WPT Capitol Report, October 10, 2016

News from the Capitol and around Wisconsin

Members, We hope your weekend was relaxing and that you were able to catch the Packers victory last night. This week, we'll talk about manufacturing month in Wisconsin, and go a bit more in depth about that industry and what it means to our state. We'll also talk about some potential changes due to the EPA's pollution review in Wisconsin, bring you the latest on the vote to raise tuition in the University of Wisconsin System, and more. Below, you'll also find a very helpful guide to upcoming spending referenda throughout the state, and the survey results from last week. We would also like to remind members that our Capitol Reports, Newsletters, and helpful resources are available on our website at under the Current Members tab. Just enter the member password wpt2016 and enjoy all of the latest news and information in one easy spot. As we continue to make improvements to our website, and add useful information and resources for our members, we would like to get your thoughts on what type of information you feel would be most helpful. Share your thoughts by e-mailing As always, we hope you find the Capitol Report to be interesting and informative. If there are any topics you would like to share, or if you have any questions or comments, never hesitate to reach out to us directly. Have a great week, WPT, Inc.

Manufacturing and the Wisconsin economy

As we shared last week, October has been proclaimed Manufacturing Month throughout the State of Wisconsin, so it's probably a good thing to share some of the importance that this industry brings to our state's economy and workforce. Incidentally, Wisconsin is actually ranked #2 in the United States for the percentage of workforce employed by Manufacturers. 16.4 percent of Wisconsinites have a job in the manufacturing industry. That's a major chunk of the population. In case you were wondering- Indiana is #1. Wisconsin boasts manufacturers both big and small. Take a second to think about the largest manufacturers in Wisconsin. Which come to mind? Mercury Marine? Oshkosh Corp? Briggs? Kohler? Manitowoc Cranes? Brady Corporation? Rockwell? S.C. Johnson? Wausau Paper? We probably missed a ton, but you get the point. But again, in our ongoing efforts to highlight the economic and community importance of small business, we actually don't have to skew any numbers. The majority of manufacturers reside right on Main Street. In fact, according to USA Today, of the nearly 252,000 manufacturers in the United States, 248,155 were identified as businesses with fewer than 500 employees. Too bad we can't find the breakdown of how many have less than 250, or even 100 employees. Wisconsin is a bit different on the jobs front, however. Manufacturing has slipped nationwide, but is on the rise in the Badger State. In 2015 there were more than 472,000 jobs in the sector across the state. The year before, 458,400. That's a 3 percent uptick. It might not sound like a lot, but that's roughly 14,000 more people in our state who can put food on their tables. WPT has been proud to work with several organizations across the state to assist the manufacturing sector in growing, and supporting incentives statewide for job creation and economic growth. We may hear stories from time to time about some of the big companies laying off employees, or shutting down part of their operation. As heartbreaking as those stories are for the families of those impacted, and even to the entire communities, the good news is, our trends are positive in Wisconsin. In fact, the Wisconsin Department of Workforce Development shows projections of job growth in the coming years, as the current generation of employees in manufacturing retire. DWD projects the state will need new machinists and manufacturing sales reps, and even new engineers.

EPA visiting Wisconsin DNR this week

The always-controversial Environmental Protection Agency will be spending most of the week in Madison, reviewing files from the Wisconsin Department of Natural Resources enforcement of water pollution. The EPA is taking a look at whether or not the federal government should overhaul Wisconsin's water pollution laws, and revoke the state's authority for enforcement. As the La Crosse Tribune points out, it's customary for states, even states run by a conservative government, to make any changes that would avoid this extreme step from taking place, and causing the state any embarrassment. In other words, nobody wants their state's law to be overhauled by Washington, D.C. According to the article, in the past 30 years, the EPA has investigated withdrawing state's water pollution authority nearly 70 times. And Wisconsin's case is moving faster because it's based on a list from five years ago where the state was directed to fix 75 water protection deficiencies. One of the major problems was a state audit released in June that showed the Wisconsin DNR was coming up short on protections against waste water release by industry, sewage plants, and CAFOs.

University of Wisconsin regents vote to green light tuition increase

UW System leaders last week voted to approve raising in-state undergraduate tuition in the2018-2019 school year if Republican lawmakers lift the tuition freeze. There has been much chatter about lifting the freeze, and allowing schools to raise their tution,and recently, Governor Walker said he would like to extend the freeze for at least one more year, but hasn't committed to extending it beyond the year. Tuition has been frozen for four years at UW schools. The modest increase would be indexed to the rate of inflation, according to the regents, who met at UW-Eau Claire last week. Tuition at UW-Madison is $9,273. UW-Green Bay's is $6,298. We will keep you posted as more decisions are made regarding the UW System, and plan to have a future survey to collect your thoughts on tuition and other UW-related topics.

Survey results: Lawmakers' proposal to stop unfunded benefit problem from growing

Last week, we shared a plan from State Senator Leah Vukmir and State Representative Jeremy Thiesfeldt that would mandate local governments set aside money for funding future benefits to retirees. Let's take a look at some of the responses. Overall, do you like the proposal from Senator Vukmir and Representative Thiesfeldt?

About 82 percent of respondents like the proposal, which would require that local governments set aside or fully fund the benefits that they offer to new employees. "These governments should be made to fund the liabilities they and they alone created." "This should already have been happening. Business owners would have to pay, why not the government?" "Republicans are the party of local control, they should reject this." "I like this proposal in the sense that these liabilities are in the public limelight now, but please shed some light on exactly what these "health benefit" liabilities are! It seems last week's survey had a lot of respondents who assumed pension liabilities, which you've stated are fully funded. Exactly what health benefits generate unfunded liabilities?" We are glad to shed some light. First, let's get the pension portion out of the way. Local governments can pay into the state's pension plan/fund (which is fully funded), and offer this particular pension to retirees. Milwaukee County, most notably, does not pay into the state's pension fund, and has a large chunk of unfunded pension liabilities. It should be noted that since his election to the position of Milwaukee County Executive, Chris Abele, has begun paying down the liabilities, and has stopped offering this benefit to new employees. Next, let's answer your question on health benefits. If a new employee is hired by a local government, often times their retirement package will include health care benefits. The health benefits that are being mentioned here are the portion that the local government commits to pay on behalf of the retiree. For example, an employee might have a retirement package where they keep their healthcare and pay $100 (random number) per month, and the local government picks up the remaining $600 (random number) per month. The local government's share, the $600, is currently unfunded. You can now see how these numbers would add up very quickly. Just to give you a real life example: a WPT employee once worked for the state. When he left the employment of the state, he was asked if he wanted to keep his health insurance by picking up what the state had been paying. This is referred to most commonly as "cobra." The employee had been paying about $90 per month for healthcare, and the state's share was over $800 per month. This is a state example, though, not local government, but it accurately illustrates a common ratio of health benefit payments. Some believe we should be focusing more on paying off the liabilities. Do you agree that the first plan of action should be to stop the problem from growing?

88 percent of respondents believe that we should first stop the problem from hemorrhaging more tax dollars. 12 percent believe we should first take the steps towards paying it off. "That would be giving like giving the patient an aspirin and not stop the bleeding." "You cannot simply just do one or the other. Stopping it from growing MUST be accompanied with some form of paying down the liabilities." "Since Act 10, most municipalities have curtailed their health plans for new employees when they retire." "I'd like to understand exactly what these 'health benefit' liabilities are!" (See above.)

Local governments are pushing back from the state intervening. They say they are working on the issue and the state should stay out of it. Do you believe them?

A sizeable 82 percent don't buy it. "Milwaukee County is the biggest culprit." "Give them a chance to prove it, if not, then step in." "We get a LOT of feedback from our local governments. They are struggling with the fact that no matter what the tax increase is, the money is still gone. Costs going out to government in particular are rising faster than they can raise taxes. It's not a matter of 'take more from the people,' it's more a matter of 'control your costs better and be a more conservative spender.' I hear what local governments pay out...and it would shock most people. But just jacking taxes isn't working, either, because that just makes your residents angry. Have to spend what you get smarter." "Can't fix what we don't know is broke." Do you currently pay into a pension?

"401K" "We have always been self-employed and in our 70s are still farming." "I was self employed, so I have no pension." "I invest in my own 401K." Major League Baseball Postseason begins tomorrow. Any World Series Champs predictions? (Share your WS match-ups in the comments.)

Wow, over 62 percent of respondents don't want baseball. That'll likely be the last time we mention MLB! But it looks like a group of people predict the Chicago Cubs will win the World Series! A respondent also predicted Mets vs. Indians in the World Series. Another respondent said they would just like to see another crushing Cubs failure...WPT's legislative director happens to agree, a Game 7, bottom of the 9th walk-off would be incredible way for Chicago fans to feel the pain.

Fall 2016 Referenda Guide

We know how important taxes are to you and your families- your businesses and or your farms, and more often these days, you get a direct vote on local spending. This fall, voters across the state will have a big say in some big spending. There are 42 referenda to issue new debt, totaling about $1.14 billion dollars. There are 11 referenda to exceed revenue caps for recurring purposes, totaling over $40 million dollars. There are also 14 referenda to exceed revenue caps for non-recurring purposes, totaling $157 million dollars. Click here to find out if your community will be voting.

The future of the Green Bay Correctional Institution

It's called crowded, unsafe, and out of date by many, and the Green Bay Correctional Institution is the second-oldest prison in the State of Wisconsin. Representative Dave Steffen, a Green Bay Republican, is calling for a study that provides more insight into the facility, its feasibility, and the financial analysis of the area around it. The current location of the prison, in Allouez, is prime real estate, situated off of the exit of 172, in the center of Brown County, and located on the Fox River. In 2009, a study concluded that $142 million in upgrades were needed at the prison, which is currently unsafe and crowded, according to the first term lawmaker, and a larger and more modern facility is likely needed. Steffen added that the prime location of the property could be generating tax revenue for Allouez. A more rural location between Green Bay and Kewaunee might be better, since the area was hit hard by the nuclear plant closure, according to Steffen, or a location between Green Bay and Brillion, where hundreds will be out of the job when Brillion Iron Works shuts down. Steffen has submitted his request to Governor Walker and the State Department of Corrections.

Fire damages barn at 2017 Farm Tech Days host farm

A large blaze Thursday afternoon, lasting until the early hours of the morning Friday, has caused a straw barn at Ebert Enterprises near Algoma. Ebert Enterprises of Kewaunee County is the 2017 host farm of Wisconsin Farm Technology Days. Officials have not determined the cause of the fire, but firefighters traveled relatively long distances to help with the blaze. As the Green Bay Press Gazette reported, firefighters traveled from as far north as Sturgeon Bay and as far south as Mishicot.