News of the Day

Wisconsin Exports up 8.2% in First Half of 2017

Wisconsin businesses exported $11.2 billion in goods and services worldwide in the first half of 2017, an 8.2 percent increase over the first six months of 2016, Governor Scott Walker announced today.

State agricultural exports in the first half rose by 8.8 percent over last year, with $1.8 billion in products shipped to 134 countries.

“Our solid first-half export numbers, which outpaced the U.S. increase in exports, is yet another indication of the overall strength of Wisconsin’s economy,” Governor Walker said. “We are seeing more companies of all sizes and industries gain access to new markets and new customers through exporting. This is outstanding news for the state business and farmers.”

Wisconsin’s export growth in the first half was generated by significant increases in shipments to Mexico and China. Exports to Mexico, the state’s second largest export destination, jumped by 17 percent to $1.6 billion, primarily because of an increase in the export of electrical machinery and oil seeds (primarily soybeans). Exports to China, Wisconsin’s No. 3 export destination, were up 19 percent to $825 million, due primarily to an increase in exports of industrial machinery. State companies exported $3.4 billion in goods to Canada, a 2 percent increase to the state’s top export destination.

State shipments to Saudi Arabia more than doubled to $476 million because of an increase in military vehicle exports.  That country jumped from 10th to fourth on the list of export destinations.

Overall, Wisconsin saw first-half increases in numerous key product categories, including electrical machinery (up 15 percent to $1.1 billion); vehicles and vehicle parts (up 36 percent to $1 billion); aircraft, spacecraft and parts (up 30 percent to $410 million); iron and steel products (up 10.5 percent to $211 million); oil seeds, miscellaneous grain, seed and fruit (up 220 percent to $182 million), dairy, eggs and honey products (up 26 percent to $152 million); and wood and wood products (up 9 percent to $125 million).

Industrial machinery continues to be the Wisconsin’s top export product category at $2.6 billion in the first half of the year, accounting for 24 percent of all state exports.  The second-largest product category is medical and scientific instruments, which accounts for 10 percent of all state exports at $1.1 billion.

“In addition to the overall growth in the first half of the year, what’s most encouraging about the numbers is that Wisconsin saw increases in every one of its top 10 export categories,” Governor Walker said. “It’s not just one or two industries driving the increases; we’re seeing success across the board.”

The numbers released today are based on U.S. Census Bureau data analyzed by the Wisconsin Economic Development Corporation (WEDC) and the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP).

 

Lawmakers Propose more Limits to State Agency Regulatory Power

Under a new proposal at the state Capitol, state agencies’ administrative rules would expire every seven years, and lawmakers would have more power to block their renewal. Right now, administrative rules don’t have expiration dates.

Under the new plan, rules would go up for review one year before their expiration date. If no lawmaker objects, they would be renewed automatically.

If a lawmaker objects, the rule — and others related to it — could be blocked.

Supporters of the proposal say it will cut down on unnecessary and burdensome regulations in the state

“We’ll find a lot of duplication, a lot of outdated and a lot of unnecessary regulations that will be taken off the books, because we’ve not reviewed some of the rules ever,” said Sen. Alberta Darling, R-River Hills, one of the bill’s sponsors.

Wisconsin Manufacturers and Commerce, Wisconsin Independent Businesses, the Wisconsin Realtors Association and the Wisconsin Dairy Business Association have all registered support for the bill.

Environmental groups oppose the bill, arguing it could have unintended consequences.

“If somebody had an issue with the walleye bag limit, and they objected, they have to object to that entire section, so they’re knocking out every bag limit for every fish species in the state,” said Bill Davis, director of Wisconsin’s chapter of the Sierra Club.

Disability Rights Wisconsin, the Sierra Club, Clean Wisconsin and the Wisconsin Democracy Campaign are opposed.

The proposal comes after Gov. Scott Walker signed the REINS Act earlier this summer, which requires legislative approval for any agency rule that would cost businesses or taxpayers more than $10 million.

 

Wisconsin Budget Committee Approves $639 million Boost for K-12 Schools

Lawmakers on the Wisconsin Legislature’s budget-writing committee voted Monday to approve the largest funding boost to Wisconsin’s K-12 schools since before Gov. Scott Walker took office.

Walker’s budget proposal included $649 million in new education spending, including an increase in per-pupil aid of $200 in the 2017-18 school year and $204 in the following year. The measure Republican lawmakers approved on a party-line vote brings that boost down to $639 million, by spending less than what Walker proposed on rural schools and high-performing Milwaukee schools.

Under the plan approved on Monday, school districts that spend less than most others could gradually raise their revenue limits from $9,100 per pupil up to $9,800 per pupil over the course of several years.

The committee also voted to raise the income limits for the statewide private voucher program — which operates outside of the programs in Milwaukee and Racine — from 185 percent of the federal poverty level to 220 percent. Under the new requirements, a family of four making $53,826 per year could receive a voucher. The Milwaukee and Racine programs will continue to operate at their current limit of 300 percent of the federal poverty level.

Also included in the lawmakers’ K-12 package are two efforts designed to alleviate shortages of teachers and administrators throughout the state.

One measure would allow people to take online classes to earn teacher certification in high-need subjects like technology, math, engineering and science. Another would offer loans for people seeking additional education and training to become principals or other education administrators.

Lawmakers also approved a measure proposed in Walker’s budget to eliminate expiration dates for teachers’ licenses following a three-year provisional period.

Also under the plan, districts could only hold referendums during already-scheduled election days or on the second Tuesday of November in odd-numbered years, with allowances made for special circumstances, such as increased costs resulting from a natural disaster.

“Thanks to the members of the Joint Finance Committee for supporting the education portion of my budget,” Walker said in a statement. “Once signed, this budget will include more actual dollars for K-12 education than ever before in our history.”

 

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.