This week's survey

Yesterday, Governor Evers delivered his second budget address, which proposes spending $91 billion over the biennium. Under his proposed budget, recreational marijuana would be legalized in Wisconsin. The state would regulate and tax marijuana sales and join fifteen other states in legalization efforts. 

Governor Evers is recommending taxing marijuana in a way similar to alcohol. He says this will ensure that the market is controlled and the product is safe for users. Under the proposal, marijuana sales could generate more than $165 million annually beginning in FY 2023. The governor suggests setting aside $80 million to reinvest in communities through a new Community Reinvestment Fund. The program would offer equity grants to assist underserved populations. A portion of the tax revenue would also be utilized for aid for small, rural school districts. The remaining revenue would be deposited into the general fund. 

Under the proposed plan, Wisconsinites could not possess more than two ounces of marijuana and would be permitted six plants for personal use. Non-residents could have a maximum of 0.25 ounces. Individuals would need to be at least twenty-one years old to purchase recreational marijuana. 

Governor Evers is also proposing allowing medical marijuana use, but refrained from elucidating the parameters that would be in place to regulate it. 

I am curious to know your thoughts on marijuana legalization in Wisconsin. 

Please, take a moment to answer this week's survey question regarding the parameters that would be in place to regulate it.

Click here for the survey

Survey results

Thank you to everyone who answered last week's survey question regarding the state's "Rainy Day Fund." It was a pleasure to hear from you.

In total, 126 individuals responded to last week's survey question. When asked what should be done with the "Rainy Day Fund," the most popular answers were: Appropriate a portion towards the state's unemployment insurance fund, COVID-19 relief, and long-term tax reduction. The least popular response was: build a new correctional facility.  

Governor Evers' budget address

Last evening, Governor Evers proposed a $91 billion two-year spending plan. While I do not agree with every provision contained in this proposal, I commend Governor Evers for presenting it to the legislature and identifying a few areas in which we can work together: investment in rural broadband, sustained state aid to public schools, and mental health funding, to name just a few.

Generally, however, Governor Evers' budget is a political document designed to fill the wish list of his constituency. The spending plan contains too many poison pills, such as expanding welfare, repealing Act 10, and growing the size of government. The following is an overview of some of Governor Evers' budget priorities:

• Turn the $921 million surplus using generally accepted accounting principles into a $938 million deficit at the end of the biennium.
• Provide an additional $612.8 million in general aid to school districts during the biennium.
• Expand Medicaid under the Affordable Care Act. Cost: $634 million.
• Establish a state-based health insurance marketplace akin to the Obamacare exchange. Cost: $2.1 million.
• Develop a state-run public option health insurance marketplace by 2024. Cost: $1.8 million.
• Repeal Act 10.
• Increase the minimum wage for all permanent and project employees at state agencies to $15 per hour. 
• Increase the minimum wage to $10.15 by January 1, 2024. Future increases will be indexed to inflation.
• Repeal right-to-work.
• Require prevailing wage for public works projects.
• Provide clean energy and conservation grants. Cost: $100 million in new borrowing. 
• Increase background checks on firearms purchases.

I cannot support Governor Evers' budget as currently written. I look forward to working with Governor Evers on a budget that prioritizes rural broadband, modernizing the unemployment insurance program, tax and spending reductions, COVID-19 relief, and education reforms. 

Floor session and committee hearings

This week, the Assembly passed several consequential pieces of legislation that positively impact the lives of Wisconsinites. What is more, two of the bills I authored, Senate Bill 46 and Senate Bill 74, received public hearings. 

Assembly Bill 2: The Taxpayer Omnibus Bill

This week, the Assembly passed Assembly Bill 2, which was a large-scale tax reform package. This overwhelmingly bipartisan bill:

• Adjusts the Consumer Price Index to allow time for local governments to prepare budgets and payments.
• Clarifies eligibility for the Homestead Credit, creating a definition of "earned income" using the Internal Revenue Code (IRC), and creates a definition of "primary income from farming" to clarify which farming losses do not have to be added to household income. 
• Allows medical care insurance subtraction for those who are self-employed. Self-employed individuals are permitted to deduct health insurance premiums from all revenue.
• Provides conformity with Internal Revenue Service updates critical to easing the compliance burden on taxpayers.

Assembly Bill 2, as amended by the Joint Finance Committee, would allow recipients of PPP loans, Economic Injury loans, shuttered venue operators, and other SBA loan payments to be both exempt from gross income and deductible as a business expense. 

Assembly Bill 2 is a win-win for taxpayers and small businesses.

Assembly Bill 3: S-Corporation Tax Payment

Assembly Bill 3 makes significant changes to the treatment of tax option corporations who elect to pay income or franchise tax at the entity level. This bill was passed unanimously by the Assembly and does the following:

• Allows corporations to exclude 30 percent of gains from the sale of assets.
• Limits excess capital loss deductions for these corporations to $500.
• Provides an exception for corporations whose Wisconsin net income is less than $250,000 to pay interest on the underpayment of estimated taxes.
• Provides that corporations--when making quarterly estimated payments-compute the amount due using the standards applicable to taxpayers with net income of less than $250,000, regardless of the corporation's actual net income.

In 2017, state law was changed to allow pass-through entities to be taxed at the entity level, and would apply the changes made in 2017 to capital gains and interest for underpayment. The bill, quite simply, ensures similar rules apply to all pass-through entities making the election to be taxed at the entity level.

Senate Bill 25: Co-Op Meeting Bill

Senate Bill 25, which relates to the meeting parameters for cooperatives, was passed unanimously, via voice vote, in both houses of the legislature and has been sent to Governor Evers for his signature. 

According to Wisconsin state statutes, cooperatives are required to hold an annual meeting at their "principal office," which is designated as a physical location, during the first six months of the fiscal year. The COVID-19 pandemic has created unique difficulties for cooperatives to meet this requirement. The Department of Financial Institutions did issue emergency guidance that waived the in-person meeting requirement. However, this did not remove all legal risk for cooperatives. To address this potential issue, Senate Bill 25 allows, during states of emergency only, cooperatives to adopt virtual meetings to satisfy the annual meeting requirement to ensure cooperatives are protected. 

It is important to allow cooperatives to safely meet their obligations to members during a public health emergency. Allowing the board to adopt emergency bylaws during a pandemic allows the co-ops to move forward and continue to represent their members.

 Senate Bill 27: Multijurisdictional Lottery Bill

Senate Bill 27, which simply changes the definition of "multijurisdictional" to include other countries, was approved unanimously, via voice vote, in both houses of the legislature. 

Powerball is looking to expand its game to Australia and the United Kingdom. Under Wisconsin law, the state is allowed to participate in multijurisdictional lotteries, but multijurisdictional is defined as only states and territories in possession of the United States and Canada. As such, if the Powerball were to move forward with licenses in these other countries, Wisconsin would no longer be able to participate. This would have a significant impact on the state property tax credit. 

Senate Bill 27 seeks to address the aforementioned issues by expanding the definition of multijurisdictional to include any other country or nation to ensure Wisconsin can participate.

Committee hearings

This week, two pieces of legislation I authored, Senate Bills 46 and 74, received public hearings in their respective senate committees.

Senator Rob Stafsholt and I testifying before the Senate Committee on Natural Resources and Energy, in favor of Senate Bill 46.

Senate Bill 46:

The Wisconsin Supreme Court, in Movrich v. Lodermier, issued a devastating blow to citizens who own land on one of Wisconsin's 242 flowages. Ultimately, the court ruled that the public trust doctrine does not allow landowners whose deed does not explicitly grant access to the waterbed of flowages, the ability to erect and maintain a pier. Thus, unless a landowners' deed grants the right to the waterbed beneath a flowage, the landowner cannot erect a pier. 

Justice Rebecca Bradley in her dissent, stated, "Riparian rights in Wisconsin are sacred." Senate Bill 46 protects the presumed riparian rights that innumerable Wisconsinites believe they are entitled to. In an effort to ensure the rights of these individuals are protected, Senate Bill 46 establishes that landowners, whose property abuts a flowage or artificial waterway, be afforded the ability to exercise all riparian rights established under law, unless the deed of the property states otherwise.

Senate Bill 46 does not make any changes to environmental standards. In fact, these standards will be analogous to these in place prior to the Supreme Court's ruling in Movrich v. Lobermier. All land that abuts flowages will be treated as is under current law.

It is imperative to denote that Senate Bill 46 does not make it any easier to erect or maintain a pier and does not alter any language relating to siting, zoning or mitigation. This is a common-sense bill that makes riparian rights a priority.

Senate Bill 74:

Testifying with Senator Kathy Bernier in favor of Senate Bill 74, before the Senate Committee on Insurance, Licensing and Forestry

In Wisconsin, the home-buying process is well-regulated from beginning to end. However, one of the most important parts of the process has been lacking in oversight. A 2018 survey found that the "inspection results were the second leading cause for failure to close." The condition of the home would certainly be a factor as well. Senate Bill 74, however, by strengthening the training requirements for home inspectors, would provide prospective buyers with peace of mind and comfort knowing of the largest purchases of their lives has been inspected by a thoroughly trained inspector.

Senate Bill 74 protects residential customers by establishing consistency in the home inspection process and home inspection report. The bill further guards the buying public by modifying when a new home inspector must complete training.

Home inspectors are currently required to inspect the property to identify items defined statutorily as "defects." However, the law does not require the inspector to call those items "defects."

Senate Bill 74 creates consistency in consumer expectations in the home inspection by:

• Modifying the definition of what is considered to be a "defect" for the purposes of a report submitted by the home inspector to the client.
• Requiring the home inspectors to note "defects" found during the inspection to be labeled as such in the report, if they satisfy the legal definition of a "defect."
• Requiring the inspection report to contain a number of elements and statements for the report, including a summary page with requirement statements for the buyer's edification. 
• Acknowledging that home inspectors are not more vulnerable to liability by requiring the word "defect" to be used in the inspection report. 

In Wisconsin, as long as an individual does not have a disqualifying criminal record, after passing two examinations (the closed-book national examination and Wisconsin-specific open-book exam), and registering with the Department of Safety and Professional Services, he or she can become a home inspector. Generally, current law requires an individual to be registered with DSPS to act as a home inspector, or represent himself or herself to be a home inspector. 

Senate Bill 74 retrains the requirement that home inspectors be registered, as under current law. However, the bill:

• Requires a new home inspector registrant to complete forty hours of instruction before taking the examination.
• Exempts newly registered home inspectors from continuing education requirements for the first two renewals of a registration. Current DSPS rules exempt newly-registered home inspectors from continuing education requirements for their first renewal period of a registration.
• Provides reciprocal registration of home inspectors licensed in other states who have comparable or more stringent requirements.
• Repeals a provision allowing DSPS to use an alternative professional disciplinary procedure for the home inspector.

Last session, this bill was approved unanimously, via voice vote, by the Assembly. For the second consecutive session, this legislation has strong bipartisan support. 

Stay up to date

One of the best ways to stay up to date on what is happening in Madison is to sign up for the legislature's notification tracking system. This service affords you with the opportunity to track legislative activities in Madison. Upon creation of a free account, you can sign up to receive notification about specific bills and legislative activity pertaining to a specific subject (i.e., health care, education, etc).