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WEDA Legislative Update: State of the State Address                                                                                              Feb. 9, 2017

 

Gov. Scott Walker unveils state budget proposal
Restores limited lending authority to WEDC; proposes income and property tax cuts

G
overnor Scott Walker delivered his budget address yesterday, unveiling his two-year spending plan for the state. The 2017-19 state budget bill - introduced as Assembly Bill 64 / Senate Bill 30 - is now in the hands of state lawmakers, who will use the next four to five months to reshape the Governor's proposal before sending it back to his desk for final approval.

The Governor's budget proposal did not include too many surprises, as many of his key initiatives were strategically released over the past few weeks, but the document does contain numerous provisions that are of interest to WEDA. While Gov. Walker did not include Tax Incremental Financing (TIF) modernization legislation in his budget, he did add a measure to restore limited lending authority for WEDC.

The WEDA Government Affairs Team is still in the process of fully reviewing and analyzing the nearly 1,000 page, $76 billion spending bill, but would like to provide members with an initial overview of the Governor's budget proposal:

 
Economic Development / WEDC:

  • Modifies the current limitations on WEDC's lending programs to allow the corporation to initiate new loans, but only if the loans are funded through the repayment of existing loans and not supported by new state funds. In addition, the WEDC would be prohibited from offering forgivable loans.
  • Increases WEDC funding by $6,300,000 (GPR) to provide the corporation with greater ability to assist Wisconsin businesses. It also modifies WEDC's funding structure to allow larger amounts of the Economic Development Surcharge to fund the corporation's operations vs. general fund dollars.
  • Increases the cap of investments eligible for the Angel and Early Stage Seed Credit program from $8 million to $12 million for each qualifying business to expand opportunities for those businesses to obtain more capital.
  • Caps the Historic Rehabilitation Tax Credit to annual awards of $10,000,000 and direct the credits to be competitively awarded on the basis of job creation potential. Create a clawback provision to ensure credits are repaid if pledged job creation totals are not met.
  • Authorizes Enterprise Development Zones to be reallocated if the contracts for those zones are canceled or if the contract term regarding a zone expires.
  • Directs WEDC to continue its Fabrication Laboratories Grant Program at $500,000 in each year of the biennium.


Workforce Development:

  • Increases funding for the Wisconsin Fast Forward Program by $11.5 million to:
    • Expand award eligibility to additional projects, such as employee resource networks, registered apprenticeships and internship programs.
    • Provide grants to technical colleges for collaborative projects with school districts and businesses.
    • Create grants for nursing training programs.
  • Implementation of the Governor's Wisconsin Works for Everyone initiative, including creation or expansion of various offender re-entry programs:
    • Create a prison mentorship pilot program for inmates who will be released from prison in 6 to 12 months.
    • Increase funding for the Windows-to-Work and vocational training programs by $2 million to help offenders obtain skills necessary for employment upon reentry to society.
    • Expand the mobile classroom program and provide job skills training for inmates at correctional facilities who are preparing for reentry into the workforce.


Transportation Funding:

  • The Governor's budget does not include a gas tax increase or vehicle registration fee increase.
  • Authorizes $500 million in new bonding for transportation projects.
  • Repeals the prevailing wage requirements for state construction projects including those led by DOT.
  • Ensures the core of the Zoo Interchange project in Milwaukee remains on schedule.
  • Ensures several major highway projects remain on schedule, including U.S. Highway 10/441 (Appleton area) and I-39/90 (state line to Madison)
  • Shifts $31 million from the I-94 east-west corridor corridor project to the I-94 north-south project in Racine and Kenosha Counties.


Taxes:

  • Provides a $203 million income tax cut that would benefit the bottom two tax brackets.
  • Implements $340 million in property tax cuts.
  • Creates a $22 million sales tax holiday (in August of 2017 and 2018) for school supplies, clothing and computers.


Higher Education:

  • Implements a 5 percent tuition cut for all UW campuses. The tuition cut would be offset by $35 million in new state funding for the System.
  • Provides an additional $100 million in new funding for the UW System, nearly have of which would be tied to certain performance measures.
  • Directs UW Institutions to provide three-year degree options.

Please stay tuned for additional and more detailed information on the state budget bill in the coming weeks. In the meantime, if you have any questions on Gov. Walker's 2017-19 state budget proposal, please contact WEDA at mwelsh@weda.org.


Budget Bill Links:

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