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Capitol Update Vol 1. Issue 14

AJR 100 "GAAP bill" Passes the State Assembly

On Tuesday, with a bipartisan vote of 69-25, AJR 100 passed the Assembly. AJR 100 is a constitutional amendment that will require generally accepted accounting principles (GAAP) to be used for the state’s biennium budget. AJR 100 is currently in the State Senate scheduled for a public hearing. If the bill passes the Senate this session it will have to clear both chambers again next session before a statewide vote can begin to amend the state constitution.

The GAAP deficit has decreased for the first time since 2004. Passage of AJR 100, which requires GAAP to be used for budgeting purposes, promotes honesty, transparency and sound fiscal budgeting. It is important that AJR 100 moves forward so Wisconsin citizens can vote in a referendum to require the state use the same accounting principles required for schools, local governments and public companies.

The bill history of AJR 100 can be found here.

Illinois Budget Comparison

Bad News Budget: IL Gov. Quinn to call for prison, health care cuts

Last year in Illinois, Governor Pat Quinn confronted a $13 billion deficit, including $6 billion in unpaid bills to social service agencies, schools and contractors. His solution to the problem included raising income taxes by an unheard of 67 percent, and borrowing $3.7 billion to fund the pension system.

This fiscal year Gov. Quinn faced $9 billion in unpaid bills and delivered a budget proposal this week that slashes Medicaid funding, closes two prisons, shutters state facilities and cuts to most state agencies. That's on top of a $83 billion long-term deficit in the state employee pension accounts.

Fortunately, Wisconsin confronted its budgets problems without massive taxes hikes and cuts to employment. We are also addressing our long term budget obligations (e.g. AJR 100). We are seeing two distinctly different paths to prosperity from the Great Recession. Illinois is addressing their problems with tax hikes, while Wisconsin charts another course.

Did you know that Illinois has one of the highest corporate tax rates in the country, because it requires businesses to pay an additional 2.5 percent “personal property replacement” tax on top of a 7 percent base corporate tax rate. Illinois legislators like to point out that they have a lower corporate tax rate, but they neglect to mention this additional tax.

In January, Moody’s lowered Illinois’ credit rating, giving the Land of Lincoln the lowest rate of any state in the country, including California. There is no state worse when it comes to a bond rating than the state of Illinois. In contrast, Moody’s called (Wisconsin’s) budget credit positive. It is an amazing contrast just a few miles apart.

An excellent summary of the budget solutions between Illinois and Wisconsin is provided below by the co-chair of the Joint Finance Committee, Robin Vos (R-Rochester).

Wisconsin state lawmakers erased a $3.6 billion budget deficit when we balanced our state budget. We increased Medicaid funding by $1.2 billion in our last budget. We paid off our old bills and our bond rating is strong. Plus, we held the line on taxes. The school tax levy is down for the first time in six years and property taxes statewide saw the smallest increase in 15 years. We put forth reforms that will help the state and municipalities balance their budgets for years to come.

Here in Wisconsin, by the end of the session, the Assembly will have been on the floor for more days than each of the last two sessions. During that entire time, we've focused on job creation. It's estimated 57 jobs bills passed in our chamber this session with several more still to come. Plus, it's been a bi-partisan session with 96% of roll call votes including Democratic or Independent votes. We're setting the right priorities as we pay our bills, keep our budget in balance and pass job creation incentives. We're proving that Wisconsin means business.

Additional commentary can be found here in an excerpt from a recent Chicago Tribune article, titled, Down and out in no time at all.

"Our state is no Greece. But its problem of excessive debt and an unwillingness to deal with it sound positively Hellenic to us. The endgame has yet to arrive for Illinois. Despite its credit-rating downgrades, financial markets have not given up on it — yet. But if public-pension and retiree health care costs continue to balloon, and if Illinois keeps failing to pay its bills, brace yourself for the day of reckoning and Greek-style sacrifice. Remember that no sacred cows were spared in Athens' debacle."

Another article along this theme from the Wall Street Journal is titled, The Greece Next Door: Illinois gets a credit downgrade, in contrast to Wisconsin.

On a similar note, U.S. Senator Jeff Sessions (R-Alabama), a ranking member of the Senate Budget Committee, revealed that the per capita government debt of U.S. citizens is worse than those of Europe's most economically troubled countries.


WI Department of Revenue (DOR) Frequently Asked Questions

When can I expect my refund?
Since this tends to be the most popular constituent inquiry, this question is at the top of the list. Constituents can check on their refund 24 hours a day, seven days a week by visiting our website or calling the automated refund line.

Automated Phone Line: 866-WIS-RFND (866-947-7363) or (608) 266-8100.

Due to taxpayer confidentiality laws, DOR is not able to provide status information directly to your office without a privacy waiver from inquiring constituents. The easiest and fastest way to provide status information to your constituents is to use the online refund status tool.

Remember, e-filing reduces the wait time for refunds from weeks to a few days.

Where can I get forms?
Visit DORs “Forms” page for more information by clicking here. Individual income tax forms and instructions are also available at public libraries throughout the state.

Over 80% of Wisconsinites e-filed their income tax return last year, and that trend will likely increase in 2012. In response to the overwhelming preference for e-filing, DOR is only mailing forms to those who request them. If your constituents do not have Internet access or the ability to visit their local library, they can request a form to be sent to them by mail by calling (608) 266-1961 and selecting option 5.

Is help available?
Yes! DOR's helpful videos are available anytime on our website. Our Customer Service Bureau is also available to answer individual tax questions by phone at (608) 266-2772 or via e-mail at

What about in-person assistance?
DOR provides taxpayer assistance (which does not include form preparation) across the state at our regional offices located in Appleton, Eau Claire, Green Bay, Madison, Milwaukee, and Wausau. For hours and locations, click here. DOR staff will also provide taxpayer assistance at the Janesville Public Library on February 21, March 5 & 19, and April 2 & 16 from 9:00 A.M. – 2:30 P.M.

If your constituents need assistance preparing their income tax returns, the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs have locations across the state. VITA/TCE sites help low-to-moderate income residents, seniors, veterans, and people with disabilities prepare their tax returns for free. For a VITA/TCE site nearest your district, call 211 from anywhere in Wisconsin. Taxpayers should check with the VITA/TCE site prior to arriving to ensure that they will bring all of the relevant documents needed to prepare their return. Also, if married and filing jointly, both spouses must be present.

What's new for 2011's tax return?
Some key changes created by the Legislature this session in effect for the 2011 tax year include:

Health Savings Accounts (2011 Wisconsin Act 1): Wisconsin now conforms to the federal tax treatment of health savings accounts (HSA). Eligible individuals may claim a deduction on their Wisconsin income tax return for contributions to an HSA. If the contribution is made by an employer (or pre-tax through an employer’s cafeteria plan), the amount of the contribution is excluded from the employee’s wages. The maximum contribution for 2011 is $3,050 for individuals and $6,150 for families. A $1,000 “catch-up” contribution is allowed for individuals age 55 and older.

Deferral and Exclusion of Capital Gains Reinvested in Wisconsin Businesses (2011 Wisconsin Act 32): Wisconsin taxpayers may defer taxes on long-term capital gains if the gain is reinvested in certain Wisconsin businesses. Other capital gains from investment in qualified Wisconsin businesses, as certified by the Wisconsin Economic Development Corporation, are excluded from taxation when held for at least five years and when meeting other conditions. More information is available here.

Adult Children Health Insurance Exclusion (2011 Wisconsin Act 49): Employer-provided health insurance benefits for adult children under age 27 are now excluded from a parent's gross income for state tax purposes, consistent with the federal treatment of these benefits.

Red Cross Tax Checkoff (2011 Wisconsin Act 32): Taxpayers may now make a voluntary donation to the American Red Cross for Wisconsin disaster relief via the new income tax checkoff.

Why is the deadline later this year?
Due to April 15 falling on a Sunday this year and Washington, D.C.'s observance of Emancipation Day on April 16, the regular deadline to file 2011 individual income tax returns is April 17, 2012.

Constituent Corner
Below are items for you to promote and share with your constituents:

Privacy Waiver for Constituent Cases: Privacy laws protect the confidentiality of taxpayers. However, sometimes taxpayers request that their Legislator work with DOR on their behalf. Constituents must complete a privacy waiver form before DOR can speak to a Legislator about their private tax situation. This form is available at: . Please note, this form is not required if DOR speaks with the taxpayer directly in response to your inquiry.

Guide for Property Owners: DOR's Guide for Property Owners provides information about property taxes, including the assessment process, definition of commonly used terms, and the appeals process. The Guide is a great resource to share with your constituents when responding to property tax questions and is available online at the following link: