September 8, 2017

The Joint Finance Committee (JFC) met Tuesday to vote on the $3 billion tax credit package for Foxconn, a foreign-based electronics manufacturer. While Gov. Walker's administration has claimed this project could create thousands of jobs, significant concerns remain over taxpayer costs, worker wages and environmental impacts. The proposal passed the committee along party lines.

On Wednesday, the JFC wrapped up voting on the governor's proposed budget. The committee took up Dept. of Transportation, Shared Revenue, Taxes and a final wrap up motion loaded with non-fiscal policy items and pork projects. Instead of fully restoring school funding and fixing crumbling local roads, Republican lawmakers on the legislature’s Joint Finance Committee once again sided with their wealthy backers. Republicans also voted to divert funding from rural public schools, expand the private voucher programs, delay road projects, and finance the largest state taxpayer giveaway to a foreign corporation in U.S. history.

Democrats have argued that the state should prioritize investments in education, transportation and health care rather than more tax giveaways for the wealthy. A $3 billion cash payment to Foxconn will further complicate the state’s budget outlook and result in additional cuts to local communities in light of the ongoing transportation funding shortfall and school funding concerns.

The full Assembly and Senate are expected to vote on the budget and Foxconn proposals in the coming days.

Follow Along!

Follow the Democratic members of the Joint Finance Committee on Facebook, Twitter and YouTube as they finish up the budget:

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Budget Update

The Joint Finance Committee met Tuesday to vote on the 3 billion dollar tax credit package for Foxconn, a Taiwanese based electronics manufacturing company. On Wednesday, the committee wrapped up voting on the governor’s proposed budget taking up the Department of Transportation, state taxes and a budget 999 wrap up motion. You can view summaries of each JFC vote on our website: Wisdems-JFC votes.

JFC Republicans adopted multiple amendments to Special Session Assembly Bill 1, the Foxconn bill. A summary of the amendments can be viewed here.

Among the Foxconn amendments was a provision that will allow parties involved in court cases related to the information technology manufacturing zone (EITM) to file appeals directly with the Wisconsin Supreme Court, rather than going through the normal court appeals process. The committee passed the Foxconn bill on a party-line vote, with all four Democratic members voting against passage of the bill.

Department of Transportation (DOT)
JFC Republicans passed a transportation package that includes $150 million in new bonding. Combined with the $252.4 million in GPR-supported bonding in the Foxconn bill, the total new bonding for transportation projects will be $402.4 million.  

A copy of the full Republican motion can be viewed here. Included in the 19-page motion are provisions that: 

  • Eliminate 200 DOT staff positions over the next two years
  • Create a new $75 fee for hybrid vehicles and a $100 fee for electric vehicles
  • Fund a DOT study on the impacts of tolling
  • Restrict the City of Milwaukee’s ability to spend money on the downtown streetcar project
  • Reduce new funding for the Local Roads Improvement Program (LRIP) by $4 million
  • Reduce new funding for the State Highway Rehabilitation Program by 4.8%
  • Reduce new funding for the Major Highway Development Program by 15.8%
  • Prohibit DOT from funding the north leg of the Zoo Interchange project
  • Repeal the prevailing wage
  • Change the composition and duties of the Transportation Projects Commission (TPC)
  • Authorize DOT to share personal information, including social security numbers, for the purpose of maintaining interstate voting records
  • Prohibit local governments from enforcing any ordinance that “defeats the purpose” or “violates the spirit” of a state law
  • Limit local authority to regulate blasting, water quality and quantity, and air quality relating to quarry operations

JFC Democrats introduced an amendment to remove the prevailing wage repeal from the Republican motion and restore the prevailing wage for local projects, but Republicans rejected the amendment on a party-line vote.

Special Needs Voucher Program
Although the Committee wrapped up the Department of Public Instruction (DPI) budget last week, Republicans passed a motion on the final day of the budget to take an additional $3.1 million from public schools to fund the special needs voucher program.

The Republican motion eliminates the requirement that, to qualify for the special needs voucher program, a student must have attended a public school or been denied admission to a non-resident district school in the previous year. LFB estimates that this enrollment expansion will lead to an additional 250 pupils participating in the program.

New provisions will also allow parents and private schools to modify the terms of a child’s individualized education plan (IEP) to determine what services will be provided by the school. Costs incurred per student will be reported to DPI and refunded the second year the voucher is in use. Costs will be refunded to the school with an up to 150% per pupil aid reduction ($18,000) and then 90% of the remaining balance will be reimbursed through GPR. There is no limit to how much a school can be reimbursed, although a school must pay the full amount of costs incurred during a student’s first year. Additionally, the Republican motion includes no new audit requirements for the program.  

Shared Revenue and Local Government
A copy of the Republican motion on shared revenue and local government can be viewed here.

Personal Property Tax Exemptions

JFC Republicans created new exemptions to the personal property tax for non-manufacturing machinery, tools, and patterns. Since the personal property tax is collected by local governments, the motion also creates a new state aid program to reimburse municipalities for those losses. However, the calculation for state aid will be frozen at 2017-18 levels. This means that local governments will receive the same amount of money in perpetuity without adjustments for inflation. The new personal property tax exemptions will cost the state $74.4 million annually.

Miscellaneous Provisions

Additionally, the Republican motion:

  • Requires municipalities to include in any levy limit referendum language the specific purpose for which the funds will be used. Current law does not require referendum language to state a purpose.
  • Expands the local room tax to short-term rentals (like Airbnb and VRBO)
  • Authorizes county human services departments to enter into contracts with each other to perform certain child protective services
  • Prevents business improvement district (BID) assessments on residential properties in the City of Milwaukee
  • Reinstates Milwaukee County Board oversight of the sale or lease of property owned by the county

Taxes and Revenue (DOR)
JFC Republicans passed a tax package that consistently favors wealthy individuals and special interests over working and low-income families. A copy of the full motion can be viewed here.

Elimination of the Working Families Tax Credit
Republicans voted to eliminate the Working Families Tax Credit beginning in 2017. The Working Families Tax Credit is specifically targeted toward low-income individuals and families – only individuals earning less than $10,000 annually and married couples earning less than $19,000 annually even qualify for the credit. About 725 people claim the tax credit and the average tax benefit is about $276 per person.

Elimination of the Alternative Minimum Tax (AMT)
Republicans also eliminated the AMT, a tax that was specifically created to ensure that individuals pay at least a minimum amount of income tax if they otherwise qualify for large tax deductions and exemptions. According to a memo from the LFB, over half of AMT claimants earn over $300,000 per year. Eliminating the AMT will cost the state $7 million annually after 2019.

Deletion of Earned Income Tax Credit (EITC) Changes
Republicans rejected Gov. Walker’s proposed EITC increase of $27 million, which would have raised the EITC for families with one child and couples who become married, and would have created a new EITC for non-custodial parents. The EITC is a refundable tax credit that benefits working families with children.

Miscellaneous Provisions

Additionally, the Republican tax package:

  • Deletes Gov. Walker’s proposed income tax cuts
  • Allows the state deduction for adoption expenses to be claimed for adoptions in other states and countries
  • Provides a generous tax break to broadcasters by creating new exemptions for income received from advertisers based outside the state
  • Eliminates Gov. Walker’s proposed Sales Tax Holiday
  • Creates new sales tax exemptions for: arcade games, tournament entrance fees, beekeeping, broadcast equipment, and internet access services

Wrap-Up Motion (Formerly Known As #999)

Despite assurances that this budget would not have a lengthy final motion, Republicans offered a motion that contains 26 new items. You can view the motion here. Noteworthy changes include:

  • Additional pork for communities across the state (most notably $2.9 million over 5 years for Janesville for no stated reason)
  • Advancing the dates of the state employee wage adjustments to July 1, 2018 and January 1, 2019
  • Requiring the DHS Office of the Inspector General to conduct audits of all family planning service MA reimbursements, which will equate to an audit of Planned Parenthood and a continuation of Republican attacks on women’s healthcare
  • Micromanaging the UW System by adopting the Governor’s faculty teaching and workload requirements and prohibiting UW institutions from requiring Chancellor candidates to be tenured faculty or hold doctorate degrees
  • Specifying that charter school authorizers must consider (rather than adhere to) certain principles and standards for quality charter schools

You can view all of the previous motions and votes on the state budget by visiting the Legislative Democrats website here:  http://legis.wisconsin.gov/democrats/jfc-votes 

What Democrats Are Saying
Democratic Proposals

LRB2762 Resolution of Rights of the Child (Rep. Taylor, Sen. Risser) is a resolution regarding upholding the articles of the United Nations Convention on the Rights of the Child.

This Week in the Senate

Senate Session

The Senate will be in session on Tuesday, September 12 to vote on the $3 billion Foxconn tax incentive package. The senate is also expected to take up the budget after it passes the Assembly. The entire floor session calendar can be found here. 

Senate Committees

Senate Judiciary and Public Safety
The committee held a Public Hearing to discuss four Senate Bills and two Assembly Bills:

  • Senate Bill 72 would impose mandatory minimum period of 18 months confinement in prison for fifth and sixth offenses of operating a motor vehicle while intoxicated (OWI).

  • Senate Bill 73 would mandate a person who is convicted of homicide by intoxicated use of a vehicle must be sentenced to a period of confinement in prison of at least five years.

  • Senate Bill 128 would authorize court commissioners to issue search warrants in matters involving a civil violation of a state or local prohibition against driving while under the influence of an intoxicant.

  • Senate Bill 135 would require DOT to permanently revoke the operating privilege of a person if they commit certain offenses related to drunken driving or driving under the influence of an intoxicant.

  • Assembly Bill 335 would classify controlled substances into one of five schedules and provides a penalty for each of the schedules.

  • Assembly Bill 98 would provide requirements for court orders related to persons whose operating privilege is restricted to operating vehicles that are equipped with an ignition interlock device.

Senate Labor and Regulatory Reform
The committee held a Public Hearing on two Senate Bills and one Assembly Bill:

  • Senate Bill 241 / Assembly Bill 60 would list what requirements must be met for the classification title of “engineer” to be used.

  • Senate Bill 235 would make changes to the Council on Worker's Compensation in the Department of Workforce Development.

The committee also held an Executive Session on three Senate Bills and one Assembly Bill:

  • Senate Bill 61 would change the procedure for forfeiture of property after it has been seized in relation to a crime. Passed along party lines, 3-2. 

  • Senate Bill 220 would eliminate the Department of Tourism administrative rules for a heritage tourism pilot program. Passed, 5-0.

  • Senate Bill 322 / Assembly Bill 317 would outline an expedited procedure an agency can use to repeal a rule that the agency determines it no longer has the authority to enforce. Passed along party lines, 3-2.

Senate Sporting Heritage, Mining and Forestry
The committee held a Public Hearing to discuss Senate Bill 395 which would lift the metallic mining moratorium, would relax wetland and ground water protections, limit the time regulators have to review mine plans, attempts to reduce the legal challenges to mining permits, and exempt mine companies from fees that cover costs of ensuring safe handling of hazardous waste.

This Week in the Assembly

Assembly Session

The Assembly was not scheduled for a floor period this week. The scheduled floor periods for the session are available here.

Assembly Committees

Assembly Committee on Aging and Long-Term Care
The committee held a public hearing on Assembly Bill 432, which would change state law for nurse aide instructional programs to the federal law requirement, Assembly Bill 444, which would authorize a hospice worker to receive written consent from a representative of a decreased individual to transfer a controlled substance to a drug disposal program that is authorized under state or federal program, and Assembly Bill 473, which would amend the Department of Health Service’s administrative code to allow attending physician’s to delegate the prescription of nursing home patient’s diet to a certified dietitian.

Assembly Committee on Agriculture
The committee held an Executive Session on Assembly Bill 321, which would change DNR regulations to enforce the idea that if a warden enters private land without evidence of a violation, any evidence obtained by the inspector would not be admissible, and Senate Bill 248, which would designate ginseng as the state herb.

Assembly Committee on Education
The committee held a public hearing on Assembly Bill 159, which would regulate the use of electronic smoking devices on school property, Assembly Bill 221, which would create a pilot program from certain school districts that would allow them to not report the amount of hours of direct pupil instruction, Assembly Bill 215, which would require schools to modify their instruction programs about nutrition, Assembly Bill 477, which would change the administrative rules that require supplemental aid programs for school districts that have under 500 pupils, and  Assembly Bill 488, which would require the Department of Public Institution make practice questions for required examinations.

Assembly Committee on Criminal Justice and Public Safety
The committee held a public hearing on Assembly Bill 389, which would create a crime for soliciting a sexually explicit photograph, recording or other representation for a person under 18, Assembly Bill 400, which would increase the penalty for the crime of patronizing a prostitute from a Class A misdemeanor to a Class I felony, Assembly Bill 435, which would add a $5,000 surcharge to be imposed on individuals who are convicted of patronizing or soliciting prostitutes, and Assembly Bill 486, which would add additional penalties for the patronizing of an individual under 18. The committee also held an Executive Session on Assembly Joint Resolution 47, which would adjust the rights that crime victims have in the state of Wisconsin.

Next Week in the Legislature

Senate Committees

There are no committee meetings scheduled for next week at this time.

Assembly Committees

Assembly Committee on Workforce Development
The committee will hold an Executive Session on Assembly Bill 228, Assembly Bill 326, and Assembly Bill 192. The committee will also hold a Public Hearing on Assembly Bill 422.

Assembly Committee on Natural Resources and Sporting Heritage
The committee will hold an Executive Session on Assembly Bill 441 and Assembly Bill 461. The committee will also hold a Public Hearing on Assembly Bill 464.

 To view updated committee notices, visit the legislative website and click on Committee Schedule: Wisconsin State Legislature.

 The State Capitol Update is provided by the Senate and Assembly Democratic Caucuses. For additional information, please send an email to WisconsinDemocrats@legis.wi.gov or call toll free: 1.800.385.3385.