Brian Dake

Estimate: Wisconsin will have $1.8B in New Revenue for Next Budget

Democratic Gov. Tony Evers and the GOP-controlled state Legislature will have about $1.8 billion in new state tax revenue as they craft the next budget, according to a report released Wednesday by the Legislature’s nonpartisan budget office.

The Legislative Fiscal Bureau on Wednesday released estimates of revenues and expenses for the state over the next three years.

In addition to new revenue projections, the numbers also show the state is projected to end the current budget on June 30 with nearly $700 million in the bank.

The estimates come as the Democratic governor and conservative majority at the State Capitol begin the early stages of budget negotiations.

“(Evers) has inherited one of the best budget scenarios in a generation,” Rep. John Nygren, R-Marinette, tweeted after the report. Nygren is the co-chair of the state budget committee. “The state is in a strong fiscal condition and there is no need to raise taxes.”

The governor’s office rejected Republicans’ assessment.

“The people of Wisconsin deserve an honest conversation about the challenges facing our state,” said Evers’ spokeswoman Melissa Baldauff. “Gov. Evers has inherited a budget from Republicans defined by eight years of failing to fully fund our public schools, ignoring our criminal justice system crisis, tax policies that prioritize millionaires instead of working Wisconsin families, no long-term solution on transportation, and attempts to gut healthcare protections for millions of Wisconsinites.”

Governor Taps Bipartisan Task Force to Solve State’s Transportation Funding Shortage

Gov. Tony Evers has named a bipartisan task force to tackle a problem that bedeviled state leaders two years ago and likely will again this year: the ongoing funding crunch for the state’s transportation network.

The 34-member group is meeting for the first time Thursday at the state Department of Transportation headquarters in Madison.

In his State of the State address last week, Evers said the task force will find a “bipartisan policy solution” to be included in his budget plan for the two-year cycle starting in July. Such a solution could include increasing gas taxes, hiking vehicle registration fees, collecting highway tolls or some combination of those.

It includes five lawmakers: Sens. Jerry Petrowski, R-Marathon; Howard Marklein, R-Spring Green; and David Hansen, D-Green Bay; and Reps. Bob Kulp, R-Stratford; and Debra Kolste, D-Janesville. It also includes former Rep. Robb Kahl, D-Monona, now head of a construction industry trade group.

Local government officials include Racine County Executive Jonathan Delagrave and Appleton Mayor Tim Hanna.

Evers vowed during the 2018 campaign to find a long-term fix for funding roads, bridges and transit.

The state DOT has delayed or canceled a host of major freeway projects in recent years and increasingly turned to borrowing to pay for other projects. The department’s data also show state highway conditions will deteriorate badly in the next decade without an infusion of new revenue.

Wisconsin Department of Revenue Kicks Off Tax Season

Wisconsin’s tax season, like the federal tax season, officially begins today. The Wisconsin Department of Revenue (DOR) expects filing activity will be brisk, particularly the first few weeks and the last few weeks of the season.

This year’s individual income tax filing deadline is Monday, April 15. DOR would like to remind taxpayers not to file until they have all their tax documents. Having to file an amended return later will significantly delay a refund.

People may use the free, fast and accurate Wisconsin E-file online tool to file their state income taxes, or they may choose to use third-party software from an approved vendor. Like other online tools, Wisconsin E-file does the required math to prevent errors and allows direct deposit or withdrawal from a bank account.

“Providing excellent customer service is very important to us,” notes Secretary Barca. “We encourage taxpayers with questions to submit them online or call DOR’s individual customer service line at 608.266.2486.”

Taxpayers will find a number of helpful resources available on DOR’s website at www.revenue.wi.gov including:

 a list of free tax help sites across Wisconsin and more information about them

 an online application that will check the status of your refund

 a mobile app available free of charge from the Apple or Android app stores

 DOR’s video center with information on e-filing, free tax help and tax credits

As in previous years, DOR cannot issue refunds until March 1, if it cannot verify wage and withholding information from employers.

Postal Service Bumps Cost of Stamp to 55 Cents

The U.S. Postal Service has raised prices on stamps and services.

  • Price to mail 1st-class letter goes up to 55 cents
  • It’s largest percentage increase since 1991
  • US Postal Service reported net loss of $3.9B in 2018

Starting Sunday, the price to mail a first-class letter went up from 50 to 55 cents.

The cost of a “forever” stamp also increased to 55 cents.

The nickel increase is the largest percentage price hike since 1991, when the cost of a stamp rose from 25 to 29 cents.

Priority mail prices also jumped 5.9 percent, increasing the cost to mail a small box from $7.20 to $7.90.

The Postal Service reported a net loss of $3.9 billion in 2018, blaming lower mail volume and pension and health care costs.

It last increased stamp prices a year ago in January 2018, when the cost rose a penny to 50 cents.

Governor to Commit $31 Million in Budget Plan for Marinette Marine

Gov. Tony Evers said Thursday he plans to commit $31 million in his budget plan to help shipbuilder Marinette Marine.

The shipyard expansion will help Marinette Marine keep its workforce of 1,500 employees and add 400 full-time positions. The state funding is contingent on Marinette Marine’s receipt of additional federal funds, according to a statement from Evers’ office.

Marinette Marine has been one of two companies building littoral combat ships since 2005. But the U.S. Navy is discontinuing the LCS in favor of a larger frigate class ship next year.

Marinette Marine is in the running for design and construction of the new ship, according to a statement from Rep. John Nygren, R-Marinette.

“This investment will help Marinette Marine continue to compete on the world stage for years to come,” Nygren said in a tweet Thursday.

Uninsured Health Insurance Rate at Highest Level Since 2014

The percentage of Americans without health insurance has reached its highest point since 2014, when ObamaCare was still in its early years of implementation.

The uninsured rate was 13.7 percent in the fourth quarter of 2018, well above the record-low rate of 10.9 seen in 2016, the last year of President Obama’s second term, according to a survey released by Gallup Wednesday.

That represents about 7 million people losing or dropping insurance between 2016 and 2018, Gallup said.

Before the implementation of the health care law, the uninsured rate was 18 percent. It steadily dropped since 2014, before hitting an all-time low in 2016.

The largest coverage losses in recent years have been among women, young adults and those with low incomes, according to the survey.

Those younger than 35 reported an uninsured rate of more than 21 percent, a 5 percent increase from 2016.  The rate of uninsured women increased from 8.9 percent in late 2016 to 12.8 percent in 2018.

Governor Evers Delivers Tone of Compromise, Budget Priorities in State of State Speech

Governor Tony Evers delivered his first State of the State address Tuesday evening focusing on a handful of campaign pledges including boosting school funding, fixing transportation, and expanding health care.

Evers pitched to return to two-thirds funding for schools and urged legislation to address the state’s achievement gap for low-income students.

Senate Majority Leader Scott Fitzgerald called it a “stretch.” Republican Senator Alberta Darling and others in her caucus do support restoring two-thirds funding but want to find what she calls appropriate ways to pay for it. “He has a lot of good ideas that we’d like to do,” said Sen. Darling. “The issue is how are we going to pay for it?”

Evers also stressed he’ll seek to expand Medicaid in his budget, citing the nonpartisan Legislative Fiscal Bureau who projects it could provide health care coverage for an additional 76,000 Wisconsinites.

Fitzgerald said Evers should “give up” on plans to include it in his budget.

“All we’re going to do is end up in a situation where it’s going to be logger-heads and will have to continue to negotiation, but he can’t balance his budget on the Medicaid number, it’s not going to work,” said Fitzgerald.

Evers said soon he will launch a task force with stakeholders and feedback from voters to form a bipartisan solution to funding transportation and infrastructure.

“I know that caucus members in both houses support different approaches to solving our transportation funding crisis, it’s going to take sacrifices and compromises to find a long-term, comprehensive solution that works for everyone,” said Evers.

Wisconsin’s Agriculture Industry Expected to Follow Downward Trend in 2019

Wisconsin’s agriculture industry had a rough go of it in 2018 after losing 638 dairy farms in just one year. According to the latest data from the state Department of Agriculture, Trade and Consumer Protection, that’s a more than 7 percent decline and the biggest drop since 2004.

Steven Deller, a professor in the department of Agricultural and Applied Economics at the University of Wisconsin-Madison, said 2019’s outlook is expected to remain weak due to the uncertainty over international trade policies.

“Farms will continue the trend toward bifurcation, which means that there will be growth in smaller and large farms, with middle-sized farms getting squeezed,” Deller said. “Most of it has to do with cost of production. The issue with the larger farms is that they tend to carry a lot more debt load and if commodity prices stay low, servicing that debt becomes harder. Smaller farms tend to have less debt to service.”

According to Deller, the best way to grow the industry is through exports, since the growth of domestic demand is limited. Most of the growth in smaller scale farming and specialty crops and products came from increasing demand for local foods. While many of the surviving dairy operations are larger, even they are struggling to survive, he said.

“Wisconsin agriculture is surprisingly diverse,” Deller said. “It is still dominated by dairy and cheese production, as most Wisconsin-produced milk goes into cheese, but compared to places like Illinois or Indiana, Wisconsin has lots of fruit and vegetable production.”

Foxconn Construction Jobs Rise in 2018, Company Misses Hiring Goal

Foxconn Technology Group spent $200 million on building early phases of its manufacturing plant in 2018, creating more than 800 construction jobs for people from 52 Wisconsin counties, the company announced Friday.

In a letter to Wisconsin Economic Development Corp. CEO Mark Hogan on Thursday, the Foxconn executive Louis Woo said the company has completed the construction of its first structure, a 120,000-square-foot multipurpose building, and would begin work this spring on buildings to house the company’s manufacturing operations.

Foxconn, however, did not create enough jobs in Wisconsin to qualify for state tax incentives last year. The company had previously said it could ultimately create up to 13,000 jobs in Wisconsin. But in its letter to WEDC, the company said it has “adjusted” its recruitment and hiring timeline. Last year, the company hired 178 employees in Wisconsin who qualified for hiring targets set by WEDC — 82 short of the minimum number required to claim credits in the project’s  first year.

As a result, Foxconn said it is not seeking state incentives for its hiring in 2018. As part of an incentive package worth $4 billion, the company could ultimately receive $1.5 billion for meeting its hiring commitments.

“As a company with operations around the world, we need to have the agility to adapt to a range of factors including global economic conditions,” Woo wrote in the letter to WEDC. “We have done so while simultaneously progressing on other aspects of the project and achieving our foremost priority for 2018 — creating a solid foundation upon which the Wisconsin project can continue to grow further.”

Work on Foxconn’s $10 billion manufacturing plant continues in 2019. The company said it will hold additional information sessions for contractors in coming months and intends to break ground this spring on buildings to be used for work on advanced displays, manufacturing and 8K+5G research and development.

Contractors working on early phases of the company’s plant moved 4 million cubic yards of dirt last year, the company said. The company awarded contracts to 93 companies in 17 Wisconsin counties last year and said 95 percent of all its construction contracts to-date were with Wisconsin companies. In addition, nearly 16 percent of contracts went to companies owned by women, minorities and veterans.

The company has also open a number of satellite offices around the state, in Racine, Eau Claire and Green Bay and opened its North American regional headquarters in Milwaukee.

Assembly GOP Proposes Middle-Class Tax Cut Paid for by State Surplus Funds

The Assembly GOP plan calls for increasing the standard deduction on the state income tax effective in 2020. For married taxpayers filing jointly who would qualify for a tax cut, it would average $231, according to the Legislature’s nonpartisan fiscal bureau.

The Assembly GOP plan would reduce state tax collections by about $490 million in the second and final year of the next state budget cycle. That includes an ongoing total tax reduction of $338 million plus a one-time cost of $152.1 million to account for the timing of the change.

In June the state ended the last fiscal year with about $588 million in the general fund after revenues outpaced expenditures by $9.5 million. In the current fiscal year, a $34.1 million surplus is expected to increase the fund balance to $622.6 million. An updated projection on state finances is due from the fiscal bureau next week.

Vos said Assembly Republicans want to advance the tax cut in a separate bill from the state budget.

Senate Majority Leader Scott Fitzgerald, R-Juneau, praised the plan in a statement issued immediately after the Assembly press conference, saying he’s “glad to see that our colleagues in the Assembly are prioritizing plans to lower taxes.” Fitzgerald said he has asked a trio of GOP senators to work “on a plan to deliver tax relief for hard-working families.”

Evers spokeswoman Melissa Baldauff said in a statement the Assembly GOP plan “falls short” of what he seeks.

“The governor’s sustainable plan to cut taxes for middle-class families — which is funded by rolling back tax giveaways for millionaires — would provide relief for 86 percent of taxpayers without adding to the deficit or relying on one-time funds,” Baldauff said.