News of the Day

Wisconsin Republican legislative leaders downplayed the state’s record budget surplus Wednesday, even as Democratic Gov. Tony Evers has pushed for massive spending increases on K-12 education, tax cuts and funding for local governments.

Assembly Speaker Robin Vos cautioned that much of the state’s projected $7 billion surplus is one-time money that he said shouldn’t be used to fund new programs or ongoing expenses. Evers has proposed a range of uses for the money, from subsidizing repairs at the Milwaukee Brewers’ stadium to creating a three-month paid leave program for most workers.

“We do not have anywhere near the money that Gov. Evers spoke about yesterday,” Vos said at a Wisconsin Counties Association event as he tried to temper expectations for what local governments would receive in the budget.

At the same event on Tuesday, Evers promised tax cuts for the middle class and additional funding for local governments — plans that Vos said relied on “phony math.”

Vos said Republicans would tie more funding for local governments to requirements on how it could be spent.

He and Republican Senate Majority Leader Devin LeMahieu, who together lead the GOP-controlled Legislature, advocated for using the surplus to enact tax cuts for payers at all income levels. Co-chairs of the Legislature’s powerful budget-writing committee said Tuesday that LeMahieu’s plan for a flat income tax rate was unlikely to be included in the budget, but Republicans view such a tax as a long-term goal.

Vos cited estimates that the state’s recurring revenue will increase by $1.2 billion over the next two years. He told county officials that about 75% of that money would be needed to continue funding Medicaid programs and wage increases for prison guards that Evers supported with federal pandemic aid.

Democratic Gov. Tony Evers on Tuesday proposed spending $3.8 billion on building projects in 28 counties around the state, with nearly half directed toward work across the University of Wisconsin System.

The plan will first go to the state building commission on March 23 for consideration, but it would ultimately need the approval of the Republican-controlled Legislature.

Republican Rep. Mark Born, co-chair of the Legislature’s budget committee, accused Evers of proposing “massive spending and unrealistic growth.” He said the Legislature’s plan, which is likely to be finalized in June, will prioritize projects that “ensure we’re in a strong position for the future.”

Unlike in previous years, which relied heavily on borrowing to pay for the projects, Evers this time proposed paying for about half of the work in cash, citing the state’s record-high budget surplus of about $7 billion.

Evers called for spending $1.8 billion on projects at UW campuses. That includes $347 million to demolish and replace the engineering building on the UW-Madison campus; $231 million to demolish the science building at UW-Eau Claire and build a new facility to house several programs; $182 million to demolish and replace the science building at UW-La Crosse, and $169 million to partially demolish, renovate and build a new art building at UW-Madison.

Other proposed projects include $41 million in fiberoptic upgrades at the state Capitol to improve cellular service; $225 million for health services facilities; an additional $60 million for the already approved construction of a new state history museum near the Capitol; and $84 million for improvements at a variety of Wisconsin National Guard facilities.

There are a host of local projects, including funding for the Milwaukee Iron District, Woodman’s Sports and Convention Center in Janesville, Green Bay National Railroad Museum, Marquette University School of Dentistry and the Door County Peninsula Players Theatre.

Hundreds of new companies have been founded in Wisconsin since the start of the COVID-19 pandemic. Now the state is getting nearly $80 million to support those startups and small businesses.

Governor Tony Evers is allocating $50 million of those funds to the Wisconsin Economic Development Corporation, or WEDC, which plans to create a new Wisconsin Investment Fund. The money comes from the federal State Small Business Credit Initiative through the American Rescue Plan Act.

The Evers administration will also allocate the money to some of WEDC’s existing programs. Its Technology Development Loan program will receive $8 million. The Capital Catalyst program, which focuses on supporting nonprofit lenders, will get an additional $6 million.

About 500 new businesses have formed on average each month in the state since the summer of 2020, but leaders still face a tight labor market and inflation.

The WEDC is also working with the Wisconsin Housing Economic Development Authority, which received $15 million to improve access to capital and credit for small businesses that receive microloans from Community Development Financial Institutions.

U.S. consumer spending rebounded sharply in January amid strong income growth, while inflation accelerated, which could add to financial markets fears that the Federal Reserve could continue raising interest rates through summer.

The personal consumption expenditures (PCE) price index, tracked by the Federal Reserve for monetary policy, shot up 0.6% last month after gaining 0.2% in December. In the 12 months through January, the PCE price index accelerated 5.4% after rising 5.3% in December.

Excluding the volatile food and energy components, the PCE price index increased 0.6% after climbing 0.4% in December. The so-called core PCE price index increased 4.7% on a year-on-year basis in January after advancing 4.6% in December.

Yesterday, Governor Evers announced his appointment of Summer Strand to the Public Service Commission of Wisconsin (PSC). The appointment fills a vacancy created by the resignation of Ellen Nowak, effective March 1, 2023. This appointment is effective March 2, 2023, for a six-year term expiring in 2029.

Strand has a long history of public service. Strand currently serves on the State of Wisconsin Building Commission (SBC), having been appointed by Gov. Evers in 2019 to serve as the sole citizen member of the commission. Strand also previously served as the administrator of the Division of Facilities Development at the Wisconsin Department of Administration (DOA) from August 2011 to May 2016, where she was secretary of the SBC and has responsible for helping develop and administer the approximately $1 billion state building program for all state agencies and the UW System.

“I am confident my public and private sector experience, legal background, and leadership and communication skills will be an asset to the Commission as we take on many of the important issues Wisconsinites are facing today,” said Strand. “I am grateful for this opportunity and excited to get to work.”

Strand comes to the PSC from the Walbec Group, a construction and engineering company, where she is the director of government affairs, responsible for maintaining relationships and coordinating with a variety of stakeholders, associations, and industry groups. Additionally, she previously served as a program and policy analyst-advanced in the Division of State Facilities at DOA in 2011. From 2008 to 2011, Strand also served as chief of staff to State Sen. Jeff Plale in the Wisconsin State Legislature.

Strand is a member of the State Bar of Wisconsin and earned her law degree from the Arizona State University Sandra Day O’Connor College of Law in 2006, as well as her bachelor’s degree from the University of Wisconsin-Madison in 2002. She lives in Waunakee with her husband, Brandon, and their two kids.

The Department of the Treasury and the Internal Revenue Service issued final regulations amending the rules for filing returns and other documents electronically (e-file). These regulations will require certain filers to e-file beginning in 2024.

T.D. 9972 affects filers of partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) to increase e-filing without undue hardship on taxpayers.

Specifically, the final regulations:

• reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of certain returns and other documents not previously required to be e-filed;
• require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations;
• eliminate the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year, and
• require partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return.

To help with this process, the IRS created a new, free online portal last month to help businesses file Form 1099 series information returns electronically. Known as the Information Returns Intake System (IRIS), this free electronic filing service is secure, accurate and requires no special software. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.

The final regulations generally provide hardship waivers for filers that would experience hardship in complying with the e-filing requirements and administrative exemptions from the e-filing requirements to promote effective and efficient tax administration.

The stage for Wisconsin’s pivotal April Supreme Court election is set after Milwaukee County Judge Janet Protasiewicz and former Supreme Court Justice Dan Kelly emerged as the top two vote-getters in Tuesday’s four-way primary.

With 94 percent of precincts reporting as of 10:40 p.m., unofficial results reported by the Associated Press showed Protasiewicz with 46 percent of the vote followed by Kelly with 24 percent. Waukesha County Judge Jennifer Dorow came in third with 22 percent of the vote, followed by Dane County Judge Everett Mitchell with about 8 percent.

Tuesday’s results place Protasiewicz and Kelly on a collision course toward what will be one of the most closely watched elections in the country this year. While the race is officially nonpartisan, Protasiewicz is backed by Democrats and Kelly by Republicans.

The campaign is expected to shatter spending records for a Wisconsin Supreme Court race, and it could quite possibly break the national spending record for a state supreme court contest.

The prize attracting so much attention is a ten-year term on Wisconsin’s Supreme Court, where the winner will decide the high court’s ideological balance. A Kelly victory would preserve the court’s 4-3 conservative edge, while a Protasiewicz win would give liberals a majority for the first time since 2008.

Tuesday is primary Election Day in Wisconsin. There are lots of local primaries, including challenges to incumbent mayors in Madison, Green Bay and Racine.

At the top of the ballot, the only statewide race will narrow the field for a seat on the Wisconsin Supreme Court. Conservative candidates are Waukesha County Judge Jennifer Dorow and former Justice Dan Kelly. Liberals are Dane County Judge Everett Mitchell and Milwaukee County Judge Janet Protasiewicz.

The top two vote getters advance to the April general election. Find out what’s on your ballot at myvote.wi.gov.

The Wisconsin Supreme Court sided with the City of Delavan on Thursday, deciding that its property tax assessments of a Lowe’s Home Improvement store were correct after the store had sued in an attempt to get a lower assessment, and therefore pay less property tax.

In Lowe’s v. Delavan, the hardware store was challenging city assessments of its property in 2016 and 2017. The store, located in a “thriving retail area,” according to the city, was assessed at $8,922,300 in both years by Delavan’s assessor. The outside assessor Lowe’s hired valued the property at $4,600,000, nearly 50% less than the city’s value. An outside assessor hired by the city valued the property even higher than the city’s original assessment at $9,200,000.

The store appealed the assessment at the local board of review and then filed a lawsuit in Walworth County Circuit Court. The circuit court sided with the city, so Lowe’s appealed the decision. The appeals court also sided with the city, so Lowe’s appealed to the Wisconsin Supreme Court.

At issue in the lawsuit were the stores used by each assessor to come up with the market value. When a store hasn’t been sold recently, which in this case hadn’t happened because the property had operated as a Lowe’s since it was constructed in 2005, assessors find comparable stores in the area to come up with a value.

The assessor hired by Lowe’s had almost entirely used stores that were “dark,” vacant or considered distressed.

Three of the stores had once been locations of the now-defunct American TV and Appliance and had been sold after the business closed through a receivership, meaning they were forced sales to cover the business’ debts and therefore the circuit court considered them not comparable to the Lowe’s. Another of the properties was a closed former K-Mart that had been vacant for four years prior to its sale, classifying it officially as a dark store. The K-Mart was also not in a busy retail area like the Delavan location. The assessor also used a Walmart in Brown Deer that had initially been a Lowe’s but closed after just five years in that location and sat vacant for two years before the purchase by Walmart. The final store used was a shuttered Target in Kenosha that had gone dark after sitting vacant for four years.

The city’s outside expert, on the other hand, used comparison properties that had all been sold while still occupied.

In a majority decision written by Justice Ann Walsh Bradley and joined by Justices Rebecca Dallet, Brian Hagedorn, Jill Karofsky, Patience Roggensack and Annette Ziegler, the court decided that both the circuit court and appeals court were correct when they decided that the Lowe’s assessor’s comparison properties weren’t adequate for assessing the property’s value. Justice Rebecca Bradley wrote a concurring opinion that Roggensack joined.

“Generally, a site that can sustain a business is more valuable than one that cannot,” Walsh Bradley wrote in the majority opinion. “The highest and best use of a store in an area that is conducive to business (and is in fact operating as a business) is different from the highest and best use of a property that contains a failed big-box store. Lowe’s’ argument treats these different things alike, which is not [an] “apples to apples” comparison …”

When he unveiled his budget proposal Wednesday, Democratic Gov. Tony Evers offered up a long list of ideas for how to spend the state’s record surplus, telling lawmakers he was confident that some of his budget plans would win bipartisan support.

“I know the people in this building might not agree with me on the periphery of every policy all the time. That is democracy, right?” he told the crowd.

But that window for compromise seemed to close quickly. Immediately after his address, Republican leaders said they’d rewrite Evers’ budget from scratch.

“His priorities might be in line with where we are on the topics. But the solutions are what’s dramatically different,” said Assembly Speaker Robin Vos, R-Rochester.

One area where Republicans and Democrats might find common ground is on the issue of shared revenue for local communities.

Evers has made funding local governments a hallmark of his platform as governor and in his reelection campaign last year. Republicans pushed back on this until recently. They’ve started to signal support for funding certain local priorities, like law enforcement.

Evers and Republican leadership rarely met in Evers’ first term. After meeting for the first time in two years in December, Evers and Vos both expressed interest in talking more.

“Let’s start having a conversation,” Evers told reporters on Thursday. “Democracy, I think, kind of demands more than just saying, ‘Well, we don’t like it.'”