Capitol Week-in-Review – June 8, 2017

Repeal of Personal Property Tax Gains Steam in State Legislature

That was the headline of an article published by Wisconsin Public Radio earlier today. Within the story, there are several noteworthy passages and quotes….

“Several GOP lawmakers are now pushing to repeal the tax as part of the state budget.”

“Locked myself in the office this evening to develop a plan to eliminate the state’s personal property tax,” Rep. Dale Kooyenga, R-Brookfield, tweeted on Tuesday night.”

Representative Kooyenga is the State Assembly Vice-Chair on the legislature’s budget-writing committee.

On Monday, the Milwaukee Journal Sentinel published an article about the ongoing budget negotiations. In this story, State Senate Majority Scott Fitzgerald (R-Juneau) was quoted as saying the personal property tax is “unjust, overburdensome and has way too much paperwork”

We are encouraged by these statements from legislative leaders. They definitely help our lobbying efforts to end this unfair and antiquated tax.


Budget Committee Leaders Pledge to End State Property Tax

Last week, the leaders of the legislature’s budget-writing committee announced that the committee will support the Governor’s plan to end the forestry mill tax – the only property tax levied by the State of Wisconsin – as of January 1, 2017 (property taxes levied in 2017, for payment in 2018).

By way of background, Wisconsin’s Constitution authorizes a state forestry tax of up to 0.2 mills for the purpose of acquiring, preserving and developing the forests of the state. The forestry mill tax is currently 16.97¢ per $1,000. According to the non-partisan Legislative Fiscal Bureau (LFB), ending the forestry mill tax will reduce statewide property tax collections by roughly $90 million per year.

The most recent data from the United States Census Bureau indicates that Wisconsin’s property tax burden is among the highest in the nation and 17.3% above the national average. As such, we support the Governor’s plan to end the state’s forestry mill tax.


Scam Alert: Fake DATCP Email Circulating

A “phishing” email is making the rounds, pretending to be from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) and the Department is warning consumers not to click on any links in the email.

The email says:

“Wisconsin DATCP has sent you a PDF via Adobe® Cloud. Kindly read through and respond with the required details. Open in Adobe®.”

This message is not from DATCP and consumers should not click on the “Open in Adobe®” box or anything else in the email. The scammers may be trying to collect credit card information or personal data.

For more information or to file a complaint, members should visit the Consumer Protection Bureau at http://datcp.wisconsin.gov, send an email to datcphotline@wisconsin.gov, or call 1-800-422-7128.

 

Capitol Week-in-Review – May 25, 2017

WIB Joins Coalition to Back Construction Sales Tax Simplification Legislation

Last Wednesday, WIB joined with eighteen other Wisconsin-based advocacy organizations to ask state lawmakers to support legislation that would simplify Wisconsin’s construction sales tax law.

By way of background, construction contracts often require a contractor to sell products which are subject to the state’s sales tax and real property construction activities which are sales tax exempt. For contractors, this tax law scenario is a paperwork nightmare as they must discern who is responsible for paying the sales tax on products used in construction project.

In 2013, state lawmakers tried to address this problem by creating an exemption from the sales and use tax for certain sales subject to the tax when sold as part of a lump sum contract. A “lump sum contract” is defined as a contract to perform real property construction activities and to provide taxable goods or services and for which the contractor quotes the charge for labor, services of subcontractors, and the taxable items as one price, including a contract for which the contractor itemizes such charges as part of the schedule of values or similar document.

If the total sales price of all taxable items is less than 10% of the total amount of the lump sum contract, an exemption would apply to the sales price of the taxable items that are sold by the contractor to the purchaser.

This tax code change cleared up some of the confusion, but contractors were still struggling to comply with Wisconsin’s construction sales tax law. Under the new legislation:

  • The sales and use tax exemption is expanded to apply to all construction contracts involving real property construction activities if the total sales price of the taxable products is less than 10% of the total contract price. If the exemption applies, the contractor is the consumer of, and pays the sales tax on, the products;
  • If the prime contract qualifies for the exemption, the exemption applies to all subcontracts entered into with respect to the real property construction activities;
  • If the exemption applies to a subcontract, the subcontractor is the consumer of, and pays the sales tax on, the products; and
  • Extends the sales and use tax exemption to products purchased by a subcontractor for eventual resale to the tax-exempt entity.

Wisconsin’s construction sales tax law is overly cumbersome and complicated for contractors and subcontractors. Tax code simplification is an ongoing priority for WIB and this modest change in the state’s construction sales tax law will ease the compliance burden on contractors and subcontractors.


Governor Creates Steering Committee on Autonomous Vehicles

All the major automobile manufacturers and two of the world’s largest computer software companies – Microsoft and Intel – are spending vast sums of money to bring self-driving vehicles to market. In turn, policymakers are moving quickly to develop a regulatory framework for the safe operation of autonomous vehicles on the road.

Last September, the National Highway Transportation Safety Administration (NHTSA) – the federal government agency with regulatory authority over the operation of vehicles on interstate highways – established a Federal Automated Vehicles Policy. This plan:

  • Establishes vehicle performance guidance for the design, development and testing of autonomous vehicles prior to commercial sale or operation on public roads; and
  • Provides model policies for states to carry out their transportation-related responsibilities – vehicle licensing and registration, traffic laws and enforcement, and motor vehicle insurance and liability laws.

Last week, Governor Walker announced the creation of the Steering Committee on Autonomous and Connected Vehicle Testing and Deployment to advise lawmakers on how to best advance the testing and operation of automated vehicles in Wisconsin. He has directed the Committee to:

  • Identify all agencies of the State of Wisconsin with pertinent jurisdiction to support the testing and deployment of automated and connected vehicles.
  • Coordinate with the identified agencies and discuss how best to administer the testing and study of autonomous and connected vehicles on roads in relation to issues such as vehicle registration, licensing, insurance, traffic regulations, equipment standards, and vehicle owner or operator responsibilities and liabilities under current law;
  • Review existing state statutes and administrative code and identify specific laws or rules that impede the testing and deployment of automated and connected vehicles on roads;
  • Identify roads for designation as special corridors for automated and connected vehicle testing or operation innovation; and
  • Identify strategic partnerships to leverage the social, economic, and environmental benefits of automated and connected vehicle technology.

Wisconsin Department of Transportation (DOT) Secretary David Ross will serve as the Chair of the Steering Committee. The DOT, with assistance from other state agencies, has been directed to submit a final report containing the Steering Committee’s findings and recommendations to the Governor no later than June 30, 2018. We will be monitoring the activities of this committee.


State Legislators ask Congressional Delegation for Assistance to Revise Phosphorus Standards

Recently, 31 members of the Wisconsin State Legislature sent a letter to Wisconsin’s Congressional Delegation asking for their assistance to revise Wisconsin’s phosphorus standards under the federal Clean Water Act.

By way of background, in 2010, the Wisconsin Department of Natural Resources Board (NRB) authorized the State of Wisconsin to participate in the federal Gulf Hypoxia Action Plan – a plan to reduce pollution that flows into Mississippi River and eventually into the Gulf of Mexico. In conjunction with this authorization, the NRB set numeric standards for phosphorus discharge into Wisconsin waterways at 0.075 parts per million – the strictest standard in the nation. This threshold was not based on any science or cost-benefit analysis.

Compliance with these new strict limits is particularly costly for so-called “point sources” of phosphorus pollution – paper mills, milk\food processing plants; and municipal wastewater treatment facilities. To address this compliance burden, the federal Environmental Protection Agency (EPA) recently granted the State of Wisconsin a variance which delays the enforcement of the phosphorus limit for a period of time.

Even so, this variance does not address the concerns of municipal wastewater treatment facilities. For example, the cheapest option available to the Village of Benton (Iowa County) to comply with the phosphorus discharge limit is chemical treatment of the wastewater at a cost of $1.97 million. These costs would be passed along to utility customers in the form of higher water utility bills – $75.05 per month. Similar compliance cost scenarios exist in small communities throughout Wisconsin.

In their letter to the Wisconsin Congressional Delegation, these state lawmakers are asking for assistance to:

“allow Wisconsin to revise the standards we set as part of the Clean Water Act to set reasonable goals that will improve phosphorus levels in our waterways with realistic expectations based on real data and our achievements over the last seven years.”

From our perspective, this is a reasonable request. We are hopeful that Wisconsin’s Congressional Delegation will work with the EPA to address this problem.

 

Capitol Week-in-Review – May 11, 2017

WCAC Begins Work on Worker’s Compensation Reform Legislation

The Wisconsin Worker’s Compensation Advisory Council (WCAC) advises state lawmakers on policy matters concerning the development and administration of the state’s Worker’s Compensation program.

Every two years, the WCAC conducts a systematic review of proposed changes to the state’s WC law offered by management, labor, the Wisconsin Department of Workforce Development (DWD) – the state agency which administers the program – and the general public. After completing their analysis, the WCAC submits their consensus recommendations for legislative review and consideration.

On Tuesday, the WCAC began its biennial review of nearly 40 proposed changes to Wisconsin’s Worker’s Compensation law. We have identified nine proposals which are consistent with our public policy objectives – reducing the cost of Worker’s Compensation insurance and\or improving the overall integrity of the Worker’s Compensation program. They are:

  • Require the DWD to establish a Medicare-based fee schedule to bring Wisconsin in line with the majority of states. The initial fee schedule would be set at 150% of Medicare rates for 2017. Thereafter, the fee schedule would be adjusted annually for medical CPI;
  • Allow employers to specify a list of health care providers authorized to provide care for injured workers. The list must include at least six healthcare providers, at least three of whom must be physicians who are geographically accessible and appropriately trained to treat the anticipated work-related injuries of the employees;
  • Prohibit indemnity benefits to an injured worker if the worker intentionally made a false statement as to his\her physical condition after a job offer was made under the following circumstances – the employer relied on the misrepresentation; this reliance was a substantial factor in the hiring decision; and there was a causal connection between the misrepresentation and the injury;
  • Terminate Permanent Total Disability (PTD) benefits once the injured worker has starting receiving Social Security and other retirement benefits;
  • Reduce the statute of limitations to two years except for occupational diseases caused by exposure to toxic substances or injuries requiring a prosthesis or artificial joint. For these exceptions there would be no statute of limitations;
  • Require all initial reports of injuries to be made by the injured worker to the employer according to the employer’s procedures as posted or outlined in an employee handbook within 30 days of the injury;
  • Allow an employer or insurer to request that an injured worker receiving PTD benefits to have their PTD ratings re-evaluated every three years; and
  • Require permanent disability determinations to be made by occupational health physicians or other qualified healthcare providers according to guidelines set forth in law; and

Over the next few months, we will closely monitoring the activities of the WCAC. Our goal will be to have these aforementioned proposals included in the consensus package of reforms submitted by the WCAC to the Wisconsin State Legislature.


Work Permit Reform Legislation Awaiting Gubernatorial Action

Since early February, WIB has been lobbying for legislation that would make it easier for small, independent businesses to hire high school student.

By way of background, under existing state law, a work permit issued by the Wisconsin Division of Equal Rights is required before anyone under the age of 18 is allowed to work in any job with the exception of agriculture or domestic service work. To obtain a work permit, the minor must:

  • provide proof of age;
  • get written consent from a parent or legal guardian to work;
  • have a signed letter from the employer describing the job duties, hours of work, and the time of day the minor will be working; and
  • pay a $10 permit fee – payment of the fee is the responsibility of the employer.

2017 Assembly Bill (AB) 25 eliminates the requirement that 16 and 17 year olds obtain a work permit.

This legislation was approved by the State Assembly last month and the State Senate followed suit on Tuesday. Soon, this proposal will be sent to Governor Walker for his review and consideration. We hope the Governor will sign this bill into law.


DWD Retires Part of Automated Telephone System to File UI Claims

Starting May 24, the Wisconsin Department of Workforce Development (DWD will retire part of a 1990’s-era automated telephone system to file Unemployment Insurance (UI) claims, shifting virtually all filing of initial UI claims online using a computer, tablet or smart phone.

Claimants can call UI help center staff for guidance in using the online process or, if they are unable to use online services, staff will file the claim over the phone. Weekly claims will still be accepted through the automated phone system until the weekly phone system is retired in a future phase.

Capitol Week-in-Review – April 27, 2017

Lawmakers Introduce Personal Property Tax Repeal Legislation 

On Monday, 2017 Assembly Bill (AB) 277 relating to the elimination of personal property tax in 2018 was introduced and referred to the Assembly Ways and Means Committee for further legislative review and consideration.

The Coalition to Repeal Wisconsin’s Personal Property Tax has reached out to the Chairman of the Assembly Ways and Means Committee, State Representative John Macco (R-De Pere), to request a public hearing on AB 277. A public hearing will provide us with a forum to discuss the merits of this legislation as well as demonstrate broad small business support for the repeal of Wisconsin’s personal property tax.

Our Coalition has also produced a short video to help educate the general public about the personal property tax. Please free to share it with your friends, neighbors, peers and colleagues.

UI Tax Rates Projected to Fall Again in 2018

One of the factors used to determine an employer’s UI tax liability is the financial condition of Wisconsin’s UI Trust Fund.

The State of Wisconsin has four UI tax rate schedules – A, B, C and D. The highest tax rate (Schedule A) applies when the balance in the UI Trust Fund is less than $300 million. The lowest tax rate (Schedule D) applies when the UI Trust Fund balance exceeds $1.2 billion.

Last Wednesday, the Wisconsin Department of Workforce Development (DWD) released the 2017 Unemployment Insurance (UI) Financial Outlook Report in which the Department stated:

“The economy is projected to grow throughout the projection period of 2017 through 2019. Employers are currently paying taxes based upon the second lowest UI tax schedule, Schedule C for tax year 2017. In the current projection, the UI Trust Fund balance exceeds $1.2 billion on June 30, 2017. This means that for 2018, the expected UI Tax Schedule will be Schedule D, the lowest UI tax schedule. It is expected that UI taxes will remain on Schedule D through the rest of the projection period.”

If the Department’s projections hold true, Wisconsin employers who participate in the UI program would experience a tax reduction for the third straight year.


Wisconsin AG Leads Coalition to Defend “One-In, Two-Out” Executive Order

Shortly after taking office, President Trump issued an Executive Order directing federal government agencies to repeal two regulations for each new regulation they issue. Soon thereafter, a trio of Washington, DC-based advocacy groups filed a lawsuit in the U.S. District Court for the District of Columbia seeking to block this order.

Last Monday, Wisconsin Attorney General Brad Schimel and West Virginia Attorney General Patrick Morrisey filed a friend-of-the-court brief defending the President’s “One-in, Two-out” order. In their filing, they noted:

  • The executive order effectively reins in a bureaucracy that has implemented a far greater regulatory burden than Congress ever envisioned; and
  • Past presidents, of both political parties, have enacted similar mechanisms to ensure review of regulations within the executive branch. Such measures have instructed agencies to consider the cumulative costs, the impact on the national economy and the effect of rules on state and local government.

Twelve other states – Alabama, Arizona, Arkansas, Georgia, Kansas, Louisiana, Michigan, Nevada, Oklahoma, South Carolina, Texas and Wyoming – have signed on to this friend-of-the-court brief.

We support the President’s Executive Order and appreciate Attorney General Schimel’s leadership on this matter. Since 2001, over 47,000 new federal regulations have been put in place. The “One-in, Two-out” directive is a simple step that should be taken to pare back the regulatory overreach of the federal government.

Capitol Week-in-Review – April 13, 2017

Budget Committee Rejects Governor’s DOT Spending Plan 

Last Thursday, the leaders of legislature’s Joint Committee on Finance announced that the committee will develop its own two-year spending plan for the Wisconsin Department of Transportation. This unusual procedural decision by the Republican-led Legislature caught us by surprise and we must now alter our lobbying efforts.

WIB is a member of the DRIVE (Devote Resources, Invest for a Vibrant Economy) Coalition. Our common goal is the enactment of a sustainable, long-term transportation plan that will keep Wisconsin’s economy strong. Collectively, we have united behind the following core principles:

  • Wisconsin Department of Transportation (DOT) spending should be reviewed to ensure that incoming tax and fee revenues are being invested efficiently and effectively;
  • Wisconsin road conditions are deteriorating as revenues have remained flat, the state is facing once-in-a-generation costs to rebuild substantial segments of our 50+ year-old Interstate System, and crucial road projects are underway that, if delayed further, will cause major disruptions to the traveling public and significant damage to state commerce;
  • Increased bonding will not solve Wisconsin’s transportation funding problem; and
  • The transportation funding solution must meet the needs of the entire state.

These principles will continue to guide our lobbying efforts.


Lawmakers Circulate Personal Property Tax Repeal Legislation for Co-Sponsorship

Last Monday, State Representatives Bob Kulp (R-Stratford) and Dan Knodl (R-Germantown) and State Senators Duey Stroebel (R-Saukville) and David Craig (R-Town of Vernon) sent a memorandum to their legislative colleagues seeking co-sponsorship of legislation that would repeal Wisconsin’s personal property tax.

Under their proposal:

  • no personal property would be subject to taxation beginning with the property tax assessments as of January 1, 2018;
  • beginning with the property tax assessments as of January 1, 2018, improvements on leased lands would be assessed as real property (not personal property); and
  • beginning in 2018, and in each year thereafter, local taxing jurisdictions would be reimbursed by the State of Wisconsin for the loss of personal property tax revenue.

The Coalition to Repeal Wisconsin’s Personal Property Tax has hand-delivered a memorandum to all state legislators asking them to co-sponsor this legislation.

Our goal is to have a long list of legislative co-sponsors. To that end, we encourage members to contact their State Senator and State Representative to ask them to co-sponsor this legislation.


Tax Filing Deadline – Tuesday, April 18

The Wisconsin Department of Revenue (DOR) is reminding taxpayers to file their income tax returns by the deadline. Returns must be received or postmarked by midnight on Tuesday, April 18. The DOR shares the following tips with taxpayers to make the filing process easier:
  • Income tax forms and instructions as well as answers to common questions about preparing your tax return, tax credits and much more can be found on its website. The Department offers online payment of taxes on its website as well;
  • Taxpayers must request an extension from the Internal Revenue Service (IRS) by April 18 to avoid late filing penalties. Taxpayers who file an extension request with the IRS automatically receive an extension from the state. Information relating to an extension can be found on the IRS website.
  • Call the DOR customer service during off-peak hours at 608-266-2772. The customer service hours are 7:45 a.m. to 4:30 p.m. Monday through Friday. The best time to call is Tuesday through Friday, especially in the afternoon. The call center is busiest on Mondays and during the lunch hour.
  • The DOR will not contact taxpayers by telephone or email regarding an income tax return. If the Department needs more information to verify items on the tax return, it will contact the taxpayers by letter.

Capitol Week-in-Review – March 30, 2017

President Issues Executive Order to Promote Energy Independence and Economic Growth

On Tuesday, President Trump issued an Executive Order entitled: Promoting Energy Independence and Economic Growth. The preamble of the Order states:

It is in the national interest to promote clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation. Moreover, the prudent development of these natural resources is essential to ensuring the Nation’s geopolitical security.

It is further in the national interest to ensure that the Nation’s electricity is affordable, reliable, safe, secure, and clean, and that it can be produced from coal, natural gas, nuclear material, flowing water, and other domestic sources, including renewable sources.

Accordingly, it is the policy of the United States that executive departments and agencies immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law. 

To effectuate this new policy, the President has directed the Environmental Protection Agency (EPA) to suspend, revise, or rescind four actions related to the Clean Power Plan – the Obama Administration’s strategy to combat global warming.

By way of background, the Clean Power Plan requires all states to reduce carbon dioxide emissions by 30% by 2030 through substantial reductions in carbon dioxide emissions from existing coal-fired power plants, greater use of natural gas and renewable resources to generate electricity and significant investments in energy efficiency.

The Wisconsin Public Service Commission estimated the cost of compliance with this EPA plan to be as much as $13.4 billion. An economic study by the Beacon Hill Institute concluded that if these regulations are put in place, by 2030, the average commercial business would pay an additional $1,530 a year for electricity. The average industrial ratepayer would pay an additional $105,094 a year in 2030.

WIB shares the President’s view that electricity must be affordable, reliable, safe, secure, and clean. Under the Clean Power Plan, electricity would be more expensive and less reliable for small, independent businesses. We hope the EPA will work quickly to carry out the President’s directive.


Mark Your Calendar for Election Day – Tuesday, April 4

The 2017 Spring Election is scheduled for Tuesday, April 4. The polls open at 7:00 a.m. and close at 8:00 p.m.

There is only one contested statewide race on the ballot. State Superintendent of Public Instruction Tony Evers is seeking re-election to another four-year term. His opponent, Lowell Holtz, is a retired Whitnall School District Superintendent.

For some voters, there will county and\or municipal elections as well as school district referenda on the ballot. If you have further questions or need additional voting-related information, please visit My Vote Wisconsin.


State Settles with DIRECTV over Billing and Cancellation Issues

The Wisconsin Departments of Justice and Agriculture, Trade and Consumer Protection have reached a consent judgment with DIRECTV to resolve consumer complaints related to billing violations and inadequate cancellation disclosures. The settlement includes $292,500 in forfeitures and assessments and a $4.25 bill credit to eligible customers.

The judgment requires DIRECTV to make changes in its communications with customers. The company must provide written notice to customers of price increases in television offerings that are subject to an early termination fee. DIRECTV must also note the effective date of the increase and the new price for each offering. In addition, these written notices will address cancellation procedures for customers who wish to end services at the time of a price increase without paying an early termination fee.

The $4.25 bill credit will be given within ninety days of the entry of the consent judgment to each of DIRECTV’s current customers who were:

  • affected by one or more price increases to their television core programming packages that went into effect from January 2010 to March 7, 2017, and
  • subject to an early termination fee at the time of the price increase.

DIRECTV customers who are eligible for the credit will likely see it listed on an upcoming bill as “WI Settlement Credit.”

Capitol Week-in-Review – March 16, 2017

Wisconsin Court of Appeals Issues Significant UI Benefits Decision

Earlier today, the Unemployment Insurance Advisory Council (UIAC) was briefed on a recent decision by the Wisconsin Court of Appeals which addressed eligibility for unemployment insurance (UI) benefits when an employer has terminated an employee for misconduct due to absenteeism.

The facts of the case were as follows:

Valerie Beres worked for Mequon Jewish Campus, Inc. as a nurse. The employer’s written attendance policy, which Beres signed, stated that a single no-call, no-show during an employee’s probationary period was grounds for termination. Employees were required to call two hours ahead of their shift if they were going to be absent. Beres had “flu-like symptoms” and failed to call her employer before missing work on one day during her probationary period. The employer terminated Beres, who filed for unemployment benefits.

The Department of Workforce Development (DWD) denied Ms. Beres UI benefits on the grounds of misconduct because Beres violated the employer’s attendance policy. In its decision, DWD relied upon a change in law enacted in 2013 which defined misconduct to include: absenteeism by an employee on more than 2 occasions within the 120−day period before the date of the employee’s termination, unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature. Of note, WIB lobbied in favor of this change in law.

Ms. Beres appealed the DWD determination to the Wisconsin Labor and Industry Review Commission (LIRC) – an independent, quasi-judicial state agency responsible for resolving appeals of disputed unemployment insurance, worker’s compensation and equal rights cases. LIRC reversed the DWD determination on the grounds that employers may not be more restrictive than the “2 in 120” day standard and that Ms. Beres’ actions did not meet the definitions of misconduct.

This case was eventually appealed to the Second District Wisconsin Court of Appeals. Last Wednesday, the Court of Appeals ruled in favor of LIRC by noting that “employers are free to adopt a ‘zero-tolerance’ attendance policy and discharge employees for that reason, but not every discharge qualifies as misconduct for unemployment insurance purposes.”

DWD has not decided whether to appeal this ruling to the Wisconsin Supreme Court. WIB members should consider consulting with legal counsel if they have an employee policy relating to absenteeism that is more restrictive than the “2 in 120” day standard.


LFB Issues Analysis of Tax\Fee Changes in Governor’s Budget Plan

Last Thursday, the non-partisan Legislative Fiscal Bureau (LFB) issued its analysis of the state tax and fee modifications proposed in the Governor’s budget plan. According to the LFB, his proposal decrease net taxes by $377.7 million and decreases net fees by $36.8 million. The most significant tax and fee reductions are:

Individual Income Tax Rate Reduction ($203.5 million)

The Governor’s plan: decreases the bottom rate of the state individual income tax from 4.0% to 3.9%; reduces the second lowest rate from 5.84% to 5.74%; and expands the range of the second lowest tax bracket beginning in tax year 2017.

Sunset of the Forestry Mill Tax ($180.5 million)

The Governor’s plan sunsets the state forestry mill tax, or “forestation state tax,” effective with the January 1, 2017, property tax assessments (property taxes levied in 2017, for payment in 2018).

UW System Tuition Reduction ($35 million)

The Governor’s plan provides $35 million in new funding to reduce tuition at UW System schools in 2018.


WIB Announces New Member Service

We are pleased to announce a new free service available to members. Through a partnership with our WIB Health Care Benefits Consultant, members can now subscribe to our monthly “E-HR” electronic newsletter.

Our E-HR publication is intended to provide members with the latest information on new federal human resources-related laws and regulations which may apply to small, independent businesses. In each edition, members can access “compliance bulletins” which outline the change in federal law or regulation and an action plan for members to follow.

The first edition will be published on April 1 and thereafter on the first of the month. If you would like to receive our new E-HR publication, please contact Brian Dake toll-free at 1-800-362-9644 or via e-mail to bdake@wibiz.org.

Capitol Week-In-Review – March 2, 2017

Lawmakers Propose Management Changes to Highway Program

Recently, the Legislative Audit Bureau (LAB) published its evaluation of the management of the State Highway Program by the Wisconsin Department of Transportation (DOT).  Of note, the LAB found:

  • When a major highway project is considered for approval, the DOT provides the Governor and the Legislature with an estimate of total project costs, but such estimates were incomplete, in part, because they did not take into account that inflation would increase project expenditures over time; and
  • The DOT budgeted to complete more major highway project work than could be completed with its available funding because it did not sufficiently take into account the extent to which project expenditures increased over time as a result of inflation and unexpected cost increases.

Last Tuesday, the legislature’s Joint Audit Committee introduced legislation to address these management deficiencies. Their proposal requires the DOT to:

  • Provide state lawmakers with cost estimates that include all costs associated with potential major highway projects, including the effects of inflation; and
  • Regularly report information to state lawmakers about the ongoing costs of each major highway project and to report this information about each major highway project:

We support this bipartisan legislation and will be asking state lawmakers to enact these programmatic reforms.


Lawmakers Introduce Rural Broadband Expansion Legislation

State Senator Howard Marklein (R-Spring Green) and State Representative Romaine Quinn (R-Rice Lake) have introduced a rural broadband expansion legislation that combines elements of Governor Walker’s budget plan and the recommendations made by the 2016 Legislative Council Study Committee on Rural Broadband.

According to Senator Marklein, this bill:

  • Allocates an additional $15.5 million for Broadband Expansion (BEX) grants;
  • Provides the Wisconsin Public Service Commission (PSC) with a requirement that BEX grants go to areas of the state with the greatest need. In other words — “fill from the bottom up;”
  • Includes a policy that prevents broadband service providers from “cherry picking” high value customers, while ignoring the needs of residential customers.
  • Directs the PSC, in evaluating BEX grant proposals, to consider the impact of improved broadband on our students at home, and patients at home; and
  • Discourages the duplication of existing broadband service.

We are backing the Marklein-Quinn proposal and will be lobbying state lawmakers to enact this legislation.


Wisconsin’s Public Sector Workforce

Analysis of recently-released state and local government employment figures collected by the United States Census Bureau show that the State of Wisconsin had 49.6 government employees per 1,000 residents in 2015 – 2.1% less than the national average.

State and local governments in Wisconsin spent 6.3% less than the national average on public payrolls and the public payroll per employee was 4.2% below the national average.

Wisconsin’s public sector employed 286,000 full-time employees in 2015 of which 74% worked at the local level. Six out of ten government employees work in education, mostly in K-12 schools.

Capitol Week In Review – February 16, 2017

Governor Submits Budget Plan to Wisconsin State Legislature

Last Wednesday, Governor Walker presented his two-year state budget plan to a Joint Session of the Wisconsin State Legislature. Shortly thereafter, his proposal was introduced as 2017 Assembly Bill (AB) 64\Senate Bill (SB) 30 and referred to the Legislature’s budget-writing committee for further review.

We have just begun our due diligence of this 989-page bill. The first step in this process is an examination of the “big picture” budget metrics – spending, borrowing and tax\fee changes.

1. Spending

The Governor’s plan calls for a two-year operating budget of $76.1 billion. On an annual basis, the Governor’s all funds-budget (state taxes, state fees and federal aid) increases spending by 1% in fiscal year (FY) 2017-18 and 3.2% in FY 2018-19. From our perspective, annual spending increases should be at or below the overall growth in the state’s economy. By this metric, the spending levels in the Governor’s plan are prudent.

2. Borrowing

The Governor’s plan authorizes the State of Wisconsin to borrow an additional $661.9 million over the next two years – the lowest amount of new bonding authorization since 1997.

We believe the amount of new borrowing should be modest and sustainable. Excessive government debt puts pressure on state lawmakers to raise taxes and fees. We applaud the Governor for presenting a budget plan with a very limited amount of new borrowing. With that said, transportation-related debt continues to be a major concern. If state legislators approve the Governor’s new transportation-related borrowing, about 20 cents out of every dollar of revenue coming into the state’s Transportation Fund will be needed to repay existing debt. That level of debt is neither fiscally prudent nor sustainable.

3. Tax\Fee Changes

The Governor’s plan reduces net taxes and fees by $199.2 million in FY 2017-18 and $233.8 million in FY 2018-19.

From our perspective, Wisconsin’s overall tax and fee burden is already too high and should be reduced. Moreover, we favor tax relief that is broad-based and beneficial to small, independent businesses. While we appreciate the Governor’s ongoing commitment to income and property tax relief, we are disappointed that the Governor did not recommend any changes to the state’s personal property tax. On this issue, we will have to make our case to state legislators.

The next step in our due diligence process is to identify and analyze provisions within the Governor’s budget plan which directly impact small, independent businesses. It will take us about three weeks to complete this work. From there, we will develop our budget-related lobbying “to do” list that we will share with members and state legislators in mid to late March.


WIB Supports Work Permit Reform Legislation

Last Thursday, the Assembly Committee on Labor held a public hearing on legislation, 2017 Assembly Bill (AB) 25, authored by State Representative Amy Loudenbeck (R-Clinton) which lowers the age requirement for a work permit to anyone under the age of 16. Outlined below is a brief summary of the issue, the legislation and our advocacy.
Under state law, a work permit issued by the Wisconsin Division of Equal Rights is required before anyone under the age of 18 is allowed to work in any job with the exception of agriculture or domestic service work. To obtain a work permit, the minor must:

  1. provide proof of age;
  2. get written consent from a parent or legal guardian to work;
  3. have a signed letter from the employer describing the job duties, hours of work, and the time of day the minor will be working; and
  4. pay a $10 permit fee – payment of the fee is the responsibility of the employer.

AB 25 eliminates the requirement that minors aged 16 or 17 obtain a work permit. In her testimony before the Committee, Representative Loudenbeck noted:

  1. Wisconsin is one of just 15 states that require a work permit for all residents under the age of 18. There are currently 18 states that have age requirements similar to AB 25 including Minnesota, Iowa, and Illinois.
  2. AB 25 does not impact the times of the day that minors can work, the number of hours a minor is allowed to work, or the minimum statutory ages established for different types of employment.

WIB has registered its support for AB 25 and we will be lobbying state lawmakers to enact this legislation.


Scam Alert: Electric Utility Service Disconnection

Over the past two weeks, small businesses in western and southeastern Wisconsin have been targets of the so-called “Electric Utility Service Disconnection” scam. In this scheme, an individual claiming to be a representative of an electric utility company calls the small business to advise them of their past due account and threatens to turn off the power unless a payment is made immediately.

These fraudsters are very sophisticated. They typically contact the small business during the busiest time of the day. Rather than sending the past due amount to the utility service provider, the small business is directed to make a payment using a pre-paid debit card. They are also manipulating the Caller ID feature to make it appear as if they are calling from the electric utility company.

If you or any of your employees receive such a call or doubt the authenticity of someone claiming to be with the power company, hang up and then call your electric utility service provider.

According to the Wisconsin Public Service Commission, a utility must send a notice before service is disconnected unless the disconnection is due to a safety hazard or self-reconnection. The reasons for the disconnection, when the disconnection can happen and the means by which to contact the utility must be included in the notice.

 

Capitol Week-in-Review – February 2, 2017

WIB Delivers “Repeal the Personal Property Tax” Petitions to the Governor’s Office

Last Tuesday, the Coalition to Repeal Wisconsin’s Personal Property Tax (Coalition) hand-delivered more than 3,500 signed petitions from individuals and business owners who favor the elimination of this onerous and unfair tax to the Office of Governor Scott Walker.

Our Legislative Director, Brian Dake, was there to present more than 700 signed petitions from WIB members. Grassroots supports from WIB members greatly enhance our lobbying efforts in the State Capitol!

Along with the signed petitions, the Coalition asked the Governor to “make repeal of the personal property tax a top priority for his administration by including an exemption for new equipment in the 2017-2019 state budget and committing to a phase out of the remaining personal property tax.”

Next Wednesday, Governor Walker will present his 2017-2019 state budget proposal to a Joint Session of the Wisconsin State Legislature. We hope it includes a plan to repeal this tax.


State Highway Program Audit Shows Room for Improvement

Last year, the Wisconsin State Legislature directed the non-partisan Legislative Audit Bureau (LAB) to conduct a comprehensive evaluation of the management of the State Highway Program (SHP) by the Wisconsin Department of Transportation (DOT). By way of background, the SHP is Wisconsin’s largest and most expensive transportation program. The SHP funds the construction, repair and maintenance of Wisconsin’s 11,800 miles of interstate and major state highways and bridges.

To conduct its evaluation, the LAB analyzed: a) trends in program expenditures and state highway conditions; b) DOT management of the planning, engineering, and construction phases of state highway projects, as well as its maintenance of state highways; and c) DOT use of performance measures to help manage and improve its operations.

The LAB released their evaluation of the SHP last Thursday and the key findings were:

Road Condition – the proportion of state highways rated in good condition decreased steadily from 53.5% in 2010 to 41% percent in 2015.

Planning – the initiation of major highway projects requires legislative approval. To guide this decision-making process, the DOT must provide state lawmakers with an estimate of the overall project cost. The LAB reviewed the initial cost estimates for 19 recently-completed road projects and 16 ongoing major highway projects. They determined the DOT did not sufficiently take into account the effects of inflation and unexpected cost increases on project expenditures.

Construction – state law generally requires the DOT to solicit bids for state highway construction contracts and award the contracts to the lowest bidders. According to the LAB, the DOT generally had effective oversight of the processes for soliciting bids and awarding construction contracts and took steps to control construction costs. However, the DOT could have potentially achieved considerable additional savings if it had met its performance measure goals.

Maintenance – the DOT is responsible for maintaining state highways, but counties perform most maintenance work under contract with DOT. Maintenance work is intended to preserve state highways and includes removing snow and applying salt in the winter, sealing cracks, and filling potholes. The LAB found that DOT generally had effective oversight of its maintenance program and took steps to control maintenance costs.

Based on its evaluation, the LAB has recommended two dozen administrative changes for the DOT to improve the management, planning, engineering, construction and maintenance of state highways; and five changes in law to improve legislative oversight of the SHP.

From our perspective, there are three important “takeaways” from the LAB evaluation.

  • The condition of Wisconsin’s network of interstate and state highways continues to deteriorate. Repairing bad roads costs much more in the in long run;
  • The DOT and state lawmakers should seriously consider adopting the recommendations made by the LAB; and
  • The potential savings identified by the LAB are not enough to fund the ongoing projects that will keep interstate and state roads safe for commuters and reliable for commerce. As such, state lawmakers need to enact a long-term transportation funding solution.

Wisconsin DOR Accepting E-filing of Tax Returns

The Wisconsin Department of Revenue (DOR) is now accepting electronically filed state income tax returns.

The DOR is encouraging Wisconsin taxpayers to consider using the Wisconsin E-file online tool to file their state income taxes. For more information on this option, please visit the DOR website.