News of the Day

A Snapshot of Wisconsin Regulation in 2017

It would take an ordinary person more than three years to read the entire US Code of Federal Regulations (CFR), which currently contains more than 112 million words. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law, but also for anyone interested in understanding the consequences of this massive system of rules.

States also have sizable regulatory codes, which add an additional layer to the enormous body of federal regulation. A prime example is the online version of the 2017 Wisconsin Administrative Code (WAC).

A tool known as State RegData—a platform for analyzing and quantifying state regulatory text—was developed by researchers at the Mercatus Center at George Mason University. State RegData captures information in minutes that would take an ordinary person hours, weeks, or even years to obtain.

For example, the tool allows researchers to identify the industries that state regulation targets most by connecting text relevant to those industries with restrictive word counts. Known as regulatory restrictions, the words and phrases shall, must, may not, prohibited, and required can signify legal constraints and obligations. The three industries with the highest estimates of industry-relevant restrictions in the 2017 WAC are utilities, food manufacturing, and chemical manufacturing.

State RegData also reveals that the WAC contains 159,253 regulatory restrictions and roughly 12.0 million words. It would take an individual about 667 hours—or almost 17 weeks—to read the entire WAC. That’s assuming the reader spends 40 hours per week reading and reads at a rate of 300 words per minute.

Governor Walker Signs Legislation Limiting New State Regulations

State agencies will have to take added steps and meet higher standards to approve new rules, under legislation signed by Gov. Scott Walker Wednesday.

The measure allows a co-chairman of the Legislature’s rules committee to request that agencies hold public hearings before submitting scope statements on new regulations. In addition, under the bill, the state Department of Administration would also need to review an agency’s scope statement for proposed rules.

Since 2011, Walker and GOP lawmakers have given the governor more power over new environmental and other regulations, including a requirement that the governor sign off on a scope statement before new rules are written. The vetting by the administration department will now come before Walker’s review.

The proposal also requires the full Legislature to sign off any administrative rule that would make the public pay more than $10 million to comply with it.

In addition, the legislation allows the Joint Committee for Review of Administrative Rules to object indefinitely to proposed rules and not just temporarily. A committee co-chairman can also contract with an outside group to analyze the compliance cost to the public of a new rule.

State Would Recoup Foxconn investment in 25 years, Estimate Shows

A new analysis released Tuesday by the nonpartisan Legislative Fiscal Bureau shows taxpayers would pay to Foxconn Technology Group about $1 billion more than the state received in tax revenues during the first 15 years of the project, and that the state would start to recoup those payments starting in 2043 — or a quarter of a century after the project starts.

A Foxconn-commissioned analysis shows that once the plant is up and running, for every 10 jobs created there, 17 jobs would be created elsewhere in the state and that the facility’s operations would support more than 35,000 jobs statewide — a figure that includes the 13,000 planned to be at the campus itself.

Fiscal bureau director Bob Lang, who authored the analysis, noted the review focuses only on the impacts of the Foxconn project on the state’s finances, and does not account for other benefits to the state’s economy and residents. Foxconn would spend $6.70 for each public dollar, for example.

But Lang also warned that any cash-flow analysis that covers a nearly 30-year time frame must be considered “highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life.”

Under fiscal estimates from state agencies released Tuesday, the state’s payments to fulfill the incentive package would reach their peak by fiscal 2023, when the state would annually be sending $119.5 million in income tax credits and $192.9 million in capital expenditure credits to the Apple iPhone manufacturer that wants to build LCD panels in Wisconsin.

The estimate from the Department of Revenue also shows annual payroll for the proposed campus would reach $703.4 million annually.

Fiscal estimates from state agencies released on Tuesday also show provisions exempting Foxconn from sales taxes on construction materials and equipment would result in $139 million the company would not need to pay. Local governments would have gotten about $10.7 million in revenue if the exemptions were not in place and Foxconn created the same campus at the same size investment, the estimates show.

Governor Walker Announces Broadband Expansion Grant Recipients

Governor Scott Walker joined the Public Service Commission (PSC) in announcing $1,500,000 in Broadband Expansion Grants, awarded to 13 projects in underserved areas throughout the state. Matching funds for these projects amounted to $2,310,475.60 for a total of $3,810,475.60 in broadband infrastructure investment.

The Broadband Expansion Grants provide reimbursement for equipment and construction expenses incurred by efforts to extend or improve broadband telecommunications services in underserved regions of Wisconsin.

“As broadband continues to become an increasingly integral part of our lives, I know that Wisconsin businesses and families will be well-served by these continued investments,” said Governor Walker. “Internet access is a critical component of education, telemedicine, e-commerce, agribusiness, and tourism, just to name a few. No corner of our state can be left behind.”

Governor Walker created the Broadband Expansion Grant Program in the 2013-15 biennial budget and increased funding for the grants in the 2015-17 biennial budget from $500,000 to $1.5 million annually. The Governor’s proposed 2017-19 biennial budget provides $11 million more for the program over the next several years. Recipients include:

24-7 Telcom ($153,500) – This project proposes to build a fiber-to-the-home service past 120 homes and businesses located southwest of the City of Menomonie in Dunn County.

Amherst Telephone Company ($170,000) – This project proposes to build a fiber to the home service in rural Portage County, northeast of Stevens Point. The 18 mile fiber route will build past 207 residential and business locations in the Towns of Hull and Dewey.

CenturyTel of the Midwest – Kendall, LLC d/b/a CenturyLink ($167,300) – This project proposes to build a 9-mile fiber route in the central and northeast portion of the City of Baraboo. The route will pass 478 locations (13 businesses and 465 residences) in the underserved portion of the project area.

ChoiceTel LLC ($72,846.40) – This project proposes to complete the construction of a fiber to the home service in the Town of Land O’Lakes in Vilas County, authorized in 3 grants in FY 2016, 2017 and 2018. When construction finishes in 2019, ChoiceTel will have buried over 60 miles of fiber optic cable along the main roads and side roads in the township, and will have connected over 1,000 customers to fiber to the home service.

Florence County ($66,712) – This project proposes to deploy a fixed wireless service from 3 towers in Florence County.

MH Telecom, LLC d/b/a MHTC ($126,162) – This project proposes to build a fiber backbone and fixed wireless service in rural areas of Iowa County.

Oneida County Economic Development Corporation ($45,000) – This project proposes to build two additional towers in rural portions of Oneida County.

Somerset Telephone Company ($90,000) – This project proposes to build a fiber to the home service to 129 locations in St. Croix County.

SonicNet Inc. ($6,746.47) – This project proposes to install a fixed wireless service on a county-owned tower in the Town of Conover in Vilas County. The project will also build microwave links to other SonicNet tower locations.

Black Earth Telephone Company d/b/a TDS Telecom ($285,917.20) – This project proposes to build a DSL service to 307 locations in the Town of Vermont south of the Village of Black Earth in Dane County. Town of Dunn ($106,395.18) – This project proposes to build a Charter Communications cable facility to 103 homes in the vicinity of Hawkinson Road in the Town of Dunn in Dane County.

Vernon Communications Cooperative ($176,587) – This project proposes to build a combination of fiber to the home and fixed wireless services to 530 locations in Vernon County.

Waupaca Online ($32,815.75) – This project proposes to build a fixed wireless service to the home service to 324 locations in northern Waupaca County.


Wisconsin Credit Rating Boosted to ‘Aa1’ by Moody’s

Wisconsin won a one-notch credit ratings upgrade to ‘Aa1’ from Moody’s Investors Service on Friday despite the state’s fiscal 2018-19 biennial budget being overdue.

The action affects about $8 billion of outstanding general obligation bonds, according to the credit ratings agency.

“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,” Moody’s said in a statement.

While Wisconsin began its new fiscal biennium on July 1, its Republican-controlled legislature has yet to pass a spending plan as lawmakers debate how to fund transportation projects and consider a $3 billion package of incentives for a new LCD screen plant by Taiwan’s Foxconn.

“We don’t consider occasional late budgets as having a credit impact,” said David Jacobson, a Moody’s spokesman.

Wisconsin’s Republican Governor Scott Walker hailed the upgrade, the first for the state from Moody’s since 1973, as an affirmation of its “fiscal stability driven by bold reforms and accountable stewardship of the taxpayer’s dollar.”

Wisconsin’s credit ratings with S&P Global Ratings and Fitch Ratings are a notch lower at ‘AA’.

Economy Adds 209K Jobs in July

The U.S. economy added a solid 209,000 jobs in July, more than expected as the labor market shows few signs of slowing down. The labor market has churned out nearly 1.3 million jobs in the first seven months of the year.

The unemployment rate fell to 4.3 percent from 4.4, the Commerce Department reported on Friday.

In the past three months, the labor market has averaged growth of 195,000 jobs a month. Reports for May and June were revised upward by 2,000 jobs.

Hourly earnings ticked up slightly, 0.3 percent last month and have risen  2.5 percent over the year.

Retail remained weak last month, only adding 900 jobs in July.  Construction added 6,000 jobs and manufacturers hired 16,000 last month.

Wisconsin Becomes Latest State to Enact Skimming Penalties

Yesterday, Senate Bill 133, authored by Representative Rob Summerfield (R-Bloomer) and Senator Robert Cowles (R-Green Bay) was signed into law (2017 Wisconsin Act 54) by Governor Walker. This Act creates penalties for the possession, trafficking, and use of credit card skimmers.

“This was very rational legislation. Our state did not have the proper laws to address this modern crime, and communities were struggling with a way to combat it,” said Summerfield. “Now, thanks to this bill, we have specific penalties on the books to help protect Wisconsinites from being scammed.”

2017 Wisconsin Act 54 makes it a Class I felony to possess a credit card scanner with intent to commit identity theft; a Class H felony to possess a scanner with the intent to transfer the scanner to another, knowing the transferee will use it to commit identity theft; and a Class H felony to use or attempt to use a credit card scanner to commit identity theft (increased to a Class G felony if the person obtains something of value from the use).

To date, over two dozen communities throughout Wisconsin have been targeted by credit card skimming.

Small Businesses, “The Engine of the American Dream”

On Tuesday, President Donald J. Trump welcomed over 100 small business owners to the White House for an event highlighting small businesses, “The Engine of the American Dream.” Together with the Administrator of the Small Business Administration (SBA), Linda McMahon, and Senior Advisor Ivanka Trump, President Trump demonstrated his Administration’s commitment to instituting policies that allow small businesses to flourish in America and to spotlight the large contributions that small businesses make to the American economy.

President Trump began his remarks in the East Room by thanking all the business owners for joining him at the White House and for the hard work they do across the Nation to create jobs and grow the economy. He then highlighted the steps his Administration has taken, and will continue to take, to end job-killing regulations, ease restrictions on American energy, and cut burdensome taxes. “America is on the verge of a golden age for small business,” said the President.

President Trump closed his remarks by reaffirming his commitment to America’s small businesses and assuring owners that his Administration will be behind them as they continue to grow and thrive in America. “You are the dreamers and innovators who are powering us into the future –- that’s exactly what you are — and my administration will be there with you every single step of the way,” he said.

After the President’s remarks, Administrator McMahon and Ivanka Trump held a question and answer session with the small business owners in the room. These small businesses represented numerous sectors of the American economy, including manufacturing, retail, and service. Topics of discussion included tax reform, growth resources, and regulatory relief.

President Trump has made economic and business reforms a central focus of his Administration. Small business is the engine of the American dream, and President Trump and his Administration are determined to create a competitive business climate and promote entrepreneurial success in the United States.

Vote on Foxconn Incentives Could Come in Mid-August

It could be mid-August before the Legislature votes on legislation providing incentives for Foxconn to build a plant in Wisconsin as lawmakers dive into details that include up to $252 million in contingency bonding for I-94 north-south and rollbacks of environmental regulations.

The legislation also would provide incentives designed to encourage Fiserv to keep its headquarters in Wisconsin as the Brookfield financial technology company continues evaluating a new location, including a possible move to Georgia.

Republican lawmakers are caucusing today to discuss the bill.

Kit Beyer, a spokeswoman for Assembly Speaker Robin Vos, R-Rochester, said a public hearing is expected this week. Beyer said it was still being decided whether committees beyond the budget-writing Joint Finance Committee would review the proposal.

Assembly Majority Leader Jim Steineke, meanwhile, said he hoped the legislation could make it through the committee process and hit the floor the week of Aug. 14. “We’ve got to do our due diligence,” he said. “We’ve got to realize probably a lot of this is baked in the cake and a lot of it has been negotiated by the administration, so I’m not sure how much wiggle room there is.”

Myranda Tanck, a spokeswoman for Senate Majority Leader Scott Fitzgerald, R-Juneau, said the office is still reviewing the proposal and hasn’t yet decided on a timeline for action on it.

Steineke said the bonding included in the bill “may make it easier for the Senate, harder for us.” Bonding for roads has been at the heart of the budget impasse that has now stretched a full month into the new fiscal year.

The contingency bonding included in the Foxconn bill would improve the state’s position to apply for new Infrastructure for Rebuilding American grants, a separate pot of money from what Walker was targeting in his offer to GOP lawmakers this month. The bonding in the Foxconn deal also could rework the Legislature’s discussion on road funding for the next two years.

Under the bill, up to $252.4 million in general obligation bonding would be approved specifically for the I-94 north-south corridor. The state DOT would not be allowed to spend the bonds unless the state received federal money for the project.

The Trump administration earlier this month announced it would make roughly $1.5 billion available through the INFRA program to rebuild the nation’s infrastructure. INFRA was billed as re-working the existing FAST Act grant program to “encourage more parties to put skin in the game,” according to the administration’s announcement. Committing the state bonding for 94 north-south could improve the state’s chances for landing an INFRA grant.


Governor Calls Legislature Into “Wisconn Valley” Special Session

Governor Scott Walker has called a Special Session of the Wisconsin State Legislature to consider legislation that would bring Foxconn, the world’s largest electronics manufacturing services provider, to Wisconsin. Governor Walker’s executive order requires the Legislature to commence the Wisconn Valley Special Session at 11 a.m. on August 1, 2017, solely to consider and act upon the attached legislation.

“This is a once-in-a-century opportunity for our state and our country, and Wisconsin is ready,” Governor Walker said. “Foxconn plans to bring the future of high-tech manufacturing to America, and Wisconsin is going to lead the way. I am encouraged by the bipartisan support we have seen for Wisconn Valley, and I call on the Legislature to support this measure and open the door for 13,000 direct Foxconn jobs, 10,000 direct construction jobs, and 22,000 more indirect or induced jobs related to this project. This is good for our entire state.”

Under a Memorandum of Understanding signed yesterday by Governor Walker and Foxconn Founder and CEO Terry Gou, Foxconn plans to invest $10 billion by 2020 to build a world-class manufacturing campus in Southeastern Wisconsin. The campus will create 13,000 new jobs in the state and represents the largest new greenfield investment made by a foreign-based company in U.S. history.

The legislation proposes a $3 billion incentive package that is performance-based and includes state income tax credits as well as $150 million sales tax “holiday.” Foxconn will be eligible to earn tax credits equal to 17 percent of wages paid or 15 percent of capital invested spread out over a 15-year period.