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.