Brian Dake

Republican leaders are considering whether to eliminate or phase out in the state budget a 170-year-old property tax that generates — mostly from businesses — a quarter billion dollars a year for municipalities and schools.

Business and conservative groups have been urging elimination of the so-called personal property tax for years and several small business owners spoke out last week at a public hearing in favor of a Republican bill that would exempt everything subject to the tax.

But the bill comes with a steep $261 million annual price tag that could make it difficult to pass during a contentious budget year in which resources are scarce. Under the proposal the state would reimburse municipalities and schools with general tax dollars that otherwise could pay for education, transportation or other tax cuts.

A spokeswoman for Senate Majority Leader Scott Fitzgerald, R-Juneau, said in an email the proposal “is certainly still on the table for this legislative session” and “as budget deliberations continue, further discussions about this measure will be guided by the amount of available revenue.”

Rep. John Nygren, R-Marinette, said in a statement that many of his Assembly Republican colleagues are interested in repealing the personal property tax.

A spokesman for Gov. Scott Walker said eliminating the personal property tax is “a proposal worth considering” but Walker does not want it to come at the expense of cutting property taxes for homeowners.

Homeowners are familiar with the annual tax bill on land and permanent structures, but they generally aren’t affected by the personal property tax, which has been around since 1849 and is assessed for non-residential properties on certain tangible items such as furniture, boats and machinery.

Over time, the state has exempted broad swaths of property from the tax, including computers and cash registers, which has led to complaints from businesses that the tax is unfair.

Those who have to pay it are required to determine each year the value of their personal property, which depreciates over time.

Jerry Martell, owner of Modern Disposal Systems in Sparta, told the Assembly Ways and Means Committee on Thursday the roughly $11,000 a year he pays in personal property taxes on his equipment could help him expand his business or hire more youth interns.

“If I get this money back, I’m not going to stick it in a bag and run down to the Carribbean with it … I’m going to put that money back into the economy,” Martell said. “I don’t think it’s right for me to pay this knowing it’s an unfair tax.”

President Trump’s America-first mantra steamrolled over the objections of lawmakers, top CEOs, the Pentagon, the U.N. and even his own daughter, as he announced Thursday that he was withdrawing the U.S. from the landmark Paris climate accord to limit greenhouse gas emissions.

“We’re getting out, but we will start to negotiate, and we will see if we can make a deal that’s fair. And if we can, that’s great. And if we can’t, that’s fine,” Mr. Trump said to applause from critics of the Paris deal assembled on the White House lawn. “I was elected to represent the citizens of Pittsburgh, not Paris,” he continued. “I promised I would exit or renegotiate any deal that doesn’t serve America’s interests.

Mr. Trump, though, delivered a detailed evisceration of the deal Mr. Obama signed, saying it crushes American businesses, unnecessarily funnels billions of dollars to other nations and allows the world’s top polluter, China, to do little to curb its own emissions for the next 13 years.

Mr. Obama had committed the U.S. to cut its greenhouse gas emissions by at least 26 percent by 2025, while China needs only to cap its pollution by 2030. The pact also calls on America to commit billions of dollars to the U.N.’s Green Climate Fund to pay developing countries to develop cleaner energy. Those terms, Mr. Trump said, are unacceptable.

“Compliance with the terms of the Paris accord and the onerous energy restrictions it has placed on the United States could cost America as much as 2.7 million lost jobs by 2025,” Mr. Trump said, citing numbers from a recent National Economic Research Associates study. “The cost to the economy at this time would be close to $3 trillion in lost GDP and 6.5 million industrial jobs, while households would have $7,000 less income, and, in many cases, much worse than that.”

A state tax watchdog group is reporting a large portion of the state budget actually is devoted to property tax relief in one form or another.

President Todd Berry of  Wisconsin Taxpayers Alliance says property tax relief is the ‘tail that wags the political dog in Wisconsin’…

“….we looked at all the taxes and fees spent by the state and close to $10 billion of that, or about 4 in every 10 dollars goes in some way or another to try to reduce property taxes. That could be either through aiding local governments or schools or funding direct property tax credits on tax bills or various credits on the income tax…..”

Berry says since starting the income tax in 1911 has provided a lot of money to local governments, counties and municipalities. He says about half of the $10 billion goes to schools at various levels. He says the most effective property tax relief has been the state property tax credits on the local tax bill have been the most effective, while other forms of relief are less direct to local taxpayers.

Berry says only about 12 percent of the budget goes to state agency operations. Berry says it’s ironic that the budget puts so much emphasis in controlling property taxes…

“….for all intents and purposes, the state doesn’t levy property taxes. The other irony is that in spite of all this Wisconsin’s property taxes still rank in the top 10-12 states in the country and are typically up to 20 percent above the state average. Alot of money from the state attempting to relieve something that the state doesn’t directly control….”

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 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.”

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.