Capitol Week-in-Review – October 12, 2017

WIB Backs Legislation to Reform Duplicative FMLA Law

In 1988, Wisconsin lawmakers approved a Family and Medical Leave (FMLA) law. Five years later, federal government enacted a nationwide FMLA law. These laws have never been harmonized, leaving Wisconsin employers to wade through two confusing laws to ensure compliance.

Last week, State Senator Alberta Darling (R-River Hills) and State Representatives Joan Ballweg (R-Markesan) and Mike Rohrkaste (R-Neenah) proposed legislation that they have dubbed the “Family and Medical Leave Simplification Act.” Under their proposal:

  • Wisconsin’s FMLA does not apply to a Wisconsin employer that is required to provide leave under the federal FMLA law;
  • Wisconsin’s FMLA does not apply to a Wisconsin employer that opts to provide leave under the federal FMLA law to an employee who is not an eligible employee, so long as the employer provides leave to such an employee in the same manner as the employer provides leave to an eligible employee; and
  • An employee is not prohibited from taking leave under Wisconsin’s FMLA law to care for a spouse, child, parent, domestic partner, or parent-in-law who has a serious health condition.

Their proposal reduces red tape and compliance costs. Moreover, it clarifies for employers and employees what the law is, what the benefits are and assist in planning for upcoming leave events. For these reasons, WIB will be lobbying state lawmakers to approve the Family and Medical Leave Simplification Act.


WIB Joins Worker’s Compensation Employers Coalition

Late last month, WIB became a founding member of the Worker’s Compensation Employers Coalition (WCEC). Along with our Coalition partners, we are seeking legislative approval of the agreed-bill from the Worker’s Compensation Advisory Council (WCAC), which includes the creation of a medical fee schedule as a means to reduce Wisconsin’s worker’s compensation medical costs.

The first official action taken by the WCEC was a memorandum to all Wisconsin lawmakers entitled: Support Reining in Out-of-Control Work Comp Medical Costs. Meetings with State Senators and State Representatives to discuss this issue in greater detail have been scheduled. Our goal is to get this legislation to the Governor’s desk for final approval before the end of the year.

President Takes Executive Action to Expand Access to More Affordable Health Care Coverage

Earlier today, President Trump signed an Executive Order that is intended to increase competition, choice, and access to lower-priced, high-quality healthcare options. More specifically, the order directs the:

  • Secretary of the United States Department of Labor to consider expanding access to Association Health Plans (AHPs). A broader interpretation of the Employee Retirement Income Security Act (ERISA) could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees.
  • United States Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low cost short-term limited duration insurance (STLDI) which are not subject to the mandates and regulations set forth in ObamaCare; and
  • United States Departments of the Treasury, Labor, and Health and Human Services to consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees.

The President’s efforts to expand access to more affordable health care coverage for small employers and their workers are most appreciated. We hope the Trump Administration will move quickly to transform these departmental directives into specific policies. When those important details are available we will share them members.

Capitol Week-in-Review – September 28, 2017

President Unveils Unified Framework on Federal Tax Reform

Yesterday, President Trump unveiled a “Unified Framework for Fixing Our Broken Tax Code” that will serve as a template for the Congressional tax-writing committees – the House Committee on Ways and Means and the Senate Committee on Finance – to develop federal tax relief\reform legislation.  The most consequential provisions for small employers and their employees are:

  • Limit the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships and S corporations to 25%;
  • Reduce the corporate tax rate to 20%;
  • Allow businesses to expense the cost of new investments in depreciable assets other than structures made after September 27, 2017, for at least five years;
  • Repeal the death tax, the generation-skipping transfer tax, the individual Alternative Minimum Tax (AMT) and the corporate AMT;
  • Partially limit the deduction for net interest expense incurred by C-corporations;
  • Preserve business credits for research & development;
  • Consolidate the seven federal individual income tax brackets into three brackets of 12%, 25% and 35%;
  • Eliminate most itemized deductions, but retain tax incentives for home mortgage interest and charitable contributions; and
  • Double the standard deduction to $24,000 for married taxpayers filing jointly and $12,000 for single filers via consolidation of existing standard deduction and personal exemptions.
Any changes to the federal tax code require approval by the Congress and the President. We will be monitoring the work of the Congressional tax-writing committees and reporting back to members on any relevant actions taken.

Governor Walker Announces Small Business Agenda

On Tuesday, the Governor announced a four-step approach to help and strengthen Wisconsin small businesses. The elements of his Small Business Agenda are:

  • Reduce business costs by lowering property taxes; stopping unemployment insurance fraud; streamlining regulations and reducing frivolous lawsuits;
  • Prepare the workforce by investing in K-12 education, increasing worker training, expanding technical college educational opportunities; and strengthen ties between the UW System and the workforce;
  • Remove barriers to work by ending the public assistance benefits cliffs; requiring able-bodied adults to work or receive employability training; require able-bodied adults to pass a drug test before receiving public assistance; and target specific populations – veterans, people with disabilities and ex-offenders – to enter the workforce; and
  •  Attract new talent by marketing workforce opportunities within Wisconsin.

We intend to work with the Governor and the Wisconsin State Legislature on these pro-small business initiatives. Of particular interest to WIB are the Governor’s initiatives to reduce businesses costs.

While the Governor did not specifically indicate the steps he would take to lower property taxes, we believe full repeal of Wisconsin’s personal property tax would definitely reduce the property tax burden on small employers.

With the support of WIB, state lawmakers have created stiffer civil and monetary penalties for Unemployment Insurance (UI) fraud. From our perspective, tougher criminal penalties for individuals convicted of UI fraud is the next logical step.

The Governor endorsed the “Sunset Clause” legislation as a means to streamline state government regulations. Under this legislation, every chapter in Wisconsin’s code of regulations would be subject to re-approval, modification or repeal every seven years. WIB has already been lobbying state lawmakers to enact this legislation.

While the Governor did not specifically indicate the steps he would take to reduce frivolous lawsuits, WIB has consistently supported legislation that will help reduce unnecessary litigation costs for small employers.


Governor Appoints Dan Meyer to Lead DNR

On Monday, Governor Walker appointed Dan Meyer to serve as Secretary of the Department of Natural Resources (DNR).

Dan Meyer represented the citizens of Oneida and Vilas County in the Wisconsin State Assembly from 2001 to 2013. Prior to that, he served as Mayor of Eagle River and the Executive Director of the Eagle River Chamber of Commerce and Visitors Center.

We applaud the Governor’s decision. The DNR has broad and far-reaching regulatory authority over business actions and activities which impact the land, air and water. Secretary Meyer’s legislative experience, local government background and work with hometown businesses will be put to good use.

Capitol Week-in-Review – September 14, 2017

Budget-Writing Committee Approves Partial Repeal of the Personal Property Tax

Last week, the legislature’s budget-writing committee approved an amendment to the state’s next two-year budget that would result in the most significant reduction in Wisconsin’s personal property tax since 1981 when business inventories and farmers’ livestock were taken off the property tax rolls. The amendment is pending final approval by the Wisconsin State Legislature and Governor Walker.

Beginning with the property tax assessments as of January 1, 2018, the amendment repeals the personal property tax on machinery, tools, and patterns, not including such items used in manufacturing. The amendment also directs the State of Wisconsin to reimburse local municipalities for the loss of revenue resulting from this tax exemption.

According to the Wisconsin Department of Revenue, this category of personal property includes the machinery, tools, patterns, dies, jigs, equipment, and implements of commercial warehouses; contractors; heating and air conditioning companies; landscapers, plumbers, repair or fix-it shops; and welding shops. Owners of this category of personal property list them in Schedule C of the Statement of Personal Property.

In 2017, the statewide value of personal property categorized as non-manufacturing machinery, tools and patterns was $3.35 billion. The non-partisan Legislative Fiscal Bureau estimates that the exemption of this category of personal property from taxation will reduce personal property taxes statewide by about $75 million per year.

WIB has been lobbying state lawmakers to end this antiquated and unfair tax on small, independent businesses for the last three years. Our persistence and perseverance has finally been rewarded, but we have more work ahead of us.

For now, we must continue our lobbying efforts to make sure this partial repeal of the personal property tax is approved by the Republican-led Legislature and signed into law by Governor Walker. If we succeed in this effort, we will then turn our attention to repealing the other categories of personal property that are still subject to taxation.


DATCP Offers Guidance on Equifax Data Breach

Last Thursday, Equifax, one of the nation’s three major credit reporting agencies, reported a data breach that may affect as many as 143 million Americans – nearly 44% of the United States population.

According to Equifax, hackers gained access to certain files between mid-May and late July of this year. Information in the breach includes names, Social Security numbers, birth dates, and addresses. Some credit card numbers, driver’s license numbers, and dispute documents (that contain personally identifying information) were also accessed.

Equifax has established a dedicated call center at 866-447-7559 to answer questions about the breach. The call center is open daily from 6:00 a.m. to Midnight. The company has also set up a website that allows consumers to check if their information may have been exposed in the breach.

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) advises all affected Wisconsin consumers to take the following additional steps to protect their credit record:

  • Consider placing a free 90-day (renewable) fraud alert on your credit reports by contacting one of the three major credit reporting bureaus: Experian (888-397-3742), TransUnion (800-680-7289), or Equifax (888-766-0008). When you place a fraud alert with one bureau, that bureau will relay the request to the other two companies on your behalf. A fraud alert warns creditors of potential identity theft victims.
  • Request a free credit report from the three credit bureaus by visiting www.annualcreditreport.com or calling (877) 322-8228 and check the report for irregularities.

WHEDA Announces New Small Business Financing Tools

On Tuesday, the Wisconsin Housing and Economic Development Authority (WHEDA) announced that new capital funds will be available to help small businesses expand.

The newly-created WHEDA/LRC Wisconsin Business Opportunity Fund totals $5 million and will finance equipment purchases and other types of hard assets for small businesses through the federal New Markets Tax Credits (NMTC) program. NMTCs allocated by WHEDA are a resource to help generate job creation and economic development by promoting equity investment in low-income urban and rural communities.

An additional $6.1 million is being made available to support WHEDA’s Participation Lending Program approved in 2012 by Governor Walker and the state legislature. The Participation Lending Program can be used for purchases such as land, facilities and equipment as well as long term working capital.

The $11.1 million of capital for the two new programs is being provided by PNC Bank, Johnson Bank and Milwaukee LISC. A minimum of $3 million will be targeted for the Milwaukee area with the balance available statewide.

For more information on this program, members should contact WHEDA toll-free at 1-800-334-6873.

Capitol Week-in-Review – August 31, 2017

DWD Seeks Greater Conformity between Federal and State Employment-Related Regulations

Last Monday, the Wisconsin Department of Workforce Development (DWD) – the state agency which oversees employment-related regulations – announced two new initiatives to bring greater conformity between the federal and state government employment-related regulations.

The first initiative will modify and update state regulations relating to hours of work and overtime pay to conform to the standards specified by the federal Fair Labor Standards Act (FLSA) and align state and federal policies in the following areas:

  • Meal Periods – under current state regulations, employers are required to pay employees for on-duty meal periods but the regulations do not address off-duty meal periods. The DWD proposal would clarify that an off-duty meal period of at least 30 minutes is not paid time, regardless if the employee is required to stay on the premises or allowed to leave premises.
  • Employee Exemptions for Overtime Pay – Under current state regulations, there are exemptions for certain employees relating to overtime pay requirements. The DWD proposal specifies that the standards for determining overtime exemptions for executive, administrative and professional employees shall be the same as the current standards incorporated under the FLSA.
  • Determining Applicability of Overtime Requirements – the DWD proposal will incorporate standards followed under FLSA for determining the applicability of overtime requirements to an employee compensated on a salary basis.

The second initiative will modify and replace outdated state regulations related to the employment of minors to conform to the standards specified by the FLSA and align state and federal policies. More specifically, the DWD proposal:

  • Expand prohibitions related to logging and sawmills to include forest fire fighting.
  • Incorporate provisions of FLSA that allow minors, under specified conditions, to use power-driven equipment to process wood products.
  • Clarify that the prohibition on use of Power-Driven Hoisting Equipment includes tending, riding upon, working from, repairing, servicing, or disassembling an elevator, crane, derrick, manlift, hoist, or high-lift truck.
  • Expand the definitions of “high-lift truck” to include backhoes, front-end loaders, and similar pieces of equipment.
  • Clarify that the Meat Processing prohibitions include work in poultry slaughtering establishments.
  • Allow minors to operate portable countertop mixers similar to those used in private homes.
  • Allow minors to operate certain pizza-dough rollers under certain conditions.
  • Clarify that use of all balers and compactors is prohibited, including those not designed or used to process paper; clarifies the exemption that allows minors to load only certain scrap paper balers and paper box compactors.
  • Clarify that chain saws, reciprocating saws, wood chippers, and abrasive cutting discs are prohibited to all minors.
  • Codify a U.S. Department of Labor enforcement position that allows minors to work as lifeguards, swimming instructors and aides at age 15 if they possess safety certification.
  • Clarify that minors aged 16 and 17 may operate skid-steers and similar lifts in agricultural employment.
  • Permit minors to operate a key-cutting machine if it has a properly equipped and functioning key saw guard.

We are supportive of these two initiatives. Greater conformity between federal and state policies reduces compliance costs, confusion and red-tape for small employers.

The DWD will be working on the details of these proposed changes over the next few months. We will be monitoring this effort. Before any of these proposed changes can go into effect they must be approved by the Governor and the Wisconsin State Legislature.


Mark Your Calendar for the Governor’s 2017 Small Business Summit

Registration is now open for the Governor’s 2017 Small Business Summit. This day-long annual event provides Wisconsin small business owners with the opportunity to discuss topics of interest and concern with Governor Walker, Lieutenant Governor Kleefisch and state government agency leaders.

The event details are as follows:

When:    Tuesday, September 26, 2017; 8:00 a.m. – 4:00 p.m.

Where:   Stoney Creek Hotel & Conference Center; 1100 Imperial Avenue, Rothschild, Wisconsin

The event registration deadline is September 15 and seating is limited. Interested members can go here to learn more about the meeting as well as register for the event.


DWD to Retire Automated Telephone System for UI Weekly Claim Filing

Beginning on August 30, the DWD will continue the transition to online services by retiring the 1990’s-era automated telephone system for unemployment insurance (UI) weekly claims.

According to the DWD, more than 90% of all UI claimants file for weekly benefits online. Claimants unable to use weekly claim online services can still call the automated telephone system at 414-438-5395 or 608-261-9990.

Capitol Week-in-Review – August 17, 2017

Governor Signs “REINS” Act into Law 

Last Wednesday, Governor Walker signed 2017 Senate Bill 15 – the Regulations from the Executive in Need of Scrutiny (REINS) Act – into law as 2017 Wisconsin Act 57. Enactment of this legislation was one of our top lobbying priorities for the 2017-2018 legislative session.

Over the past five years, with the support of WIB, state lawmakers have enacted new laws to improve the state’s regulation-making process, but there are still some material weaknesses in this process such as:

  • The full compliance costs of a proposed state agency regulation often become known only after significant steps in the regulation-making process have been completed;
  • The regulation-making process is lengthy and there are steps along the way for public input, but that opportunity to provide input occurs after the state agency has drafted the regulation; and
  • State agencies often lack the technical expertise and private sector experience to discern the true compliance costs of a proposed regulation.

Act 57 addresses these material weaknesses and brings more accountability, private sector economic expertise and small business input to the processes by which state government agencies create new regulations. More specifically, Act 57:

  • requires passage of separate legislation before a state government agency can create a regulation that would result in implementation and compliance costs of $10 million or more over any two-year period;
  • allows the Wisconsin State Legislature to require a state agency to hold preliminary public hearings and comment periods before the agency starts drafting a new regulation; and
  • authorizes the Wisconsin State Legislature to request and receive independent economic analysis when there is uncertainty regarding the financial impact of a proposed regulation.

State of Wisconsin Receives Credit Upgrade

The State of Wisconsin may borrow money to finance the construction, rehabilitation and maintenance of state–owned facilities and state highways as well manage cash flow. Periodically, credit rating agencies independently evaluate the credit worthiness of the State of Wisconsin.

Last Friday, for the first time since 1973, Moody’s Investors Service upgraded the State of Wisconsin’s General Obligation debt rating from Aa2 to Aa1. According to the report:

“The upgrade to ‘Aa1’ reflects the proven fiscal benefits of the state’s approach to granting and funding pension obligations when many other states are experiencing stress from rising costs and heavy liabilities; an economy that delivers steady but moderate growth; conservatively managed budgets, and adequate liquidity.”

This is welcome news.

As a result of this credit upgrade, the State of Wisconsin will see a reduction in its borrowing costs on about $8 billion of outstanding general obligation bonds. The savings to Wisconsin taxpayers will depend on market conditions at the time of borrowing.


Wisconsin’s Real Estate Market Continues to Grow

On Tuesday, the Wisconsin Department of Revenue (DOR) has released its annual Equalized Value Report.

By way of background, Equalized Value represents an estimate of a taxation district’s total taxable value, and provides for the fair apportionment of school district and county levies to each municipality. Changes in Equalized Value do not necessarily translate into a change in property taxes.

The report shows that Wisconsin’s total statewide equalized property value as of January 1, 2017, was $526 billion, a 4% increase over the prior year. Among the classes of property:

  • Residential property was valued at $369 billion, an increase of 4.3%, or $15.1 billion.
  • Commercial property values were $102 billion, an increase of 5.1% or $5 billion.
  • Manufacturing property was valued at $14 billion, an increase of 2.4% or $338 million
  • Personal property was valued at $12.9 billion, an increase of 2.4%.
  • Agricultural land was valued at $2 billion, an increase of 1.3%.

The DOR report also shows construction activity continues an upward trend. Wisconsin added $8.1 billion in new construction during 2016, including $3.6 billion in residential property, $3.8 billion in commercial property, and $389 million in manufacturing property. In total, new construction value increased by 13.6% from the prior year.

Capitol Week-in-Review – August 3, 2017

Global Leader in Electronics Manufacturing Coming to Wisconsin 

Last Wednesday, Foxconn Technology Group – a Taiwanese-based electronics manufacturer – announced their intention to produce liquid crystal display (LCD) panels for a variety of industries from automotive to health care to entertainment in Wisconsin.

In its Memorandum of Understanding (MOU) with the State of Wisconsin, Foxconn intends to invest up to $10 billion to construct manufacturing facilities at a yet to be determined location (most likely Racine or Kenosha County). Facility construction is expected to begin next year and be completed in two phases over a six-year period. Manufacturing of the LCD panels is scheduled to begin in 2020. Foxconn plans to create up to 13,000 jobs with an estimated average salary of $53,875 during this six-year period.

The State of Wisconsin pledges to provide up to $3 billion in performance-based tax incentives, expedite permitting reviews in various state government agencies and expand tax incremental financing (TIF) limits for the community or communities where the Foxconn facilities are located.

On Friday, Governor Walker called a Special Session of the Wisconsin State Legislature to consider legislation that implements the state’s portion of the MOU. The Special Session began on Tuesday and we expect final approval of this legislation by the end of the month.

Of particular interest to WIB are the performance-based tax incentives.

Under this legislation, Foxconn would be eligible to claim up to $1.5 billion in refundable state income tax credits equal to 17% of wages paid and up to $1.35 billion in refundable state income tax credits equal to 15% of capital invested. If Foxconn employs 13,000 full-time workers and makes capital expenditures of at $10 billion, the company would receive the full amount of the tax benefits – $2.85 billion.

A state sales and use tax exemption is created for the purchase of taxable building materials, supplies, equipment and services used in the construction of the Foxconn manufacturing facilities. The estimated value of this exemption is $150 million.

The income tax breaks are structured as “pay-as-you-grow” incentives whereby Foxconn does not receive any tax benefits unless, or until, it makes capital expenditures or hires full-time workers.

The State of Wisconsin may recoup the tax benefits if Foxconn fails to maintain employment levels or capital investments in property required by the MOU; supplies false or misleading information to obtain the tax credits; leaves to conduct substantially the same business elsewhere; or ceases operations and does not renew operation of the business or a similar business within 12 months.

Later today, the Assembly Jobs and the Economy Committee will hold a public hearing on this proposed legislation. We will be there to learn more about this legislation and the Foxconn project.


State of Wisconsin Responds to Flooding Problems

Flooding in southeast and western Wisconsin during the month of July has caused widespread property and infrastructure damage.

Teams comprised of officials with the Federal Emergency Management Agency (FEMA), the Small Business Administration and Wisconsin Emergency Management are conducting preliminary damage assessments in Kenosha, Racine, and Walworth Counties to determine whether federal aid will be available to homeowners, businesses and communities.

Local damage assessments from these counties show three homes destroyed, 92 homes with major damage, and more than 4,000 with minor damage. In addition, ten businesses sustained major flood damage and 26 reported minor damage. Flooding also caused more than $8.4 million in damage to public infrastructure such as roads, bridges, and dams, and emergency protective measures.

Governor Walker has declared a State of Emergency for 17 counties following torrential rains that fell throughout western Wisconsin during the third week of July. The counties in the declaration include Buffalo, Crawford, Dane, Grant, Green, Iowa, Jackson, Juneau, La Crosse, Lafayette, Monroe, Pepin, Richland, Rock, Sauk, Trempealeau, and Vernon.

By Executive Order, the Governor directed state agencies to help those affected by the storms and called the Wisconsin National Guard to state active duty to assist local authorities in the recovery efforts.

Members should contact their County Emergency Management office to report any flooding-related property damage to their business. If you have further questions or need additional information, please contact us toll-free at 1-800-362-9644.


Wisconsin Bankruptcy Filings at Historically Low Level

For the first six months of 2017, 8,921 bankruptcy petitions were filed in federal courts in Wisconsin – the fewest number of filings in more than a decade and down significantly from the first half of 2010 when nearly 16,000 bankruptcy petitions were filed.

Let’s hope this trend continues.

 

Capitol Week-in-Review – July 20, 2017

State Senate Republicans Unveil Complete Budget Plan

The Republican-led Legislature is struggling to reach consensus on a new two-year state budget. While there is broad agreement on funding and programmatic changes for most state agencies, boards and commissions, legislative Republicans are divided on transportation financing, tax policy and state funding for K-12 education.

On Tuesday, Senate Majority Leader Scott Fitzgerald (R-Juneau) presented a complete Senate Republican budget plan to Assembly Speaker Robin Vos (R-Rochester). This 660-page plan includes budget-related provisions already approved by the legislature’s Joint Committee on Finance and the proposed Senate Republican position on the unresolved budget items.

Speaker Vos indicated that Assembly Republicans will “give the proposal fair consideration.” It remains to be seen whether the Senate Republican proposal brings the two sides closer together. We hope it will.

We have completed our initial review of the Senate Republican budget proposal. On the key issues – tax policy and transportation financing – their proposal is a combination of good and not-so-good news.

Their tax relief plan is “small business-friendly.” More specifically, their proposal:

  • Repeals the Personal Property Tax on watercraft, machinery, tools, patterns, furniture, fixtures, and equipment from the property tax, and classifies certain items that are currently assessed as personal property, but which have characteristics similar to real property, as real property, effective with property assessed as of January 1, 2018;
  • Repeals the State Forestry Mill Tax effective with property tax assessments as of January 1, 2017 (property taxes levied in 2017, for payment in 2018);
  • Eliminates Wisconsin’s Alternative Minimum Tax in tax year 2017; and
  • Expands the state sales and use tax exemption for lump sum contracts to apply to all construction contracts and to subcontractors.

We are particularly pleased with their proposal to end the state’s Personal Property Tax. Repealing this unfair and antiquated tax imposed on Wisconsin small businesses is our top budget priority. With the Senate Republicans on our side, we will now focus our lobbying efforts on Assembly Republicans.

From our perspective, their transportation financing plan is too reliant on new borrowing – $712 million – to finance improvements to Wisconsin’s state highway network. Transportation-related debt service costs already exceed 20 cents on the dollar. Borrowing even more money is not a long-term, sustainable transportation funding solution.


State of Wisconsin Launches New Website to Help Employers Fill Internship Positions

On Tuesday, the Wisconsin Department of Workforce Development (DWD) launched a new website – WisConnect – to help employers fill internship positions and college students get valuable on-the-job training.

On this site, Wisconsin employers can post internship openings and search for internship candidates by location, by major and by key skills and competencies.

All college students with an active .edu email address can create a WisConnect account, upload their resume and search Wisconsin internship opportunities by geography, college major and more.

For more information, we encourage members to visit this new site.


Wisconsin Supreme Court Sides with Property Owners

State law sets forth a basic scheme for the assessment of property. It is to be valued from actual view or from the best information that can be practicably obtained.

An actual view assessment requires a detailed viewing of the interior and exterior of all buildings and improvements and the recording of complete cost, age and use of the property. A property owner may deny the assessor entry to view the property in which case the assessor values the property using the best evidence available. This is commonly referred to as a doomage assessment.

Property owners who disagree with the assessment may appeal to the local Board of Review. However, under state law, no person is allowed to appear before the Board of Review to contest an assessment if the person has refused to allow the assessor to view the property.

In 2013, a married couple from the Town of Dover in Racine County had their property reassessed but objected to the assessor’s inspection of the interior of their home. After receiving their property assessment, the couple appealed the assessment to the Board of Review. In turn, the Board of Review refused to hear the objection because the Town’s assessor was refused entry to the home.

A court battle ensued. The couple claimed their due process rights were violated because they have been subjected to a tax, but have been denied any process by which to challenge it. The Town of Dover countered that the couple made the affirmative decision to deny the tax assessor an interior inspection of their home.

Earlier this month, the Wisconsin Supreme Court ruled that a tax assessor’s search as a precondition to challenging the revaluation of their property violated the couple’s due process rights as guaranteed by the Fourteenth Amendment to the United States Constitution and Article I, Section 1 of the Wisconsin Constitution.

This is a clear victory for property rights advocates. With that said, the practical consequence of this ruling may be limited. In a challenge to the valuation of property, the assessor’s valuation is presumed to be correct. The property owner may present evidence in support of what he\she believes to be the proper valuation. Based on that evidence, the Board of Review decides whether to adjust the assessor’s valuation.

Capitol Week-in-Review – July 6, 2017

OCI Approves Reduction in Worker’s Compensation Rates

Last Tuesday, the Wisconsin Commissioner of Insurance approved an overall 8.46% rate decrease for Worker’s Compensation (WC) premiums for business this year. Some specific industries, like manufacturing, will see even greater decreases of 9.28%. This overall decrease represents a savings of nearly $170 million for employers.

Worker’s Compensation rates are adjusted annually by a committee of actuaries from the Wisconsin Compensation Rating Bureau (WCRB). The committee studies the prior losses (claims) of hundreds of categories and professions throughout the state’s employment pool and submits a rate recommendation to the Office of the Commissioner of Insurance (OCI) who has final approval over the rates.

The reduction in Worker’s Compensation rates is attributable to improvements in workplace safety and Wisconsin employers are being rewarded for their collective efforts to operate a safe workplace for their employees.

Members who have questions about the development of the rates should contact the Wisconsin Compensation Ratings Bureau at 262-796-4540.


Governor Enacts Work Permit Reform Legislation

Since early February, WIB has been lobbying in support of legislation that would make it easier for small, independent businesses to hire high school students. Our persistence has been rewarded.

Two weeks ago, Governor Walker signed into law the so-called Teen Employment Act which eliminates the requirement that minors aged 16 or 17 olds obtain a work permit for the Wisconsin Division of Equal Rights before being allowed to work in any job with the exception of agriculture or domestic service work.

2017 Wisconsin Act 11 does not change 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.


State Budget at an Impasse

Wisconsin lawmakers are struggling to reach consensus on the state’s next two-year budget for the Departments of Public Instruction and Transportation. There are also some areas of disagreement over state tax code changes.

Wisconsin’s two-year budget cycle ended on June 30 and lawmakers have missed the July 1 deadline to have a new one in place. In the absence of a new biennial budget, the State of Wisconsin operates under the spending levels set forth in the 2015-2017 state budget.

Capitol Week-in-Review – June 22, 2017

A Call to Action for WIB Members

The legislature’s budget-writing committee is finishing up their work on the state’s next two-year budget and all reports indicate that repeal of the personal property tax is “on the table” for possible inclusion as part of the budget.

With that in mind, we are asking members to contact Governor Walker and state legislators to let them now that it’s time to get rid of this unfair tax on small, independent businesses.

Click here to send a message to Governor Walker.  Legislators can be reached via the Legislative Hotline (toll-free)  at 1-800-362-9472. If you do not know who represents you in the Wisconsin State Legislature, click here.

Thank you in advance for your assistance.


New Hope for a Minnesota-Wisconsin Tax Reciprocity Agreement

For decades, Minnesota and Wisconsin had an income tax reciprocity agreement. Residents who lived in one state and worked in the other only had to file an income tax return in their state of residence, rather than in both states.

Minnesota ended the tax reciprocity agreement with Wisconsin in 2009. At that time, Minnesota wanted accelerated payments from Wisconsin to improve Minnesota’s cash flow and an updated benchmark study of the amount of taxes border-crossers owed to the two states. To address these issues, Wisconsin offered to:

  • Provide payments to Minnesota that would rise from the $58 million that was paid for tax year 2009 to $87 million for tax year 2015 and more in future years;
  • Make payments to Minnesota on a quarterly basis; and
  • Base future payments on a benchmark study completed in 2013.

Minnesota rejected that offer and requested an additional provision whereby the State of Wisconsin would make an additional payment of up to $6 million to Minnesota to cover the cost of a tax increase imposed by the State of Minnesota on its own residents who work in Wisconsin when the prior reciprocity agreement ended. Wisconsin rejected this new provision.

It now appears that the State of Minnesota is softening its negotiating position. Minnesota Governor Mark Dayton recently signed into law a provision authorizing a new income tax reciprocity agreement between Minnesota and Wisconsin. The income tax reciprocity provision calls for a dual track approach.

In tax year 2017 and beyond Minnesota residents working in Wisconsin will be eligible for an income tax reciprocity tax credit. For tax year 2018, the Commissioner of the Minnesota Department of Revenue is directed to work with the Secretary of the Wisconsin Department of Revenue to enter into a new income tax reciprocity agreement.

We hope these negotiations will lead to a new, long-term Minnesota-Wisconsin tax reciprocity agreement.


Wisconsin Supreme Court Justice Announces Retirement

Last Thursday, Wisconsin Supreme Court Justice Michael Gableman indicated that he will not seek re-election to the Wisconsin Supreme Court.  This unexpected announcement caught even the most astute political observers by surprise. Traditionally, Supreme Court Justices serve for more than one term.

Justice Gableman was elected to a ten-year term on the state’s highest court in 2008. Next spring, Wisconsin voters will choose his replacement.

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.