Brian Dake

Legislators Plan to Approve State Property Tax Cut

State lawmakers plan to eliminate the state’s portion of the property tax in the next state budget, according to leaders of the budget-writing committee.

Gov. Scott Walker called for eliminating the forestry mill tax in his 2017-2019 budget proposal. According to the state’s nonpartisan budget office, the average homeowner paid about $26 for the tax in 2016.

Leaders of the budget committee said Wednesday they plan to approve the governor’s plan to cut the tax.

“Both houses agree we’re going to stay with the governor’s position,” said state Sen. Alberta Darling, R-River Hills, co-chair of the budget committee.

The tax funds forestry programs and pays for equipment used by local fire departments to fight forest fires. Under the governor’s plan, those programs would keep current funding levels, with their money coming instead from the state’s general fund.

40 Percent of State Budget is Property Tax Relief

A state tax watchdog group is reporting a large portion of the state budget actually is devoted to property tax relief in one form or another.

President Todd Berry of  Wisconsin Taxpayers Alliance says property tax relief is the ‘tail that wags the political dog in Wisconsin’…

“….we looked at all the taxes and fees spent by the state and close to $10 billion of that, or about 4 in every 10 dollars goes in some way or another to try to reduce property taxes. That could be either through aiding local governments or schools or funding direct property tax credits on tax bills or various credits on the income tax…..”

Berry says since starting the income tax in 1911 has provided a lot of money to local governments, counties and municipalities. He says about half of the $10 billion goes to schools at various levels. He says the most effective property tax relief has been the state property tax credits on the local tax bill have been the most effective, while other forms of relief are less direct to local taxpayers.

Berry says only about 12 percent of the budget goes to state agency operations. Berry says it’s ironic that the budget puts so much emphasis in controlling property taxes…

“….for all intents and purposes, the state doesn’t levy property taxes. The other irony is that in spite of all this Wisconsin’s property taxes still rank in the top 10-12 states in the country and are typically up to 20 percent above the state average. Alot of money from the state attempting to relieve something that the state doesn’t directly control….”

Lt. Gov. Rebecca Kleefisch: Wisconsin is Actually Winning the War on Poverty

Fewer people, especially fewer children, are living in poverty in Wisconsin than ever before. In fact, we’ve seen a “significant reduction” in poverty across our state the past several years.

That’s the data presented in a new report from UW-Madison’s Institute for Research on Poverty. Why is poverty at such low levels? The study credits the more than 70,000 new jobs created in this growing economy. As Bill Novak reported in the State Journal on Wednesday, “More jobs mean less poverty in Wisconsin.”

The report and its author, professor Timothy Smeeding, identify several public policy levers government can pull to further reduce poverty. Smeeding praises the earned income tax credit for incentivizing people in poverty to take jobs. He’s absolutely right. The EITC encourages people to jump on that initial bottom rung of the ladder to the American dream, knowing they’ll start climbing to higher incomes and greater independence as they advance in their careers.

The report also says “the growing cost of rent for private apartments in Wisconsin’s major cities is of great concern,” a conclusion I’ve seen with my own eyes during my last 18 months focused on homelessness. It’s a simple fact that people can’t move out of homeless shelters if no affordable apartments or houses are available for them to move into.

In my view, we need to start with a new approach to government-subsidized housing that helps people “move in, move up, and move out” so we can keep opening affordable units up for new occupants. One way to accomplish that goal is by attaching work requirements, drug testing and time limits to housing vouchers, especially as we increase the intensity and intentionality of services we wrap around our remaining unemployed neighbors.

The UW report concludes, “Because we believe that the long-term solution to poverty for the able-bodied non-elderly is a secure job that pays well, not an indefinite income support program, these findings are encouraging.”

I couldn’t agree more.

We can’t stop now though. Just because poverty rates are the lowest on record by this metric doesn’t mean much for the people still stuck and struggling. But we should take heart that our reforms our working, and our economy is growing, and then recommit to ensuring our state’s prosperity embraces all her citizens.

Budget Committee Votes to Continue UW Tuition Freeze

GOP lawmakers have rejected Gov. Scott Walker’s plan to cut tuition at the University of Wisconsin System, but they’ll continue a tuition freeze for in-state students at system campuses.

Overall, the Republican budget would increase state funding on the UW System by $36 million over the next two years. It would be the first time Republicans have increased state funding for the system since they took control of state government in 2011. “I’m pleased that today we are making an important investment in the UW System,” said Sen. Sheila Harsdorf, R-River Hills.

Democrats disputed that, saying when you consider the amount of revenue the UW System would lose under two more years of a tuition freeze, the system would see less funding, not more. “This puts the UW behind,” said Rep. Katrina Shankland, D-Stevens Point. “And I’m disappointed.”

Most of the new state funding the system would receive would be tied to performance measures that would be set by the Board of Regents. The budget committee approved $31 million in performance funding, which is less than the $42 million Walker proposed.

The performance measures would have to emphasize student access, degree completion, contributions to the workforce and enhanced efficiency. That’s far more general than the performance measures proposed by Walker, who wanted to tie state funding to everything from faculty instruction hours to the number of math and science graduates a campus produces.

In a written statement, UW System President Ray Cross praised the plan.  “I would like to thank the members of the Joint Finance Committee for their support of the UW System,” Cross said.

The Republican co-chairs of the budget committee also pledged to support back-to-back 2 percent raises for UW System employees later in the budget process, although they did not vote on the raises Thursday. Those would mirror the raises Walker proposed for other state employees.

State Lawmakers Push to Eliminate Personal Property Tax

State lawmakers are looking to do away with Wisconsin’s personal property tax.

Republican state Senator Duey Stroebel (R-Saukville) is sponsoring legislation to eliminate what he says is a relic of the state’s tax code that unfairly targets small businesses.

“Before the technology and infrastructure existed for the administration of an income tax, sales tax, corporate tax, and many other excise taxes and fees, the property tax was the only realistic revenue source government had,” Stroebel told a legislative committee on Wednesday.

Lawmakers heard from a long line of small business owners, who testified on how the tax has made it difficult for them to do business, since they often have to come up with a value to apply to used equipment.

Bud Styer with the Wisconsin Campground Association, who operates 16 parks in the state, said the tax is “all over the board” across the state, and they’ve watched as personal homes, computers, and other items have been exempted. “The pie that used to be a whole pie is now just a sliver,” he said.

It’s estimated eliminating the tax would reduce state revenues by about $261 million, and Democrats on the committee questioned how that might impact state finances. While Stroebel said the legislature’s budget committee would determine cuts in state spending to help cover the lost revenue, Sen. Janis Ringhand (D-Evansville) said there needs to be more transparency on what those cuts might look like.

“I don’t want to see more cuts to education, we certainly can’t afford more cuts to education,” Ringhand said. “We have a lot of areas where we’re struggling right now, and I’d rather have a stronger answer as to where the money’s going to come from.”

Budget Committee OKs Drug Testing for Welfare Job Programs

About 14,000 low-income parents who apply for Wisconsin Works job programs would be screened for drugs, and possibly tested, under a proposal a key legislative committee approved Tuesday.

The Republican-controlled Joint Finance Committee voted 12-4 Tuesday to include the provision in the state budget, further increasing its chances of becoming law after the Assembly passed the idea as a separate bill earlier this month.

The proposal from Gov. Scott Walker would require screening for drugs in order to participate in three W-2 work programs. Drug screening has been required for four state-run work programs since 2015. In that time, 1,837 people have been screened and 42 of them have been referred to drug testing based on their responses to questions in the screening. Of those, nine were referred for treatment.

The nonpartisan Legislative Fiscal Bureau estimates that under the expanded screening, about 264 additional W-2 participants would be referred for drug testing annually, or 2.3 percent of those in the programs. Of those, about 56 are projected to test positive and be referred for treatment.

Given the low numbers of people expected to be tested, the cost of expanding the screening, testing and treatment is expected to be minimal. Those who fail the tests and get treatment continue to receive benefits during that time.

The new testing requirement would apply to the Temporary Employment Match program, which provides a subsidy for wages to the participant’s employer, and the Community Service Jobs and Transitional Placement programs, both of which provide a participant with a monthly grant.

Governor Announces Creation of Steering Committee to Study Automated Vehicles

Governor Scott Walker has issued Executive Order #245 creating the Governor’s Steering Committee on Autonomous and Connected Vehicle Testing and Deployment, which will advise the Governor on how to best advance the testing and operation of automated vehicles in Wisconsin.

Wisconsin is uniquely positioned to study, test, and develop automated and connected vehicle technology. In fact, the University of Wisconsin-Madison was recently chosen as one of ten ‘Proving Grounds’ by the United States Department of Transportation to research how we can make automated vehicles a reality.

As a result, I’m creating a Steering Committee to assist with this process by advising me and other state agencies on how we can safely and effectively test and study autonomous and connected vehicles on Wisconsin roads.

This is great news for Wisconsin and has the potential to create jobs, spur economic growth, and strengthen mobility throughout the state. We have a long history of contributing to advancements in the automotive field, and I know we will rise to the challenge in this instance as well.

A copy of Executive Order #245 is attached.

Foresters Push Back As Walker Pushes Property Tax Cuts

Gov. Scott Walker is making an aggressive push to eliminate the state’s portion of property tax bills in the 2017-19 state budget, but his proposal is getting resistance from forestry groups across the state. For the average homeowner, the forestry mill tax cost about $26 in 2016, according to the Legislative Fiscal Bureau.

The tax pays for items such as equipment to fight forest fires. In his budget proposal, Walker cut the tax and funded its programs from the state’s general fund budget instead.

That change concerns some forestry groups.

“This would mean that forestry would have to line up with schools and with transportation and with health care and all the other important needs that are funded with general revenue,” said Fred Clark, executive director of the Forest Stewards Guild.

The programs are fully funded in the 2017-19 proposal from the governor, but Clark expressed concern they could be cut in future budgets. “There’s no guarantee that the level of funding that’s provided today would be sustained,” Clark said.

Some GOP state lawmakers have also expressed concern about the governor’s plan.

“I think there’s some in our caucus that have concerns about the things (the mill tax) actually funds within forestry, especially when you get into more rural parts of the state,” said Rep. John Nygren, R-Marinette, before Tuesday’s budget committee meeting.

Nygren’s co-chair on the committee, Sen. Alberta Darling, R-River Hills, said the issue is being debated in the Senate as well. “This is not a consensus deal right now,” Darling said.

Supporters argue the tax cut will help make home ownership more affordable in Wisconsin.

The proposal has yet to come before the budget committee for a vote. The committee is scheduled to complete its work by June 30

Budget Committee wants Study of LIRC Decisions

Members of the Wisconsin Legislature’s budget-writing committee on Thursday rejected Gov. Scott Walker’s proposal to axe the independent board that handles employment disputes in Wisconsin.

The Labor and Industry Review Commission dates back to 1911, when it was first formed as the State Industrial Commission. The independent agency resolves disputes over unemployment insurance, workers compensation and equal rights in the workplace, reviewing appeals of decisions from the state Department of Workforce Development and the state Department of Administration.

Under Gov. Scott Walker’s proposed budget, the agency’s functions would have been transferred to the governor’s administration. Walker argued eliminating the commission would “remove an unnecessary layer of government” and streamline the timeline for decisions.

The Joint Finance Committee’s Republican majority voted to preserve LIRC and eliminate 7.8 vacant positions. The committee also voted to request the Chief Justice of the state Supreme Court conduct a review of the agency’s decisions to determine which statutes are cited in its opinions and whether its opinions are later modified by circuit courts.

Committee co-chair Sen. Alberta Darling, R-River Hills, said committee members have heard complaints that some LIRC decisions have been overturned by circuit court judges because they were not based on current law. The report requested from the Supreme Court seeks to find out whether those complaints are true, she said.

“We’re trying to find the balance here: Is LIRC a necessary function to preserve equal rights and safety, or is it an added layer of bureaucracy?” Darling said. “I think we need some information on that and if we look at the report and we decide we need to come back to this, we can.”

In 2016, 88 LIRC decisions, or 5 percent of the agency’s decisions, were appealed to circuit court, according to the nonpartisan Legislative Fiscal Bureau.

Democrats on the Joint Finance Committee voted against the measure, although they support retaining the agency, because of the elimination of vacant positions. If unemployment insurance or workers compensation appeals increase in the 2017-19 budget period, LIRC would not be able to hire additional staff without approval and additional funding from the Joint Finance Committee.

Committee to Consider Eliminating Labor Review Panel

Wisconsin’s 106-year-old labor commission would vanish and Gov. Scott Walker’s administration would decide workplace disputes in its place under a budget proposal up for consideration Thursday in the Legislature’s finance committee.

Walker’s plan to eliminate the Labor and Industry Review Commission could create uncertainty in applying Wisconsin labor law, raising questions about whether the commission’s precedent-setting decisions would evaporate and whether his administration can fairly weigh cases.

The commission was formed in 1911 as the State Industrial Commission. The panel of three governor’s appointees considers appeals of administrative law judges’ rulings in fights over unemployment benefits, worker’s compensation and equal rights in the workplace.

The finance committee is a key testing ground for the budget. Its changes to Walker’s two-year, $76 billion proposal are the blueprint for what the Senate and Assembly will vote on, and though the full Legislature often makes changes, they typically don’t stray far from the committee’s recommendations.

Walker’s budget would eliminate the commission and its 26.5 positions in January to save an estimated $5.1 million. Its work would be handled by the Department of Workforce Development and the Department of Administration’s Division of Hearings and Appeals — both Walker cabinet agencies.

The governor’s administration justified the move by noting the number of appeals has dropped nearly 60 percent between 2011 and 2016. DWD Secretary Ray Allen said eliminating the commission would speed up appeals.

Parties can appeal the commission’s decisions to circuit and state appellate courts. Those courts have given great deference to the commission, lending certainty to labor disputes. Parties in disputes could end up going to court more often if it’s eliminated, leading to more expensive disputes. The Legislative Fiscal Bureau estimates about 1,000 additional cases could end up in court annually if the commission disappears. Only 88 commission cases went to court in 2016.