Progress on Education Funding, but Transportation Still an Issue in Wisconsin Budget Negotiations

Posted on June 19, 2017 by - News of the Day

An agreement on education funding may be in sight, but Wisconsin lawmakers still have a long road ahead before they reach a deal on the state’s transportation budget.

The Legislature’s Joint Finance Committee resumed work on Gov. Scott Walker’s two-year budget proposal on Thursday after a two-week hiatus prompted by stalled negotiations over those two areas.

As negotiations began to deteriorate early this month, Senate leaders raised the possibility of splitting the budget into separate proposals between the two houses, and Assembly Republicans proposed their own education plan designed to bring relief to school districts that spend less than most others.

Assembly members including Joint Finance co-chair Rep. John Nygren, R-Marinette, and committee member Rep. Mary Felzkowski, R-Irma, toured the state promoting their plan, which would direct an additional $92 million in revenue limit authority for school districts that spend less than most others and an additional $30 million for the state’s general schools funding mechanism than what the governor proposed in his own spending plan. At the same time, the proposal would offer about $70 million less than Walker’s proposed $649 million increase in per-pupil aid.

Senate Majority Leader Scott Fitzgerald, R-Juneau, dubbed the plan a nonstarter before it was even released, arguing it “raises property taxes and picks winners and losers within our school districts.”

But Senate Republicans have since shown a willingness to address low-spending districts, if not in the exact way proposed by their Assembly counterparts.

“I’m not thinking education will be that large of a stumbling block,” Nygren told reporters on Thursday. “I do think transportation, their position with GPR borrowing, is going to be a stumbling block.”

Fitzgerald said last month Senate Republicans would likely pursue financing some roads borrowing with general purpose revenue. Walker’s proposal includes $500 million in borrowing, the lowest level since the 2001-03 state budget, but Assembly Republicans say that’s still too much.

Earlier this month, Fitzgerald said he doesn’t think Senate Republicans’ support has moved far from what Walker initially proposed in his transportation budget.

“The Senate wants more. The Assembly wants less. Goldilocks would say, that makes our budget just right,” Walker said last month.

Legislators are aiming to complete work on the budget before the start of the new fiscal year on July 1, but Assembly Speaker Robin Vos, R-Rochester, called that an “artificial deadline” on Wednesday. If a new budget doesn’t pass by the start of the new fiscal year, state programs will continue to operate under the previous budget.

Lawmakers Reject Governor’s Proposed Move to Self-Insurance

Posted on June 16, 2017 by - News of the Day

The state budget committee voted unanimously Thursday to reject Gov. Scott Walker’s proposal to move about 250,000 state workers to a self-insurance system.

Under the proposed change, the state would pay employee medical bills directly through a third-party administrator instead of paying premiums to an insurance provider.

Lawmakers had previously signaled they planned to reject the move, arguing it’s too risky. Leaders of the finance committee reiterated that point Thursday.

“Our competitive marketplace is really a model for the nation, and we think with what’s happening nationally this is the wrong time for us to make major shifts in the marketplace,” said Sen. Alberta Darling, R-River Hills, co-chair of the budget committee.

The governor had linked $60 million in estimated savings to the proposed move to self-insurance. The budget committee identified $63.9 million in other savings.

Those changes include $22.7 million in negotiation savings, $25.8 million from the state insurance board’s reserve fund, and $15.4 million from increased usage of health plan tiers and plan design changes. They say they’ll achieve those by making changes to employee benefit plans and using money from the state insurance board’s reserve fund.

Committee co-chair Rep. John Nygren, R-Marinette, said those plan design changes will not result in state employees seeing premiums, co-pays or other expenses rise more than 10 percent in each of the 2018 and 2019 calendar years.

REINS Act on the Verge of Becoming Law

Posted on June 15, 2017 by - News of the Day

Wisconsin this week could become the first state in the nation to pass a REINS Act, legislation demanding greater oversight of state bureaucratic rule-makers. The Regulations from the Executive in Need of Scrutiny, commonly known as the REINS Act, is slated for floor debate Wednesday in the Assembly, where the bill enjoys wide support from majority Republicans.

Early last month the Senate passed the bill – co-authored by Sen. Devin LeMahieu (R-Oostburg) and Rep. Adam Neylon (R-Pewaukee). Last session the Assembly passed a similar REINS Act bill on a party-line vote, but it died in the Senate as time wound down on the session.

Neylon says the GOP majority in the Assembly hasn’t changed its stance. “I think we are in a very good position. There is no wavering support. I believe it will (pass) on a party-line vote,” he said.

Gov. Scott Walker included the reform measure in his biennial budget plan, but REINS was one of 83 “non-fiscal” policy items stripped from the Joint Finance Committee’s starting budget document.

“State agencies currently have the power to pass harmful regulations with little oversight from the legislature that can cost Wisconsin businesses and citizens tens of millions of dollars in compliance and lost revenue,” LeMahieu said in a statement following passage. “The REINS Act improves transparency in the rule making process and gives the legislature more power to hold unelected bureaucrats accountable.”

The REINS bill is similar to legislation moving through Congress, but with lower thresholds. It provides greater legislative oversight of the regulations adopted by state agencies. Any rule or regulation with an economic impact of more than $10 million would require legislative approval.

And it gives the Legislature’s Joint Committee for Review of Administrative Rules more muscle. The committee would be empowered to request a public hearing earlier in the rule-making process and call for an independent review of the proposed regulation’s economic impact.

The REINS Act, proponents say, is ultimately about transparency and preventing “rogue” government agencies from implementing onerous and costly “rules in the dark of night without public scrutiny.””This bill will limit the power of these rogue agencies” and limit the power of governors who want to circumvent the legislative process with executive orders, Neylon said.

“It goes to the heart of checks and balances within our system. We elect people to set policies. If we as taxpayers and voters don’t like these policies, we have the ability to fire those lawmakers,” the Republican said. “When you have rogue bureaucrats who have been there for decades, they have the ability to basically make laws.”

Wisconsin’s REINS Act has earned the praise of fiscal hawks and limited-government advocates such as Grover Norquist and his Americans for Tax Reform. Norquist said Wisconsin over the past six years has been a national leader in enacting “transformative, pro-taxpayer policy reforms.”

 

Joint Finance Co-Chair Considers Toll Roads Best Fix for Transportation Funding Shortfall

Posted on June 13, 2017 by - News of the Day

Joint Finance Committee Co-Chairman John Nygren (R-Marinette) told Newswatch 12 last week he sees three potential options to fix a billion-dollar shortfall: raising registration fees, raising the gas tax, or using toll roads.

Nygren says lawmakers have pushed off this issue for the last two budgets, so now’s the time to take action.

“I do think tolling, which is a true user fee–you can use other roads if you choose not to use the interstate system–could be an option,” Nygren said.

Toll roads wouldn’t be an immediate fix, because Wisconsin would need federal approval. Nygren thinks the system would be easy enough to install.

“It’s the direction we’re going and, as I said, it’s a true user fee,” Nygren said. “I know it’s not the old world of tolling with all the booths. You can do it nowadays with a transponder in your car.”

Gov. Scott Walker told reporters last week he’s not pushing for toll roads, telling the Associated Press that if he agreed to tolls, he would want the gas tax to drop. Meanwhile, Joint Finance Co-Chair Sen. Alberta Darling (R-River Hills) said Republicans aren’t unified in backing the toll idea.

“I don’t know that I ever met anybody who agrees with me on every single issue, right?” Nygren said. “I don’t care if they’re a constituent or they’re another elected official. We’re elected to bring different perspectives to the table.”

The Joint Finance Committee plans to meet Thursday, when Nygren hopes to focus more on transportation funding.

Walker’s Sales Tax Holiday Appears to be Doomed

Posted on June 12, 2017 by - News of the Day

Gov. Scott Walker’s proposed sales tax holiday for back-to-school shopping appears to be doomed, with Republican lawmakers saying Friday that they instead want to reduce or end the personal property tax for businesses.

Republican members of the Joint Finance Committee said they hadn’t seen support for the sales tax break, making it unlikely to survive the Legislature’s re-write of Walker’s budget. There is a strong push, primarily from businesses that are subject to the personal property tax, to eliminate that.

Walker’s sales tax holiday cost an estimated $17 million a year in revenue while getting rid of the personal property tax would cost about $260 million annually.

Walker’s sales tax holiday would apply to certain purchases targeted to families, including clothing under $75, computers costing less than $750 and school supplies. The personal property tax is primarily paid for by businesses for items like boats, furniture, machinery and non-residential property.

Republican lawmakers have been voicing increasing support for doing away with the 170-year-old personal property tax, if they can find a way to pay for it. Eliminating it would create a $260 million hole that could take property tax revenue away from schools and local municipalities if not replaced with funding elsewhere.

While support is growing to reduce that tax, there appeared to be little enthusiasm for the sales tax holiday. The nonpartisan Legislative Fiscal Bureau in a memo released this week identified several other tax cut options that would more precisely target families in the state, while also raising concerns about how the sales tax holiday would be implemented and whether it would work as envisioned.

Seventeen other states have sales tax holidays.

“I have a feeling it probably won’t happen,” said Republican Sen. Luther Olsen, a member of the budget committee. “People are concerned it’s not money well spent.”

DHS Submits Application to Reform BadgerCare Plus for Childless Adults

Posted on June 9, 2017 by - News of the Day

The Wisconsin Department of Health Services (DHS) has submitted an application to the Centers for Medicare and Medicaid Services (CMS)  requesting an amendment to certain provisions of the Section 1115 Demonstration Waiver, known as the BadgerCare Reform Demonstration Waiver. The policy amendments, many of which are included in 2015 Wisconsin Act 55, are aimed at bolstering Governor Scott Walker’s efforts to help people move from government dependence to true independence.

“Wisconsin Works for Everyone is about helping people transition from public assistance into Wisconsin’s workforce, where they can build a solid financial foundation for themselves and their families,” Governor Walker said. “Unemployment is low, and the percentage of people working in Wisconsin is among the best in the nation. This application is a step in the right direction, and we’re continuing to build on Wisconsin’s legacy as a leader in welfare reform.”

The core changes in the waiver amendment application affect the childless adult population and include the following:

  • Establishes monthly premiums and copayments for emergency department visits.
  • Implements a work requirement that members work or participate in job skills training at least 80 hours every month.
  • Limits benefits to 48 months, unless a member meets a work requirement.
  • Rewards healthy behaviors by establishing lower premiums for members who make healthy choices.
  • Requires members to be screened for drugs and if necessary, submit to a drug test. Those who test positive will be offered treatment so they can get healthy. Healthy workers help Wisconsin employers fill jobs that require passing a drug test.
  • Expands access to treatment by creating a new residential substance use disorder treatment benefit to allow coverage of medically necessary residential substance use disorder treatment services for up to 90 days for all BadgerCare Plus and Medicaid members.

Once CMS receives the complete application, a 30-day federal public notice process begins along with a 45-day minimum federal decision-making period. During this time, DHS will work with CMS to finalize the details of the waiver. Once the changes to the waiver are approved by CMS, the effective date of the changes will be at least one year after approval to inform and work with members, providers, and partners, and to make system enhancements and implement the changes.

Repeal Of Personal Property Tax Gains Steam In State Legislature

Posted on June 8, 2017 by - News of the Day

More Republican state lawmakers are lining up behind a push to end Wisconsin’s personal property tax, a move that could come with a big price tag for state government.

The personal property tax applies mostly to small businesses, which pay taxes on the value of their equipment, like refrigerators or manufacturing machinery.  According to estimates from the state Department of Revenue, the tax brings in about $261 million per year to help fund schools and local governments.

Several GOP lawmakers are now pushing to repeal the tax as part of the state budget.  “Locked myself in the office this evening to develop a plan to eliminate the state’s personal property tax,” Rep. Dale Kooyenga, R-Brookfield, tweeted on Tuesday night.

Kooyenga is the author of the Assembly GOP transportation and tax plan that rolled out last month.

Last week, a spokeswoman for Senate Majority Leader Scott Fitzgerald’s office said the repeal “is certainly still on the table for this legislative session.”

Gov. Scott Walker said Wednesday he’s open to the change, but only under certain conditions.

“I want to make sure that the property tax relief that we’re providing for homeowners across the state is maintained, I don’t want it to be one at the expense of the other,” Walker said. “So, if there are ways they can chip away at that without taking away from the property tax relief we proposed in the budget, then we’re willing to look at it.”

Aside from a movement to insert the tax repeal in the state budget, a separate bill is moving through the state Legislature to do the same thing.

Small business owners from across the state testified in support of the measure at a public hearing in the Capitol last week.

“By investing in our business, we ended up with a higher tax bill,” said Ted Balistreri, a small business owner in the Milwaukee area. “In fact, at a time when we could use help the most, when we have just spent a lot of money remodeling a store, the tax is the highest.”

Opponents to the bill argue its supporters haven’t offered a good way to replace the estimated $261 million annually that would be lost if the tax were repealed.

“I think that the personal property tax is not a good and fair tax, but just to repeal it without a plan to backfill the dollars that municipalities and schools and counties rely on is not a good idea,” said Sen. Janis Ringhand, D-Evansville.

The bill repealing the personal property tax has yet to receive a vote in committee.

Consumer Alert: Fake DATCP Email Circulating

Posted on June 7, 2017 by - News of the Day

A “phishing” email is making the rounds, pretending to be from the Wisconsin Department of Agriculture, Trade and Consumer Protection, or DATCP. Officials there are warning consumers not to click on any links in the email.

The email says, “Wisconsin DATCP has sent you a PDF via Adobe® Cloud. Kindly read through and respond with the required details. Open in Adobe®.”

This message is not from DATCP. Do not click on the “Open in Adobe®” box or anything else in the email. The scammers may be trying to collect credit card information or personal data.

DATCP does not send emails under aliases. However, if you have any doubts about whether a message is actually from DATCP, hover your cursor over the sender’s email address to see the underlying, actual address. Messages from the agency will generally be in the format of firstname.lastname@wi.gov or firstname.lastname@wisconsin.gov. In some cases, the address may include the name of a program rather that an individual’s name, such as “datcphotline.” But the suffix will always be either wi.gov or wisconsin.gov.

For more information or to file a complaint, visit the Consumer Protection Bureau at http://datcp.wisconsin.gov, send an email to datcphotline@wisconsin.gov, or call 1-800-422-7128.

GOP Wants to Cut Personal Property Tax in State Budget

Posted on June 6, 2017 by - News of the Day

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.”

 

Editorial: Two-State Tax Reciprocity Long Overdue

Posted on June 5, 2017 by - News of the Day

For 41 years, Wisconsin and Minnesota were downright neighborly when it came to tax reciprocity.

If you lived in Minnesota and worked in Wisconsin, you could pay your income taxes to Minnesota. If you lived in Wisconsin and worked in Minnesota, you could pay your income taxes to Wisconsin.

For a border area like ours, it was a big deal. You didn’t have to file tax returns in both states. Life was good.

That changed in 2009, when Minnesota Gov. Tim Pawlenty understandably grew tired of waiting on the Badgers to settle up with about $60 million they owed to the Gophers.

While Wisconsin finally paid up, reciprocity has been hung up because the two sides have been arguing over a difference of $6 million.

That means about 80,000 workers – about 56,000 who live in Wisconsin and work in Minnesota, and about 24,000 Minnesotans who work in Wisconsin – have been stuck with the needless inconvenience and cost of filing in two states.

During that time, we’ve emphasized the need to fix the problem and move on. We’ve emphasized it in several editorials and during discussions with governors, legislators and revenue secretaries in both states. Now, two Minnesota state legislators from our region has taken some positive steps to get the ball rolling, and it’s time for the two states to come to agreement before the frost returns.

Thanks to legislation successfully pushed in St. Paul by Rep. Greg Davids, R-Preston, and Sen. Jeremy Miller, R-Winona, Minnesotans who work in Wisconsin will be eligible for a reciprocity tax credit on their income tax for 2017 (total cost estimate is $8 million).

The measure also directs the commissioner of the Minnesota Department of Revenue to resume negotiations on a renewed agreement with the folks in Wisconsin.

For goodness’ sake, sit down and figure this out.

It’s the right thing to do and the best thing for 80,000 people who are tired of being jerked around for no good reason.

If you the revenue directors of the two states can’t settle on a place to meet, you’re welcome to use the conference rooms in our newspapers in La Crosse and Winona. No charge for the rooms – and the coffee is free.

It’s time to put pride aside and think of what’s best for the taxpayers.

We have a regional economy. We have a mobile workforce. We have regional tourism attractions. We have contributors and volunteers who do good work on both sides of the river.

In other words, the people of our region have figured this out. It’s time for our elected officials to follow.