Month: March 2017

One of the most important priorities of state government is creating an environment that is conducive to job creation. To do this, there are many factors involved: a strong education system, an educated work force, quality infrastructure, and a competitive tax code.

However, another key factor is also creating a regulatory environment that doesn’t stifle business growth and prosperity. Wisconsin’s regulatory environment is heavily impacted by state agencies such as the Department of Natural Resources or the Department of Transportation. These agencies have the ability to create regulations that have the same impact and force as laws passed by the Legislature. However, even though these bureaucratic rules have the force of law, the bureaucrats making these rules were never elected by the public, and elected officials often never voted to approve these rules.

This is why we introduced the REINS – Regulations from the Executive in Need of Scrutiny – Act. This legislation makes several changes to improve the transparency of the administrative rule-making process in Wisconsin.

Rule-making is often a mundane affair. State agencies use rules to add additional clarity to state laws. Pending rules are referred to legislative committees, who can choose whether or not to act on them. Certainty is important to businesses, so some amount of bureaucratic red tape is inevitable.

However, the process for approving an expensive rule is no different than a rule that has little impact on taxpayers.

In 2010, the Department of Natural Resources (DNR) put forward a new rule – new requirements to limit phosphorus in surface waters in Wisconsin – to comply with a federal requirement. While a laudable goal, estimates varied substantially over how much the rule would cost. Worse still, the rule went above and beyond what was required by federal law. Unfortunately, without even a committee vote, the rule was allowed to move forward.

It was only when the DNR began to implement the rule that many local communities started to grasp the size of the problem this new rule had on them. Subsequent legislation required a detailed cost analysis. The result was alarming: The rule would cost $7 billion (including interest) to businesses and local governments (taxpayers).

Thankfully, the Legislature has taken steps in recent years to mitigate the impact of this rule on our economy. Still, more than six years later, we are still trying to undo the worst aspects of this rule. And the uncertainty continues to be a drag on Wisconsin’s economy.

The REINS Act would have prevented problems like this in the following ways:

• Allow the Legislature to require an independent economic impact analysis.  This would permit an impartial third party to determine the cost of a rule instead of relying on bureaucrats.
• Require very expensive rules – those that cost more than $10 million over two years – to get approval by the full Legislature before they are enacted.

At the very least, taxpayers have a right to know what these expensive bureaucratic mandates will cost them. The REINS Act improves rule-making transparency and empowers the public to hold legislators accountable.

Rep. Adam Neylon (R-Pewaukee) and Sen. Devin LeMahieu (R-Oostburg) are the lead authors of the REINS Act (Assembly Bill 42, Senate Bill 15).

President Trump is set to make a trip to the Environmental Protection Agency Tuesday to sign an executive order that will “initiate a review” of the Obama administration's Clean Power Plan and unravel a handful of other energy orders and memorandums instituted by his predecessor.

The Clean Power Plan caps the amount of greenhouse gases that can be emitted from power plants. The White House argues that the regulation, and others sanctioned by former President Barack Obama, are burdensome to the American economy.

“The president’s been very clear, he’s not going to pursue climate or environmental policies that put the American economy at risk,” said a senior Trump administration official Monday evening.  “[The president] believes that we can serve the twin goals of protecting the environment — providing clean air, clean water, getting EPA back to its core mission, while at the same time… [protecting] energy production in the U.S.,” the official said.

Upon the Clean Power Plan's signing in 2015, President Obama called it “the biggest, most important step we have ever taken to combat climate change,” but the law isn't currently being enforced. In February 2016, the Supreme Court stayed implementation of the law pending judicial review.

Attorneys general from 28 states — led by EPA Administrator Scott Pruitt, then Oklahoma's attorney general — joined together to claim that the plan presents too broad an interpretation of the 1963 Clean Air Act, originally designed to restrain air pollution across the country.

Tuesday's executive order will not address the Paris Agreement, a 2015 United Nations plan to reduce greenhouse gas emissions set to go into effect in 2020, of which the U.S. is a signatory. The official who commented upon the order said the administration's stance on the Paris Agreement is still under discussion.

The push by Wisconsin public schools to ask for more money from local property taxpayers isn’t stopping, with 65 referendums going before voters in the spring election.

About half of the districts will ask voters on April 4 to sign off on new debt while the other half want permission to exceed revenue caps, which prevent districts from spending more than they get from property taxes and state aid. Because enrollment numbers factor into state aid calculations, school districts with declining numbers of students tend to hold referendums to exceed revenue limits. Those asking to borrow are more often located in growing areas and want the money to build more space.

“In 2016 and early 2017, we will have had $2 billion or more of debt questions, which is an incredible spike,” said Todd Berry, president of the Wisconsin Taxpayers Alliance. He attributes it to voters’ increased appetite for referendums and the fact that many districts are retiring debt they used in the late 1990s on buildings now overdue for updates.

The biggest ask next month will come from the school district of Verona, a Madison suburb. The district wants to borrow $162.5 million to fund projects including a new swimming pool, more athletic fields and a new high school. The population in Verona has been booming thanks to Epic Systems, the ever-growing health care software company that employs close to 10,000 people.

Burlington, a city west of Racine, wants to borrow $94.4 million to build a new middle school and a performing arts center and expand the high school’s athletic facilities.

Unlike debt referendums, revenue limit referendums come with a property tax increase unless the school is eliminating spending elsewhere.

West Allis Superintendent Marty Lexmond said his district hopes that by raising the revenue cap it can avoid eliminating music lessons, downsizing its athletic program and increasing class sizes, among other changes. The district has spent down its reserve and is projected to lose 200 students next year. It estimates an extra $12.5 million in funding over the next five years will increase residents’ annual property taxes by $58 for every $100,000.

Green Bay Area Public School District will hold its first revenue limit referendum to deal with a projected $18 million funding deficit that could cost the district 150 jobs, spokeswoman Lori Blakely said. But Blakely notes it would not raise residents’ property taxes because it coincides with decreased debt payments.

“We’re in kind of new territory,” Blakely said. She said she’s not sure what to expect from voters but hopes they’ll recognize a need.

Green Bay will also ask voters to sign off on new debt of $68.5 million to rebuild an elementary school the district has outgrown and fund upgrades including more secure entrances.

The Trump administration will approve the Keystone XL pipeline on Friday, senior U.S. officials said, ending years of delay for a project that has served as a flashpoint in the national debate about climate change.

The State Department will recommend that the pipeline is in U.S. interests, clearing the way for the White House to grant a presidential permit to TransCanada to build the $8 billion pipeline, two officials said. It’s a sharp reversal from the Obama administration, which rejected the pipeline after deeming it contrary to national interests.

The officials, who weren’t authorized to speak publicly on the matter and demanded anonymity, said the State Department’s recommendation and the White House’s final approval would occur Friday.

The White House declined to comment, other than to say it would offer an update Friday. State Department spokesman Mark Toner wouldn’t reveal the decision, but said the agency had re-examined Keystone thoroughly after ruling against the proposed project barely two years ago.

“We’re looking at new factors,” Toner said. “I don’t want to speak to those until we’ve reached a decision or conclusion.”

The 1,700-mile pipeline, as envisioned, would carry oil from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. The pipeline would move roughly 800,000 barrels of oil per day, more than one-fifth of the oil Canada exports to the U.S.

Oil industry advocates say the pipeline will improve U.S. energy security and create jobs, although how many is widely disputed. Calgary-based TransCanada has promised as many as 13,000 construction jobs — 6,500 a year over two years — but the State Department previously estimated a far smaller number. The pipeline’s opponents contend the jobs will be minimal and short-lived, and say the pipeline won’t help the U.S. with energy needs because the oil is destined for export.

President Donald Trump has championed the pipeline and backed the idea that it will prove a job creator. In one of his first acts as president, he invited the pipeline company TransCanada to resubmit the application to build and operate the pipeline. And he had given officials until next Monday to complete a review of the project.

A Trump presidential directive also required new or expanded pipelines to be built with American steel “to the maximum extent possible.” However, TransCanada has said Keystone won’t be built with U.S. steel. The company has already acquired the steel, much of it from Canada and Mexico, and the White House has acknowledged it would be difficult to impose conditions on a pipeline that is already under construction.

Portions of Keystone have already been built. Completing it requires a permit involving the State Department because it crosses the U.S.-Canada border.

In 2012, Brown County sheriff’s investigators spent thousands and used 30 officers to crack a welfare-fraud case that officials say saved taxpayers $1.3 million. For their efforts, which sent three people to prison, the county received $0 in reimbursement.

State lawmakers from the Green Bay area are introducing a bill they hope will change that. Rep. Andre Jacque, R-De Pere; and Sen. Robert Cowles are circulating a bill to allow local and tribal governments to keep up to 20 percent of the money they save the federal and state government when they stop fraud. The bill covers the FoodShare, Medicaid, and Wisconsin Works programs. They plan to seek co-sponsors for the next two weeks. The bill would also:

» Limit the reissuance of FoodShare cards — a common tactic used by people who commit fraud — to four times,

» Freeze “carryover balances” that have gone unused for six or more months, and

» Wipe out balances on cards that have been unused for a year or more. Authorities have found unused balances in the thousands of dollars, including one of more than $14,000.

Welfare fraud investigations have frustrated Wisconsin’s local police, district attorneys and lawmakers for years. It’s a crime, so it must be investigated and prosecuted. But unlike other types of investigations, the police agency is prohibited by law from seizing proceeds, or otherwise profiting financially, when they take a bite out of crime. Federal law — welfare money originates in Washington — prohibits it.

The Jacque-Cowles bill would direct the state to work with the feds to change that, Jacque said.

That would make a difference in places such as Brown County, where the sheriff’s office spends about $100,000 annually for salaries and benefits for two full-time fraud investigators who together handle about 200 cases per year. About 20 or 25 investigations become criminal cases each year, District Attorney David Lasee said, with dozens of others resulting in charges for ordinance violations. The caseload accounts for less than 20 percent of one prosecutor’s time.

In real estate the mantra is, “location, location, location.”” So it goes for the state’s agency leasing program.

But when it comes to the Department of Administration, the government’s leasing agent, location is most often Madison, Madison, Madison.

A bill authored by state Rep. Joe Sanfelippo, R-West Allis, and Sen. David Craig, R-Town of Vernon, aims to change that singular point of view. The measure would require the DOA to identify the “most appropriate and cost efficient locations to place an agency when securing or renewing a lease.”

Leasing agents would have to consider situating a state agency where it provides the most services, and identify multiple locations – at least two of which are outside Dane County.

“When considering leases to house state agency headquarters, the Department of Administration (DOA) currently restricts eligible property locations to a limited geographical area,” Sanfelippo wrote in a legislative memo. “This practice has created an artificial market for commercial real estate which is inflating the cost of lease rates and resulting in taxpayers paying unnecessarily high prices.”

DOA’s general policy, Sanfelippo said, is that the state agencies have to be located in Dane County, and primarily in the county seat and state capital, Madison. “You see these buildings all right there around the Capitol, for the most part,” the lawmaker said in an interview Tuesday with Wisconsin Watchdog. “These landlords know (about the DOA policy) and they screw us 10 times from Sunday when it comes to these leases.”

DOA spokesman Steve Michels said the agency is happy to look at any proposal that might save money and improve its services. “We are aligned in our shared goal to deliver value to the taxpayers through a more efficient government,” he said.

The argument has long been that Madison is the seat of state government. The infrastructure is there and that’s where state government operations should remain. There is no bigger advocate of that position than the city of Madison, a ready benefactor of state centralization.

Keeping state agencies together in the same city or geographical area makes it much easier for departments to interact with the executive and the Legislature, proponents say. Sanfelippo says those arguments no longer apply, particularly in the Digital Age.

“The vast majority of employees that work in these agencies do not interact on a daily basis with the Legislature, and most of the secretaries don’t. That pretty much goes out the window,” the legislator said. “In 1848, when we became a state, maybe that made sense back then, with communications and transportation primitive at the time. In 2017, you don’t have to be in one place. It doesn’t make sense anymore.”

It’s also not fair to citizens who live hours away from Madison, the bill’s authors assert. Some government services arguably are much better suited for other locations around the state.

A battle pitting big-box retail giants including Menards and Wal-Mart against Wisconsin towns and cities is headed to the Legislature.

Republican-backed proposals, written in conjunction with the League of Wisconsin Municipalities, are designed to close the so-called dark store loophole and increase how much the mega-retailers pay local communities in property taxes.

The bills come in reaction to court rulings in Wisconsin and nearby Midwestern states — starting in Michigan — that have helped the retail giants lower the value placed on their stores for levying property taxes. The retailers have successfully challenged their tax assessments in communities across Wisconsin, and the Midwest, by arguing they are overtaxed and should pay the same rate as a store that is closed and vacant.