News of the Day

Physicians, WMC Clash over Worker’s Compensation Proposal

Physicians and a key business group are clashing over a new workers’ compensation proposal that would significantly change how doctors are paid.

Wisconsin Manufacturers & Commerce says companies get overcharged by providers and hospitals for medical expenses to treat their injured employees — and that adding a fee schedule for medical procedures like most other states would keep costs down.

“It’s something that employers have long sought, to bring some relief to the equation when it comes to medical bills within workers’ comp,” said Chris Reader, WMC’s director of health and human resources policy.

But the Wisconsin Medical Society says the current system leads to better patient outcomes and satisfaction, improved access to doctors, lower rates of lawsuits and injured workers getting back to their companies sooner.

“There’s no evidence that such a scheme is necessary in the first place,” said Mark Grapentine, the senior vice president of government and legal affairs at the Wisconsin Medical Society. “By just about every metric that folks care about, the Wisconsin workers’ comp system is one of the best in the country.”

The fight isn’t new. The two sides battled over the issue two sessions ago, when WMC’s effort to add a fee schedule to the system failed.

The venue — until now — has been the Worker’s Compensation Advisory Council, made up of five labor representatives, five management representatives, three non-voting insurance representatives and one representative from the Department of Workforce Development. The health care community also has four liaisons who advise the council.

The council on Wednesday, after two days of meetings, reached an agreement between labor and management that would, among other things, add the fee schedule that WMC supports and meet a key labor priority of boosting disability benefit rates.

That agreement is now being drafted as a bill and will head to the Legislature, which in 2014 rejected a proposal from the council for the first time in decades, largely over the fee schedule provision.

Reader, of WMC, predicted that lawmakers would approve the measure this session because they have more time to review it and there aren’t other controversial elements of the bill.

But Grapentine, of the Medical Society, said lawmakers rejected the idea last time because “all of the facts and data” show that Wisconsin’s system is working. Eric Borgerding, the president and CEO of the Wisconsin Hospital Association, made a similar pitch.

“Here we are, once again, talking about fee schedules and price setting; outdated solutions looking for a problem,” he said in a statement. “It’s really time to move on.”

Stephanie Bloomingdale, secretary-treasurer of the Wisconsin AFL-CIO, said in a statement the union backs the “agreed-upon bill that was arrived at through the long-established” process of the council.

Wisconsin Budget Committee Votes to End Forestry Mill Tax

The state’s portion of Wisconsin’s property tax revenue would be eliminated under a measure approved Thursday by the state’s budget-writing committee.

The Republican-led Joint Finance Committee voted to sunset the forestry mill tax, which would amount to a reduction of about $180 million over the two-year budget period. Under the proposal, the forestry account would receive funding from the state’s general fund rather than the specified tax. But critics argue that puts the forestry fund in competition with other areas funded by general purpose revenue, like schools and health care.

While most property taxes are levied by local governments and school districts, the state’s portion — up to 20 cents per $1,000 of property value, but currently set at about 17 cents — goes to fund the acquisition, preservation and development of forests in the state.

The estimated savings for the owner of a median-valued home would be between $25 and $30, according to the nonpartisan Legislative Fiscal Bureau.


Minnesota Shelves Tax Reciprocity Talks With Wisconsin

Minnesota is shelving talks with Wisconsin to restore tax reciprocity between the two states. However, Wisconsin’s top revenue official says Minnesota rejected an offer they sent in June.

Around 20,000 Minnesotans work in Wisconsin, while roughly 50,000 Wisconsin residents work across the border.

Wisconsin Department of Revenue Secretary Rick Chandler expressed disappointment in Minnesota’s decision to abandon an income tax agreement with Wisconsin in a prepared statement on Tuesday.

“We sent Minnesota an offer in June that met all the conditions in the Minnesota statutes,” wrote Chandler. “A new agreement would have made tax filing more convenient for tens of thousands of Minnesota and Wisconsin residents by allowing them to file one state tax return rather than two.”

In a letter dated June 28, Wisconsin offered to make quarterly payments of $25.25 million for the upcoming 2018 tax year to offset an estimated $150 million in revenues that would be foregone by Minnesota under the agreement. The draft agreement also proposed annual reconciliation payments that would be made with interest beginning on Nov. 15, 2019.

However, Cynthia Bauerly, commissioner for the Minnesota Department of Revenue, wrote in a letter to Chandler last week that Minnesota statutes authorize entering into a reciprocity agreement when it is “in the best interest of the people of this state.” She said some Minnesotans who were paying higher taxes in the absence of an agreement will no longer do so after Minnesota lawmakers included a refundable credit in the state’s 2017 tax bill.

“Given the existence of the new refundable credit that will reduce any negative tax consequence for Minnesotans, and the additional financial exposure for Minnesota’s budget created by the payments required under an agreement, an income tax reciprocity agreement is not in the best interest of the people of Minnesota,” wrote Bauerly.

The two states have been working on an agreement after a previous deal that had been in place for decades ended in 2009. Former Minnesota Gov. Tim Pawlenty pulled out of the agreement after Wisconsin was late making payments.

In his statement on Tuesday, Chandler said Wisconsin is still willing to reinstate reciprocity “if Minnesota agrees to do so.”

State of Wisconsin Seeks to Tighten Job Requirements on Foxconn Deal

Gov. Scott Walker’s administration is seeking to tighten up job creation requirements as part of a multibillion dollar deal to bring a Taiwanese company to southeastern Wisconsin, a top official said Tuesday. 

Foxconn Technology Group could receive up to $2.85 billion in cash payments from the state in exchange for building an up to $10 billion flat screen plant and hiring up to 13,000 workers. 

Speaking at a budget committee hearing here Tuesday, the head of Wisconsin’s jobs agency said the state was seeking to include stronger safeguards on those payments in its final contract with the company. 

Mark Hogan, chief executive officer of the Wisconsin Economic Development Corp., said his agency is seeking to require Foxconn to return some of the payments if employment at the factory doesn’t hit employment targets.

If Foxconn’s employment should rise to 13,000 by the fifth or sixth year of the deal but then decline, “we would look at putting in our contract the ability to pull back some of those dollars,” Hogan told lawmakers. 

Production workers at the plant will be paid more than $20 an hour, Hogan said. He said that not only will the average annual salary be nearly $54,000, but so will the median. That means half of Foxconn employees here would be paid more than $54,000 a year and half less.

Hogan also confirmed what has been widely believed but not officially acknowledged: Foxconn will locate its massive liquid crystal display panel factory in Racine County or Kenosha County.

That would represent a significant addition to the Foxconn deal, which has some safeguards in place but no minimum job creation requirement for some of the potential payments to the company. Democrats have called for including these protections in the Foxconn bill itself rather than waiting to see if they are included in the final contract with the company.

Work on State Budget Resuming

After two months of stalemate, work on the stalled state budget will restart next week as lawmakers take up a property tax cut and hear testimony on an up to $3 billion deal to lure a flat screen plant to southeastern Wisconsin.

The Legislature’s budget committee will meet twice next week in its first sessions since June 15 and will vote on eliminating the state’s roughly $86 million-a-year property tax for forestry. The Joint Finance Committee isn’t scheduled, however, to act on the most difficult to resolve issues like spending on state highways, a personal property tax levied on businesses and school funding.

Rep. John Nygren (R-Marinette), the panel’s co-chairman, said there is an agreement in principle on transportation and the personal property tax between Gov. Scott Walker and GOP leaders in the Senate and Assembly. But Nygren declined to reveal the deal in detail, saying it was tentative and could still fall apart as legislative leaders share it with rank-and-file lawmakers.

“It’s not final, but there’s a framework,” Nygren said.

A spokesman for Walker had no comment but the committee’s other co-chair, Sen. Alberta Darling (R-River Hills), said progress has been made between Senate Republicans, who favor sizable borrowing for road construction, and Assembly Republicans, who oppose new borrowing without new revenue to pay for it.

 “We’re very close on transportation and both sides had to give to get to something,” Darling said.

Both Nygren and Darling said the committee will vote Thursday to eliminate the property tax levied by the state for forestry programs, which would save $26 on the tax bill for a median-valued home.

Nygren and Darling said the budget committee is also close to a deal to cut the personal property tax, which is levied by local governments and paid by businesses on certain furniture and equipment.

Darling said Republicans are looking at eliminating the tax on certain classes of property to help small businesses such as restaurants and grocery stores.

The tax is also levied on some manufacturers, but Darling noted that Republicans have already moved to eliminate nearly all income and corporate taxes on manufacturers.

“I think the priority is small business,” Darling said.

State Legislators Introduce Legislation to Eliminate Moratorium on Metallic Mining

Yesterday, State Senator Tom Tiffany (R-Hazelhurst) and State Representative Rob Hutton (R-Brookfield) introduced LRB 2652 that will eliminate the moratorium on nonferrous metallic mining in Wisconsin. LRB 2652, also known as The Mining for America Act, is the first step forward in guaranteeing our nation’s ability to manufacture while ensuring our long-term global economic independence.

“People want to make things in America again. Our neighbors, Minnesota and Michigan, have placed their shovels in the dirt of America’s future. It is Wisconsin’s turn to do the same”, said Tiffany. He continued, “American technological needs such as mobile phones, hybrid cars, and even solar panels require mined minerals to be built. It is time for America to build these products. That process can begin here.”

The Mining for America Act will eliminate the nearly 20-year ban that the legislature placed on Wisconsin’s mining industry. Wisconsin has comprehensive mining laws in place and the moratorium prevents those laws from being used. Wisconsin can mine in a responsible way.
“Wisconsin is uniquely equipped to supply precious minerals to the world. Encouraging significant investments in safe mining will create a new economic environment in northern Wisconsin, resulting in family supporting jobs throughout our entire state,” said Hutton.

If American consumers want to continue enjoying the luxuries of small electronic devices or hybrid vehicles, it is critical to look inward to build those products. Consumers purchase products every day that are mined in countries with little to no environmental protection. It is time to step up to the plate and mine in a state that chooses to rigorously protect its environment. Mining can be done responsibly within our state while fulfilling the American consumers’ penchant for mineral-based products.

Wisconsin Assembly Set to Approve $3 billion for Foxconn

The Wisconsin Assembly planned to approve a $3 billion tax break Thursday for Taiwan-based Foxconn Technology Group to build a massive display panel factory in the state, a project President Donald Trump touted as a transformational win for the U.S. economy.

If built, the plant would be the first outside of Asia for liquid crystal display panels used in television, computers, medicine and other fields.

Republican Gov. Scott Walker, who led negotiations on the deal won by Wisconsin over competition from several other nearby states, has called it a once-a-generation opportunity.

The deal signed by Walker and Foxconn officials calls for the electronics giant to invest $10 billion in the state and hire up to 13,000 people at the massive plant that would be spread over a 20 million-square-foot campus. Construction would begin in 2020.

It will take at least 25 years for Wisconsin taxpayers to break even under the deal, according to an analysis by the nonpartisan Legislative Fiscal Bureau.

Democrats complain the bill is moving too quickly through the Republican-controlled Legislature. Walker and Trump announced that Foxconn was coming to Wisconsin on July 26, and the $3 billion incentive package was introduced on July 28. The Assembly is voting on it less than three weeks later.

The measure must also clear the Senate, but Republicans there have indicated they may want to make changes. If that happens, the Assembly would have to vote on it again.

The agreement with Foxconn calls for the state to approve the incentive package and secure the roughly 1.56 square miles of land for the deal by the end of September.

Wisconsin’s Real Estate Market Continues to Grow

The Wisconsin Department of Revenue (DOR) has released its annual Equalized Value Report. The report shows that Wisconsin’s total statewide equalized property value as of January 1, 2017, was $526 billion, a 4 percent increase over the prior year. Equalized Values are based on data from January 1, 2016 to January 1, 2017.

Wisconsin residential property was valued at $369 billion as of January 1, 2017, an increase of 4.3 percent, or $15.1 billion. The 4.3 percent increase marks the fourth consecutive year of positive gains in residential home values.

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 percent from the prior year.

The DOR report indicates that commercial property values were $102 billion, an increase of 5.1 percent or $5 billion. Manufacturing property was valued at $14 billion, an increase of 2.4 percent or $338 million from the prior year. Agricultural land was valued at $2 billion, an increase of 1.3 percent from a year earlier (agricultural land value changes do not represent changes in market value; agricultural land values are based on the income that could be generated from its rental for agricultural use). Undeveloped land saw a slight increase in total value of 0.2 percent, or $4 million, with a total value of $1.9 billion. The Agricultural Forest and Forest property classes had overall changes of +1.9 percent and -1.2 percent, respectively. To round out real estate value changes, the value of Farm sites and Farm buildings (Other) increased by 0.5 percent. Lastly, the value of personal property increased by 2.4%, to $12.9 billion.

Equalized Values are calculated annually and used to ensure statewide fairness and equity in property tax distribution. The 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.

Assembly Lawmakers Advance Foxconn Incentive Package

An Assembly committee Monday gave the green light to a package of incentives designed to convince Taiwanese electronics manufacturing giant Foxconn to build its first U.S. plant in Wisconsin.

The Republican-controlled Assembly Committee on Jobs and the Economy voted 8-5 along party lines to advance Gov. Scott Walker’s bill that provides Foxconn with nearly $3 billion in tax credits, exempts the company from a number of environmental regulations and spends $20 million in state funds on job training to ensure the state’s workforce is prepared to fill the 13,000 jobs the company has promised to create.

The full Assembly is scheduled to vote on the package Thursday.

Republicans said amendments to Walker’s bill that the committee adopted Monday have added some of the protections Democrats want. They included asking state officials negotiating the final contract with Foxconn to add a goal of hiring Wisconsin-based workers and making sure enough workers in the state are available to be hired and at a livable wage.

The amendments also call for providing $20 million to the Department of Workforce Development after 2019 for job training, requiring the state’s jobs agency to provide tax credits only for jobs that have a salary of at least $30,000 per year and allowing tax incremental financing funds to be used for fire, police and other government services.

The lawmakers also want state officials negotiating a final contract with Foxconn to emphasize that workers living in Wisconsin should be given preference for hiring. But Assembly Speaker Robin Vos, R-Rochester, has acknowledged that requiring that preference could be illegal.

If Foxconn fills a wetland during its construction process, Assembly lawmakers also want to require the creation of two wetlands in its place in the same watershed, if possible.

A spokesman for Walker did not say whether Walker supported the changes.“Governor Walker is working closely with the Legislature to advance this bill and he looks forward to signing it into law in the coming weeks,” spokesman Tom Evenson said.

Deteriorating State of Wisconsin Bridges Adds to Transportation Budget Woes

As lawmakers continue to struggle over how to fund the state’s transportation budget, drivers are contending with bridges that have deteriorated to their worst condition since 2003, according to Federal Highway Administration data.

While the number of structurally deficient bridges has held relatively steady over the past decade, the average structural fitness of the state’s bridges has been declining since 2008. The National Bridge Inventory rates the structural fitness of a bridge from 0 to 9, with 0 indicating the bridge is closed and 9 indicating its status is superior to desirable criteria. Since 1992, about a quarter of Wisconsin bridges were rated an 8 or 9, the best two designations on the evaluation scale, peaking at around 27 percent from 2006 to 2008. By 2016, that number had fallen to 19 percent, the lowest in the span of the data.

The percentage of bridges that are “basically intolerable” meanwhile increased slightly from 2.5 percent in 2008 to 3 percent in 2015 and 2016. That slight increase on the low end only accounts for about 100 of the state’s 14,230 bridges. But combined with a general slide in ratings, the average bridge rating has decreased from a high of 6.5 in 2008 to 6.3 in 2016, the lowest since 2003.

For the most part, Wisconsin’s bridges are converging in the middle range, creating the potential to significantly swell the number of bridges in poor condition in coming years, requiring more of them to close or impose weight limits.

The main concern with the deteriorating condition of bridges isn’t safety — it’s commerce. Bridges are inspected regularly, and those in very poor condition are posted with weight limits or closed as needed. Those closures and weight limits can have a significant impact on agriculture, timber and other commerce that involves transporting heavy loads.

The number of bridges posted with weight limits has already more than doubled since the mid-2000s, hitting a high of 875, or 6 percent of bridges, in 2015 and 2016. County Highway Administration Executive Director Dan Fedderly said that’s both due to declining bridge conditions and recent increases in the amount of weight trucks are allowed to carry. Some bridges end up posted simply because they weren’t designed to carry that much weight.