Brian Dake

Wisconsin Health Care Stability Plan

Posted on May 8, 2018 by Brian Dake

(2017 Wisconsin Act 138)

Many small, independent business owners and their employees access health care coverage for themselves and their families through the individual health insurance market. After seven years of ObamaCare, this market is collapsing. In its most recent report to the Wisconsin State Legislature, the Office of the Commissioner Insurance (OCI) highlighted that fact by noting:

“There are 16 health insurers – down from 28 prior to the enactment of the ACA – selling individual health coverage plans in the state and even fewer of them (11) are offering plans on the federal health insurance exchange. Throughout much of the state, there are only two health insurance plans available for purchase on the exchange. In Northeast Wisconsin, there is only one exchange-offered plan available. Rate increases for exchange-offered plans in 2018 averaged 38% and in some areas of Wisconsin were as high as 105%.”

Earlier this year, state lawmakers approved a plan to stabilize Wisconsin’s individual health insurance market which in turn should bring at least some modest financial relief to small employers and their employees who purchase health care coverage for themselves and their families on the federal health insurance exchange.
The Wisconsin Health Care Stability Plan (WHCSP) is modeled after similar programs operating in Alaska, Minnesota and Oregon. Under this plan, the State of Wisconsin will operate a health care reinsurance plan. Reinsurance is essentially insurance for insurance companies. It helps insurers manage high cost claims and offers a greater level of market predictability for insurers when setting rates.

The WHCSP will cover between 50% and 80% of an individual’s annual health insurance claims costs between $50,000 and $250,000 (paid directly to the insurer). Annual funding for the WHCSP is a shared responsibility. Federal funding of $166 million is matched by $34 million from the State of Wisconsin.

With the WHCSP in place, the State of Wisconsin estimates the premiums for federal health care exchange-offered plans will be reduced by 10.6% from levels that otherwise would have occurred, resulting in a 5% decrease in 2019 premiums, compared to 2018.

Regulations in Need of Executive Scrutiny (REINS) Act

Posted on May 8, 2018 by Brian Dake

(2017 Wisconsin Act 57)

Reducing the burden of state-imposed government regulations on small, independent businesses requires reform of the processes by which state government agencies create regulations. Prior to the start of the 2017-2018 legislative session, we identified the following material weaknesses in Wisconsin’s regulation-making process:

state government agencies are required to prepare cost-benefit analyses of proposed regulations, but often lack the technical expertise and private sector experience to discern the actual compliance costs of proposed regulations;
during the regulation-making process, the compliance costs of a proposed regulation may become far greater than previously expected but there is no formal process in place to address this unforeseen circumstance; and
state government agencies rely heavily on ad-hoc advisory committees and advocacy organizations for guidance and input in the early stages of the regulation-making process.

The REINS Act effectively addresses these material weaknesses.

Approval by the Governor and the Wisconsin State Legislature is now required for proposed state government agency regulations in which the implementation and\or the compliance costs exceed $10 million over a two-year period. State legislators may request and receive independent cost-benefit analysis performed by trained economists when there is uncertainty regarding the financial impact of a proposed state government agency regulation. Finally, the REINS Act creates a new opportunity for small employers to advise state government agencies of their concerns about a proposed regulation before the agency begins drafting the proposed regulation.

Partial Repeal of Wisconsin’s Personal Property Tax

Posted on May 8, 2018 by Brian Dake

Last year, Governor Walker signed into law the most significant reduction in Wisconsin’s personal property tax in nearly forty years. (2017 Wisconsin Act 59)

Beginning with property tax assessments as of January 1, 2018, machinery, tools and patterns, not including such items used in manufacturing, are exempt from taxation – Schedule C on the Statement of Personal Property. Machinery is defined as a structure or assemblage of parts that transmits force, motion, or energy from one part to another in a predetermined way by electrical, mechanical, or chemical means.

In 2017, the statewide value of personal property categorized as non-manufacturing machinery, tools and patterns was $3.35 billion. The non-partisan Wisconsin Legislative Fiscal Bureau estimates this exemption will reduce statewide personal property taxes by approximately $75 million annually. To prevent a shift in the property tax burden to other classes of property, the State of Wisconsin is required to reimburse local municipalities for the loss of property tax revenue resulting from this personal property tax exemption.

Foxconn Names 26 More Subcontractors for Site Prep Work

Posted on May 8, 2018 by Brian Dake

Foxconn Technology Group and M+WǀGilbane on Monday announced 26 additional subcontractors selected for site preparation work at the company’s planned LCD manufacturing campus in Mount Pleasant.

Officials also previously announced Black River Falls-based Hoffman Construction Co. was selected for mass excavation, storm water management and erosion control and Milwaukee-based Gestra Engineering was chosen for soil testing work. Monday’s announcement brings the total number of named subcontractors for the project to 28.

All but one of the firms is based in Wisconsin and seven qualify as minority-, woman- or veteran-owned, Foxconn said. The company has set a target of having 60 percent of the work performed by Wisconsin companies and 10 percent by firms owned by minorities, women or veterans.

“We are proud to continue to deliver on our ‘Wisconsin First’ commitment through our partnership with companies across the state,” said Louis Woo, special assistant to Foxconn Founder and CEO Terry Gou. “As we actively move forward with construction of this project, we look forward to partnering with additional Wisconsin companies.”

Gov. Scott Walker is making stops around the state Monday to tout the announcement of the subcontractors. He has stops planned in Black River Falls, Brownsville and Racine.

Foxconn and M+WǀGilbane say the businesses selected as subcontractors will draw their direct and indirect workforce from 60 of the state’s 72 counties.

“We are pleased to be bringing together some of the best and the brightest from all over the state to work on a project that will help transform the Wisconsin economy,” said Adam Jelen, Gilbane senior vice president.

The subcontractors include:

A.W. Oakes and Sons, Racine (aggregate and earthwork)
Case International, Mt. Pleasant (equipment rental)
County Materials Corp., Marathon (material manufacturer)
Environmental Control Inc., Franksville (erosion control)
Fabick CAT Racine Rents, Sturtevant (equipment rental)
George Schroeder Trucking, Burlington (trucking)
Gestra Engineering, Milwaukee (soils testing work)
Heider & Bott Company, Milwaukee (material supplier)
Hoffman Construction Co., Black River Falls (mass excavation, storm water management, erosion control)
Hribar Corp., Sturtevant (equipment rental)
Johnson Sand and Gravel, New Berlin (aggregate)
Kapur Associates, Burlington (surveying)
Lannon Stone, Sussex (aggregate)
Metro Security, Racine (site security)
Michels Corporation, Brownsville (aggregate and underdrain)
MJM Truckin LLC, Nekoosa (trucking)
Neenah Foundry Company, Neenah (material manufacturer)
Northway Fence, Menomonee Falls (site fence)
Otter Sales and Service, Burlington (equipment rental)
Pac-Van, Sturtevant (support trailers)
Panacea Group, LLC, Seymour (trucking)
Payne & Dolan, Waukesha (asphalt paving)
Quick Fuel Fleet Services, Milwaukee (fuel)
R A Seaton Contractor Services LLC, Rockford, Illinois (trucking)
Super Aggregates, Waterford (aggregate)
Terracon, Franklin (soils testing work)
Tremmel-Anderson Trucking LLC, Sussex (trucking)
Vizcaino’s Trucking LLC, Oconomowoc (trucking)

Wisconsin’s Tourism Economy Tops $20.6 Billion

Posted on May 7, 2018 by Brian Dake

Governor Scott Walker joins Tourism Secretary Stephanie Klett in traveling throughout the state to highlight Wisconsin’s tourism economy, which reached $20.6 billion in 2017. This marks a $631 million boost from $20 billion in 2016.

“Wisconsin’s travel and hospitality industry is booming,” said Governor Walker. “Our tourism industry continues to be crucial to our state and is consistently a top performing sector of our economy. Investing in tourism promotion and marketing at the national, state, and local level is not only an effective way to attract visitors and grow the economy, it also enhances the image of Wisconsin as a great place to live, work, and do business.”

The tourism industry continues to show stable, long-term growth according to Tourism Economics’ recently-released economic impact figures. Last year’s visitor volumes topped 110 million visits, an increase of 17.5 million, compared to 92.5 million in 2011. Tourism supported a total of 195,255 jobs in 2017, up from 172,000 in 2011, a 13.5% increase.

“For seven years in a row, Wisconsin’s tourism industry has had a positive impact on the economy and job growth,” said Secretary Klett. “Research shows us that the increased investment in marketing the brand of fun positively influences the way people think about Wisconsin as a top to place to vacation, work, live, attend college, and own a second home.”

Key Results

The total seven-year growth of tourism activity in the state is $5.8 billion, a nearly 40 percent increase according to Tourism Economics, the research firm for the Department of Tourism.
Visitor volumes topped 110 million visits, an increase of 17.5 million, compared to 92.5 million seven years ago. This is a 19 percent increase since 2011.
Traveler spending on recreation, which includes all activities travelers choose to do on vacation, had the fastest growth at 5.5 percent in 2017.
Tourism directly and indirectly supported 195,255 jobs in Wisconsin’s labor market in 2016.
Visitors generated $1.5 billion in state and local revenue and $1.2 billion in federal taxes, saving Wisconsin taxpayers $660 per household.

Governor Signs Executive Order Increasing Efficiency, Responsibility of State Government

Posted on May 4, 2018 by Brian Dake

Yesterday, Governor signed Executive Order #288 today, implementing recommendations
from the Governor’s Commission on Government Reform, Efficiency, and Performance. Through this order, Governor Walker is implementing measures that will make government more efficient and responsible to hardworking Wisconsin taxpayers.

“At the end of the day, our government is accountable to Wisconsin’s hardworking taxpayers,” said Governor Walker. “It’s our responsibility to ensure that we are continually improving the way we do business in order to maximize the effectiveness of government services and deliver them to taxpayers at the lowest cost possible.”

Executive Order #288 directs the Department of Administration and multiple state agencies to adopt several recommendations in accordance with the Governor’s Commission on Government Reform, Efficiency, and Performance:

The Department of Administration will combine the Office of Lean Government with the Division of Executive Budget and Finance and any other administrative units as determined by the Secretary of the Department of Administration.

State agencies will work with the Department of Administration, Division of Enterprise Operations, to identify procurement savings opportunities, reduce purchased services and contracts, and make state vehicle purchasing, maintenance, and operating policies more cost-effective.
State agencies will submit a plan to the Department of Administration, State Controller’s Office, outlining strategies to minimize paper-based finance operations, with the goal of eliminating paper-based payments and maximizing the use of electronic exchange.
State agencies will review their current practices and enter into debt collection agreements where necessary with the Department of Revenue to perform collections on agency debts outstanding longer than 90 days unless an exemption is granted by the Secretary of the Department of Revenue pursuant to current law.

Wisconsin Ranks 10th in Nation on Hospital Safety

Posted on May 3, 2018 by Brian Dake

Wisconsin ranked 10th in the nation for the safety of its hospitals, with 42 percent of the state’s hospitals receiving “A” grades for their prevention of medical errors, according to a new report.

The Leapfrog Group, a national nonprofit organization focused on health care quality and safety, gives out grades to hospitals twice a year for how well they prevent errors, accidents, injuries and infections.

Of the approximately 2,500 hospitals graded nationally, 30 percent earned an “A,” 28 percent earned a “B,” 35 percent a “C,” six percent a “D” and one percent an “F.”

Hawaii was first in the U.S. for its hospital safety, followed by Idaho (2); Rhode Island (3); Massachusetts (4); Virginia (5); Colorado (6); Maine (7); Ohio (8); and North Carolina (9).

Leapfrog uses performance measures from its own hospital survey, the Centers for Medicare & Medicaid Services, the Agency for Healthcare Research and Quality, the Centers for Disease Control and Prevention, and the American Hospital Association’s Annual Survey and Health Information Technology Supplement to compile its rankings.

EPA Trims Wisconsin Areas Facing Tougher Smog Regulations

Posted on May 2, 2018 by Brian Dake

The U.S. Environmental Protection Agency on Tuesday limited areas of Wisconsin that will face tougher smog regulations.

The agency sided with Wisconsin officials by sharply narrowing areas that will come under stricter federal ozone regulations to small strips of land along the shoreline of Lake Michigan.

Businesses and Republican Gov. Scott Walker’s administration argued that metropolitan Milwaukee and areas along Lake Michigan were being polluted by smog from Illinois and northern Indiana.

The EPA was under a court-ordered deadline of Monday to decide which counties across the country were in violation of the new standard and would need to reduce pollutants that form ozone. Those pollutants come from sources such as factories, power plants and emissions from cars and trucks.

Ozone is created when heat and light interact with nitrogen oxides and volatile organic compounds.

In a tweet Tuesday, Walker said that Wisconsin already has cut emissions of nitrogen oxides and volatile organic compounds by 50 percent since 2002.

“We are working with the EPA to implement a plan that continues to look out for the best interest of Wisconsin,” Walker tweeted. “We continue to search for ways to balance between environmental stewardship and a positive, pro-jobs business environment.”

In December, the agency had made an initial determination that a much larger area of southeastern Wisconsin was in violation of ozone standards. Officials with the Wisconsin Department of Natural Resources pushed back against that initial determination. Officials asked that the entire state be declared in compliance or, failing that, urged the EPA to designate narrow strips of land near Lake Michigan.

“We are pleased that EPA did take into account the science and data the DNR provided showing that ozone concentrations … are limited to a narrow strip of land near the Lake Michigan lake shore,” DNR spokesman Jim Dick said in a statement.

Wisconsin Utility Companies are Told to Credit Customers $130 million, to Start

Posted on May 1, 2018 by Brian Dake

Wisconsin’s investor-owned utility companies must give a total of $130 million to their customers in the form of credits on their July bills followed by monthly reductions, the Wisconsin Public Service Commission has ruled in a preliminary decision.

The proposed July bill credit represents the first six months of tax savings the utilities will have amassed since Congress passed major changes to the tax code in late 2017, lowering the corporate tax rate from 35 percent to 21 percent.

“Every customer of an investor-owned utility (in Wisconsin) will receive some sort of bill credit,” said PSC spokesman Matthew Spencer.

Specific amounts were not provided as part of the PSC’s oral decision last Thursday so it is not clear yet how big each customer’s credit will be. The amounts are expected to be included in the three-member panel’s written decision when it is released in a few weeks.

Democratic Gubernatorial Candidates Offer Varied Tax Proposals

Posted on April 30, 2018 by Brian Dake

The Democrats running for governor this year have several ideas for how to rewrite the state’s tax laws, with an emphasis on higher taxes for the rich, and lower taxes for the working and middle class. They largely support more state revenues to pay for things like better roads and schools, expansion of BadgerCare and free technical college tuition.

Madison Mayor Paul Soglin wants to lower homeowner property taxes statewide by up to 25 percent while raising income taxes on the top 3 percent of earners.

Former Wisconsin Democracy Campaign executive director Mike McCabe is calling for a reduction in the sales tax from 5 percent to 4.5 percent, and also applying it to currently exempt goods and services such as airplane parts, health club fees and professional services.

Former Rep. Kelda Roys would repeal a recently adopted fee on hybrid and electric vehicles, but would be willing to slap a new fee on certain heavy trucks to help pay for road repairs.