Brian Dake

Numerous Ways Governor Walker's Budget Would Impact Businesses

Posted on February 10, 2017 by

Gov. Scott Walker’s proposed budget made news on plenty of fronts – including K-12 education, the UW System and transportation — when it was released, but look a little deeper into the executive budget and the budget bill itself and there are some other provisions businesses could be interested in.

Changes in how employment disputes are handled

The governor’s budget would make several changes to the handling of employment disputes. The Wisconsin Employment Relations Commission would be changed from three part-time commissioners to a single chairperson. Walker’s office said the proposal is in recognition of the commission’s decreased workload. The commission conducts elections to determine collective bargaining units, mediates collective bargaining disputes and issues decisions on unfair labor practices.

Walker is also proposing the elimination of the Labor and Industry Review Commission, which reviews Department of Workforce Development decisions on unemployment insurance, employment discrimination and equal enjoyment of places of public accommodation and worker’s compensation decisions by the Division of Hearings and Appeals in the Department of Administration. Instead, those decisions would be reviewed by administrators in the department or division before being appealed to circuit court.

The governor says the change would streamline appellate functions and decrease the time to get a decision for unemployment insurance, equal rights and worker’s compensation cases.

Limiting historic rehab tax credits

The budget puts an annual $10 million limit on the historic rehabilitation tax credit. It also requires the Wisconsin Economic Development Corporation to award the credits competitively based on the potential for job creation, benefit to the state, projected impact on the local economy, likelihood the project would happen without the credits and number of credits given out in the area in prior years. Those receiving the credits could have to repay some of the money if they come up short on job projections.

Energy efficiency construction projects at schools

Walker’s budget would eliminate a loophole that allowed school district to exceed their revenue limits for energy efficiency building projects. Many districts had used the exemption to implement multi-million dollar capital improvement campaigns in recent years. Districts would still be able to use referendums for the projects.

The budget also directs the Public Service Commission to prioritize school energy efficiency projects in the Focus on Energy program. Walker proposes an additional $10 million in Focus on Energy funding annually prioritized to public elementary and secondary schools.

Sales tax holiday

The governor is proposing a two-day sales tax holiday in August of the next two years on items related to school supplies, including clothing, computers and certain other supplies. The holiday is expected to reduce tax revenue by $11 million each year.

Businesses get their own court

The state Supreme Court is directed to establish rules for a pilot program that would create a specialized business court program for commercial disputes. The court would have until Jan. 1, 2019 to establish the rules for the project.

Changes to manufacturing and ag tax credit

Walker is proposing a change that would eliminate an “unintended overlap” that allowed businesses to claim the manufacturing and agriculture tax credit and the taxes paid to other states credit on the same income. The change is expected to increase tax revenues by $9.7 million in fiscal 2018 and 2019.

Governor's Budget Includes $600 Million in Tax and Fee Reductions

Posted on February 9, 2017 by

Gov. Scott Walker on Wednesday called for nearly $600 million in reduced taxes and fees along with significant new spending in areas where he made sizable cuts in the past as part of his $76.1 billion two-year budget proposal.

Walker is proposing to cut the state’s two lowest income tax rates by a tenth of a percentage point — to 3.9 percent and 5.74 percent — and increase the amount of income taxed at the second-lowest rate by about $30,000. A median income four-person family making about $86,000 a year would save $139 over two years, while state revenues would decline by $203 million under the proposal.

Walker is also seeking to make good on a promise to reduce property taxes below 2010 levels by eliminating a state forestry property tax that brings in about $90 million a year and paying for the programs it funds with other state tax revenue; boosting a property tax credit by $87 million; and increasing aid to school districts by $72 million, which, paired with a state-imposed lid on district revenues, will drive down property taxes.

Walker also plans to create a sales tax holiday in August on certain school supplies, clothing and computers, estimated to cost the state about $11 million in lost sales tax revenue.

His budget also increases a tax credit for low-income working families with one child and increases the Homestead Tax Credit for seniors and the disabled.

For the 2017-19 state budget, Walker and lawmakers are working with revenue estimates that are about $700 million better than expected in the fall when agencies prepared their budget requests. The better budgeting position comes from improved economic forecasts since the November presidential election, which translates to higher tax collection projections and lower-than-anticipated Medicaid costs.

EPA Gives Final Approval to Wisconsin's Phosphorus Multi-Discharger Variance

Posted on February 8, 2017 by

Facing impending deadlines that will force municipal water utilities and Wisconsin job creators to spend billions of dollars on costly filtration upgrades, Sen. Robert Cowles (R-Green Bay) and Rep. Amy Loudenbeck (R-Clinton) today lauded the final approval of the State of Wisconsin’s Phosphorus Multi-Discharger Variance (MDV).

This newly approved reform measure will offer a vastly more cost-effective and resource protective means of reducing the phosphorus in our waters while lowering costs to water utility ratepayers and potentially saving thousands of Wisconsin manufacturing and food production jobs.

“I’m incredibly pleased that we were able to move this much-needed legislation. However, I am still disappointed by the amount of time it took the EPA to review and approve our creative approach to reduce phosphorus,” Cowles said.

This innovative Wisconsin provision will offer a new fee-based compliance option in order for water utilities and manufacturers to meet the strict phosphorus discharge standards. This leaves existing phosphorus standards intact and does not repeal or suspend the existing water quality standards.

“A point-source discharger, such as a municipal wastewater treatment plant or a papermaker, that is eligible for the MDV does not receive a free pass or a proverbial get-out-of-jail-free card,” said Loudenbeck. “Those point-sources,in exchange for reducing their phosphorus discharges over a longer compliance schedule, will pay $50 per pound to counties to complete water quality improvement projects within the watershed the source is located.”

“Wisconsin waterways are significant economic drivers and support our nearly $20 billion tourism industry. The MDV utilizes the flexibility provided to increase funding for nonpoint source pollution. This will result in a more direct approach on phosphorus pollution and increase the protection of our lakes and rivers,” stated Cowles.

The new option will allow water utilities, manufacturers and food processors to assist in reducing non-point phosphorus discharges, which constitute a majority of the phosphorus in our waters.

Tax Identify Theft Avoidance Starts with Taxpayers

Posted on February 7, 2017 by

Tax-related identity theft is an established concern nationwide, as state and federal tax authorities have wrestled for years with a blight of criminals filing fraudulent tax returns using other people’s personally identifiable information. For a scammer, tax identity theft means quick cash. For a victim, it’s a delayed return, concern about who has their personal information, and the fear of what else the criminal might do with these personal details.

“Last year, tax identity theft was a factor in three of every four identity theft complaints that consumers filed with the Wisconsin Department of Agriculture, Trade and Consumer Protection,” said Frank Frassetto, Division Administrator for Trade and Consumer Protection. “Federal and state tax authorities have recently put additional safeguards in place to protect the public from this threat during the tax filing process, but taxpayers are chiefly responsible for protecting their own information throughout the year.”

If you run into difficulties when you file, you may be a victim of tax identity theft. If someone misused your identity for a fraudulent return, the IRS or your tax preparer may warn you that multiple returns were filed under your Social Security number, that you owe additional taxes or are facing collection actions for a year you did not file a return, or that you received wages from an employer for whom you did not work.

If you face any of these issues, report the suspected fraud by phone to the IRS (1-800-829-0433) and the Wisconsin Department of Revenue (1-608-266-2486). Contact DATCP’s Consumer Protection Bureau (1-800-422-7128) to inquire about next steps for shoring up your identity. The IRS also advises taxpayers to continue paying their taxes and filing their returns, even if they suspect that they may be victims of identity theft.

“A consumer’s best protection against a criminal filing taxes in your name is to get a jump on the thieves by filing early. Also, if you file your return online, make sure to use up-to-date security software on your computer and set up strong passwords for your tax software login,” said Frassetto.

During the year, follow these simple tips to protect your personally identifiable information:

  • Share your sensitive information as rarely as possible. Turn down any request for personal information from an unsolicited caller.
  • Don’t carry cards containing sensitive details like your Social Security or Medicare numbers unless you specifically need them (for an appointment, for example).
  • Remember that the IRS, United States Treasury and Wisconsin Department of Revenue will NEVER call and threaten you with arrest or legal action about back taxes. Any phone calls of this nature are scams.
  • Use online security best practices. Learn how to recognize phishing emails and text messages. Never click on links or download attachments in emails from unknown senders or in emails that seem suspicious.

For additional information or to file a complaint, visit the Consumer Protection Bureau at datcp.wisconsin.gov, call the Consumer Protection Hotline at 1-800-422-7128 or send an e-mail to datcphotline@wisconsin.gov.

Construction-Related Employment Reaches Highest Level Since 2008

Posted on February 6, 2017 by

National construction employment reached its highest level in January since 2008, as wages in the industry pushed ever higher, according to a trade group.

Employment in the industry increased by 36,000 jobs from December to January, according to an analysis of seasonally adjusted federal data by the Associated General Contractors of America. The roughly 6.8 million people working in the industry in January were the most seen in any month since November 2008.

Hourly earnings in the industry, meanwhile, increased 3.2 percent over the year-long period running through January, rising to $28.52 an hour. Hourly earnings in construction are rising faster than those for all private-sector workers on average, which were up 2.5 percent in the year-long period.

Average wages for all private-sector workers were also slightly lower — at about $26 an hour.

“This report aligns with what contractors have been telling the association — that the construction industry is still eager to add workers,” said Ken Simonson, the association’s chief economist. “The employment gains would be even larger if there were enough workers with the right skills available to hire.”

The industry added 170,000 new jobs from January 2016 to January 2017, according to an analysis of the same jobs data by the Associated Builders and Contractors, a group that largely represents non-union companies. That comes out to a 2.6-percent increase.

Moreover, the nonresidential construction sector added 14,900 new jobs for the month, and the residential sector added 20,300 jobs.

“Today’s employment report indicated growing strength in construction along a variety of dimensions,” said Anirban Basu, chief economist of ABC.

Lifting the Veil on the State Budget Process

Posted on February 3, 2017 by

When Gov. Scott Walker (R) unveils his 2017-19 state budget next week, it will be the highlight of the two-year legislative session, dominating the attention of lawmakers, the public, and the press until summer or even beyond.

What makes the budget so important? And how do citizens understand how it’s developed and proceeds through the Capitol?

In a new report, “Raising the curtain on the state budget,” the nonpartisan Wisconsin Taxpayers Alliance (WISTAX) explains the critical importance of the budget bill to both state and local government and provides a guide to the state budget process. The report notes:

The budget is big: The 1,000-plus-page bill affects virtually every aspect of state and local government for the next two years. It is often controversial, with recent budgets proposing policy changes ranging from welfare reform to UW System restructuring. And it is costly, spending more than $70 billion on state and local government operations and programs, and regulating more than $20 billion in property taxes.

The budget is political: The state budget implements the tax and spending priorities of the governor and legislative majority. It delivers on campaign promises and lays the groundwork for the next election.

The budget is “the” bill: Because the budget is the only bill the legislature must pass, it has become the primary vehicle for passing a variety of laws. Increasingly, lawmakers have rolled controversial bills that might not otherwise survive as separate legislation into the biennial budget bill.

The budget takes time: The budget process, which lasts nearly a year from beginning to end, starts and finishes with the governor. The summer before the budget is introduced, the governor issues spending guidelines to state agencies. By fall, agency requests are totalled, preliminary revenue estimates are assembled, and the governor begins making spending and tax decisions.

The governor usually introduces the budget proposal in early February of odd-numbered years. The focus then moves to the Joint Committee on Finance (JCF), which is typically the only committee to review, amend, and approve the bill. JCF begins in late February or early March with agency briefings, followed by public hearings.

The real work on the budget lasts from April until late May, when the committee amends the bill, voting on individual proposals. When committee action concludes, the bill moves to each house of the legislature for approval, usually in June. If the two houses can’t agree to each other’s amendments, the bill goes to a conference committee where a compromise is worked out.

After lawmakers pass the budget bill, it returns to the governor. With some of the broadest veto powers in the nation, the governor can veto the whole bill, strike out individual line items or whole sections, or “write down” spending amounts. Lawmakers can always override the governor’s vetoes, but they have not done so in
more than three decades.

Ideally, a new budget takes effect on July 1, the start of the state’s fiscal year, but in recent years, lawmakers have occasionally taken until even October to pass a final bill. In the absence of a new budget, state spending and taxes continue at current levels.

Stage Set for Biggest Welfare Reforms Since mid-1990's

Posted on February 2, 2017 by

Every generation, Republicans in Wisconsin’s Capitol “reform” welfare.

This year, however, the political stars are aligned—with Republican Gov. Scott Walker, Republican majorities in both houses of the Legislature, and Republican control of the White House and Congress—for the most significant reforms in more than 20 years.

Although exactly what changes Walker wants won’t be known until he introduces his 2017-19 budget on Feb. 8, his aides promised this broad package of changes:

It “will increase investment in job and skills training for the employed and unemployed, reduce barriers to work and increased earnings, and expand programs that incentivize employment. Where flexibility is needed, it will also aggressively seek (Trump Administration) waivers to encourage work and enhance self-sufficiency (and) pilot work requirements for working-age, able-bodied adults receiving housing vouchers.”

Let’s make sure “work is dignifying and connects individuals to society and its values,” Walker said. Public aid should be a “trampoline—not a hammock,” he added in his State of the State speech.

For the history lesson on how Wisconsin became a petri dish for welfare reform, let’s consider how four-term Republican Gov. Tommy Thompson—who traveled Wisconsin with Walker last week to endorse the new changes—justified his 1994 reforms, Wisconsin Works or W2. Walker is calling his changes Wisconsin Works for Everyone.

In his book, “Power to the People,” Thompson said he gave these marching orders:

“I wanted a program built around work. I wanted to end the cash benefit premise of welfare and replace it with a real-world concept: pay for performance. Everyone would have to work, and only work would pay. I described it as a new contract… Government would agree to provide child care, health care, and other assistance for a limited time to help people find and keep a job.

“In return, people must be willing to take personal responsibility for themselves and their families. They have to get up in the morning, get the kids fed and off to school or day care, and get themselves to a job—just like ordinary, hard-working Americans.”

Here’s a 2017 example of that, Walker said: An able-bodied adult with one or more children over age 6 should be required to work 80 hours per month, or be enrolled in job-training programs, to qualify for food stamps. Children in those families would not lose food stamps, however. With some exceptions, healthy adults between ages 18 and 50 without minor children have a work or job training requirement to get food stamps.

But Thompson also offered a welfare-reform warning to Walker and Republicans who control the Legislature: It costs “more money up front. We invested more money in child care, health care, transportation and caseworkers who would work with people one-on-one.”

Democratic legislators from Milwaukee fought Thompson’s welfare reforms then, and are again. This generation of Milwaukee Democrats have much less Capitol clout.

“May I ask, how are you going to be able to only penalize the adult—and not the child?” Democratic Sen. Lena Taylor told the Milwaukee Journal Sentinel, referring to new food stamps criteria.

Beyond the political rhetoric, how many Wisconsin residents would have their lives reshaped by welfare reform?

The fine-print details of Walker’s proposals won’t be known for weeks. But the state Department of Health Services reported that 352,148 households—or “assistance groups,” in bureaucrat speak—received food stamps in December. That’s about one out of every six households statewide.

Of those households, 41 percent of them had children. And, the average help from food stamps those households got last month was $211.

Other questions legislators will ask about Walker’s welfare changes:

–How many of these households now have one or more working adults?

–Of them, how many households already have an adult who meets new criteria of working at least 80 hours per month, or getting job training?

–How many people now exempt from the work requirement would continue to be exempt for other reasons—chronic homelessness or mental health problems, for example.

Why threaten to end recipients’ benefits? “People move faster when you require them to do something, either training or work,” Thompson wrote.

Neil Gorsuch: Who is he? Bio, Facts, Background and Political Views

Posted on February 1, 2017 by

Judge Neil Gorsuch, 49, is President Donald Trump’s choice to fill the Supreme Court seat vacated a year ago by the death of Justice Antonin Scalia.

Gorsuch has the typical pedigree of a high court justice. He graduated from Columbia, Harvard and Oxford, clerked for two Supreme Court justices and did a stint at the Department of Justice.

Since 2006, he has served on the 10th Circuit Court of Appeals, in Colorado. He is an outdoorsman who fishes, hunts and skis. On the court, conservatives hope he will become the intellectual heir to Scalia, long the outspoken leader of the conservative bloc.

“The real appeal of Gorsuch nomination is he’s likely to be the most effective conservative nominee in terms of winning over Anthony Kennedy and forging conservative decisions on the court,” said Jeffrey Rosen of the National Constitution Center. “He’s unusual for his memorable writing style, the depth of his reading and his willingness to rethink constitutional principles from the ground up.

Like Justice Scalia, he sometimes reaches results that favor liberals when he thinks the history or text of the Constitution or the law require it, especially in areas like criminal law or the rights of religious minorities, but unlike Scalia he’s less willing to defer to regulations and might be more willing to second-guess Trump’s regulatory decision.”

Gorsuch is a favorite of legal conservatives because he has sharply questioned a three-decade old legal precedent that many on the right believe has given too much power to the regulatory state. The landmark 1984 Supreme Court ruling involving the Chevron oil company held that courts should defer to federal agencies’ reasonable interpretations of ambiguous federal laws.

In a ruling last August in an immigration case, Gorsuch questioned the wisdom of that doctrine, arguing that the meaning of the law is for judges to decide, not federal bureaucrats.

“Where in all this does a court interpret the law and say what it is?” Gorsuch asked in an extended digression on the subject. “When does a court independently decide what the statute means and whether it has or has not vested a legal right in a person? Where Chevron applies that job seems to have gone extinct.”

Other rulings give conservatives confidence that Gorsuch is a strong supporter of religious freedom rights. Last September, he joined a dissent arguing that requirements for contraception coverage in Obamacare ran roughshod over the rights of religious non-profits.

Gorsuch also wrote a 2000 law journal article and a 2006 book arguing strongly against assisted-suicide laws. The practice of allowing the terminally ill to end their lives is now legal in six states and is on the verge of being legalized in Washington, D.C.

President Trump Signs Executive Order to Curtail Federal Regulations

Posted on January 31, 2017 by

President Donald Trump signed an executive order Monday aimed at slashing federal regulations to help businesses, the latest in a string of presidential directives he has unveiled in his first 10 days in office.

The “one in, two out” plan requires federal agencies requesting new regulations to cut two existing regulations. Trump said the order will reduce regulatory burdens on the private sector, particularly small businesses.

“If you have a regulation you want, number one, we’re not going to approve it because it’s already been approved probably in 17 different forms,” Trump said while signing the order surrounded by small business leaders.

“But if we do, the only way you have a chance is we have to knock out two regulations for every new regulation,” he said. “So if there’s a new regulation, they have to knock out two.”

Government agencies must self-identify the regulations to cut, although the White House will ultimately decide what to nix.

A temporary regulatory freeze issued by White House Chief of Staff Reince Priebus is already in place, but Monday’s directive sets a budget for new regulations. It doesn’t apply to the military or to national security regulations, and there is also an exception to allow flexibility during emergencies.

Before signing the order, Trump held a listening session with the business leaders at the White House where he pledged to create a climate that will allow businesses to thrive.

“We’re going to create an environment for small business like we haven’t had in many, many decades,” Trump said. “This isn’t a knock on President Obama. This is a knock on many presidents preceding me. It’s a knock on everybody.”

The businessman-turned-politician campaigned heavily against overbearing government rules that he said stifle entrepreneurship. Trump has pledged to repeal the Dodd-Frank Act aimed at regulating Wall Street, which he claims made the big banks bigger, and to replace it with “new policies to encourage economic growth and job creation.”

Wall Street has embraced Trump’s presidency so far, with the Dow Jones Industrial Average hitting 20,000 points for the first time last week. Stocks dipped, however, on Monday as uncertainty swirled around Trump’s order to close the United States to people from certain predominantly Muslim countries.

Trump has relied heavily on executive orders since his inauguration Jan. 20 to begin addressing his biggest campaign promises. He has declared that the United States will build a wall on the southern border with Mexico, advanced the construction of the Keystone XL pipeline and weakened the Affordable Care Act.

After Critical Audit, Wisconsin Republicans Request Transportation Cost Updates Before Budget

Posted on January 30, 2017 by

Assembly Republicans have asked the Wisconsin Department of Transportation to update its cost estimates for ongoing, future and completed highway projects after the release this week of a critical audit.

The audit, conducted by the nonpartisan Legislative Audit Bureau, found that the DOT significantly underestimated the costs of ongoing and completed major highway projects.

Costs for 19 completed projects exceeded estimates by $772.5 million, or double what was projected, the audit found, and cost estimates for 16 ongoing major highway projects were underestimated by a total of about $3.1 billion. The discrepancies were attributed to a failure to account for the extent to which inflation and unexpected expenses could contribute to cost increases.

“Taxpayers deserve to know how much a road is going to cost before it’s built,” Assembly Speaker Robin Vos, R-Rochester, said in a statement. “Unfortunately, these miscalculations will probably confirm what many of us fear; our transportation fund is deeper in the red than we thought.”

Vos, Assembly Majority Leader Jim Steineke, R-Kaukauna, and Joint Finance Committee co-chair Rep. John Nygren, R-Marinette, sent a letter on Friday to newly-appointed DOT Secretary Dave Ross seeking updated estimates.

The lawmakers are seeking a “full review” of cost estimates for ongoing mega and major highway projects planned or budgeted for the 2017-19 and 2019-21 budget years, a review of all projects not yet enumerated and a “comprehensive report” on all projects since 2010 documenting estimated and actual costs.

“We would like to have in detail how and why these underestimates continued to occur in order to prevent issues like these from happening again,” they wrote.

They have requested a report from the department by March 15, before the Legislature’s budget committee starts its work this spring on the 2017-19 budget.

“Lawmakers need to account for these new estimates in the overall budget plan as the nearly $1 billion projected deficit in the transportation fund could potentially be far worse than initially reported,” they wrote.

The audit comes weeks before Gov. Scott Walker is set to release his budget proposal, and amid an ongoing debate over how to address a projected $1 billion shortfall in the state’s transportation fund.

“The bottom line is we shouldn’t even be thinking about raising the gas tax or fees until we find every last cost savings at the DOT, and the audit shows we can find more savings. We welcome the opportunity to deliver services taxpayers expect at a price they can afford,” Walker spokesman Tom Evenson said Thursday.

Assembly Republicans last week called for a $300 million increase in funding offset by corresponding cuts elsewhere. They have not said where they would like to raise that revenue, but Vos acknowledged last week a gas tax hike is unlikely.