News of the Day

Governor Highlights Wisconsin Tourism’s $20 Billion Economy

Governor Scott Walker joined Tourism Secretary Stephanie Klett in traveling throughout the state to highlight Wisconsin’s tourism economy, which reached $20 billion in 2016. This marks a $700 million boost from $19.3 billion in 2015. The announcement comes as Governor Walker and Secretary Klett kick-off this year’s National Travel and Tourism Week, which runs May 7- May 13. Throughout the day, they will visit top tourist destinations in Madison, La Crosse, Appleton, and Minocqua.

“The travel and hospitality industry continues to be crucial to our state and is consistently a top performing sector of our economy,” Governor Walker said. “Investing in tourism promotion and marketing at the national, state, and local level is not only an effective way to attract visitors and grow the economy, it also enhances the image of Wisconsin as a great place to live and do business.”

Lower gas prices, consumer confidence, and spending increases in the lodging sector were all key factors in the 3.5 percent growth seen in 2016. The tourism industry continues to show stable, long-term growth according to recently-released economic impact figures.

“For six years in a row, Wisconsin’s tourism industry has had a positive impact on the economy and job growth,” said Secretary Klett. “The research shows that the increased investment in marketing our brand of fun continues to positively influence the way people think about Wisconsin as a great place to vacation, work, and live.”

Key Results

  • The total six-year growth of tourism activity in the state is $5.2 billion, a 35 percent increase according to Tourism Economics, the research firm for the Department of Tourism.
  • Visitor volume for the same period is up 15.2 million from 92.5 million to 107.7 million in 2016.
  • Additionally, international travel to Wisconsin was up $100 million.
  • Last year’s decline in gas prices resulted in lower transportation costs for visitors and increased spending on lodging, restaurants, and recreation.
    • Lodging, which makes up over 27 percent of visitor spending, showed the strongest growth at 5.8 percent.
    • Visitors spent over $3 billion on food and beverage, the second largest sector of the tourism economy.
    • Traveler spending on recreation had a growth of 4.2 percent.
  • Tourism directly and indirectly supported 193,500 jobs in Wisconsin’s labor market in 2016.
  • The growth of tourism over the last six years has helped add 21,500 jobs, a 12.4 percent increase.
  • Visitors generated $1.5 billion in state and local revenue, saving Wisconsin taxpayers $650 per household.

House Passes ObamaCare Repeal

House Republicans on Thursday narrowly approved their sweeping health care bill aimed at fulfilling a campaign promise to upend ObamaCare, after resuscitating legislation that had flatlined on the floor not six weeks earlier.

The revised American Health Care Act passed on a 217-213 vote.

“We’re going to get this finished,” President Trump declared in a celebratory Rose Garden event, surrounded by Republican congressional allies shortly after the vote. He vowed premiums and deductibles will be “coming down” and the Affordable Care Act is “essentially dead.”

The bill would eliminate tax penalties in Obama’s law which clamped down on people who don’t buy coverage and it erases tax increases in the Affordable Care Act on higher-earning people and the health industry. It cuts the Medicaid program for low-income people and lets states impose work requirements on Medicaid recipients. It transforms Obama’s subsidies for millions buying insurance — largely based on people’s incomes and premium costs — into tax credits that rise with consumers’ ages.

The measure would retain Obama’s requirement that family policies cover grown children until age 26.

But states could get federal waivers freeing insurers from other Obama coverage requirements. With waivers, insurers could charge people with pre-existing illnesses far higher rates than healthy customers, boost prices for older consumers to whatever they wish and ignore the mandate that they cover specified services like pregnancy care.


GOP Bills Target ‘Dark Store’ Big-Box Tax Strategy

Republican state lawmakers have unveiled a pair of bills they say would prevent owners of big-box retail stores from lowering their property tax bills while shifting local tax burdens to small businesses and homeowners.

Rep. Rob Brooks, R-Saukville, and Sens. Duey Stroebel, R-Saukville, and Roger Roth, R-Appleton, announced the legislation at a Capitol news conference Wednesday. At least one Democrat, Oshkosh Rep. Gordon Hintz, also supports the measures.

Opponents of the bills fault “activist assessors” for creating the problems the bills are meant to address: the so-called “dark store” strategy.

In recent years, owners of big-box retail stores have used that strategy — stemming from a court ruling about a Madison Walgreens store — to lower their assessments to reflect the value of other stores that are “dark,” or vacant. The ruling was in 2008, when the state Supreme Court found Madison city assessors had overvalued a Walgreens store.

The bills’ opponents, which include Wisconsin Manufacturers and Commerce, the state’s powerful business lobby, say they amount to a tax increase on businesses.

But Roth said the current standard — which owners of huge commercial properties are using to appeal to lower their tax bills — shifts the cost of paying for city services to other property owners.

“We do not want to see that cost shift go to our residential property taxpayers,” Roth said. “That, fundamentally, is why I support this bill.”

One of the bills would overturn the 2008 court ruling, writing in law that “property be assessed at its highest and best use,” according to a summary prepared by the bill’s authors.

It also would clarify that, for property tax purposes, real property includes any leases, rights and privileges pertaining to the property.

The other bill would require assessors to value property based on comparable properties “within the same market segment and similar to the property being assessed with regard to age, condition, use, type of construction, location, design, and economic characteristics,” according to the summary. Vacant stores could not be used as comparable properties for valuing open stores under the bill.

Gov. Scott Walker has not taken a position on the bills, according to a spokesman, Jack Jablonski.

Assembly GOP Transportation Plan Cuts Gas Tax, Applies Sales Tax to Gas

A sweeping Republican proposal to fund transportation and cut taxes would flatten income tax rates, lower the gas tax and raise new funding for roads by applying the sales tax to gasoline.

The goal of the plan, which is subject to change, is to hold gas prices steady by lowering the state’s 9.18 percent minimum markup on gas prices, according to Rep. John Macco, R-Ledgeview, chairman of the Assembly Ways and Means Committee.

That means more money for the transportation fund could come from the bottom lines of companies that benefit from higher retail gas prices under the minimum markup law — both large national retailers and locally owned stores. Critics, however, say the money could also end up coming from consumers at the pump.

“If we do it right, the price at the pump will be exactly the same,” Macco said.

One of the goals of the proposal is to cut borrowing in Gov. Scott Walker’s 2017-19 budget plan from $500 million to $200 million.

In addition to the transportation funding changes, the plan also includes the first steps in eventually creating a 4 percent flat income tax over the next 11 years, Macco said. He declined to offer specifics.

Under the current thinking, the gas tax would be reduced by 4 to 7 cents per gallon, Macco said. It is currently 30.9 cents per gallon. Also the minimum markup on gasoline — currently 9.18 percent — would be reduced so as to bring gas prices down another 7 cents, Macco said.

The Depression-era Unfair Sales Act prohibits retailers from selling merchandise at less than cost and also sets a minimum price for tobacco, alcohol and gasoline.

The gas price reductions would be offset by applying the 5 percent state sales tax and any local sales tax to gasoline, which currently costs $2.26 in Madison.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said the proposal is a commentary on how far Assembly Republicans have to go to persuade Walker to support increased revenue for roads, especially when he previously said he would support a gas tax increase if there was an offsetting tax cut.

“It is truly amazing and amusing the number of hoops they have to jump through to effectively raise the gas tax and index it,” Berry said. “You can’t fault them for the creativity or the cleverness of it.”

New Bill Would Require Voter OK on Wheel Taxes

A newly introduced state bill would require local governments to poll voters before passing a so-called wheel tax, a measure more cities have explored in recent years to meet transportation costs.

A bill authored by Rep. Michael Schraa, R-Oshkosh, requires municipalities to put plans for a wheel tax up for a binding voter referendum instead of simply passing such measures through city council or county boards. The tax is a charge tacked on to the $75 yearly car registration. Schraa is looking for sponsors for the measure and hopes the Legislature will consider the bill before budget deliberations, he said.

“We’re not saying that you can’t have a wheel tax,” Schraa said. “To me, if I was on a city council, I’d want as much public input as possible.”

More communities have turned to a wheel tax to fund transportation projects in recent years to offset shrinking state funding. USA TODAY NETWork-Wisconsin reported that 13 of the 16 cities and counties in the state that levy a wheel tax passed them in the last two years. Nearly all of the communities that employ wheel taxes passed the rule without a referendum.

Milwaukee County voters in April rejected a wheel tax totaling $60. Voters in Wausau scrubbed a $20 wheel tax in a referendum by a 14-percentage-point margin in November.

Legislators Introduce Legislation to Reform Administrative Rules

Representative Joan Ballweg (R-Markesan) and Senators Nass (R-Whitewater) and Darling (R-River Hills) introduced legislation to provide additional legislative oversight on the administrative rulemaking process and reform the procedures for repealing outdated and burdensome rules.

This proposal is an evolution of the Assembly’s Red Tape Review project and initiatives by the Governor to clean up outdated and burdensome rules. The proposed bill allows better legislative checks on state agencies and the administrative rulemaking process, and creates a process to continually review agency rules.

“Speaker Vos tasked me with the Red Tape Review project to see that the nearly 1800 chapters of administrative code are reviewed by the Assembly Standing Committees. This proposal will make the review of administrative code an ongoing process and in some cases, vastly simplify the rules process,” said Ballweg.

Five procedures are created under this bill: (1) an expedited procedure for agencies to repeal unauthorized rules; (2) a process for agencies to regularly review rules; (3) a process for agencies to regularly review new enactments to determine how they affect current rules; (4) a process for the Legislative Reference Bureau to biennially report to the legislature on rules in need of revision; (5) a process for the Joint Committee for Review of Administrative Rules to request a retrospective economic impact analysis on existing rules.

Under current law, to repeal an administrative rule the agency must go through the promulgation process which can take a year or more and is resource and time intensive. There is also nothing that requires agencies to continually review their rules or new enactments, so the process will vary from agency to agency or not happen at all.

“Right now, it’s difficult for small business owners to know which rules apply to them and which are outdated,” Darling said, “This bill eliminates outdated rules from the books and gives our rules a thorough check-up to make sure they are accurate, fair, and clear.”

Farms Caught in Canadian Trade Dispute Find Buyers for Their Milk

Just days before they might have had to close, most of the Wisconsin dairy farms caught up in a trade dispute with Canada have found buyers for their milk, enabling them to stay in business. At risk had been some 58 farms ranging in size from 80 to 3,000 cows, including many in Dodge and Jefferson counties and others near Fond du Lac and Sheboygan.

Grassland Dairy Products of Greenwood said it would stop buying from the farms effective this Monday because it lost millions of dollars when Canada changed its milk-buying practices to favor Canadian farmers at the expense of U.S. milk producers.

On Thursday, though, dairy farmers close to the situation said nearly all of the farms that lost their contracts with Grassland now appear likely to have new milk buyers by Monday, even if the agreements are short term.

Some of the new contracts have come from Mullins Cheese of Mosinee, Rolling Hills and the cooperative Dairy Farmers of America. State officials would not confirm the positive turn of events Thursday, although they said earlier that the situation was changing “hour by hour” and they were hopeful it would be resolved by the end of the week.

The displaced milk is estimated at 1 million pounds, or about 116,000 gallons, a day. That’s milk that farmers otherwise would have had to dump, because cows have to be milked two or three times a day whether or not there’s a buyer for the product.

Still, a few of the displaced farms probably won’t find buyers before Monday. The Farm Center at the state Agriculture Department has a “situation room” where staff members are talking with dairy plant owners, trying to connect them with the remaining farms.

Canada has said it’s not to blame for the crisis; it faults American farmers for producing too much milk in a global marketplace flooded with it. But U.S. authorities, including Trump, have said the Canadian dairy system is choking off sales of Wisconsin and New York milk in Canada. “We need to get at the root of the problem,” said Chris Galen, spokesman for the National Milk Producers Federation in Washington, D.C. “There are long-term ramifications that aren’t as visible as a few dozen farms all of a sudden losing their markets. The longer-term impact will affect a much larger number of America’s dairy farmers from coast to coast.”

GOP Bill Extends Deadlines for Fixing Self-Reported Environmental Violations

Participants in the state’s voluntary environmental compliance audit program would have more time to correct violations under a new Republican-backed bill.

Assembly Bill 264 also instructs the state Department of Natural Resources and the Department of Justice to consider whether a violator is a small business that has committed a minor violation before pursuing enforcement in court.

The bill, introduced Monday by Rep. Andre Jacque, of DePere, would extend the current 90-day deadline for correcting violations found through the DNR environmental compliance audit program. Violators would be allowed 180 days for most violations, and would be allowed 360 days if modification of pollution prevention equipment is required.

The bill also would eliminate the current legal requirements that businesses notify the DNR at least 30 days before beginning a compliance audit, and that the public be notified and be allowed to comment on timetables for bringing a business into compliance.

Jacque said the bill brings the state self-compliance program in line with a similar U.S. Environmental Protection Agency program with the goal of encouraging more companies to participate. The EPA program has a 180-day correction time period and no requirement to notify the agency before an audit begins. “Currently the state program is, as I understand it, woefully underutilized compared with the federal process,” Jacque said. “This is going to make the state program more usable.”

Jacque noted the DNR’s Small Business Environmental Council, composed of both Republican and Democratic appointees, unanimously supported the bill draft.

Under existing state law, a business can reduce its liability for violations of environmental standards by enrolling in the environmental compliance audit program, voluntarily auditing its own performances, reporting results and correcting violations.

The law contains provisions that prevent use of the program to deflect penalties for known or serious violations. The program was created in 2004. The DNR received two compliance reports identifying five potential violations in the past two years and three reports identifying 37 potential violations in the prior two years.

Wisconsin’s First-Quarter Home Sales Highest in at Least 12 Years

Sales of existing homes in Wisconsin posted their best first quarter in at least a dozen years, the Wisconsin Realtors Association said Monday. At the same time, prices continued to increase in what real estate professionals say is a thin inventory of homes on the market, especially in the state’s more-urban metro areas.

A strong March helped boost the first-quarter sales total to 13,376, up 3.2% from 12,958 in the first three months of 2016. In March, sales increased 7.2%, to 5,906 from 5,509 in March last year. The median sale price of homes sold in Wisconsin through March this year was $159,575, or 6.4% higher than $150,000 in last year’s first quarter.

The Wisconsin Realtors Association said first-quarter existing home sales were the strongest for that three-month period in the state since the association recalibrated its system of tracking home sales in 2005.

“What is amazing about these record sales is that they are occurring against a backdrop of very tight statewide inventories,” Erik Sjowall, chairman of the Wisconsin Realtors Association, said in a statement.

Economist David Clark, a Marquette University professor who analyzes the monthly sales and price data for the state Realtors, said buyers seemed to have grasped the reality they must have their financial qualifications in order and should act quickly on a property they want. “That behavioral change may be allowing us to see growth even though our inventory levels are getting really tight,” said Clark, who is executive associate dean at Marquette’s business school.

All regions of the state had monthly growth in sales in March.

Economic conditions point toward more consumers likely getting into the homebuying market. The statewide labor market continues to improve, with the March seasonally adjusted unemployment rate at 3.4%, the Realtors said. The unemployment rate has gone down even though the state labor force has grown over the last 12 months, which means job growth is more than keeping pace with the number of new job seekers.


In New Trade Front, Trump Slaps Tariff on Canadian Lumber

The Trump administration announced on Monday that it would impose new tariffs on Canadian softwood lumber imports, escalating a longstanding conflict with America’s second-largest trading partner.

The Commerce Department determined that Canada had been improperly subsidizing the sale of softwood lumber products to the United States, and after failed negotiations, Washington decided to retaliate with tariffs of 3 percent to 24 percent. The penalties will be collected retroactively on imports dating back 90 days.

The decision came days after President Trump complained bitterly about Canada’s dairy trade practices, and the tariffs signaled a harsher turn in his relationship with Canada, even as he seeks to renegotiate the North American Free Trade Agreement. While he has often assailed China, Mexico and others for their trade practices, he seemed to have forged a strong relationship with Canada’s prime minister, Justin Trudeau.

The United States and Canada have been at odds over softwood lumber in one form or another since the 19th century, with the current dispute tracing back to 1982. The United States imported $5.7 billion in softwood lumber last year alone, mainly for residential home building.

At the conflict’s heart is a fundamental difference in forestry ownership. In the United States, forest lands are largely held by lumber companies. In Canada, they tend to be owned by the government, and American mills contend that Canadian provinces subsidize their industries by charging low royalty rates for cutting trees. A temporary truce under President George W. Bush, which effectively limited Canadian exports to the United States, expired in 2015.

Responding on Monday to a complaint filed by American mills, the Commerce Department found that five Canadian companies received subsidies worth 3 percent to 24 percent and ordered equivalent tariffs on each of them. For other Canadian lumber companies, it set a tariff rate of 20 percent. The department will issue a final determination in September.

“The government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty,” Chrystia Freeland, the minister of foreign affairs, and Jim Carr, the minister of natural resources, said in a joint statement. “The accusations are baseless and unfounded.”

Commerce Secretary Wilbur Ross told The Wall Street Journal that the Trump administration had tried to negotiate a settlement but failed. In a separate statement on Monday, he called it “a bad week for U.S.-Canada trade relations,” repeating Mr. Trump’s complaints about dairy exports. “This is not our idea of a properly functioning free trade agreement,” he said.