News from the Capitol and around Wisconsin
Members, We hope your week is off to a productive start, and that you had a chance to relax over the weekend. We would like to also wish everybody a Happy Presidents Day! This week, we will be touching on a few topics, including a budget provision that boosts the number of tax auditors in the Department of Revenue, a proposal to eliminate Daylight Savings Time in Wisconsin, a proposed audit that examines the role of federal dollars in the budget, how Wisconsin fits into a recent report that rated America's bridges, some news on food manufacturing, and more. We would also like to remind members that our Capitol Reports, Newsletters, and helpful resources are available on our website at www.WPTonline.org 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 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 at email@example.com. Have a great week, WPT, Inc.
Last week at WPT
By: John Jacobson
Last week was full of member contacts! I had several business owners and other members reach out to me regarding the piece I wrote on unemployment insurance, and the burden placed on businesses due to work search requirements and compliance. As you know, WPT will be working to find sponsors for a bill that returns the exemptions for those employees in the seasonal workforce. I appreciate the e-mails and calls over the past week, and I am glad many of you decided to share your story. Last week, I also drove to Janesville to be a guest on the "Your Talk Show" 1230 WCLO radio in regards to our efforts to repeal the Personal Property Tax (PPT). Accompanying me was Michelle Kussow, the Vice President of the Wisconsin Grocers Association, and the founder of the Coalition to Repeal PPT WI. The interview lasted for about 40 minutes, and we were able to take a few call-ins and answer their questions and address their concerns. You can listen to the episode here. Additionally, if you visit www.REPEALPPTWI.com, you will be able to learn more about our coalition, our efforts, and some useful tools for contacting Governor Walker and your lawmakers directly. I also received several questions about why it is necessary to find a replacement revenue, if we are to repeal the $260 million personal property tax, rather than address spending and the size of local governments. While we do advocate for responsible spending, the coalition's official stance is that we believe the state, through general purpose revenue (GPR) reimburses the municipalities for the lost revenue. Without that type of revenue replacement proposal, the entire $260 million would be shifted onto residential and commercial property taxes. Last week, we also received news that Governor Walker inserted a provision into his budget proposal that would eliminate local school districts from surpassing revenue limits by claiming an energy efficiency exemption. This exemption was enacted in 2009, and allows for schools to go around taxpayers and referenda, and levy a tax on property by claiming the funds will be used for "energy efficiency" projects. While, in theory, many might want schools to easily have the ability to make their buildings more energy efficient, this is not always what is happening in reality. Since 2009, taxpayers have been put on the hook for $800 million through this exemption, and without any type of voice in the process. Additionally, since most of the dollars are borrowed, it takes school districts about 10 years or more to pay off the debt that they accrue. Unless, you're in Green Bay. That school district has borrowed $33 million for building projects and equipment costs. Because of the 2009 law, it will now be able to collect taxes beyond its revenue limit for the next 20 years to pay off the debt and interest. The district claims it will save them nearly $30,000 per year in energy costs, but at the interest rate of the loan and terms of the repayment, it will take them 48 years for the project to pay for itself. It's not a "for sure" thing that this will remain in the budget. As you know, this is a long process, and many things are added, changed, or removed altogether. But I see this as a win for local property owners across the state, who have demanded to have a voice in the process of local taxes and levies. I hope you have a great remainder of the week. If you wish to reach out to discuss anything you've read, or just to say hello, please don't hesitate to reach me at firstname.lastname@example.org
Budget includes 46 new tax auditor positions
A tax audit program which raked in an extra $27 million in revenue for the state could see an expansion, if the provision lives through the budget process. The Audit 2020 initiative, enacted by Governor Walker's office, would see an addition 46 new full-time tax auditor positions due to a provision that was inserted into the state budget proposal. It is expected that the new positions will bring in an additional $64 million in revenue over the course of the biennium, adding to the 102 permanent positions from the last budget. Their goal was to collect $113.5 million. According to Governor Walker's office, the program is designed to focus on taxes owed by businesses that reside outside of Wisconsin, so that the cost doesn't shift onto Wisconsin residents and businesses. Some business groups disagree with the move, such as Wisconsin Manufacturers and Commerce, who call the audit process long, cumbersome, and expensive when it comes to associated compliance costs. Other groups, such as the Metropolitan Milwaukee Association of Commerce, praised the plan, particularly its focus on reigning in tax cheats, and providing more revenue to further lower other taxes.
Idea to eliminate Daylight Savings Time being floated around legislature
In less than three weeks, the dreaded "spring forward" adjustment for Daylight Savings Time will take effect. Generally, you don't hear too many complaints about "fall back," when we "gain" an hour of sleep. But nonetheless, Republican lawmakers, Representatives Samantha Kerkman and Michael Schraa circulated a bill last week that would eliminate Daylight Savings Time in Wisconsin. This would mean that Wisconsin would have the same time, year round, even if it put us at odds with surrounding states' time for half of the year. For example, crossing into Minnesota, Iowa, Michigan, or Illinois from the months of November through March would mean you'd have to set your clocks back by one hour. The authors of the bill contend that the twice-yearly adjustment would save people an hour of sleep in the spring, and eliminate confusion. Arizona and Hawaii are the only two states in the United States that do not observe Daylight Savings Time. Wisconsin began observing Daylight Savings Time by referendum in 1957. Neither legislative leaders, Speaker Vos or Majority Leader Fitzgerald, have weighed in on this. The bill's author said there is no time table for the bill, and might not even be introduced this session.
Lawmaker requests audit of all state programs using federal dollars
Whether roads, bridges, local governments, housing, or many other funding needs, federal funds have likely contributed to the pot of money that goes into many projects around the state. But how much does the compliance that is often tethered to the use of federal funds inhibit or cost the programs that use them? For example, through the federal Davis-Bacon Prevailing Wage law, any public projects that use federal funds must comply with prevailing wages. There is often this type of red tape on many federal funds, and one lawmaker in Wisconsin wants to take a closer look. Last week, State Senator David Craig (R-Big Bend) requested an audit of all state programs that use federal funds. The letter, addressed to the Joint Legislative Audit Committee, asked that the Legislative Audit Bureau conduct a "comprehensive audit of all state programs which receive or utilize federal funds," and would like a review of the federal government's requirements, regulations and restrictions "which bind the usage of those (federal funds) and tie the hands of our state government officials, local officials, and limits the freedom of our constituents." More specifically, Craig would like to know the costs of compliance and loss of freedom by a state agency and local officials due to regulation, the estimated savings that could accrue if a regulation were to be lifted, and the cost of compliance and loss of freedom by citizens as a result. In 2013, 30 percent of all 50 state revenues were from federal aid grants, including Medicaid payments, education funding, housing and infrastructure projects.
WPT Weekly Member Poll Results: Proposed $76 billion budget, Milwaukee Bucks' minor league team in Oshkosh, limitations on project labor agreements, moving CAFO regulations from DNR to DATCP, bankruptcy filings drop in Wisconsin
Last week, we brought you some of the provisions of Governor Walker's proposed $76 billion state budget, as well as news that the Milwaukee Bucks have decided to partner with a local business executive to build a new arena in Oshkosh that will serve as the home of a new NBA minor league team. We also shared the news that the State Senate passed a bill that bars local governments from requiring project labor agreements on public projects, and a directive in the state budget that requires a study of moving CAFO regulations from the DNR to DATCP. As always, we wanted your thoughts. Governor Walker introduced his $76 billion state budget proposal last week. From what you've read so far, what do you think?
About 66 percent of respondents like what they see in Governor Walker's budget so far. About 33 percent responded that they're not sure. "Still need more for roads and K-12 education. Glad to see college tuition freeze." "Doesn't deal with the roads (bad roads!)" "Transportation funding borrowing is a bad idea. Raise gas tax and license fees. These are actually user fees. They have done it with state parks." "Looks like a lot of spending increases with lots of tax cuts. Not sure how that adds up, we're already borrowing a lot." "More school funding is far over-due." The Milwaukee Bucks have decided to own and operate a new minor league team in Oshkosh, which will also include a new arena for the team. Do you think this will be good for the Oshkosh and Fox Valley economy?
Over 40 percent say this will be good for the local economy. A little over 20 percent think there isn't the fan base in the area to support this team long-term. About 35 percent say they don't know. We also asked if you've ever attended a Bucks game: "How much corporate welfare will the taxpayers regurgitate to "help" pay for this?" "NEVER" "I've never been to a Bucks game, Packers game, Badgers game...If it creates jobs, and keeps people employed full time, I'm OK." "Years ago!" "3 years ago" "I am not a pro basketball fan. High school and College ball are much better." "Too far to drive from Milwaukee." "Someone gave me Bucks tickets about 10 years ago. That's the only time I've gone." "I have never gone to a Bucks game but enjoy watching them on TV."
The State Senate passed a bill barring local governments from requiring project labor agreements on public projects. Good or bad?
About 65 percent think this is a good idea. About 10 percent said it was a bad idea, and 25 percent said they weren't sure. "Union labor adds way too much $$$ to these projects." "Sometimes labor agreements stop other companies from undercutting labor, material quality, or stops them from rushing jobs. It also can help hold down cost over-runs. Too many companies bid a "government job" and then bid it sky high. We run into this regularly, matching specifications and then finding out we beat the competition by so much that the folks receiving the bids are stunned. Makes me wonder what's really going on..." "I do not understand the democrats argument that the change will take away local control. Maybe in a city or county like Dane county where there are way too many restrictions for doing anything, but in the rural areas, the local contractors do not get the work because so many are non union. Just because cities like all the "extra jobs" government provides with all their local directives that require compliance officers by both the government and the industry, does not make sense for the rural areas of the state. Many local companies can benefit by providing a lower cost for building for their local municipalities which benefits the local economy. The workers enjoy a lower cost of living because their property taxes are lower because the work was done at a lower cost. We are a shop that does repair work of all kinds. We are not union, all the workers here could make more elsewhere, but the shop rate undercuts most of the competition by $30 an hour and we never run out of work. Sometimes more isn't always better!" "Free market" "Good because it gives local govt more flexibility when negotiating project costs." "Oh, look, another GOP bill limiting local control. Shocking!" The proposed budget includes a directive to study the move from CAGO regulations from the DNR to DATCP. Good or bad?
About 45 percent think this is a good move, and about 45 percent don't know. A little over 10 percent say it's a bad move. "I have had dealings with DATCP, and all have ended with me wondering why nobody there can give any help to the Consumer, Agriculture, or Trade victims. Not a fan of either DNR or DATCP..." "DATCP, just as stated, has a better handle on agriculture and the issues concerning it. A good farmer is always going to treat the land right, those who don't will have it catch up with them sooner or later." "DATCP has a better idea of agriculture needs and issues. There will still be all the regulations in place to safeguard the environment." "The folks who say the DNR "isn't doing its job" really want CAFOs regulated out of existence. Nothing will make them happy. DATCP already regulates most of the state's farms and does just fine. DNR is already stretched very thin. Seems there's no harm in trying this." "Not a chance to have DATCP to watch over water quality." Bankruptcy filings in Wisconsin are down to their lowest in nearly a decade. Is this a good economic indicator?
About 88 percent think this is a good economic indicator. 12 percent say no. And have you used bankruptcy, or anybody you know? Did it help? "I have seen neighbors file bankruptcy and now they enjoy a larger house and a better life as we paid for their poor financial planning." "I have not had a bankruptcy. Thanks to financial training I've plugged into, I've kept a business afloat and run the family finances through some of the worst economic times we've seen. I'm not sure if this is good or bad...But I don't think we should celebrate just yet." "I used to work in the lending industry, bankruptcy is not a good choice at all unless it's your one and only choice out of desperation! As a lender, we would not even look at someone who had a former bankruptcy. Bankruptcy is a "dirty word" as far as I'm concerned. Another idea thought up by lawyers so they can make another buck off from someone else's misfortune." "No" "Never used bankruptcy. Never known anybody to use bankruptcy. Any good manager with good financial ethics should use bankruptcy."
56,000 bridges in the US "structurally deficient"
According to the American Road and Transportation Builders Association (ARTBA), 56,000 bridges in the United States are labeled as structurally deficient. To put that into context, vehicles cross these bridges a combined 185 million times per day. The list, which uses Transportation Department numbers, scores each bridge on a nine-point scale. Deficient does not necessarily mean that the bridge needs to be replaced or is unsafe, but it means that the bridge requires attention. Nearly 174,000 bridges are around 50 years old, and have never had any type of major construction work, and about 13,000 bridges need replacement or major reconstruction. Five states with the most deficient bridges include Iowa (4,968), Pennsylvania (4,506), Oklahoma (3,460), Missouri (3,195), and Nebraska (2,361). Wisconsin falls right in the middle, ranked 24th for structurally deficient bridges. Of the 14,230 bridges in the Badger State, 1,232 (9%) are classified as structurally deficient. 783 bridges are classified as functionally obsolete, meaning the bridge does not meet the design standards currently being used. Also, according to the report, $2.3 billion federal investment dollars have come to Wisconsin for capital improvements on 2,259 bridges between '05 and '14.
Number of Wisconsin farms down, but state ranks #3 in food manufacturing
The total number of farms in Wisconsin in 2016 were 68,700 according to USDA estimates, meaning the state lost 200 farms from 2015. Farms with sales of $500,000 to $999,999 saw an increase of 50 farms from the numbers in 2015. Additionally, the average Wisconsin farm size was up just one acre from 2015, at 210 average acres per farm. Total farm acres stayed unchanged at 14.4 million. And while the total number of Wisconsin farms were down from 2015 to 2016, the Midwest Food Products Association reported that our state had $43.7 billion in food shipments in 2015, putting us at #3 nationally, behind only California and Texas. Experts say that our ranking is due to the Dairy State's diverse food portfolio, including dairy, meant, cheese, fruits, and vegetables. 64,000 people were also employed in food manufacturing in 2014, which according to their data accounts for 14.8% of manufacturing jobs in the state, and accounted for $3.1 billion in annual payroll, which is 13.2% of the manufacturing total.