News from the Capitol and around Wisconsin
Happy Monday to you all! We hope that you found some time to relax over the weekend. The Badgers last night pulled out of their recent rut, by snapping Minnesota's eight game winning streak, defeating the Golden Gophers 66-49, and preventing that team's first win at Wisconsin in nine years. This week, the WPT Capitol Report will focus on a new transportation funding proposal, some new information regarding the Wisconsin economy, a newly-proposed amendment to the US Constitution, efforts to rein in utility profits in our state, and a newly-released tax proposal. 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 firstname.lastname@example.org. Have a great week, WPT, Inc.
Last week at WPT
By: John Jacobson
I hope you're all having a great day. Last week was packed full of meetings. Earlier in the week, I met with a few members of the PPT repeal coalition to discuss some of our actions moving forward. I also spent some time talking to business owners again about unemployment insurance, and the proposal to rein in the profits of utilities in Wisconsin. It's interesting, the two most profitable utility corporations in Wisconsin also charge the highest rate in the Midwest, all the while having a surplus of energy that goes unused by consumers. That almost seems against the basics of supply and demand, doesn't it? Later in the week, I had the tremendous opportunity to spend some time in Winnebago County, where I met with quite a few farmers, with whom I had some great conversations. First, I would love to talk about mandatory commodity check-offs. This seems to come up a lot. Truthfully, I had more farmers in one day ask me about the dairy check-off than any other period in my life combined. There were a lot of questions, so I'd love to give you the break down. Check-offs are a mandatory deduction from various agriculture producers' profits, for the research, marketing and promotion of the industry. If you are not familiar, in a nutshell, for every 100 pounds that dairy farmers produce in milk, they have no choice but to pay 15 cents to a special interest group. "Whoa whoa whoa! That's an unfair characterization!" I've been told. Let's take a look at the numbers. In 2015, Wisconsin produced 29 billion pounds of milk. That comes out to $43.5 million that came directly from the pockets of dairy farmers in 2015. The way it works is, the national group Dairy Management Inc. receives a nickel of every 15 cents, and the local group essentially gets the remaining ten cents. That would mean DMI received $14.5 million from Wisconsin alone, and $104 million nationally, and the Wisconsin Milk Marketing Board received roughly $29 million. The problem is not the existence of these groups. Nobody is saying that we don't need marketing, promotion, research, analysis, and everything else. Heck, nobody is saying that every person at DMI or WMMB aren't great people. But does the 15 cents need to be mandatory? What if you milk a small amount, can't there be a tier system? This really cuts into farmers margins, and at a time when those margins are razor thin or nonexistent, it leaves a lot of families asking, "What do these groups really do for me?" Luckily, U.S. Senators Mike Lee (R-Utah) and Cory Booker (D-Massachusetts) introduced legislation last year that would allow these check-offs to be voluntary, and it would create oversight and transparency into how those dollars are being spent. Secondly, and briefly, I had a lot of people ask me about Use Value Assessment on agriculture land. "Is is safe?" one man asked me. The answer is; nothing is ever safe when it comes to tax reductions, credits, and incentives. There will always be people who think that farmers should pay more, or that manufacturers should pay more, or the like. As recently as December, I have overheard talks of the removal of use value to fund local schools. There are many people who believe that the removal or alteration of use value could fix all of Wisconsin's fiscal problems, both locally, and statewide. Wisconsin has the lowest agriculture property taxes per acre than any other state in the Midwest, and we have been very fortunate to keep it that way. Take a look at Nebraska, for example, where they pay $76 per acre, or Indiana, where they pay $40. I hope you all have a great week and that you enjoyed this short rant. If you ever want to get ahold of me, never hesitate to shoot me an email at email@example.com, or give me a call at 608-255-7473. Have a great week ahead, John
Sen. Fitzgerald considering alternate transportation funding
With the debate over whether or not to raise the gas tax continues in Madison, and in communities across the state, Senate Majority Leader Scott Fitzgerald (R-Juneau) late last week said that he's still skeptical about raising the gas tax, and he would consider using revenues from income and sales tax to fund the state's roads. This would mean instead of providing a dedicated funding source for the transportation fund itself, cash would be shifted from the state's general fund. Dollars from the general fund, or General Purpose Revenue (GPR), come mainly from income, sales, and corporate taxes. Others watching the debate closely have pointed out that while this is a new funding idea, it still does not provide long-term solutions. If money comes out of the general fund for transportation purposes, it's likely that funding for other programs funded by GPR would need to be reduced. Further debate and division between the state's top Republican leaders could be avoided, however. This is just the latest chapter in what will likely be a challenging first half to 2017 in regards to roads in Wisconsin. WPT will continue to keep you up to date on all new developments.
Republican lawmakers take on utilities, introduce "ratepayers first" legislation
Wisconsin's utilities are the costliest in the Midwest, and it's impossible for any ratepayer in Wisconsin not to notice it. But Senators Duey Stroebel (R-Saukville) and Rob Cowles (R-Allouez), alongside Representatives Jim Ott (R-Mequon) and Adam Neylon (R-Pewaukee) last week introduced a bill that would unravel legislation from the 1990s that guaranteed We Energies and Madison Gas & Electric (MG&E) earn a 12.7% return from their investment in building a coal and natural gas-fired power plant in Oak Creek and Port Washington. Also, under the bill, the Public Service Commission would be granted the authority to review the rates for those plants, and grant PSC the authority to lower the rates. The lawmakers, all Republicans, said that their bill would help lower rates for business, manufacturers and homeowners across Wisconsin, and that the bill would ensure the plants in Oak Creek and Port Washington are subject to the same reviews as other plants in Wisconsin. At the time these plants were financed and purchased, Wisconsin was in the midst of an energy crisis, and needed to move fast to fix it. But energy production in the state has sped to the point that there is currently more power available than customers need or consume. We Energies is calling the proposal unconstitutional, and as the Journal Sentinel points out, it could cut into the profits earned by some utilities in Wisconsin. What do you think; are your rates too high? What do you think about the basis of this bill? Share your thoughts in our weekly member poll below.
Assembly Democrats' tax plan: Tax the rich and repeal tax credit for farmers and manufacturers
Democrats in the Assembly last week introduced their income tax plan, which would raise taxes on high income earners, manufactures, and farmers. The bill would lower income tax around $265 per year for individuals making $50,000 or less, and families making $100,000 or less, and would also repeal the state's Manufacturing & Agriculture Tax Credit. The plan would also create an entirely new income tax bracket for Wisconsinites making more than $1 million per year, taxing them 8.25%. Their plan does not raise taxes overall, but rather shifts it onto high-income-earning residents. In a statement, Representatives Chris Taylor (D-Madison) and Lisa Subeck (D-Madison) dubbed the plan "progressive tax reform," stating that it would ensure that millionaires and corporations "pay their fair share." A joint statement from the two Madison lawmakers goes on to say, "The Republican agenda sacrifices the future of our children by cutting our public schools and UW System simply to pay for tax breaks for the rich." Governor Walker last month proposed $650 million in increases for public K-12 schools, with a separate initiative that would increase aids for rural schools particularly. State Superintendent Tony Evers, generally a critic of the governor, applauded the budget proposal. A statement from Assembly Speaker Robin Vos issues a statement in response to the Democrats' plan, saying they need a lesson in economics. "Assembly Democrats what to raise income taxes by $400 million and hike taxes on farmers and business owners, when Republicans have reduced taxes by $4.7 billion since 2011 with no support from Democrats," he said. "We all know income taxes are still too high and Republicans are trying to fix the problem. Because of our real reforms, the average Wisconsin family is enjoying over a thousand dollars more in their powers despite Democrats opposing our efforts at every turn." With historic low numbers in the legislature, the Democrats' plan is basically dead on arrival. Make sure to share your thoughts in the weekly member poll.
WPT Weekly Member Poll Results: $803 million capital budget, new high capacity wells bill, proposed farm-to-school program cuts, DOR tax fraud savings, and business optimism
Last week's Capitol Report touched on the proposed $803 million capital budget, a new high capacity well bill, proposed cuts in the state's farm-to-school program, the $255 in savings from DOR tax fraud initiatives, and a JPMorgan Chase survey showing that 88% of Wisconsin business owners are optimistic about the next year. As always, we wanted your thoughts. Last week, Governor Walker proposed his capital budget, which would spend $803 million ($450 million borrowed) on new construction, or remodeling of state buildings and facilities. Do you support this proposal?
Nearly 50 percent don't support this proposed capital budget, and nearly 30 percent give the plan a nod. A little over 20 percent of respondents weren't sure.
"Too much borrowed money." "Why Borrow and add interest to the cost? Just pay for it." "Enough with the new gov't buildings." "Too much borrowing" "We have to quit borrowing money!" "State buildings can wait the roads cannot, a building face lift only supports a small sector of the state, improved roads help many more and is more equitable." "Too much debt." "I support capital construction, but the $450 million shouldn't be borrowed, it should be from tax revenue. Walker keeps cutting taxes, not realizing that's what you need to build and repair what the state needs. Typical GOP logic...cut taxes then be surprised when you don't have enough funding to take care of the state's needs." "Too much borrowing...you cannot borrow your way out of debt." "Can't keep borrowing. We'll be like the federal government." "Are these projects needed so badly that we have to borrow in order to complete them? I don't like that." "I would like to have money to renovate my retail area or repave our subdivision." Sen. Fitzgerald introduced a new high capacity well bill. After reading the specifics outlined in the article, do you support this proposal?
About 42 percent of respondents like the details of the plan, which were outlined, with all of the specifics of the bill, in the article. 45 percent don't know. "Not enough details" "Our ground water needs more protection and is a precious resource, the bill allows too much control in the hands of an existing high capacity owner, if another one needs to be dug, go thru the steps once again!" "So they study watersheds then what, is Fitzgerald going to introduce environmental laws born out of the study. I think not."
The current budget proposal cuts funding for the state's farm-to-school program, including its coordinator and its entire advisory council. Do you support this proposal?
About 55 percent of respondents don't support this provision in the budget. Over 25 percent think it's the right move.
"Important that kids know where food comes from." "This is a niche market that doesn't save taxpayer money in fact may raise tax dollars neeed to make it work." "Drain the swamp and the bureaucracy. This can get done without another bureaucracy." "It does little good, only effects a few people." "The information provided claims a large amount of revenue generated by the program for area farmers, but I have produce available, and would probably sell it at a discounted price to the local school district, but I have never heard of this program. Apparently they are doing a poor job of getting the word out here, or you have "connections" to be able to benefit from the program. I donate all the products I cannot sell to the local food pantry, which I am totally fine with!" "It seems to be a good program that works and helps our economy." "Why would you cut something that is good for the kids, they are learning where vegetables come from and most of them are really proud of what they have produced! Then you want to turn around and add more Auditors to government. More government is not a good idea, are you listening?" "86 thousand vs. 9 mil plus in sales to farmers." "Fund it with a producer check off to maintain the council." "Our schools get fresh vegetables, good for the kids." WI Department of Revenue's tax fraud prevention initiatives have saved taxpayers an estimated $255 million since 2011. Have you or anybody you've known been a victim of tax fraud?
Well this is good news, only a few people answered yes, and a few didn't know. Otherwise, it seems as most respondents have been able to avoid the fraudsters! "Me!" JPMorgan Chase released a survey, showing that 88% of Wisconsin's business leaders are optimistic about the economy and future revenue growth. Are you optimistic?
Almost 70 percent of respondents are optimistic about the economy and future revenue growth! "Proposed tax cut and regulation reduction." "Optimism from the President who sounds and so far appears to be acting in the best interest of Americans. Cutting taxes for individuals and business puts more $$$ in their pockets, which drives the economy. If higher taxes and bigger gov't is the answer then why not 100% tax rate and all jobs are gov't. It doesn't work, that's why. Skepticism would be from the enormous amounts of debt for gov't, the Fed, car loans, student loans, etc. if there is no increase in jobs/labor participation rate. Slow, but steady growth which may be bigger with a lower corporate tax rate and re-repatriation of income stashed in foreign countries." "We have seen an up tick in our business since the Presidential election. 95% of our customers have a good feeling about things as the result of the past election, at the national and state level. Many have been waiting for a change where the economy will not be hindered by special interest groups demanding burdensome regulations. The pipeline projects are a good example already! Now if we can just get the $s from overseas back into the USA and put to use here and tax decreases, the economy will grow at 4% a year. Not deterred by all the leftist protests, they need a job and something to do with all their free time! They are afraid of actually having to contribute something of substance to this great nation." "We got rid of Obama and his dumb regulations" "Too many people are leaving their small town retailers and running off to major big city places. They deals are not there. The quality is not there. The service is not there. I fight constantly to stop folks from driving an hour to get things we have right here in our town for the same money or less than the bigger city. I don't know if I can BE optimistic or not." "It helps that Trump is leading the way." "It's been too long between massive global events. Something huge is going to happen with the current administration in office." "The 'Trump Blimp' in/of optimism will Burst!" "Being a farmer, optimism is one of my biggest faults." "I'm not optimistic. Good business managers (owners) know how to stay on top of things with their money. Should be a good year overall in my mind."
Senator Kapenga calls for amending US Constitution
Senator Chris Kapenga (R-Delafield) is calling for the Badger State to join other states across the nation in amending the US Constitution to include a "balanced budget" amendment. The amendment would constitutionally prohibit the federal government from spending more money than it receives. Nearly 30 states have requested a convention to amend the US Constitution to include a balanced budget requirement. If 34 states voted to call for a convention to amend the constitution, Congress must act. Then-Representative Kapenga authored a similar bill nearly three years ago that passed the Assembly but never advanced through the State Senate. Kapenga said it's time for the federal government's power to be reined in, and that he is concerned that Washington D.C.'s power is hurting the country without any type of fiscal responsibility.
Wisconsin job growth down, but wages up
Department of Workforce Development data shows that Wisconsin's job growth slowed in the 3rd Quarter of 2016, but wages saw some of their largest gains in the past five years. Among the steadier job growth were the industries of healthcare and social assistance, construction, and technical services. Manufacturing, however, lost jobs. Between September 2015 and September 2016, the states job market increased just over 1%, adding 25,608 jobs, putting Wisconsin at 30th in job growth nationally. Average weekly wages increased to $883, which was a 5.8% or $48 hike. Dane County saw the largest jobs bump by adding over 8,000 jobs, and increasing wages by 7 percent, to $1,005 weekly.