Following Budget Success, Give'em a Raise

According to a piece in the Milwaukee JS by Steven Walters, the Joint Committee on Employment Relations unanimously approved pay raises for state legislators and other state officials, including:

The 6.3% pay raise for legislators will take their salaries from $47,413 to $50,438. The $88 tax-free daily expense stipend that most legislators get when in the Capitol would not be increased; legislators from Dane County would still get a $44 per diem.

The article also reported the following pay increases:

Under the changes, the governor elected in November 2010 will see his or her salary rise from $137,092 to at least $147,313, a 7.4% raise. The next governor's base salary will probably be higher, because cost-of-living raises for non-union workers expected to be approved two years from now also usually go to all elected state officials.

Four other constitutional officers - attorney general, lieutentant governor, secretary of state and treasurer - would also get 7.4% raises, starting when their new terms begin in January 2011. The attorney general is now paid $137,092; lieutenant governor, $72,394; and both secretary of state and treasurer, $65,079.

The superintendent of public instruction who is elected to a new four-year term in April 2009 will be paid $122,516. That will be 11.7% more than the $109,587 now paid Superintendent of Public Instruction ElizabethBurmaster.

Kaufert and Doyle in SB 122

Doyle signed into SB 122 on Aug 8. According to the LRB:

Under current law, generally, all property purchased or constructed as a waste treatment facility and used to treat industrial wastes or air contaminants is exempt from property taxes.

Under this bill, all property purchased or constructed as a waste treatment facility and used exclusively and directly to remove, store, or cause a physical or chemical change in industrial waste or air contaminants is exempt from property taxes.

According to Gov Doyle's release:

Governor Jim Doyle today signed Senate Bill 122, which will protect property taxpayers by updating a tax exemption for waste treatment plants and pollution abatement equipment. This bill, which clarifies the current statutory exemption, returns $34 million of property value to the 2007 tax assessment rolls, preventing an undue property tax burden on homeowners

Doyle also thanked Senators Dave Hansen, Robert Cowles as well as Representatives Jim Soletski and Dean Kaufert for their work on SB 122

SB 122 was strongly supported by the WI Counties Association, who stated on their website:

SB 122 relates to property tax exemptions and, in particular, attempts toaddress the huge loophole created by the Newark Decision. SB 122, if signed into law, will fix a loophole in the property tax exemption for waste treatment facilities by specifically defining waste treatment facilities as used "exclusively and directly" for removing, storing or causing change in industrial waste or air contaminants.

SB 122 was also supported by the Wisconsin Association of School Boards. According to WASB:

Under Senate Bill 122, as amended, only property purchased or constructed as a waste treatment facility and "used exclusively and directly" to remove, store or cause physical or chemical change in industrial waste or air contaminants would be exempt. It also specifies that "industrial waste" has no monetary or market value, except as specified in the definition of "used exclusively," and that industrial waste would otherwise be considered as superfluous, discarded, or fugitive material. The bill, as much as possible, restores the original intent of the 1953 law and allows those treatment facilities that have been receiving the tax exemption properly for 50 years to continue to do so.

On May 8, Wisconsin Manufactures and Commerce issues an opposition statement to SB122. According to WMC:

We are, however, concerned about the impact legislative responses to the Newark could have on existing applications of the exemption. We believe SB122 goes beyond the authors stated intent of returning to a pre-Newark understanding of 70.11(21). In other words, the bill goes beyond repealing Newark and threatens the exemption for companies that used it prior to the decision.

Gov Doyle's release

SB 122

WCA statement

WASB statement

WMC statement

Kaufert and Tax Loophole (Newark)

Press Release on 5/30 from the Wheeler Report:

BILL TO CLOSE NEWARK LOOPHOLE ADVANCES THROUGH COMMITTEE - Court Decision Threatens to Shift Millions of Taxes to Homeowners

(Madison)—A bi-partisan bill aimed at closing a tax loophole that could shift millions of dollars in property taxes to homeowners received unanimous support today from the Legislature’s Joint Survey Committee on Tax Exemptions. The bill, sponsored by State Senators Dave Hansen (D-Green Bay) and Rob Cowles (R-Green Bay) and State Rep Dean Kaufert (R-Neenah), is designed to reverse a controversial Tax Appeals Commission ruling that has already forced homeowners and small businesses to pick up over $34 million in extra property taxes throughout the state, with many millions more possibly on the way.

“I am thankful to the members of the committee for their support, but we must continue to fight to get this bill to the Governor’s desk as soon as possible,” said Cowles. “The longer we wait, the more taxes will be shifted to our homeowners and small businesses.”

A 2004 decision by the Tax Appeals Commission, upheld on appeal at circuit court, extended the property tax exemption for treatment plant and pollution abatement equipment to property of a paper board manufacturing facility in Milwaukee owned by the New Jersey-based Newark Group, Inc. The ruling was loose interpretation of a 1953 statute designed to reduce air and water pollution from manufacturing sources.

The decision has become known as the Newark decision. “This bill has now received unanimous, bi-partisan support from both committees that have acted on it and Wisconsin homeowners need to know that leaders of both parties are committed to closing this outrageous loophole,” said Hansen. “It is my hope that leadership on both sides can avoid the temptation to play politicswith this bill so we can get this to the Governor’s desk as soon as possible.”

Exemptions based on the Newark decision have been granted to paper makers, wood product manufacturers, oil and grease shops and even a cheese maker. Over $34 million in manufacturing property has been removed from the tax rolls because of Newark-based appeals of property tax assessments. It is expected that the effects of the exemption may spread much further unless the loophole is closed. Up to $1.8 billion in manufacturing property value may become exempt from property taxes because of the court ruling. This would cause a massive property tax shift to homeowners and small businesses.

"We need to keep this moving through the legislative process to send a clear signal to municipalities that the Legislature is going to resolve this problem," said Kaufert. "We have a good bill here and there is no reason to delay action any longer."

The legislation now needs approval from the Joint Committee on Finance, before being voted on for final approval by the Senate and Assembly.

Hintz and Tax Levies

A proposal in the legislature would raise the maximum local tax levies to 4% from 2%. The proposal is supported by most local officials but opposed by many businesses, developers / realitors, and Republican officials.

According to the Oshkosh Northwestern:

Rep. Gordon Hintz, D-Oshkosh, opposes levy caps, but said a 4 percent cap would at least give local governments more flexibility.

"I have been critical about the state imposing arbitrary limits in the past. The state instead of imposing itself on local government should look at how they've under-funded shared revenues and the mandates they've put on local government," Hintz said.

Owens on Budget

Rep Carol Owens, Sen Carol Roessler, and other state officials recently participated in a Fond du Lac County meeting discussing the state budget and state issues.

According to the Fond du Lac Reporter:

While an increase in the cigarette tax received mostly favorable reviews from legislators at the county meeting, taxes on hospitals and oil drew grumbles.

State Sen. Carol Roessler, R-Oshkosh, and Olsen agreed the hospital tax would only hurt hospitals and patients. "It's a sick tax," Roessler said. "The sick people are going to pay for it."

Officials also aren't pleased with a tax on oil companies. Doyle has said oil companies would be prohibited from passing the expense on to consumers. Roessler said she doesn't believe the governor's claims.

A tax on big oil would only hurt Wisconsin, Roessler said. If an oil shortage occurred, providers wouldn't sell to Wisconsin. Instead, they would sell to other states that don't have taxes.

Due to the proposed taxes, legislators have a rocky road ahead of them, said State Rep. Carol Owens, R-Oshkosh. "It's not going to be pretty," she said. "That's what I see through my fuzzy, fuzzy crystal ball."

Owens & Roth: Pension income tax credit

Both Roth and Owens are coauthors of AB28, which creates an individual income tax credit for retirement plan income.

According to the Legislative Reference Bureau:

This bill creates a nonrefundable individual income tax credit that is calculated by multiplying the claimant's marginal tax rate by the amount of pension income received by the claimant each year from a qualified retirement plan under the Internal Revenue Code, except that the credit may not be based on pension income hat is already exempt from taxation.

The bill first applies to taxable year 2008, and limits the maximum amount of pension income on which the credit may be calculated. For taxable year 2008, the maximum allowable pension income is $2,500. The maximum amount of pension income increases each year from $2,500 to $5,000 in 2009, $10,000 in 2010, $15,000 in 2011, and $20,000 in 2012 and thereafter.

Hintz, Wells, and Building

UWO received the approval of the regents for several UWO building projects totaling $97 Million.

The Oshkosh Northwestern today posts that the additions include:

• What taxpayers will be paying for:
  -- Academic Building - $40 million
  -- Student support and Development Center- $8.5 million
  -- Acquisition of Cub Food lot for Facilities Management- $5.9 million
• What UWO pays for:
  -- Academic building – $8 million
  -- Residence hall- $34 million
  -- Cub food acquisition - $350,000
  -- Softball stadium- $500,000

The article also included the following information regarding Rep Hintz:

Rep. Gordon Hintz, D-Oshkosh, said the biggest hurdle UWO faced was getting approval from the building commission. Hintz said he knows that the chancellor has spent considerable time at that commission.

"One of the reasons why I believe this plan will be successful and will have the support of the legislature is because UWO and Chancellor Wells have done a good job planning it," Hintz said.

Sort-of Waste Treatment Tax Exemption

The Oshkosh Northwestern reported on March 24 that an issue is being raised by Winnebago County officials and state reps surrounding tax breaks for waste treatment and equipment storage facilities. According to the article:

A bipartisan group of state lawmakers on Thursday introduced a bill designed to block manufacturers that convert waste into sellable products, such as paper mills, from claiming the exemption. reworking state law so only a facility or equipment that exclusively and directly treats waste would qualify for the exemption.

Rep. Gordon Hintz, D-Oshkosh, one of the bill's co-sponsors, said closing the loophole is not just a Fox Valley issue, but of concern statewide because of how state funding for public schools and shared revenue works.

"It does have statewide impact. Its not just Winnebago County or Outagamie County or Brown County. There's going to be a ripple effect on this," Hintz said.

One of the bill's authors, Sen. Dave Hansen, D-Green Bay, accused manufacturers of trying to exploit a loophole that the tax commission's ruling created.

"The decision was not fair to the property taxpayers of this state," Hansen said.

The article was written by: Bethany K. Warner of the ONW and Michael King of the Appleton Post-Crescent and The Associated Press.