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The
end of the 2005-06 legislative session provided both parties an opportunity
to take positions they hoped would help in the November 2006 election.
Republicans held substantial majorities in both houses of the legislature
during the 2005-06 session. Based on the election results, Republicans
either emphasized the wrong issues or didn't get their message across
because Democrats won control of the Senate and substantially narrowed the
GOP majority in the Assembly. These are some of the issues from the past
session of greatest importance to independent and farm business owners: |
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SALES TAX BASE EXPANSION |
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Proposals to expand the sales tax base create justifiable fears for owners
of independent and farm businesses. Sales tax base expansion is targeted
taxation, it is targeted at small business and farm owners There are only
two areas from which the state can find significant new revenue if the sales
tax base is expanded : business services and farm necessities.
WIB members probably won the 2005 sales tax expansion battle in the summer
of 2004, months before the legislature returned. The governor’s Special
Committee on Educational Excellence had recommended massive sales tax base
expansion to business services (accounting, legal, advertising, etc.) to
reform funding for K-12 education. WIB field representatives alerted members
of the tax threat, which would amount to hundreds-of-millions of dollars
annually. Members contacted legislators and candidates and the idea was so
badly beaten down that the governor did not put it in his fiscal 2006-07
state budget proposal. The issue, however, never goes away.
In 2005 some leading legislative Democrats said they could find $3 billion a
year in new state tax revenue by “closing loopholes” in the sales tax law.
As is often the case, the “loopholes” weren't really loopholes at all, but
historically justified exemptions to the sales tax code affecting small
business services and farm necessities. The Dems called it their “HOPE” plan
for property tax relief and gave it much fanfare. They held a series of
“hearings” around the state, tried to amend the budget bill and tried to
pull the legislation out of its burial place in committee. All efforts
failed but they discussed the concept during the 2006 campaign and are
certain to bring it back in 2007.
During the 1980s and early 1990s, legislative leaders made repeated efforts
to expand the sales tax base. Governor Tommy Thompson joined the parade, at
one point proposing to expand the sales tax to commercial leases on all
business property. In 2001 newly installed Governor Scott McCallum proposed
expanding the sales tax base to custom computer software. WIB strongly
opposed this new tax targeted on a small but rapidly growing industry and
its customers. Historically unorganized, the industry looked for leadership
and found it from WIB. Defeating this bad idea became our top tax priority.
It was proposed by the governor and remained in the budget versions approved
by the Joint Committee on Finance and the Senate. The Assembly removed the
provision and it remained out when the Conference Committee finished its
work.
WIB continues to make defeat of all targeted taxation initiatives a top
legislative priority. |
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CO-OP CARE |
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Small businesses will be able to buy health insurance as part of a large
group “pool” as health care purchasing cooperatives are developed throughout
Wisconsin. Businesses and farmers in 14 counties will be eligible for Co-op
Care of Southeast Wisconsin. Health insurance rates are expected to
stabilize because of the large poll’s purchasing power. WIB led the
legislative fight to pass two new Co-op Care bills in the 2005-06 session.
Those bills strengthen the ability of health care cooperatives to form and
compete throughout Wisconsin.
Innovative Benefit Solutions of Milwaukee, a WIB member, has aggressively
led the fight to develop this major health care cooperative. The Cedarburg
Chamber of Commerce has also been instrumental in this effort.
Officials say Co-op Care of SE Wisconsin will be operational 2007. There has
been predictable resistance from some giants in the health insurance
industry that fear losing market share. Co-op Care expects to provide a
variety of benefit plans with “the express goal of providing affordable
choice.” A web site for the program should be available soon.
The 14 counties of Co-op Care of Southeast Wisconsin are Rock, Walworth,
Kenosha, Racine, Milwaukee, Waukesha, Jefferson, Dodge, Washington, Ozaukee,
Sheboygan, Fond du Lac, Winnebago and Manitowoc.
The Green Bay Area Chamber of Commerce and Non Profit Resource Group of
Brown County are establishing the Healthy Lifestyles Cooperative. And the
Wisconsin Federation of Cooperatives (WFC) is working on a program for a
combined Northwest and Northcentral region. Talks continued to progress in
other regions.
Co-op Care is a near look-alike to WIB’s Private Employer Health Care
Coverage Program, approved by the legislature and former Governor Tommy
Thompson but killed when then-governor Scott McCallum vetoed funding in
2001. The first of 3 Co-op Care bills was approved by the legislature and
signed into law by Governor Doyle in December, 2003. |
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UNEMPLOYMENT INSURANCE |
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benefits went up slightly while tax rates stayed the same. With benefit
increases of 3.6% in 2006 and 4.1% in 2007 the weekly maximum benefit
increased to $341 and then to $355. The taxable wage base remained at
$10,500 although labor originally sought a hike to $15,000. The Department
of Workforce Development is studying the stability of the UI reserve fund
amidst some fears that the slowing economy in recent years isn’t keeping the
balance adequate to pay increasing benefits. |
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BUSINESS CONTRACTS |
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Large companies keep using tiny print to write hidden automatic renewal
clauses in business service contracts. It is unfair and unscrupulous but it
isn’t illegal. Three bills to curb this practice were introduced. None made
it out of committee but all got some close attention. WIB told the Assembly
Committee on Small Business, “This issue won’t go away. And legislators will
have to explain to constituents why it didn’t pass in 2006.” This was a
classic “Good guys versus black hats” battle with WIB opposed by Waste
Management, Onyx Waste, A-T-T, Cingular, GE, TDS, Nextel, Time Warner, Dell,
Water Quality Association and WMC. Small businesses with a contract with any
of the firms on that list should review every clause of their contracts very
carefully. |
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SMALL CLAIMS COURT |
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valiant fight to increase the jurisdictional limit was led by Assembly
rookie-of-the-year Joan Ballweg (R-Markesan). Opposition from Milwaukee
County – they fear increased costs and that county is broke – stalled the
bill but we are already working on 2007 |
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MINIMUM WAGE |
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After several local communities adopted their own minimum wage regulations,
the legislature finally accepted a proposal to increase the state minimum
wage to $6.50 an hour in exchange for a law banning local units of
government from adopting their own minimum wage. WIB did not support the
increase. |
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HEALTH SAVINGS ACCOUNT DEDUCTIBILITY |
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governor twice vetoed a provision allowing taxpayers to claim a deduction
for contributions to health savings accounts. The governor said it
encouraged high deductible insurance policies that would lead to more
out-of-pocket cost for modest income workers. The legislature failed to
override either veto. |
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RECYCLING FEE |
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effort to increase the so-called “tipping” fee for dumping trash in state
landfills failed. The fee would have gone from $3 per ton to $10 per ton and
was aimed largely at Illinois waste haulers who dump trash in Wisconsin. |
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UNFAIR SALES ACT |
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Retail giants wanted to repeal the state’s historic “minimum markup” law on
gasoline. Small businesses opposed repeal. We won when the bill died without
a vote in the Senate. |
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