News of the Day

Budget Committee Votes to Continue UW Tuition Freeze

GOP lawmakers have rejected Gov. Scott Walker’s plan to cut tuition at the University of Wisconsin System, but they’ll continue a tuition freeze for in-state students at system campuses.

Overall, the Republican budget would increase state funding on the UW System by $36 million over the next two years. It would be the first time Republicans have increased state funding for the system since they took control of state government in 2011. “I’m pleased that today we are making an important investment in the UW System,” said Sen. Sheila Harsdorf, R-River Hills.

Democrats disputed that, saying when you consider the amount of revenue the UW System would lose under two more years of a tuition freeze, the system would see less funding, not more. “This puts the UW behind,” said Rep. Katrina Shankland, D-Stevens Point. “And I’m disappointed.”

Most of the new state funding the system would receive would be tied to performance measures that would be set by the Board of Regents. The budget committee approved $31 million in performance funding, which is less than the $42 million Walker proposed.

The performance measures would have to emphasize student access, degree completion, contributions to the workforce and enhanced efficiency. That’s far more general than the performance measures proposed by Walker, who wanted to tie state funding to everything from faculty instruction hours to the number of math and science graduates a campus produces.

In a written statement, UW System President Ray Cross praised the plan.  “I would like to thank the members of the Joint Finance Committee for their support of the UW System,” Cross said.

The Republican co-chairs of the budget committee also pledged to support back-to-back 2 percent raises for UW System employees later in the budget process, although they did not vote on the raises Thursday. Those would mirror the raises Walker proposed for other state employees.

State Lawmakers Push to Eliminate Personal Property Tax

State lawmakers are looking to do away with Wisconsin’s personal property tax.

Republican state Senator Duey Stroebel (R-Saukville) is sponsoring legislation to eliminate what he says is a relic of the state’s tax code that unfairly targets small businesses.

“Before the technology and infrastructure existed for the administration of an income tax, sales tax, corporate tax, and many other excise taxes and fees, the property tax was the only realistic revenue source government had,” Stroebel told a legislative committee on Wednesday.

Lawmakers heard from a long line of small business owners, who testified on how the tax has made it difficult for them to do business, since they often have to come up with a value to apply to used equipment.

Bud Styer with the Wisconsin Campground Association, who operates 16 parks in the state, said the tax is “all over the board” across the state, and they’ve watched as personal homes, computers, and other items have been exempted. “The pie that used to be a whole pie is now just a sliver,” he said.

It’s estimated eliminating the tax would reduce state revenues by about $261 million, and Democrats on the committee questioned how that might impact state finances. While Stroebel said the legislature’s budget committee would determine cuts in state spending to help cover the lost revenue, Sen. Janis Ringhand (D-Evansville) said there needs to be more transparency on what those cuts might look like.

“I don’t want to see more cuts to education, we certainly can’t afford more cuts to education,” Ringhand said. “We have a lot of areas where we’re struggling right now, and I’d rather have a stronger answer as to where the money’s going to come from.”

Budget Committee OKs Drug Testing for Welfare Job Programs

About 14,000 low-income parents who apply for Wisconsin Works job programs would be screened for drugs, and possibly tested, under a proposal a key legislative committee approved Tuesday.

The Republican-controlled Joint Finance Committee voted 12-4 Tuesday to include the provision in the state budget, further increasing its chances of becoming law after the Assembly passed the idea as a separate bill earlier this month.

The proposal from Gov. Scott Walker would require screening for drugs in order to participate in three W-2 work programs. Drug screening has been required for four state-run work programs since 2015. In that time, 1,837 people have been screened and 42 of them have been referred to drug testing based on their responses to questions in the screening. Of those, nine were referred for treatment.

The nonpartisan Legislative Fiscal Bureau estimates that under the expanded screening, about 264 additional W-2 participants would be referred for drug testing annually, or 2.3 percent of those in the programs. Of those, about 56 are projected to test positive and be referred for treatment.

Given the low numbers of people expected to be tested, the cost of expanding the screening, testing and treatment is expected to be minimal. Those who fail the tests and get treatment continue to receive benefits during that time.

The new testing requirement would apply to the Temporary Employment Match program, which provides a subsidy for wages to the participant’s employer, and the Community Service Jobs and Transitional Placement programs, both of which provide a participant with a monthly grant.

Governor Announces Creation of Steering Committee to Study Automated Vehicles

Governor Scott Walker has issued Executive Order #245 creating the Governor’s Steering Committee on Autonomous and Connected Vehicle Testing and Deployment, which will advise the Governor on how to best advance the testing and operation of automated vehicles in Wisconsin.

Wisconsin is uniquely positioned to study, test, and develop automated and connected vehicle technology. In fact, the University of Wisconsin-Madison was recently chosen as one of ten ‘Proving Grounds’ by the United States Department of Transportation to research how we can make automated vehicles a reality.

As a result, I’m creating a Steering Committee to assist with this process by advising me and other state agencies on how we can safely and effectively test and study autonomous and connected vehicles on Wisconsin roads.

This is great news for Wisconsin and has the potential to create jobs, spur economic growth, and strengthen mobility throughout the state. We have a long history of contributing to advancements in the automotive field, and I know we will rise to the challenge in this instance as well.

A copy of Executive Order #245 is attached.

Foresters Push Back As Walker Pushes Property Tax Cuts

Gov. Scott Walker is making an aggressive push to eliminate the state’s portion of property tax bills in the 2017-19 state budget, but his proposal is getting resistance from forestry groups across the state. For the average homeowner, the forestry mill tax cost about $26 in 2016, according to the Legislative Fiscal Bureau.

The tax pays for items such as equipment to fight forest fires. In his budget proposal, Walker cut the tax and funded its programs from the state’s general fund budget instead.

That change concerns some forestry groups.

“This would mean that forestry would have to line up with schools and with transportation and with health care and all the other important needs that are funded with general revenue,” said Fred Clark, executive director of the Forest Stewards Guild.

The programs are fully funded in the 2017-19 proposal from the governor, but Clark expressed concern they could be cut in future budgets. “There’s no guarantee that the level of funding that’s provided today would be sustained,” Clark said.

Some GOP state lawmakers have also expressed concern about the governor’s plan.

“I think there’s some in our caucus that have concerns about the things (the mill tax) actually funds within forestry, especially when you get into more rural parts of the state,” said Rep. John Nygren, R-Marinette, before Tuesday’s budget committee meeting.

Nygren’s co-chair on the committee, Sen. Alberta Darling, R-River Hills, said the issue is being debated in the Senate as well. “This is not a consensus deal right now,” Darling said.

Supporters argue the tax cut will help make home ownership more affordable in Wisconsin.

The proposal has yet to come before the budget committee for a vote. The committee is scheduled to complete its work by June 30

Budget Committee wants Study of LIRC Decisions

Members of the Wisconsin Legislature’s budget-writing committee on Thursday rejected Gov. Scott Walker’s proposal to axe the independent board that handles employment disputes in Wisconsin.

The Labor and Industry Review Commission dates back to 1911, when it was first formed as the State Industrial Commission. The independent agency resolves disputes over unemployment insurance, workers compensation and equal rights in the workplace, reviewing appeals of decisions from the state Department of Workforce Development and the state Department of Administration.

Under Gov. Scott Walker’s proposed budget, the agency’s functions would have been transferred to the governor’s administration. Walker argued eliminating the commission would “remove an unnecessary layer of government” and streamline the timeline for decisions.

The Joint Finance Committee’s Republican majority voted to preserve LIRC and eliminate 7.8 vacant positions. The committee also voted to request the Chief Justice of the state Supreme Court conduct a review of the agency’s decisions to determine which statutes are cited in its opinions and whether its opinions are later modified by circuit courts.

Committee co-chair Sen. Alberta Darling, R-River Hills, said committee members have heard complaints that some LIRC decisions have been overturned by circuit court judges because they were not based on current law. The report requested from the Supreme Court seeks to find out whether those complaints are true, she said.

“We’re trying to find the balance here: Is LIRC a necessary function to preserve equal rights and safety, or is it an added layer of bureaucracy?” Darling said. “I think we need some information on that and if we look at the report and we decide we need to come back to this, we can.”

In 2016, 88 LIRC decisions, or 5 percent of the agency’s decisions, were appealed to circuit court, according to the nonpartisan Legislative Fiscal Bureau.

Democrats on the Joint Finance Committee voted against the measure, although they support retaining the agency, because of the elimination of vacant positions. If unemployment insurance or workers compensation appeals increase in the 2017-19 budget period, LIRC would not be able to hire additional staff without approval and additional funding from the Joint Finance Committee.

Committee to Consider Eliminating Labor Review Panel

Wisconsin’s 106-year-old labor commission would vanish and Gov. Scott Walker’s administration would decide workplace disputes in its place under a budget proposal up for consideration Thursday in the Legislature’s finance committee.

Walker’s plan to eliminate the Labor and Industry Review Commission could create uncertainty in applying Wisconsin labor law, raising questions about whether the commission’s precedent-setting decisions would evaporate and whether his administration can fairly weigh cases.

The commission was formed in 1911 as the State Industrial Commission. The panel of three governor’s appointees considers appeals of administrative law judges’ rulings in fights over unemployment benefits, worker’s compensation and equal rights in the workplace.

The finance committee is a key testing ground for the budget. Its changes to Walker’s two-year, $76 billion proposal are the blueprint for what the Senate and Assembly will vote on, and though the full Legislature often makes changes, they typically don’t stray far from the committee’s recommendations.

Walker’s budget would eliminate the commission and its 26.5 positions in January to save an estimated $5.1 million. Its work would be handled by the Department of Workforce Development and the Department of Administration’s Division of Hearings and Appeals — both Walker cabinet agencies.

The governor’s administration justified the move by noting the number of appeals has dropped nearly 60 percent between 2011 and 2016. DWD Secretary Ray Allen said eliminating the commission would speed up appeals.

Parties can appeal the commission’s decisions to circuit and state appellate courts. Those courts have given great deference to the commission, lending certainty to labor disputes. Parties in disputes could end up going to court more often if it’s eliminated, leading to more expensive disputes. The Legislative Fiscal Bureau estimates about 1,000 additional cases could end up in court annually if the commission disappears. Only 88 commission cases went to court in 2016.

OCI Commissioner Nickel Op-Ed: Health Insurance Reforms like Wisconsin’s HIRSP Offer Way Forward

Obamacare is falling apart. One third of US counties have only one health insurer offering coverage on the federal exchange. Last year, Tennessee indicated its market was very near collapse, and it hasn’t gotten any better. Currently, no health insurers in Iowa will be participating on the exchange. Minnesota is planning on spending $800 million tax dollars just this year to shore up its individual market. Alaska is spending its entire premium tax to keep their one health insurer in the market.

Tragically, Wisconsin isn’t immune from the harmful effects of Obamacare. We have seen insurers leave the exchange, significantly reduce service areas, and leave the individual market altogether.

There has been a lot of talk about what would happen to people with preexisting conditions if Obamacare was repealed and replaced. Thankfully, Wisconsin can provide a map for the road ahead.

Prior to Obamacare, Wisconsin consumers could choose from over 20 individual insurance companies offering coverage in our state. There were a variety of plan options to meet a range of coverage needs. If a person was denied insurance due to a preexisting condition, they would receive coverage from Wisconsin’s high-risk pool known as the Health Insurance Risk-Sharing Plan (HIRSP).

For more than 30 years, HIRSP provided Wisconsin consumers with peace of mind by providing high-quality, comprehensive coverage to over 20,000 of our friends and neighbors. This plan is widely regarded as a national model for providing coverage to individuals who did not have access to coverage through an employer or the government.

Unlike the current Obamacare market where most people must wait until open enrollment to purchase coverage, consumers could enroll in HIRSP at any time. There were no preexisting condition limits for people signing up for coverage if they had prior coverage. If consumers had no prior coverage, they would receive coverage for most conditions, but had to wait 6 months for preexisting conditions. In contrast, with Obamacare you may have to wait up to 11 months for any coverage if you miss open enrollment.

Once enrolled in HIRSP, consumers chose from a variety of benefit plans including both high- and low-deductible plans. While Obamacare plans are criticized for having narrow networks, there were no network limitations for HIRSP; members were able to visit any medical provider in our state and receive coverage when traveling outside of Wisconsin. Subsidies were also available to offset premiums, deductibles, and prescription drug out-of-pocket maximums for low-income members.

HIRSP benefit and administrative costs were funded by member premiums and contributions from insurers and providers. No state dollars were needed to support this program. Obamacare did away with HIRSP, and premiums for individuals who were formally covered by HIRSP increased.

The bill that recently passed the House, known as the American Health Care Act (AHCA), provides a strong starting point for implementing a HIRSP 2.0. It utilizes federal dollars to ensure affordable and accessible coverage for all individuals with preexisting conditions.

Critics of AHCA are quick to claim the bill will provide no coverage for any preexisting conditions. This isn’t true. AHCA specifically states, “Nothing in this Act shall be construed as permitting health insurance issuers to limit access to health coverage for individuals with preexisting conditions.”

ACA is in trouble, but with AHCA help is on the way to stabilize insurance markets and return access to affordable health insurance choices for consumers. It is the failure of Obamacare which is going to leave people without coverage. This failure created an individual market not viable either in the short term or long term.

Reforms like Wisconsin’s HIRSP offer a way forward.


U.S. Nuclear Capacity and Generation Expected to Decline

Nuclear power currently accounts for about 20% of electricity generation in the United States, playing an important role in electricity markets. EIA’s 2017 Annual Energy Outlook (AEO2017) Reference case assumes that about 25% of the nuclear capacity now operating that does not have announced retirement plans will be removed from service by 2050.

Nearly all nuclear plants now in use began operation between 1970 and 1990. These plants would require a subsequent license renewal before 2050 to operate beyond the 60-year period covered by their original 40-year operating license and the 20-year license extension that nearly 90% of plants currently operating have either already received or have applied for. The AEO2017 Reference case projections do not envision a large amount of new nuclear capacity additions. By 2050, only four reactors currently under construction and some uprates at existing plants are projected to come online.

Except during maintenance or refueling cycles, nuclear plants operate around the clock as baseload generators, meaning nuclear plants make up a disproportionately large share of generation compared with their share of electricity generating capacity. Generating capacity using other fuels is typically dispatched at much lower rates than nuclear units. As more nuclear capacity is retired than built, and as other fuels such as natural gas and renewables gain market share, the nuclear share of the U.S. electricity generation mix declines from 20% in 2016 to 11% in 2050 in EIA’s Reference case projections.

New commercial nuclear power plants are licensed by the Nuclear Regulatory Commission (NRC) for 40 years. Because many nuclear plants were built more than 40 years ago, nearly 90% of currently operating nuclear plants are currently operating under or have applied for 20-year license renewals. Plant operators may apply for subsequent license renewals to continue operating for an additional 20 years (a total of 80 years).

The capital investment needed to extend the life of nuclear plants beyond 60 years is currently unknown and could vary significantly across the nuclear power fleet. Other areas of uncertainty include plant operators’ interest in obtaining subsequent license renewals and the Nuclear Regulatory Commission’s willingness to grant those license renewals for plants to operate beyond 60 years. Furthermore, policy or technology cost developments that might advantage or disadvantage existing nuclear plants relative to other generation technologies and the cost of natural gas are likely to play an important role in future retirement decisions.

Sunsetting Bill Shines Light on Red Tape

By sunsetting red tape rules, a new bill will bring sunlight to the bureaucratic process. State Senator Alberta Darling (R-River Hills) and State Representative Jim Steineke (R-Kaukauna) are introducing legislation which would sunset administrative code chapters every seven years. Senator Darling says red tape needs to keep up with the times.

“With how quickly technology and the marketplace change, we can’t keep doing things the same way just because that’s the way we’ve always done it,” Darling said, “Adding sunset clauses to entire chapters of rules will make sure they stay relevant with our fast-changing world.”

Currently, once it’s established, administrative code or red tape can exist forever – and often do, even when the rules don’t reflect the times. This bill would retire entire chapters of code every seven years.

One year before it expires, the agency can seek the chapter’s re-adoption by going to the Legislature. If the relevant standing committees object, then the code can be renewed by going through the rule making process all over again. The process will allow for more input from the public and lawmakers and regular opportunities to hold bureaucracies accountable.

“By returning some of the responsibility of rule-making back to elected officials, we’re creating an atmosphere of accountability,” said Steineke. “We need to ensure rules are serving the needs of Wisconsinites rather than the whims of individuals within state agencies.”