Wisconsin Independent Businesses

The Wisconsin Assembly & Senate have approved their versions of a $62+ billion state budget for 2009-2011. The budget protects small business and farm owners with NO expansion of the sales tax base. Expansion of the sales tax base to business services and farm necessities would add hundreds-of-millions of dollars to business and farm operation costs in Wisconsin. It has been WIB’s top priority during the budget process to protect small businesses and farms from this added tax burden.

Because the Assembly and Senate versions differ there will be a conference committee to iron out the final budget. It is expected that this could be finished by next Tuesday and to Governor Doyle's desk by next Thursday. The Governor has repeatedly stated he wants the budget done by June 30th.

The Senate differences with the Assembly include:

Big oil tax & Capital Gains Tax: The Assembly kept the tax but eliminated the prohibition of passing it on to the consumer (would mean 4 cents a gallon gas tax increase). The Senate, to fund transportation, except for certain farming assets, totally eliminated the current individual income tax exclusion for long-term capital gains. This exclusion will have a chilling affect on small businesses when owners decide to sell the business.
Minimum wage (state) would be indexed to the rate of inflation.
Prevailing wage. Some changes were made by the Senate to the Assembly version.

After the budget the single biggest danger facing Wisconsin employers is the state of the Unemployment Insurance Fund. Employers WILL pay higher unemployment insurance taxes in 2010. The fund has paid more in benefits than it has collected in taxes for 13 years. The balance was already dropping when the recession began and the balance has been sinking. By the end of May it was $238 million in the red with no expectation of an early recovery.

The department of Workforce Development estimates that the fund will have borrowed $700 million from the federal government by the end of 2009, money that will have to be paid back – paid back by higher taxes on Wisconsin employers. The deficit could reach $1 billion dollars by the end of 2011!

WIB believes those with positive balances in their accounts are not the blame for the present crisis, and they SHOULD NOT be asked to financially solve this problem which is the result of years of inaction by the Unemployment Insurance Advisory Council (UIAC). As in 1983 the battle will come down to small, positive balance employers vs. large, negative balance employers. WIB has fought this battle before and will this time to protect stable small businesses. WIB will work with the Department of Workforce Development, the UIAC and legislative leaders to keep positive balance employers from having to bail out businesses that are paying out more in UI benefits than they have paid into the UI Fund and to insure the stability of the fund in the future.

While the budget remains a top priority, WIB is moving forward with working with key legislators for the passage of Senate Bill 190, the small business contract protection bill and legislation to increase the $5,000 limit for small claims court actions

WIB, once again, is the ONLY business lobbying organization in attendance at all budget deliberations. On the issues of expansion of the sales tax base, the UI Fund, and removing hidden automatic renewal clauses in service contracts, WIB remains the strongest voice being heard standing up for the small business owner!