News of the Day

Gov. Tony Evers has signed into law a bill that eliminates a tax benefit for companies that move out of Wisconsin.

The measure he signed Monday targets tax deductions businesses claim when they move. Under current law, a business may deduct from its income or tax liability all expenses paid to move from one location to another.

The new law that passed the Legislature with bipartisan support does not allow for businesses to deduct expenses if they move out of state. The state Department of Revenue does not anticipate the change will result in a significant change in taxes paid, likely less than $1 million a year.

State of Wisconsin health officials have recommended limits on 27 pollutants found in groundwater, including one type of pollutant that’s increasingly in the headlines — PFAS.

The limits, known as enforcement standards, can be used to regulate facilities, practices, and activities that can affect groundwater.

More than 60% of state residents obtain their drinking water from groundwater, including many people living in Milwaukee suburbs.

Officials from the Dept. of Health Services (DHS), Dept. of Natural Resources (DNR), and Dept. of Agriculture, Trade and Consumer Protection discussed the recommendations Friday at a news conference in Madison.

The portion of the proposal drawing the most initial attention covers substances known PFAS, or Per- and Polyfluoroalkyl Substances. Those are human-made chemicals found in non-stick cookware, fast food wrappers, firefighting foam, fabric protectors, and other products.

Wisconsin officials are proposing an enforcement standard for PFAS that is far more stringent than what the U.S. Environmental Protection Agency recommends.

DHS also wants even tighter limits that could trigger an earlier step — preventive action aimed at protecting the public.

The DNR hasn’t revised state groundwater standards in ten years. The department says it gave a list of substances to DHS and asked DHS to review.

Wisconsin’s conservative-controlled Supreme Court on Friday upheld lame-duck laws limiting the powers of Democratic Gov. Tony Evers and Attorney General Josh Kaul, handing Republican lawmakers a resounding victory.

A group of liberal-leaning organizations led by the League of Women Voters sued in January alleging the laws are invalid because legislators convened illegally to pass them in December. The groups maintained the Legislature’s session had ended months earlier and that the lame-duck floor session wasn’t part of the Legislature’s regular schedule.

But the Supreme Court, in a 4-3 ruling, declared that the Wisconsin Constitution gives lawmakers the authority to decide when to meet.

“The terminology the Legislature chooses to accomplish the legislative process is squarely the prerogative of the Legislature,” the conservative majority wrote. Three liberal justices dissented, saying the Legislature went beyond what is constitutionally allowable when it convened the lame-duck session.

The legal fight over the lame-duck laws isn’t over. A group of unions has filed a separate lawsuit in state court arguing the laws steal authority from the governor and attorney general in violation of the separation of powers doctrine. That challenge is pending before the Supreme Court.

The state Democratic Party has filed a federal lawsuit contending the laws are meant to punish Evers’ supporters in violation of free speech and equal protection guarantees.

Yesterday, the U.S. Environmental Protection Agency (EPA) issued the final affordable Clean Energy (ACE) rule – replacing the prior administration’s overreaching Clean Power Plan (CPP) with a rule that restores the rule of law and empowers states to continue to reduce emissions while providing affordable and reliable energy for all Americans.

“Today, we are delivering on one of President Trump’s core priorities: ensuring the American public has access to affordable, reliable energy in a manner that continues our nation’s environmental progress,” said EPA Administrator Andrew Wheeler. “Unlike the Clean Power Plan, ACE adheres to the Clean Air Act and gives states the regulatory certainty they need to continue to reduce emissions and provide a dependable, diverse supply of electricity that all Americans can afford. When ACE is fully implemented, we expect to see U.S. power sector CO2 emissions fall by as much as 35 percent below 2005 levels.”

The ACE rule establishes emissions guidelines for states to use when developing plans to limit carbon dioxide (CO2) at their coal-fired power plants. Specifically, ACE identifies heat rate improvements as the best system of emission reduction (BSER) for CO2 from coal-fired power plants, and these improvements can be made at individual facilities. States will have 3 years to submit plans, which is in line with other planning timelines under the Clean Air Act.

EPA projects that ACE will result in annual net benefits of $120 million to $730 million, including costs, domestic climate benefits, and health co-benefits.

Speaker Robin Vos (R-Rochester) released a Legislative Fiscal Bureau memo that shows that the Budget Stabilization Fund balance is expected to nearly double with a projected transfer of $291 million.

“Thanks to a great economy and good budgeting, we can continue to put money into the rainy day fund,” said Speaker Vos. “The WISCONSIN budget approved by the Joint Committee on Finance allows for the largest investment into the Budget Stabilization Fund in state history.”

According to the Legislative Fiscal Bureau, the Budget Stabilization Fund now sits at $326 million and is projected to grow to a record high of $617 million by the end of the 2018-2019 fiscal year.

“It’s important that the state saves money in case there’s a downturn in the economy,” said Speaker Vos. “This was a priority we heard about from our constituents and we delivered on it during the budget process. The JFC-approved budget also invests in our top priorities of education, health care, and transportation, and we’re still able to cut taxes on the middle class.”

The Wisconsin State Assembly will vote on the budget next week.

Wisconsin home sales rose in May, following several months of declines.

The latest report from the Wisconsin Realtors Association found 8,589 sales of existing homes last month, up 3.2 percent from May 2018.

Economist David Clark of Marquette University said while supply continues to hamper sales, new listings in May were only down slightly from the previous year.

“If we continue to see new listings at or near where they were last year, or even higher than last year, that ought to help with sales, and it should help to moderate, at least slightly, the median prices,” he said.

High demand and limited inventory pushed Wisconsin’s median home price up 9.1 percent in May to $203,000.

Sales for all of 2019 still trail last year by about 4 percent.

The Wisconsin Supreme Court has temporarily restored nearly all of the laws Republicans passed in December’s lame-duck session, including one that makes it harder for Democratic Attorney General Josh Kaul to leave or settle federal lawsuits.

In a 4-3 ruling, the court’s conservatives acknowledged their stay might delay the attorney general’s ability to settle cases where funds are distributed to the public.

“On the other hand … the public as a whole suffers irreparable injury of the first magnitude where a statute enacted by its elected representatives is declared unenforceable and enjoined before any appellate review can occur,” justices wrote.

The case was filed by the Service Employees International Union (SEIU) and others in organized labor. It argued the laws Republicans passed in December’s extraordinary session violated the state constitution’s separation of powers protections.

Dane County Judge Frank Remington issued a ruling in March that struck down several of the laws, including the one that limited the power of Kaul.

The Wisconsin Supreme Court is also handling the appeal in the lawsuit brought by the League of Women Voters of Wisconsin among other groups. That case contends the entire lame-duck session was unlawful because the Wisconsin Constitution does not explicitly allow for “extraordinary” sessions of the Legislature. The Supreme Court heard arguments in that case last month.

Republicans on the Joint Finance Committee (JFC) voted to cut taxes by more than $530 million Thursday, finishing their work on the 2019-21 budget and passing the document out of committee. The vote follows more than a month of JFC meetings on Gov. Tony Evers’ budget proposal.

Under the Republican package, the average tax filer will see more than $200 in tax relief in the next two years, with the bulk of the tax relief coming through income tax rate reductions. The second income tax bracket, currently at 5.84 percent, will fall to 4.93 percent in 2020. The bottom-most bracket will fall from 4.0 percent to 3.76 percent in 2020.

Immediately after the budget vote, JFC passed a separate bill authored by Sen. Dale Kooyenga (R-Brookfield) and Rep. Jessie Rodriguez (R-Oak Creek). Assembly Bill 251 (AB 251) sends new revenue from remote sales tax collections (out-of-state online sales) into income tax reductions for the bottom-most rate. The budget motion and AB 251 together bring tax relief over the biennium to more than $530 million.

The Assembly and the Senate are expected to take up the budget in its entirety during the last week in June.