WPT Capitol Report, July 25, 2017

News from the Capitol and around Wisconsin

Members, We hope your week is off to a greats start! This week, we will focus on the latest on the state budget showdown, registration surcharges for electric vehicles, the impending deal with Foxconn, the State of Emergency declared by Governor Walker, public assistance fraud savings, DATCP Secretary Ben Brancel's retirement, and more. As always, we hope you find this weekly report to be interesting and informative. If there are ever any issues that you would like to see included, or if you ever have any questions or comments, please reach out to us at Have a great week, WPT, Inc.

Last week

Last week, a few members reached out to me with very similar questions. What is going on with education funding in this budget? All three members understood that Governor Walker's initial proposal called for $650 million in K-12 funding increases, but with the Senate now releasing its own budget plan to deal with transportation, do those numbers change? The answer is yes. Under the Senate Republicans' proposal, school funding would be increased by $740 million over the next two years, which would include the plan from Governor Walker, and additional dollars for low-spending school districts. It would also increase amounts for private voucher schools. Since the overall funding would go up nearly $100 million more, the $20 million in sparsity aid would be almost completely eliminated. That is not for sure, as this is a major detail that is still being hashed out, along with several other numbers in the funding formula. It's important to remember that any proposals on paper that are released by leadership are not a "done deal" and are almost certain to change in the negotiation process. Once any major deals are reached, WPT will send along the info in a future Capitol Report. For now, here are some more of the actual details from the Senate GOP plan: - Keep Governor Walker's proposal and raise the state's per-pupil aid from $250 to $450 in 2017-2018 and $654 in 2018-2019. - Increase funding for voucher schools, with most of the cost being absorbed by local school districts by reducing aids by the amount of enrolled voucher students - Place a two-year moratorium on school districts ability to raise property taxes behond their revenue limits by using the so-called energy efficiency exemption - Limit school district referendums to regularly scheduled spring and fall elections, unless for emergency purposes - Give $3.7 million in grants to help the state's poorest performing schools - Keep $3 million from Gov. Walker's proposal to fund school social workers, and add $3.5 million for community-school mental health grants Cut school library funding by $4 million We also had a couple of people ask why the Capitol Report was issued on a Tuesday last week instead of Monday. Much like last week, we decided to wait and see if any major budget announcements were made at the beginning of the week, so we decided to push the Capitol Report by a day.

Gov. Walker offers deal, Assembly says yes, Senate says no

You know the entire budget and transportation impasse story by now. The Assembly wants lower or no new borrowing and new revenues, the Senate wants new borrowing and no new revenue. Until late last week, Assembly Speaker Robin Vos was appearing to hold up the process by not caving on his demand for lower levels of borrowing to meet transportation needs. But then, Governor Walker offered to change his budget proposal, and eliminate $203 million in income tax cuts, which combined with his earlier offer to lower bonding by $300 million, would reduce or completely eliminate all new borrowing for roads in this budget. Vos agreed, and said the Assembly was ready to move forward. In a letter to the Governor, he called it a positive step forward, and applauded the governor for his leadership in bridging the divide between the two legislative houses. Done deal? Not so fast. No deal. Senate Majority Leader Scott Fitzgerald spoke with the members of his caucus, who are not ready to commit to the plan. His members still want to see the elimination of the personal property tax, and other issues in the budget, including spending from the state's general fund for transportation. The Joint Committee on Finance, arguably the most powerful committee in state government, has not met in over a month, with the budget now more than three weeks overdue. While it seems like this process has been dragging on needlessly, there seems to be much light at the end of the tunnel. Many legislative leaders predicting the committee will be back to work as early as next week, with possible budget passage by mid-August.

Registration surcharge for electric vehicles

Republican lawmaker Rep. Paul Tittl last week circulated a bill that would charge electric vehicle owners a surcharge for registering their vehicles. Under the plan, the owner of electric cars would pay a $125 surcharge on top of the state's $75 annual registration fee. Tittle said that the fee would create fairness in road funding by having electric car owners "contribute to the financing, repair and maintenance of our roads in an amount comparable to those who drive other vehicles." If this proposal sounds somewhat familiar, it's because earlier in the spring, Assembly Republicans released their Road to Flat Tax plan which included an overhaul of some taxes in Wisconsin and an alternative to the Governor's transportation plan. In their plan, Assembly Republicans also proposed adding a $125 surcharge onto vehicle registration for electric cars, and $30 for hybrids. Many WPT members have reached out and expressed an interest in seeing electric and hybrid cars pay a surcharge, since they are all-but exempted from paying the current gas tax at the pump in Wisconsin. Share your concerns in our weekly WPT Member Poll below.

Foxconn deal to be announced Thursday in Milwaukee

As part of a billions-of-dollars investment into United States manufacturing and workforce, tech manufacturing giant Foxconn has been woo'd into scoping out Wisconsin as a potential spot for a 10,000 employee plant. Foxconn, which manufactures parts for iPhones and Sharp TVs will be making a large announcement at the Milwaukee Art Museum on Thursday, according to conservative radio host Mark Belling, after the Wall Street Journal also reported that a decision could be coming as soon as this week. Last week, Governor Walker called the talks with the Taiwanese corporation speculative, also downplaying the notion that legislative leaders could be working incentive from the state government into a Memorandum of Understanding as a means to lure the company's investment to Wisconsin, which would result in 10,000 jobs, and likely hundreds of millions in investment. No official word has been confirmed by any sources, but stay tuned for a likely very large announcement later this week.

Governor Walker declares state of emergency

Seventeen Wisconsin counties have been declared State of Emergency areas by Governor Walker last week, as he issued Executive Order #249. Following torrential rains that have fallen throughout western Wisconsin in the past week, several counties have been dealing with floods and additional potential heavy rains after the fact. Alongside Major General Donald Dunbar, Adjutant General of the Wisconsin National Guard, Brian Satula the Wisconsin Emergency Management Administrator, and DNR Deputy Secretary Kurt Thiede, Governor Walker met with flood victims and local officials and surveyed flood damage in Arcadia in Trempealeau County and Ontario in Vernon County. More surveys were scheduled for this week. "Our thoughts and prayers are with the victims of the flooding," the Governor said. "I have instructed state agencies and the Wisconsin National Guard to help those affected by the flooding and to continue to provide resources to assist with the response and recovery efforts. I thank the Wisconsin National Guard, Wisconsin Emergency Management, and all state agencies for their coordinated response to this emergency." The counties in the declaration include Buffalo, Crawford, Dane, Grant, Green, Iowa, Jackson, Juneau, La Crosse, Lafayette, Monroe, Pepin, Richland, Rock, Sauk, Trempeaulea, and Vernon.

WPT Weekly Member Poll Results: DOT reforms, unemployment insurance savings, wheel taxes, mink output, and your thoughts on debt vs. taxes

After reading some of the specifics of the plan (outlined in the article), the DOT reforms being proposed are...

About 55 percent think it's a good idea. Nearly 30 weren't sure, and about 15 percent said it's a bad plan. Past time to cut the DOT fat. We don't need to over think this. O the states must do something similar. I believe that they are careless with our money. The DOT is a bloated bureaucracy whose workings and finances need to be reviewed often and the findings presented to the Legislature. Provisions on design, engineering, and prevailing wage seem to be good ideas. However, most of the rest seem to add red tape, costs and delays to projects. This is a good start but it needs much refinement. There needs to be a clause in these big projects that put the burden of the cost overrun into the lap of the contractor. I run a business. When we bid a job, our bid MUST stand. It cannot increase. Put that on the companies building roads. Too many companies see a government project as endless money. I think that car registration fees also need to be raised as increased fuel mileage still leaves many auto owners paying very little in gas tax. Some very good ideas, go ahead and go with it. WISDOT is fine the way it is. The only issue is the GOP has cut taxes so much, they can't fund road projects and think resorting to these proposals will make a difference. -- The roundabout issue is daffy as well. They installed 3 on my way to work -- for the first year, it was awful -- now, they are fantastic, as people learned to use them. So asking localities whether they want roundabouts is silly. Too many nervous Nancies out there who can't handle change. Employers are now expected to save $637 million on unemployment tax by next year. Do you deal with or have you dealt with unemployment in Wisconsin? Either as an employer or employee.

About 55 percent of respondents have dealt with unemployment. Over 40 percent have not. UI "judges" almost always side with the employee Fraud. Too many fraudsters. We now turn away people who come into our business, asking us to sign their papers saying they were looking for a job. If I'm not hiring and they do that, then I consider THAT to be fraudulent. It's a pain in the butt for our employees!!! Construction companies are no longer considered "SEASONAL." That has been like pulling teeth in our business. Our guys work 50-60 hours week 8-9 months of the year. The type of construction we do cannot be done in snowy/cold. We pay for the unemployment ins. and they are raked over the coals when they apply! and they have to do a job search if they are laid off more than 8 weeks!!!!!! As an employer with less than 10 employees I have paid over $7000 in the last 5 years I've been on both sides of the experience. It is not pleasant to try and file your initial claim as the system is terrible and one small mistake will cost you. As far as the employer, had one bad experience with a former worker who just was not doing his job and had to be fired. Appealed the case to the state and he will still given benefits for the full amount of time allowed. He was unable to get a different job because he enjoyed the benefits he was receiving while working for cash on the side. My rates are just now starting to come down, five years since he had been fired.

Green Bay might be getting a wheel tax. Overall, do you support or oppose wheel taxes to pay for local roads needs?

About 41 percent support wheel taxes, and about 44 percent say they do not. About 15 percent say they aren't sure or preferred to not respond. Unless approved by referendum. Just raise the gas tax a little and tax the electric car owners. If they have to have a wheel tax, helping the property owners is a good idea. I support the ability of cities to impose them. I'm not a fan of them. Good thing it's about to change to require a referendum to impose. The state needs to step up and finally provide leadership on roads and their funding. Start by scaling back over built freeway projects and divert those dollars back to state, county, and local roads. There's a lot of miles of smaller roads hidden in every fly over ramp that's very nice but 20 or 30 years ahead of its time. Also, find a way possible to drive down the out of control inflation on these projects. Wheel tax is just MORE government taxation. STOP THE INCREASE. CUT THE FAT. In most circumstances, large vehicles are exempt from wheel taxes...Yet they do the greatest damage to the roads. Within reason- shouldn't be so high that it unduly stressed trucking companies. More gas tax. It has to start somewhere. I support any way local governments can raise funds in this GOP strangled environment. If the locals don't like what their local reps do, they can vote them out of office.

Wisconsin is the #1 state in the nation for mink output. DO you own/have you owned any mink products?

95 percent of respondents do not or have not owned any mink products. Would never buy anything made of mink. Mink teddy bear, flowers Have never owned any mink products. Was strictly dairy and grain now. Not really the right answer, but as a dairy farmer, I was grateful for the mink farmers that were willing to puck up dead animals from the farm Very simply...choose one...

30 percent say more debt. 70 percent say higher taxes. Some respondents weren't happy with the two options that were presented, and also assumed that this question related solely to transportation funding. Unfortunately, these seem to often be the only two options on the table when it comes to many decisions in Madison. Neither, improve DOT effectiveness and get rid of prevailing wage. Not fair to push our bills onto our children. In farming it seems you are always in debt. I don't quite understand your question. For roads, raise the gas tax a nickel. Insufficient options presented. The choices are not limited to the two options presented. We do have a debt and credit card bills, but we do make a point to save, but sometimes that gets used too. I don't like debt or higher taxes. More debt IS higher taxes. It's simply deferred to a later date or a different person. People need to either step up and pay on the present for what they claim to want or say "no thank you" and cut spending. Why not less spending? Seems to be a logical third option. I'm paying off debt after a disaster. Insurance didn't pay anything. I ended up taking on additional 20K in debt from that, and I'm STILL fighting to get some sort of something from insurance. NOT enjoyable. Fix THAT problem, Madison... It is impossible to borrow one's way to solvency. Split the burden equitably- more debt is never good. Why higher taxes, if we are talking gas tax everyone pays then who uses our roads. No debt in our personal life and will not if we can help it. Pay as we go no matter how big the item is. Be smart with your money and look ahead and not day to day. We also own two homes. One in northern WI and residential home plus rental home. I am not happy with either answer, but only take on more debt if you have a plan to pay it off. Better to pay as you go. Interest is just money gone that can't be put to use. Debt has helped to ruin people and the economy. If you can't pay your credit card bill each month, you should not have one. If everyone wants this and that in a budget, then be ready to dish out for it and pay your fair share. Way too many people are dependent on the gov't more their existence, and I am not only talking about social programs but all the funds that go back thru various "pet projects" which is really sad. I have always not liked debt. I worked hard for many years so I could be debt free. As I get older, I purchase things I need, but only purchase things I want, if I can pay for it now. 2007 showed me even if you have great credit, do not take it for granted because I saw many lines of credit available to me for no reason at all completely go away. Oh, now they all want me to borrow from them, but I had to tighten my belt immensely back then, and will continue to do the same the rest of my life. That credit was not available to me when I needed it, and would have made my payments, so I will not give business to any organization lending money again No one should be surprised. The GOP loves tax cuts, but they can't think long term. Now the state doesn't have the revenue to do what it needs to do with roads and education. Undo the repeal of gas-tax inflation indexing, let local communities set their tax levies as they see fit. Stop bowing to special interests who want tax cuts (cough, Personal Property Tax, cough).

Kwik Trip to acquire PDQ stores

With an already massive Wisconsin presence, La Crosse-based Kwik Trip moved last week to acquire Middleton-based and employee-owned PDQ gas station/convenience stores. Kwik Trip, which is known for its friendly staff, low prices, and helpful perks (no fee ATMs), currently has 337 stores in Wisconsin, 147 in Minnesota, and 82 in Iowa, where they are branded Kwik Star, due to their large Iowan competitor being QuickTrip. The company grosses about $5 billion annually, but does not currently operate in the City of Madison. This purchase, of which the details have not been released, would include 15 stores in Madison, eight more in the Madison area, 11 in other Wisconsin communities, and one store in California. According to the State Journal, the purchase would include licenses to sell alcohol in each store, and would net about 1,000 new jobs.

DATCP Secretary Ben Brancel to retire in August

The man in charge of the Department of Agriculture, Trade, and Consumer Protection will be retiring from the department next month after having served seven years on the job under Governor Scott Walker. Walker's office issued a statement Thursday, saying that Mr. Brancel, age 67, would like more time with his family and his farm in Marquette County. Secretary Brancel also served as a lawmaker, and Assembly Speaker, from 1986 to 1997, and was appointed to DATCP Secretary under Governor Tommy Thompson in 1997. He served until 2001 when he later became U.S. Department of Agriculture Farm Services Agency Director. Brancel wrote, "It has been my pleasure to serve as Secretary. I have given this much thought about when is the right time to retire. I came to the conclusion that there will always be unfinished business to be done, but now is the time to return to my family's farm full-time in Marquette County as we plan for our first ever production sale. My son and daughter-in-law are now the sixth generation to farm the land. My first job was a farmer and my last job will be a farmer." Brancel is a 5th generation beef farmer from Endeavor, and raises Angus beef cattle on a 290-acre farm.

$51 million in public assistance fraud savings in 2016

The Office of the Inspector General last week released its 2016 Annual Report, which showed fraud prevention and detection savings, including overpayments established and cost avoidance topped $150 million since the creation by Governor Walker in 2011, and a record $51 million in 2016 alone. "Public assistance programs are an important safety net for those who need them," Governor Walker said. "The fraud prevention and detection work done by the Office of the Inspector General, along with strong partners at the local level, ensures the integrity of these programs and protects taxpayer dollars." The Department of Health Services provides nearly $9 billion in benefits to more than 1.3 million people in Wisconsin each year.