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Tony Ever’s Tax Plan & Lame Duck Bills

Following an all-night session, the Republican controlled Wisconsin state Assembly and Senate passed a number of bills in a “lame-duck” session, restricting the executive power of Governor-elect Tony Evers when he takes up office in early January 2019.

One of the republican bills, AB1069, holds somewhat vague provision for a reduction in income tax in Wisconsin through an off-set against out-of-state online sales taxes.  [1]

In contrast, in the run-up to the November 2018 mid-term elections, incoming Democratic Governor Tony Evers focused on the need to reduce the tax burden on middle-class Wisconsinites.

In October 2018, just weeks prior to his election win, Evers went on to state that:

For eight years Scott Walker has rewarded the wealthy and the special interests…that’s not fair. It’s time the middle class gets a break.”  [2]

Evers plan for reducing the tax burden on low and middle income earners consists of:

  • A ten per cent income tax cut for individuals making no more than $100,000 a year and families making no more than $150,000.
  • Working with “state revenue officials to determine the best way to implement it as part of his first budget proposal in early 2019.” [3]
  • Funding the tax cut by removing Wisconsin’s manufacturing and agriculture credit which “…effectively eliminated income tax liability for manufacturers and agricultural users that claim it.” [4]

During his campaign, Evers was unequivocal when it came to the issue of taxation:

I think we need to prioritize the working men and women of Wisconsin.” [5]

Now that the lame-duck session has passed its legislation, the question is how ham-strung Evers will be upon taking office. The session and subsequent legislation was highly contentious and, when signed into law by current Governor Scott Walker, is very likely to be challenged in court as to its validity.

That alone will no doubt blunt the energy of Evers’ gubernatorial role from day one and thus limit his resources for pursuing his income tax agenda as detailed prior to the election, let alone having to overcome the passage of AB1069.

[1]  https://apnews.com/d0fa382b8ca24d01959a12046059bf30

[2]  https://lacrossetribune.com/news/state-and-regional/tony-evers-proposes-cutting-middle-class-taxes-percent/article_1c8ddc48-e927-5193-a42e-38707db9d5a2.html

[3]& [4]  https://madison.com/wsj/news/local/govt-and-politics/tony-evers-proposes-cutting-middle-class-taxes-percent/article_173ea94f-3673-585e-b382-429a8839ed7b.html

[5]  https://www.jsonline.com/story/news/politics/elections/2018/09/20/tony-evers-says-under-scott-walker-states-priorities-out-whack/1367187002

Wisconsin Lame Duck

In an extraordinary “lame-duck” session, majority Republican lawmakers in the Wisconsin Assembly and Senate have this week pushed through legislation that weakens the position of incoming Democratic Governor Tony Evers.

Despite days of public protest and vehement opposition from Democrats and others, the legislation was passed for approval to soon to be ex-Governor Scott Walker.

Walker has signaled his support for the bill. He has 10 days to sign the package from the time it’s delivered to his office.” [1]

Consequently, the Wisconsin GOP is being accused of imposing its mandate, hampering Evers ability to govern on arrival in office in January, despite the Republicans losing the gubernatorial race in November.

Key points of the lame-duck session include:

  • Legislation that weakens the “Governor’s ability to make rules that enact laws” by shifting power away from the Governor to the GOP controlled Senate and Assembly. [2]
  • The lame-duck package includes “legislation that also shields the state jobs agency from his control until September and cuts into the powers of the incoming Democratic Attorney General.” [3]
  • 82 Scott Walker appointees to various state positions were approved in just one day, Tuesday December 4th 2018, with Walker set to stand down in just a few weeks. [4]
  • The Republican lame-duck legislative package also launched an assault on early voting in Wisconsin, something that has historically been helpful to Democratic candidates at election time, restricting it to no more than two weeks in advance. [5]

Opponents of this legislative maneuvering, including Tony Evers, have vowed to challenge the legitimacy of the GOP lame-duck package.

Evers has indicated that he will appeal directly to Walker to have the legislation vetoed. [6] Additionally, Evers and Democrats are exploring the possibility of legal challenges to the legislation. [7] Evers’ tenure as Governor is likely to be born into the midst of legal wrangling and political acrimony.

[1] https://www.chicagotribune.com/news/nationworld/midwest/ct-wisconsin-governor-powers-voting-bill-20181205-story.html

[2] & [3] https://www.apnews.com/dbded03c16ce4c3c8609d01b403e57d9

[4] https://www.huffingtonpost.com/entry/scott-walker-82-appointees_us_5c084080e4b0844cda4f9959

[5] https://www.theatlantic.com/politics/archive/2018/12/wisconsin-gop-seeks-to-limit-democrat-everss-powers/577411

[6] https://www.huffingtonpost.com/entry/tony-evers-walker-republican-power-grab_us_5c087993e4b0844cda4fbb25

[7] https://www.cnn.com/2018/12/05/politics/wisconsin-democratic-lawsuits/index.html

Changes to Wisconsin Healthcare Law

Healthcare was a major campaign issue during the recent November mid-term elections.  In particular, incoming Democratic Governor Tony Evers ran on a platform of overhauling healthcare delivery in the state and undoing some of outgoing Republican Governor Scott Walker’s signature health-care policy and proposals.

However, despite Evers’ platform, uncertainty continues to hang over healthcare in Wisconsin and how far he can take his proposed reforms.  That uncertainty has been compounded by the State Assembly and Senate “lame duck” sessions.

Some fundamental healthcare issues at stake include:

  • Allowing Republican lawmakers to push through Governor Walker’s proposal to impose work requirements on able-bodied citizens in return for receiving Medicaid, similar to Arizona. [1]
  • Governor-elect Evers ability to use additional tax dollars offered by the federal government to expand Medicaid, while outgoing Governor Walker rejected the opportunity to do so. [2]
  • In February this year, 20 states, including Wisconsin (with the full support of Governor Walker) filed a lawsuit with a federal judge in Texas alleging the Affordable Care Act is unconstitutional and should be invalidated. [3] In stark contrast, Evers has called on Walker to drop the lawsuit and is committed to expanding ACA coverage in Wisconsin. [4] & [5]

In mid-2017, Democratic State Representative Daniel Reimer and State Senator Jon Erpenbach introduced Assembly Bill 365 in an effort to “…protect the part of the ACA that prevents insurers from putting annual or lifetime caps on insurance coverage.” [6] However, the Republican majority amended AB365 at the procedural stage and morphed the Bill into something very different from what its Democratic authors had intended, to the potential detriment of those Wisconsinites with pre-existing conditions. [7]

Healthcare in Wisconsin remains contentious and subject to a partisan fault-line that seems to divide the state.

[1]  https://www.jsonline.com/story/news/politics/2018/01/12/able-bodied-adults-have-work-medicaid-under-plan-gov-scott-walker-trump/1026414001

[2]  https://www.wpr.org/can-wisconsins-incoming-governor-deliver-campaign-health-care-promises

[3]  https://www.jsonline.com/story/money/business/health-care/2018/09/10/wisconsin-and-other-states-argue-immediate-end-obamacare-least-protections-people-pre-existing-healt/1259251002

[4]  https://www.jsonline.com/story/news/politics/elections/2018/09/17/tony-evers-calls-scott-walker-drop-obamcare-lawsuit/1333835002

[5]  https://www.jsonline.com/story/news/politics/elections/2018/11/28/tony-evers-tour-state-he-makes-case-obamacare-expansion/2143408002

[6]  http://www.wisconsinbudgetproject.org/wisconsin-bill-does-little-to-protect-people-with-preexisting-conditions

[7]  http://kidsforward.net/without-the-affordable-care-act-promises-to-cover-pre-existing-conditions-are-not-enough

AB 1070 Changes to Wisconsin Economic Development Corp.

Intellegere Project previously covered the proposed AB 1069, one of five bills on the agenda during the lame duck session. This piece covers AB 1070, specifically those changes impacting the Wisconsin Economic Development Corporation (WEDC).

The WEDC is resposible for designating “Enterprise Zones” (EZ) such as the Electronics and Information Technology Manufacturing Zone (EITMZ) designated for the Foxconn project. In addition, the WEDC is responsible for negotiating the tax incentive packages for companies in the EZ areas. [1]

AB 1070 proposes changes to the board of directors of the WEDC. The following quote describes the make up of the board under current law. [2]

(14.)
Under current law, the board of directors of the Wisconsin Economic
Development Corporation consists of 12 voting members as follows:
1. Six members are appointed by the governor subject to senate confirmation,
to serve at the pleasure of the governor.
2. Three members are appointed by the speaker of the assembly, consisting of
one majority and one minority party representative to the assembly and one person
employed in the private sector, all of whom serve at the speaker’s pleasure.
3. Three members are appointed by the senate majority leader, consisting of
one majority and one minority party senator and one person employed in the private sector, all of whom serve at the majority leader’s pleasure.
As it stands currently, 6 board members are appointed by the Governor. The remaining 6 are appointed by the assembly speaker and the senate majority leader. There are specifications as to who may be appointed by these two individuals such that these 6 board members should represent the majority and minority parties as well as the private sector.
(14. cont.)
Under this bill, the board consists of 12 voting members. However, the governor
appoints four members. The speaker of the assembly and the senate majority leader
each appoint three members, but the appointees need not be members of the
legislature nor employed in the private sector. The minority leader of each house
appoints one member to the board.
Under the proposed changes the Governor appoints 4 members (two less than currently). The assembly speaker and the senate majority leader still appoint 3 each, but there are no restrictions as to who they may appoint. The two remaining board members are appointed by the minority leaders of the house and senate.
(14. cont.)
The bill further provides that the chief executive officer of WEDC is appointed
by the board of directors of WEDC and serves at the pleasure of the board. Currently, the governor appoints the CEO.
This final piece removes the ability of the Governor to determine the Chief Executive Officer of the board and instead gives this authority to the board.
AB 1070 and the other bills contain many other changes which have been widely reported in the media. [3] [4]

Governor-Elect Evers Calls on Citizens to Contact Representatives, Wisconsin GOP Leaders Continue to Defend Lame Duck Legislation

Today, five bills proposed by Wisconsin GOP legislators face a public hearing and vote by the Republican-controlled Joint Committee on Finance (JCF) [1]. The hearing is in-session at the time of this publication. Should the JCF approve the proposed legislation (AB 1069-73), the bills will move to a special session vote by the Wisconsin State Assembly and Senate which will likely take place this Tuesday [2].

The bills cover a range of topics including:

  • Moving the Wisconsin primary from April to March [3].
  • Giving lawmakers the power to appoint a special counsel to replace Attorney General Josh Kaul—on litigation determined by a legislative panel [3].
  • Shifting the responsibility of setting new income tax rates from the executive branch to the legislature—in cases which are subject to determination by the legislature [4].

A general theme in the five proposed pieces of legislation, according to Wisconsin Democrats and Republicans alike, is changing or removing the powers of Governor-elect Tony Evers and Attorney General–elect Josh Kaul [5]. Governor-elect Tony Evers spoke up this week to decry the GOP-proposed limits to his administration. Among other measures, he called on Wisconsin’s citizenry to aid his effort by contacting their local legislators to voice their opposition to the special session bills [6,7]. The Wisconsin Democracy Campaign, a non-profit network of Wisconsin citizens, is likewise urging Wisconsinites, via social media, to “contact [their] legislators at 1-800-362-9472” and ask that lawmakers vote no on all five bills [8]. Tony Evers has tweeted the following:

EversRetweet

Many republican lawmakers continue to defend their proposed legislation, arguing that the changes will limit the Governor, but only in an attempt to balance power at the Capitol [9]. Senate Majority Leader Scott Fitzgerald, of Juneau, remarked last week that the bills in question are in no way meant to undermine the Governor-elect [10]. Fitzgerald and Assembly Speaker Robin Vos released a joint statement, saying “”Wisconsin law, written by the Legislature and signed into law by a governor, should not be erased by the potential political maneuvering of the executive branch. In order to find common ground, everyone must be at the table” [11].

 

[1] https://docs.legis.wisconsin.gov/raw/cid/1474917

[2] https://www.nytimes.com/aponline/2018/12/03/us/ap-us-xgr-wisconsin-legislature-lame-duck-the-latest.html

[3] https://madison.com/wsj/news/local/govt-and-politics/gop-lawmakers-seek-sweeping-new-restrictions-on-incoming-democratic-attorney/article_97fcae5b-ce51-5bef-8871-dd0d6fa9c327.html

[4] https://intellegereproject.org/2018/12/03/2017-18-wisconsin-lame-duck-ab-1069/

[5] https://www.nytimes.com/aponline/2018/12/03/us/ap-us-xgr-wisconsin-legislature-lame-duck-the-latest.html

[6] https://www.jsonline.com/story/news/politics/elections/2018/12/03/5-senators-spotlight-opponents-try-stop-lame-duck-bill/2189439002/

[7] https://www.jsonline.com/story/news/politics/2018/12/02/tony-evers-says-he-take-any-steps-possible-prevent-gop-plan-take-away-his-power/2181201002/

[8] https://www.wisdc.org/news/commentary/6260-gop-lame-duck-session-subverts-the-will-of-the-people?fbclid=IwAR3h0Xrd648a8waik6C6o2OjqQC_9to5rkSnjrs9ksG96KBZJ-61znLyqiw

[9] https://www.wpr.org/democrats-push-back-possible-gop-limits-evers-power

[10] https://www.wpr.org/node/1357081

[11] https://www.jsonline.com/story/news/politics/2018/11/30/lawmakers-consider-changes-early-voting-transportation-funding-2020-presidential-primary/2162684002/

 

Governor-Elect Evers Calls on Citizens to Contact Representatives, Wisconsin GOP Leaders Continue to Defend Lame-Duck Legislation

Today, five bills proposed by Wisconsin GOP legislators face a public hearing and vote by the Republican-controlled Joint Committee on Finance (JCF) [1]. The hearing is in-session at the time of this publication. Should the JCF approve the proposed legislation (AB 1069-73), the bills will move to a special session vote by the Wisconsin State Assembly and Senate, which will likely take place this Tuesday [2].

The bills cover a range of topics including:

  • Moving the Wisconsin primary from April to March [3].
  • Giving lawmakers the power to appoint a special counsel to replace Attorney General Josh Kaul on litigation determined by a legislative panel [3].
  • Shifting the responsibility of setting new income tax rates from the executive branch to the legislature—in cases which are subject to determination by the legislature [4].

A general theme in the five proposed pieces of legislation, according to Wisconsin Democrats and Republicans alike, is changing or removing the powers of Governor-elect Tony Evers and Attorney General–elect Josh Kaul [5]. Governor-elect Tony Evers spoke up this week to decry the GOP-proposed limits to his administration. Among other measures, he called on Wisconsin’s citizenry to aid his effort by contacting their local legislators to voice their opposition to the special session bills [6,7]. The Wisconsin Democracy Campaign, a non-profit network of Wisconsin citizens, is likewise urging Wisconsinites to “contact [their] legislators at 1-800-362-9472” and ask that lawmakers vote no on all five bills [8]. The Wisconsin Public Education Network and League of Conservation Voters published similar calls to action on their social media pages.

Many republican lawmakers continue to defend their proposed legislation, arguing that the changes will limit the Governor, but only in an attempt to balance power at the Capitol [9]. Senate Majority Leader Scott Fitzgerald, of Juneau, remarked last week that the bills in question are in no way meant to undermine the Governor-elect [10]. Fitzgerald and Assembly Speaker Robin Vos released a joint statement, saying “”Wisconsin law, written by the Legislature and signed into law by a governor, should not be erased by the potential political maneuvering of the executive branch. In order to find common ground, everyone must be at the table” [11].

[1] https://docs.legis.wisconsin.gov/raw/cid/1474917

[2] https://www.nytimes.com/aponline/2018/12/03/us/ap-us-xgr-wisconsin-legislature-lame-duck-the-latest.html

[3] https://madison.com/wsj/news/local/govt-and-politics/gop-lawmakers-seek-sweeping-new-restrictions-on-incoming-democratic-attorney/article_97fcae5b-ce51-5bef-8871-dd0d6fa9c327.html

[4] https://intellegereproject.org/2018/12/03/2017-18-wisconsin-lame-duck-ab-1069/

[5] https://www.nytimes.com/aponline/2018/12/03/us/ap-us-xgr-wisconsin-legislature-lame-duck-the-latest.html

[6] https://www.jsonline.com/story/news/politics/elections/2018/12/03/5-senators-spotlight-opponents-try-stop-lame-duck-bill/2189439002/

[7] https://www.jsonline.com/story/news/politics/2018/12/02/tony-evers-says-he-take-any-steps-possible-prevent-gop-plan-take-away-his-power/2181201002/

[8] https://www.wisdc.org/news/commentary/6260-gop-lame-duck-session-subverts-the-will-of-the-people?fbclid=IwAR3h0Xrd648a8waik6C6o2OjqQC_9to5rkSnjrs9ksG96KBZJ-61znLyqiw

[9] https://www.wpr.org/democrats-push-back-possible-gop-limits-evers-power

[10] https://www.wpr.org/node/1357081

[11] https://www.jsonline.com/story/news/politics/2018/11/30/lawmakers-consider-changes-early-voting-transportation-funding-2020-presidential-primary/2162684002/

 

2017-18 Wisconsin “Lame Duck” AB 1069

The Wisconsin Legislature will begin debate on several proposed bills during the “Lame Duck” session beginning this week. It has been widely reported that these bills are an attempt to limit the powers of the incoming Governor, Tony Evers, and Attorney General, Josh Kaul. Both of these men are Democrats and both won elections against incumbent Republicans. [1] [2]

Five proposed bills outline the changes that lawmakers are seeking. These bills are AB 1069, AB 1070, AB 1071, AB 1072 and AB 1073. The Legislative Reference Bureau (LRB) provides an analysis of the proposed changes. The following is a summary of these analyses along with additional background and context of the proposed rule changes in AB 1069 [3].

(1.) This bill provides that for Southeast Wisconsin freeway megaprojects, major highway development projects, and certain state highway rehabilitation projects for which the Department of Transportation spends federal money, federal money must make up at least 70 percent of the aggregate funding for those projects.

70% of the funding for specific highway projects, including the planned highway expansion near the Foxconn plant, will be federal money.

(2.) Under current law, DOT may make transfers of state and federal funding between highway programs. This bill eliminates this authority.

The Dept. of Transportation (DOT) may no longer reallocate funding between projects.

(3.) The bill also provides that the new individual income tax rates based on the determinations would not take effect automatically in the year following DOR’s certification, but, instead, the Department of Administration, in consultation with DOR, would determine the new tax rates to take effect for the taxable year ending on December 31, 2019, and report its determinations to the governor, JCF, and the Legislative Audit Bureau. LAB would then review the determinations and report its findings to JCF and the Joint Legislative Audit Committee. If LAB’s review results in a re-determination of the rates, JCF would determine which rates apply to the taxable year ending on December 31, 2019, and report its determination to the governor, the secretary of administration, and the secretary of revenue.

Supreme Court case South Dakota v. Wayfair (2018) established that out-of-state retailers (meeting certain criteria) may be charged sales tax. Under current law, this decision triggers action by the Dept. of Revenue (DOR) to determine how much additional sales and use tax will be collected under the new federal law. The DOR must then reduce individual income tax rates to an amount equal to the increased sales tax revenue. The DOR must “certify” these new rates to the secretary of administration, governor, and the legislature. The new rates take effect the following year.

Under the proposed change the Dept. of Administration (with DOR) will determine the new rates. The Legislative Audit Bureau (LAB) will review and if they find that the rate is “incorrect” then the JCF will determine the rate.

The leaders of the DOR and the DOA are both appointed by the governor [4]. However, the Legislative Audit Bureau is led by the state auditor. This position is appointed by the Joint Committee on Legislative Organization [5]. The JCF is entirely made up of the House and Senate finance committees [6].

What this really breaks down to is an attempt to shift the responsibility of setting of the new income tax rates from the executive to the legislature. Of course, this can only be done IF the legislature determines that the DOA/DOR recommendations are flawed.

[1] https://www.jsonline.com/story/news/politics/2018/11/30/lawmakers-consider-changes-early-voting-transportation-funding-2020-presidential-primary/2162684002/

[2] https://www.wbay.com/content/news/Republicans-prepare-to-move-ahead-with-lame-duck-session-501740511.html

[3] https://docs.legis.wisconsin.gov/2017/related/proposals/ab1069

[4] https://docs.legis.wisconsin.gov/misc/lrb/blue_book/2017_2018/060_executive.pdf

[5] https://docs.legis.wisconsin.gov/misc/lrb/blue_book/2017_2018/050_legislature.pdf

[6] https://docs.legis.wisconsin.gov/2017/committees/joint/1680