, accounted for 44 percent of the overall expenditure, according to a Department of Administration spokesperson. The bonuses are meant to retain employees, reward good job performance, and make their pay equitable to those of their peers. The number of awards is up 1,544 from last year, in which Governor Walker suspended these bonuses to assist with budget gaps. The state only ended up granting about $3.7 million. In 2013 and 2014, the state paid $17.9 and $16.3 million in bonuses.

Survey results: Wheel taxes and other potential revenue sources

Last week, we talked more about the wheel tax, which communities already have it, and which are proposing such a measure- like Wausau's current proposal, and latest plan to extend the tax to all of Marathon County. It's not uncommon throughout the state, and it impacts many drivers. Some argue that it's a more equitable way to fill revenue gaps, since most people have registered cars, and others argue that there's a better way than to increase fees in order to fund road maintenance, repairs, and repaving. Like every week, we wanted to get your thoughts on the issue. Do you currently pay a wheel tax?

Judging by the responses, only about 16 percent of respondents currently pay a wheel tax. It's our prediction that as revenue shortfalls continue to widen, and municipalities become (seemingly) more strapped for cash as state aid drops, this 16 percent will actually rise. As we stated above, it's not an uncommon measure in many parts of the state, and in more urban communities such as Milwaukee and Appleton. Some of the comments came from Chippewa County, St. Croix County, and Manitowoc. It looks like only a small percentage of respondents pay, but what do the majority of readers actually think about this tax? Is it the right way to go about fixing roads? Do you think this is a more equitable way to raise local funds for roads, rather than raising property taxes?

A whopping 80 percent say it's equitable, and they don't want to see their property taxes go up in order to repair roads. As you recall, Marshfield recently voted down a referendum that would have increased property taxes in order to achieve the same goals as the Wausau wheel tax. It looks like most members would prefer the latter solution locally. Should single axle trailers pay title and registration fees with the DOT to generate revenue?

A 50-50 split on this solution. So, let's turn to the comments to get some of your thoughts out in the open. "Most other states do this already." "This is common in most other states." "Wheel tax on the items that pull them including farm tractors and self-propelled implements." "They do in many other states. This is a user gee, not a tax." "Leave it the way it is and find another way." "Why pay registration on something most people only use a handful of times per year?" It looks like there really is an even split among readers. The reason we asked this question is because several WPT members have contacted us to suggest this as a local way to raise money for local roads. If this is suggested at any point during the legislative session, we will keep you informed of the proposal's topic and movement through the process. But how about another common suggestion? Many have suggested an annual DOT mileage tax when you register your vehicle every year; your fee increases as your mileage increases. What do you think?

35 percent say it's a good idea and they'd like more information. 60 percent say it's a bad idea and to find another way. 5 percent say they're indifferent, just pave the roads already. There are a lot of problems with such a proposal, and not surprisingly, those who commented were quick to point them out. "That would penalize rural people and farmers who have to go longer distances than city people." "Raise license plate fees." "Who's going to tell the truth on mileage?" "Not all miles are (driven) within the State of Wisconsin." "This arguably is already covered via state gasoline taxes." "Why the **** would you add another tax? Just raise registration fees and the fuel tax and the problem would be solved. These are both user fees and not real taxes. Flatland tourists would help pay for our roads with increased fuel tax." And our fun question of the week:

"51 Chevy. Didn't take any long trips with it. Went from Muskego to UW-M 1960-1964." "1968 Ford Torino. Going parking with my girlfriend. Now my wife of 40 years." "55 Chevy. Trip to Minnesota." "1973 Pontiac Firebird" "1951 Pontiac Chieftan" "1958 Ford. The car was used to get work." "1973 Mercury. Wisconsin Dells." "1948 Ford" "Chevrolet Impala" "Trips to New Orleans, West Virginia and San Diego. Lots of trips to campgrounds within Wisconsin." "1970 Ford Maverick- I bought for $10, a case of beer, and had to remove from my buddy's parents' yard in 24 hours. It had flat tires and no battery!" "First car was a 1957 Dodge. Favorite trips were on a motorcycle and they were all memorable." "Packers training camps and the Dells." "Private memory, sorry." "Pontiac Firebird" "Plymouth Fury 1953" "1956 Chevy convertible."

Kewaunee County calling for a tax hike

When the nuclear plant closed in 2013, it was unclear just how much revenue shortfall would befall Kewaunee County. Now that number seems to have taken shape, and it looks like $740,000 in electrical generation taxes annually. That's a substantial loss of revenue, without which, could cause serious cuts in communities residing in Kewaunee County. That figure also represents a loss of nearly 10% of the county budget. But is a tax hike the right answer? Members of the Kewaunee County Board think so. Supervisor Lee Huft says the county needs to take steps now to deal with the loss of income, as well as the increase costs to maintain services to residents in the area. The proposal is for a half percent sales tax to fix the gap. Without the tax, according to Luft, services will need to be cut. But other board members aren't too keen on levying a half percent sales tax just yet. Christopher Rasmussen, also a Board Supervisor, says the county needs to take a close look a spending before asking taxpayers to foot the bill. "There's a multitude of areas where I think we owe it to our taxpayers, to those who elected us, to take a look at it,'' he said. But Luft says the county has sifted through 600 pages of county budget books and made all of the cuts possible, and urges the tax hike. If you live in Kewaunee County and would like to voice your thoughts on the $740,000 shortfall and how to deal with it, there'll be a forum tonight at the County Fairgrounds beginning at 6:30PM.

USDA purchases 11 million pounds of cheese to alleviate surplus

An oversupply of dairy products is weight down the dairy market, and the USDA has purchased 11 million pounds of cheese to help alleviate the struggling market, and on the heels of dairy exports falling. While the USDA believes that this drop in exports coupled with the oversupply is one of the reasons why prices have dropped and remained low and stagnant, some in Wisconsin don't think the USDA's plan won't correct the market. Darin Von Ruden, a Wisconsin dairy farmer and president of the Wisconsin Farmers Unions says that farmers are not encouraged to produce less, and that the only way farmers can make ends meet and pay their bills is to produce more milk- which ultimately ends up hurting them. The surplus of cheese, according to the USDA, is at a 30 year high of nearly 1.3 billion pounds in July. The USDA's purchase of 11 million is less than 1 percent of the total surplus. One professor at UW-Madison said that the 11 million pound purchase by the USDA is a signal that Tom Vilsack, federal Ag Secretary, recognizes the problem, and that the purchase could help.