Wednesday August 23, 2017

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Is There a “Good” Tax?

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
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on Monday, 29 May 2017
in Wisconsin

roads-i-39-90-94Sen. Kathleen Vinehout writes about a public hearing before a committee, of which she is a member, on a bill to eliminate the personal property tax. What will be the financial impact of the proposed change, who pays more, and what goods and services do we do without?

ALMA, WI - “Taxes are what we pay for a civilized society,” Supreme Court Justice Oliver Wendell Holmes said ninety years ago.

Taxes pay for much of the goods and services we take for granted, such as roads, fire and police protection, consumer protections, schools, parks, and our social safety net. Taxes make up the largest part of the revenue in our state budget.

Taxes are a part of our daily lives, through the money we pay in sales tax or a deduction in our paycheck for income tax. Once a year, property owners send in a check to their local government for property taxes on their homes and farms.

Property tax is probably the most unpopular tax. A subset of this tax, the personal property tax, came under fire at the recent Senate committee hearing.

“When the tax bill came, I always viewed this tax as a penalty.” Quentin Schultz of River Falls told our committee. He joined dozens of business owners who traveled to Madison with hopes of getting rid of the personal property tax.

About three percent of the property tax paid is for things that are not land or buildings. Our committee heard from a diverse group of businesses who asked for things such as the equipment to bake bread or their ski lifts at a ski resort to not be taxed.

Over the years, business groups advocated for loopholes or “exemptions” to the personal property tax. In a January 2017 paper, the nonpartisan Legislative Fiscal Bureau (LFB) listed 18 pages of “exemptions” to the personal property tax. The list includes many common items from A to Y: from animals to youth hockey.

Business owners at the committee hearing gave many examples of how difficult it was for them to know what was and was not taxed, and how expensive the tax was for them to keep records. Many complained the tax on them was unfair, calling it a “bad” tax.

But is there ever a “good” tax?

To answer this question, I turned to the teachings of many economists I learned from over the years. Recognizing that all taxes have negative effects, a “good” tax is broad-based - it affects everybody. It has a low rate and does not have loopholes. When a tax is broad-based and has a low rate, everyone pays something but no one pays too much.

A “good” tax is easy for taxpayers to comply with and easy to collect. Finally, a “good” tax causes little change in normal economic activity. The personal property tax fails this standard on many levels.

Lawmakers following the wisdom of “good” tax policy would choose a reform that gets us closer to these standards. To be revenue neutral, any lowering of the state’s revenue should be made up somewhere else.

The “somewhere else” or how the lost revenue would be made up was never discussed in the committee hearing. The cost of this personal property tax change would be about $520 million. For comparison, that is about that same amount the Governor put in his budget as a “per student” increase for all public schools.

Lawmakers who support eliminating the personal property tax said they planned to add state money to offset the loss to local community. They also said, without that additional state money, homeowners would pay higher property taxes. Some communities would see a much higher increase in property taxes. For example, the City of Blair in Trempealeau County receives 22% of its property tax revenue from personal property taxes.

The proponents of the bill suggested the money lost to communities like Blair would be made up in more state aid. However, no one could answer my question of where this money would come from.

I applaud my colleagues who want to get rid of a “bad” tax. However, we must have an honest discussion about how we are going to pay for local services upon which people depend.

History shows us that local government bears a heavy burden to make up for cuts in state funding. Eliminating the personal property tax increases that burden. If promises to make up for the loss of revenue are not met, it will affect local programs and local taxes.

If we are going to eliminate “bad” taxes, we must consider the consequences and discuss either who pays more or what goods and services we want to do without.

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Republican Budget Cuts UW Classrooms

Posted by Jon Erpenbach. State Senator 27th District
Jon Erpenbach. State Senator 27th District
State Senator Jon Erpenbach (D-Madison) - A former radio personality and legisla
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on Saturday, 27 May 2017
in Wisconsin

uw-mdsn-studentsWalker and the Republicans who control the legislature are pushing the biggest budgets in the history of Wisconsin, yet they have cut $800 million from the UW.

MADISON - A budget is all about priorities and Republicans and Governor Walker have made it very clear that the UW is not their priority.

Since elected, Governor Walker’s state budgets have spent nearly $282 billion dollars – over $127 billion in GPR alone. These are the biggest budgets in the history of Wisconsin, yet Governor Walker and Republicans have cut $800 million from the UW in the last few budgets.

The funds are there, but Republicans have chosen not to restore their $800 million cut.

Democrats will not agree to continue this cut to the UW because we value the UW and the economic engine it is. Wisconsin deserves better than another state budget with cuts to our UW classrooms.

Truly the great state of Wisconsin deserves a strong UW system and the educational opportunities a strong investment in our UW schools brings for our people.

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WEDC Cannot Be Certain of Any Jobs Created or Retained

Posted by Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout, State Senator 31st District
Kathleen Vinehout of Alma is an educator, business woman, and farmer who is now
User is currently offline
on Tuesday, 23 May 2017
in Wisconsin

walker-no-jobsThe most recent LAB report again points out that WEDC does not collect the information necessary to report on the jobs promised when taxpayer dollars are used. Is our money effectively and efficiently invested?

MADISON – Our state spends a great deal of money on economic development. The Wisconsin Economic Development Corporation (WEDC) is responsible for overseeing much of the taxpayer money that goes to job creation.

A recently released audit by the nonpartisan Legislative Audit Bureau (LAB) found that “WEDC cannot be certain about the number of jobs actually created or retained as a result of any awards that ended.”

By law, WEDC is required to report jobs created or retained. The agency meets the requirement through reports posted on its website. However, auditors found these data inaccurate.

“We found that the on-line data in January of 2017 included 183 jobs created and 1,082 jobs retained by recipients that had sold their operations in Wisconsin, ceased their operations in Wisconsin, or had withdrawn from their contracts before the contractually specified completion dates.

For example, WEDC claimed credit for retaining 340 jobs for a company that ceased operations in Wisconsin; claimed credit for creating 68 jobs for another company that sold its operations in Wisconsin; and claimed 485 jobs retained for a third company that withdrew from its contract years before it was to deliver the created and retained jobs.

In addition, auditors found WEDC double counted jobs created and retained. For example, one company received awards in both June 2012 and September 2012 for the same 305 jobs created and 284 jobs retained. Another company signed two different contracts in July of 2011 but the company claimed they would retain the same 110 jobs for both awards.

Auditors also looked at 192 contract awards made since July 2011 through the end of September 2016. Presumably, at the end of a contract one would know if the promised results were achieved. Upon review of the 192 awards, LAB found only 12.5% (24) even had an expected result of job creation or retention.

Of those 24 with expected results, three of the contracts did not actually require the company to create or retain jobs; 13 contracts ended before their completion date (meaning the requirements were not fulfilled). Of the eight contracts completed, WEDC did not collect sufficient information to verify that promised jobs were created.

Without accurate information about WEDC program results, lawmakers and taxpayers cannot know if the investment in job creation and retention was money well spent.

WEDC authorized hundreds of millions in tax credits, grants and loans since its 2011 inception. The most recent audit is the third report that raises ongoing concerns about the lack of independent verification of jobs created or retained.

Some WEDC problems were corrected, such as establishing accounting policies and procedures for the agency (the lack of which was a finding in 2013). But other problems identified in prior audits continue. For example, in 2015 auditors found WEDC kept a reserve of state money larger than necessary. In the most recent audit, auditors found WEDC’s cash and investment reserves more than doubled over four years.

Prior problems with administering its loan program caused legislators to phase out any further loan activity by WEDC. In this most recent audit, the potentially uncollectable loan balance nearly tripled and auditors found a substantial rise in the loan delinquency rate.

Just days before the release of the audit, the Legislature’s budget writing committee voted, along partisan lines, to restart WEDC’s troubled loan program. The committee also voted along partisan lines to increase state taxpayer dollars going to WEDC.

Both of these actions should be stopped.

For nearly six years, Wisconsinites asked whether WEDC lived up to the promises made at its inception. The Legislative Audit Bureau continues to tell us that WEDC does not collect adequate information to provide lawmakers and citizens with accurate information on whether promises of job creation and retention were delivered

Most of WEDC’s money is state taxpayer dollars, a precious resource that is used to fund many other programs. A dollar spent on unverified job creation/retention programs means a dollar is not available for critical investments like transportation infrastructure, public schools or local government.

It is time for all of us to demand that the Governor and the WEDC Board step up and correct the ongoing problems documented in three separate audits of WEDC over the last six years. Job creation is important, but so is the most effective and efficient investment of state taxpayer dollars.


The audit briefing sheet and full audit can be viewed online.

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Medicaid Matters to Wisconsin

Posted by Disability Rights Wisconsin, Dan Idzikowski
Disability Rights Wisconsin, Dan Idzikowski
Daniel Idzikowski is the Executive Director of Disability Rights Wisconsin
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on Monday, 22 May 2017
in Wisconsin

americanhealthcareactThe American Health Care Act passed in the House cuts $839 billion from Medicaid, removes coverage from millions, and drastically alters healthcare protections for the rest. It would shift billions to Wisconsin taxpayers and does nothing to reduce health care costs, it only reduces the revenue available to pay them.

MILWAUKEE, WI - The House of Representatives voted last week to deliver Wisconsin citizens, including our most vulnerable adults and children, a multi-billion-dollar bill we cannot pay. The American Health Care Act (AHCA) initiates a $839 billion cut to Medicaid, removes healthcare coverage from millions, and drastically alters healthcare protections for the rest. Most disturbing, rather than focusing on the promised replacement of the Affordable Care Act, the AHCA robs a quarter of the Medicaid budget to pay for tax changes that will benefit only the wealthiest Americans.

Medicaid funds far more than medical insurance for the poor. In Wisconsin, forty percent of Medicaid funds support popular and innovative programs like Family Care, IRIS, and Community Options that keep older adults and people with disabilities in their homes and out of expensive institutions, supporting them to work, volunteer, and contribute to the economy.

people_with_disabilitiesMedicaid funds HealthCheck, ensuring babies and children get the early care and treatment they need. Medicaid funds Katie Beckett, the Children’s Long Term Support program, and special education services that support families of all incomes with children with significant disabilities. Medicaid funds mental health services, addiction treatment, and BadgerCare, providing health care security for low-income working adults. For nearly 1.2 million Wisconsinites, Medicaid matters.

Medicaid is an investment in Wisconsin’s economy. With access to healthcare, Wisconsinites can avoid illness and manage chronic conditions, keeping them working. Family caregivers can keep their jobs instead of being forced to leave to care for family members. Tens of thousands of Wisconsin jobs and our healthcare infrastructure are supported by Medicaid.

Wisconsin now receives 59 cents from the federal government for every dollar it invests in Medicaid. It invests those dollars efficiently. By selectively expanding coverage and moving to a statewide managed care system for adults with disabilities and the frail elderly, Wisconsin has saved tens of millions of dollars in more expensive hospital and institutional care.

Under the Affordable Care Act, nearly a quarter of a million more Wisconsinites have health insurance. In fact, Milwaukee won an award for the highest increase in coverage. This has benefitted Wisconsin’s economy. Hospital based uncompensated care costs have decreased by $500 million dollars from 2013 to 2015, lowering hospital costs and reducing cost shifting.

In contrast, Wisconsin stands to be one of the AHCA’s biggest losers. The AHCA will cap future federal payments based upon 2016 state Medicaid spending. In 2016, Wisconsin underspent its Medicaid budget by $312 million, refused Medicaid expansion funds, and had the lowest per capita spending on children in the nation. Worse, any attempt by Wisconsin to make up the “difference” will be met by a dollar-for-dollar reduction in federal funding. That is not flexibility – that is an unfunded mandate to reduce coverage, care, and support for our most vulnerable citizens.

The AHCA would shift billions of costs to Wisconsin, cause thousands to lose coverage, and pass on to Wisconsinites the hard decisions about waiting lists, terminations, and rationed care for our most vulnerable citizens. Nothing in the AHCA addresses the actual drivers of health care costs – it only reduces the revenue available to pay them.

It’s time for Wisconsin – and the United States Senate -- to recognize the value of Medicaid and the ACA to its people, the economy, and our State. We can’t afford any less.

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When Officers Die, Words Are Not Enough

Posted by Janet Bewley, State Senator Dist 25
Janet Bewley, State Senator Dist 25
Janet Bewley, State Senator Dist 25 was elected to the Senate in the fall of 201
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on Saturday, 20 May 2017
in Wisconsin

police-officersTime for Assembly to Step Up for Spouses and Children of Law Enforcement Officers Killed in the Line of Duty.

ASHLAND, WI - Soon we will all be celebrating the unofficial start to summer, Memorial Day. I will spend the day with a group of veterans from Mellen VFW Post 2273 visiting cemeteries across Ashland County. I’m honored to join them as they quietly pay their respects and remember the men and women who answered the call, and too often lost their lives defending our freedom. I also will speak at a Memorial Day Ceremony at the Northern WI Veterans Memorial Cemetery in Spooner on the Saturday before Memorial Day. It’s important to find the right words. Even more important is making sure that our actions speak as loud as our words.

The same is true when it comes to honoring the men and women who lose their lives policing our streets, fighting fires and responding to emergencies. Sadly, we’ve lost too many good public safety professionals in Wisconsin recently. In the 25th Senate District we lost Dan Glaze, a 33 year old Rusk County Deputy Sheriff killed in the line of duty responding to reports of a suspicious vehicle in November of 2016. Trevor Casper, a young Wisconsin State Trooper was gunned down in a grocery store parking lot in 2015. Dennis Swenson, a dedicated EMT for South Shore Ambulance, died trying to save his 95 year old mother who also perished in the fire in 2015. Dennis left behind an abundance of family and friends; he did not leave behind a family who depended on him for financial support.

Unfortunately, other public servants who lose their lives in the line of duty do leave behind spouses and children who depend on their incomes and benefits. In 2009 the legislature passed a law that required municipalities to pay health insurance premiums for the survivors of a Firefighter who dies, or has died, in the line of duty. For some reason, the law did not extend the same benefit to the surviving spouses and children of Law Enforcement Officers, Emergency Medical Technicians, Rangers, Foresters and others who lose their lives while on duty protecting the public.

Jason Zunker, A Chippewa County Sheriff’s Deputy and graduate of Maple Northwestern High School, died in the line of duty in 2008. He left behind a young wife, Lisa. After Deputy Zunker’s loss, people in Northern Wisconsin began asking: “Why do we treat the surviving spouses and children of these public servants differently?” It is a good question, one that should be answered by passing legislation that extends the benefit to the young children and spouses left behind when any of our public safety personnel lose their lives while on duty.

I am proud to be working with one of my colleagues, Republican State Senator Van Wanggaard, a retired Racine Police Officer, to make this happen. I have coauthored a bill with him again this session to extend health insurance coverage for spouses and children of Law Enforcement Officers, DNR Firefighters, Correctional Officers and EMTs who are killed in the line of duty.

The bill passed in the State Senate, but not in the State Assembly. No one has been able to give me a straight answer as to why the Republicans who control the Assembly won’t step up, pass the bill and send it to the Governor. Today Governor Walker will lay a wreath at a State Capitol Ceremony in honor of Wisconsin's fallen Law Enforcement Officers. At a similar ceremony earlier this month in Milwaukee, he laid another wreath and said “we owe them respect and honor their selfless courage.” I couldn’t agree more. I believe we can and should do better than some nice words and a wreath. We should pass the bill that provides health insurance benefits to their surviving spouses and children and give the Governor the chance to sign it.

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