Legislature’s budget-writing committee restores WEDC capital lending program; increases broadband expansion funding
With summer approaching quickly, the weather is getting warmer and the days are getting longer. For lawmakers, legislative staff and political observers in the State Capitol, the onset of summer typically means the state budget debate is at its apex. And in fact, the Legislature is roughly halfway into the process of reshaping Gov. Scott Walker’s 2017-19 State Budget bill.
The governor introduced the two-year, $76 billion state spending plan back in February, and the Legislature’s Joint Finance Committee (JFC), which is charged with retooling the governor’s budget, began voting on the bill at the beginning of May. While several major spending items have yet to be addressed by JFC that could delay the process – including transportation and K-12 education funding –the committee appears to be on track to finish their work by mid-June. The bill will then be sent to the full Legislature for final consideration.
More importantly, many of the budget issues important to WEDA have already been considered and approved by JFC. They include restoration of the Wisconsin Economic Development Corporation’s (WEDC) capital lending program and increased funding for the state’s broadband expansion grant program.
On May 9, the Finance Committee acted to reestablish WEDC’s capital lending program to ensure new and expanding businesses across Wisconsin have continued access to a critical financing option. The loan program is a key component of WEDC’s economic development toolbox and helps fuel private-sector investment.
Under current law, WEDC’s existing capital lending authority is scheduled to expire at the end of the state’s current fiscal year (June 30, 2017). The budget proposal approved by JFC not only restores WEDC’s lending authority, but also eliminates the provision included in the governor’s budget that would have required new WEDC loans to be funded solely with repayments from exiting loans. The JFC did retain the provision to prohibit the agency from issuing forgivable loans.
Restoration of the lending program is a top budget priority for WEDA and was an issue WEDA members discussed with state lawmakers at the Association’s 2017 Legislative Day on March 29.
The committee also approved the governor’s proposal to restore WEDC’s base funding, which was cut in the 2015-17 budget bill. The committee’s action restores $6.3 million in the second year of the upcoming budget cycle and every year thereafter. Without restoration of their base funding, WEDC’s mission could be jeopardized, and it would become increasingly challenging for the corporation to provide timely economic development assistance to Wisconsin businesses. The JFC also approved a provision to modify WEDC’s funding structure to rely more heavily on support from the state’s Economic Development Fund rather than general purpose revenue.
Both measures are expected to remain in the final budget that will be considered by the full Legislature
The Finance Committee also recently approved a budget motion to inject new funding into the state’s broadband expansion grant program. The JFC vote came one day after a stand-alone broadband expansion bill (AB 123) stalled in the state Senate due to a proposed “privacy” amendment.
Facing a prolonged debate on AB 123 and fearing the bill would “die,” JFC lawmakers moved quickly to fold the legislation into the state budget bill. The provision is expected to survive the budget process and be signed into law by the governor.
Under the broadband provision, $14 million would be available for broadband expansion grants in 2017-18, as opposed to the $1.5 million that is available under current law. In addition, funding for the program will be ongoing and will be set at a minimum of $2 million per year.
Like AB 123, which had strong WEDA support, the budget provision would make the following changes to the eligibility criteria for broadband expansion grants:
- Gives priority to projects that promote economic development. The budget language defines economic development as “development designed to promote job growth or retention, expand the property tax base, or improve the overall economic vitality of a region.”
- Gives priority to projects that affect underserved areas of the state. Underserved area is defined as “an area of the state not served by an Internet service provider offering Internet service that is either fixed wireless service or wired service at speeds of at least 20% of the speed for advanced telecommunications capability as designated by the FCC.”
- Takes into consideration the degree to which projects would duplicate existing broadband infrastructure.
Once the budget is signed into law—presumably on or near the statutory deadline of July 1, 2017—the Public Service Commission is expected to open a new round of broadband expansion grant applications in late summer/early fall and issue grant awards prior to the end of the year. WEDA will provide members with specific details on the grant process once the information becomes available.
Other Budget Items
While the budget news to date has been positive, WEDA’s work isn’t done. There are still a handful of budget issues WEDA is lobbying on, including efforts to eliminate the Historic Tax Credit budget proposal that would cap the program at $10 million annually and tie awards to job creation requirements. WEDA also is supporting a budget motion that would increase funding for the Career and Technical Education Incentive Grant program.
Of course, it’s never too early to start thinking about WEDA’s post-budget advocacy efforts. WEDA’s Government Affairs Team will continue to work on TIF modernization legislation well into the fall legislative floor session and also focus on additional workforce development policies to help close Wisconsin’s skills gap