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.