News of the Day

Lawmakers Approve Bill Restricting Local-Government Control on Employment

The State Assembly voted on Thursday on a proposal to prevent local governments from adopting mandatory labor-peace agreements and other requirements related to employment laws.

Assembly Bill 748 seeks to put in place statewide rules for occupational licensing, overtime and other employment matters. Supporters of the legislation say it would prevent the state from having employment requirements that vary greatly from one government jurisdiction to the next. Uniformity, they argue,w ill make it easier for companies to know what rules they have to follow when doing business in Wisconsin.

The provision concerning labor-peace agreements, for instance, would prevent local officials from requiring employers to sign onto these sorts of agreements before doing municipal work. Employers who sign labor-peace agreements agree to not resist employees’ unionization attempts.

Beyond that, the bill would:

  • scrap local governments’ ability to set minimum-wage requirements for contractors who are working on local public-works projects; and
  • prohibit local governments from enforcing occupational-licensing requirements that are stricter than those set by the state;
  • set a statewide standard for regulations concerning employee scheduling, hours and overtime;
  • establish uniform statewide regulations for employee benefits;
  • make it clear that employers throughout Wisconsin have the right to ask job applicants for salary information;
  • prevent local governments from establishing a wage-claim process that is separate from the one set by the state.

The legislation had once called for the setting of a statewide standard to determine when employment discrimination had occurred. But an amendment introduced earlier this week scrapped that provision.

To become law, AB 748 still needs the state Senate’s approval and Gov. Scott Walker’s signature. Lawmakers in the Senate have said they plan to convene in March for the final time this legislative session.

Contractor Liability Bill Heads to Assembly

Legislation that that could decrease contractors’ legal costs and liability has received a boost that could have it before the Wisconsin Assembly on Thursday, the last day lawmakers in that chamber plan to meet this legislative session.

The proposal, Assembly Bill 773, calls for a series of changes to the state’s civil-litigation rules. Among other things, it would curtail the state’s construction statute of repose, which contractors commonly invoke when defending themselves against personal-injury lawsuits alleging negligent design. Current law bars lawsuits involving injuries that occurred more than 10 years after a given construction project had come to an end. AB 773 proposes reducing that window to six years.

Although enjoying support from industry groups like the Wisconsin Builders Association, the proposal had appeared to be stalled in the Assembly Judiciary Committee with little chance of being sent to the full Legislature for a vote. But, late on Monday, lawmakers arrived at a compromise that will seemingly allow the bill to advance and the bill was scheduled for a vote before the Assembly Judiciary Committee.

Among the proposed changes to the bill is one that would give plaintiffs an additional year to sue contractors over allegations of negligent designs. Rather than six-year limit in the current version of AB 773, the amendment would allow lawsuits to be filed within seven years of a project’s wrapping up.

The committee adopted that amendment on Tuesday and voted 6-3 to give the bill a favorable recommendation.

The bill’s next stop is the Assembly. Should it pass there, AB 773 still needs to be voted on by the full Senate and signed by Gov. Scott Walker.

Separately from the construction statute of repose, the proposal would make various changes to procedures used to gather information during litigation, placing time limits on depositions, restricting how many depositions could be requested and changing rules governing what electronically stored information parties must either retain or produce.

Although these changes appear unrelated to construction, supporters of the bill have contended they could cause contractors who are involved in litigation to spend less money and time responding to discovery requests.

Michael Screnock and Rebecca Dallet Advance in Supreme Court Race

Sauk County Judge Michael Screnock and Milwaukee County Judge Rebecca Dallet will compete for a 10-year term on the state’s highest court in the April 3 general election.

The two candidates prevailed in Tuesday’s primary election, topping Madison attorney Tim Burns, who was eliminated from the race.

Screnock, who is backed by conservatives, earned the most votes after arguing to voters he would set aside his personal views or policy preferences and apply the law as it’s written and not in a way to seek a certain outcome.

“Tonight’s results serve as proof that voters across Wisconsin value the importance of a fair and impartial judiciary focused on upholding the rule of law and respecting our Constitution and the separation of powers, regardless of their political affiliation,” Screnock said.

Dallet, who is backed by some liberals, came in second after receiving the support of hundreds of judges and lawmakers across the state. She ran to the left of Screnock, who is heavily backed by conservatives, and to the right of Burns, who ran as an “unshakable champion of progressive values” who would “stand up” to Gov. Scott Walker.

She emphasized her 10 years of experience as a judge presiding over more than 10,000 cases — a resume she characterized as evidence of her ability to be an impartial jurist. She said in an interview Tuesday that her experience set her apart from her opponents.

State Home Sales Rose 2.8% in January

Home sales in Wisconsin rose 2.8 percent in January, compared to January of 2017, according to the Wisconsin Realtors Association’s latest report.

The number of home sales rose despite a sharp decline in listings. The inventory of homes for sale in the state was down 16.4 percent in January to 24,607. That represents a supply (the time it would take to sell all of the homes on the market at a given time) of just 3.5 percent. That is a seller’s market. A 6-month supply is considered a balanced market.

The number of new listings in January was down 4.5 percent in the state, compared to January of 2017.

“Tight inventories dominated Wisconsin’s housing market throughout 2017 and that challenge has continued into the first month of the new year,” said WRA chairman Peter Sveum. “Strong economies typically translate into strong home sales. The only factor holding us back from an even stronger housing market is lack of supply.”

With rising sales and declining inventory, home sale prices continue to rise. The median home sales price in the state was up 6.8 percent in January, compared to a year ago, to $168,500.

“Rapid price growth is a result of high demand, fueled by a great economy and very low mortgage rates,” said WRA president and CEO, Michael Theo. “The good news is low mortgage rates, combined with solid income growth, have kept our housing affordable, even as home prices have grown at a rapid pace,” “One big concern, however, is that the strong economy has begun to generate more inflation, and the threat of inflation is what causes long-term interest rates to move up, which will further erode our affordability.”

Legislative Republicans Want Income Tax Rate Cut Paid for with Tax Code Tweaks

Legislative Republicans are contemplating an income tax cut paid for with tweaks to the state tax code as part of their end-of-session legislative sprint.

Rep. Dale Kooyenga, R-Brookfield, said Friday he is working on a bill that would make changes to Wisconsin’s tax code to conform with the recent changes in federal tax law.

If the state doesn’t make changes to its own tax law, state taxpayer income will be based on federal law prior to the tax law changes Congress and President Donald Trump recently passed.

If the state adopted all of the changes in federal tax law, it would reduce state tax revenues by $315 million, the fiscal bureau reported in a memo this week. The memo identified 41 different changes in state law that would be needed to conform with federal law, with 26 of the changes generating additional revenue and the others reducing tax collections or having a minimal impact.

Kooyenga said the changes to the state tax code being proposed would result in a net increase in tax collections of roughly $90 million. He wasn’t able to provide a list of which changes would be included and which wouldn’t.

To offset that tax revenue increase, he said the bill would likely include adoption of the income tax rate reduction Gov. Scott Walker proposed in his 2017-19 budget but Republicans ultimately rejected.

“This isn’t big sexy tax reform, this is maintenance of the tax code,” Kooyenga said. “We’ve got to make this easier for businesses and individuals.”

Walker’s income tax cut proposal would have reduced the lowest marginal tax rate from 4 percent to 3.9 percent and reduced the second-lowest rate from 5.84 percent to 5.74 percent while expanding the amount of income covered by that bracket by $30,000.

The income tax cut would cost about $100 million a year, according to the Legislative Fiscal Bureau. Walker’s office estimated the cut would save $139 over two years for a median-income, four-person family making about $86,000 a year.

Walker spokesman Tom Evenson said his office and the Department of Revenue were reviewing the proposal.

“We appreciate the legislators for putting this proposal forward,” Evenson said

State Assembly Approves Welfare Overhaul Package

The Assembly signed off on a package of special session welfare bills to set new requirements for various government assistance programs including food stamps. All but two of the bills passed on 62-35 party-line votes.

Initial combined cost estimates of the bills from the Department of Health Services and Department of Children and Families showed the legislation would collectively cost more than $90 million annually — excluding one-time start-up costs. But an updated overall figure isn’t yet available following the adoption of a series of amendments with the bills.

The package includes:

*SSAB 1, which would up the work requirement for FoodShare to 30 hours from the current requirement of 20 hours.

*SSAB 2, which would require expand work requirements for food stamps that now apply only to able-bodied adults to those have school-aged dependents.

*SSAB 3, which would create asset limits for food stamps, W-2 or Wisconsin Shares.

*SSAB 4, which would add drug screening to the application process for those seeking public housing.

*SSAB 5, which would create a two-year pilot program to make monthly payments to those who received the Earned Income Tax Credit rather than waiting until after they’ve filed their tax returns to send them a lump sum.

*SSAB 6, which would require DHS and DCF to create performance-based payment systems for W-2 and food stamps vendors.

*SSAB 7, which would allow DOA to contract with a private vendor to create a “pay for success trust fund.” Those with a proposal to address an issue with social, employment or correctional services provided to individuals could bring it to the state and then negotiate an incentive based on the expected budget savings. That money would be set aside and the state would only pay the vendor if the goal was achieved.

*SSAB 8, which would cut off from Medicaid those able-bodied adults who refuse to cooperate with a paternity test or comply with a child support order.

*SSAB 9, which would create a savings account program for Medicaid.

*SSAB 10, which would add photo IDs to food stamp cards.

The bills now head to the Senate.

Wisconsin Electricity Rates Among Highest, Use Low

Wisconsin has some of the highest electricity prices in the nation, although the average customer spends far less on electricity than in most states.

The average residential price for a kilowatt of electricity was 10.67 cents in 2016, according to numbers released this week by the U.S. Energy Information Administration. Only 15 states had higher residential rates, a reversal from 20 years ago, when Wisconsin had the 14th lowest rates in the nation.

Commercial rates are 15th highest in the nation, while industrial rates are 18th.

So why are Wisconsin’s rates so high?

“Built-in costs,” said Gary Radloff, director of Midwest Energy Policy Analysis for the Wisconsin Energy Institute. “It’s a combination of legacy infrastructure and legacy business models.”

Utilities have invested heavily in power plants and transmission lines — such as the CapX2020 and Badger Coulee projects through western Wisconsin — that are paid off over decades through customer rates set by the Public Service Commission.

In 2013, a group of Wisconsin utilities agreed to spend $1.2 billion to upgrade coal plants to settle a case brought by the Environmental Protection Agency over emissions of sulfur dioxide and nitrogen oxide.

The PSC acknowledged rising rates in its last statewide energy assessment, though the report said investments are necessary to replace aging facilities and comply with federal regulations. The regulatory agency says it is continuing to investigate ways to mitigate rate increases and suggests customers can offset the impact by conserving energy.

Bill Increasing Penalties for UI Benefits Fraud Advances

A panel of lawmakers has given its approval to a bill that would increase the penalties for unemployment claimants who fraudulently obtain jobless benefits.

State law already has penalties for people who conceal material facts related either to their ability to obtain jobless benefits or to the wages they had earned while working. Those who are found to have committed a violation known as concealment can be forced to pay back the money they received from the state plus a penalty equal to 40 percent of that amount.

Aside from those civil penalties, a person can also face criminal charges for concealment and be hit with penalties ranging from $100 to $500 in fines and as many as 90 days in prison.

Assembly Bill 710, and its companion in the state Senate, Senate Bill 542, would ratchet up those criminal penalties, making them go up in accordance with the amount of benefits a claimant illegally obtained. If the benefits fraudulently obtained totaled $2,500 or less, a claimant would face a maximum of $10,000 in fines and nine months in prison.

For those who obtained between $2,500 and $10,000 worth of benefits, the offense would become a felony and the criminal penalties would be three and a half years in prison and a maximum of $10,000 in fines.

For claimants who had fraudulently obtained more than $10,000 worth of jobless benefits, the crime would also be a felony but the maximum penalties would be $25,000 in fines and 10 years in prison.

The bill would allow a series of violations to be prosecuted as a single crime.

The Assembly Committee on Public Benefit Reform voted 5-3 on Tuesday, along party lines, to recommend the bill for adoption.

State Rep. Debra Kolste, a Democrat, had proposed amending the bill so that it would also apply to employers. However, that amendment failed on a 5-3 vote on party lines.

Both bills still need to be approved by the full Legislature and signed by Gov. Scott Walker to become law.

 

President Trump Unveils Infrastructure Plan

The 53-page document lays out his vision: To turn $200 billion in federal money into $1.5 trillion for fixing America’s infrastructure by leveraging local and state tax dollars and private investment.

Half of the new federal money, $100 billion, would be parceled out as incentives to local government entities.

An additional $20 billion would go toward “projects of national significance.”.

Another $50 billion is earmarked for rural block grants, most of which will be given to states according to a formula based on the miles of rural roads and the rural population they have. States can then spend that money on transportation, broadband, water, waste and power projects.

The rest of the money would support other infrastructure-related undertakings, including existing loan programs like the one operated by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, which White House officials said could leverage up to $40 in local and private money for every $1 in federal investment.

The plan proposes to cut federal permitting to two years, down from five to ten. Former President Obama also tried to address the problem through an executive order that instructed agencies to use better technology and work concurrently on their reviews in order to cut down on approval times.

The plan also calls for changes aimed at widening the pipeline of skilled construction workers, such as allowing Pell Grants to be used for short-term credentials from places like community colleges and targeting federal work-study funding toward on-the-job training.

Finally, the plan proposes to allow the federal government to quickly and more easily sell assets that it says “would be better managed by state, local, or private entities.” As examples of property that could be divested, the plan named the Ronald Reagan and Dulles International Airports, the Tennessee Valley Authority and Bonneville Power Authority’s transmission assets, and the Washington Aqueduct, which supplies Washington, D.C. with fresh drinking water.

 

Governor’s Reinsurance Proposal Could Help Lessen Key Problem in ACA

Wisconsin is on track to join states such as Minnesota and Oregon that have a program to help lessen the problems with the Affordable Care Act.

Gov. Scott Walker, a longstanding opponent of the law, has proposed using a mix of federal and state dollars to lower premiums — or at least check future increases — for insurance sold directly to individuals and families.

The proposed program would pay as much as 80% of the insurance claims of people with high medical bills, lowering insurers’ costs and enabling them to set rates with more certainty.

The program, known as reinsurance, addresses one of the key problems with the Affordable Care Act: The health plans have drawn too many people with high medical bills and not enough healthy people to offset the costs.

That has contributed to health insurers incurring large losses that lead to steep increases in premiums. The hope is that a state-run reinsurance program would lower rates and pull more healthy people into the market.

A similar program in Minnesota is estimated to have lowered premiums by 20% compared with what they would have been otherwise this year. Reinsurance also has worked well in the market for Medicare prescription drug plans, known as Part D, sold by private health insurers.