Oct. 19, 2018

In This Edition…

  • Legislative Study Committees Continue to Work on Key Economic Development Issues
  • WTCS Releases 2018 Employer Satisfaction Report
  • Quick Notes

Legislative Study Committees Continue to Work on Key Economic Development Issues

Although it’s the height of election season, legislative work is still taking place under the Capitol dome. In fact, special legislative study committees tasked with examining and offering solutions to challenging issues facing the state continue to meet with the goal of finishing their work by the end of the year. The committees are comprised of lawmakers and citizen members with expertise in the issue areas being studied.

Of the ten study committees created this cycle, two are of great interest to WEDA – the Study Committee on Property Tax Assessment Practices, which is investigating potential solutions to the dark store issue, and the Study Committee on the Investment and Use of the School Trust Funds, which is considering changes to the State Trust Fund Loan program. Both committees are charged with recommending legislative proposals that will be introduced and considered by the full Legislature during the 2019-20 session.

The “dark store” study committee has meet three times since August. At the September meeting, WEDA member and West Allis Community Development Manager Patrick Schloss presented before the committee to educate members on the importance of tax incremental financing (TIF) as a tool for local economic development and how property tax assessment appeals on property within a TIF district using the dark store theory can create serious financial risks for TIF districts. He also expressed WEDA’s support for legislation to close the dark store loophole in Wisconsin.

At the October 9 meeting of the study committee, the following potential legislative recommendations were discussed and debated by the committee:

  • Shift the assessment of commercial property to the county level. The thought behind the idea is county level assessment of complex commercial property would increase proficiency and uniformity. However, this proposal was essentially rejected by the committee, citing opposition from municipalities and other stakeholders.
  • In an effort to address assessment challenges created by build-to-suit properties, triple-net leases, and sale-leaseback transactions, require assessors to rely on estimates of property value filed by a taxpayer for specified investment purposes. The proposal could also establish a presumption that such specified filings represent the market value of the real estate, unless proven otherwise. Other filings could include Imputed value for purposes of income tax, real estate transfer tax returns, securities filings, and real estate asset disclosures reported to shareholders.
  • In many dark store assessment disputes, municipalities chose to settle out of court – despite having a strong case against the property owner – as they don’t want to incur litigation costs. Current law requires the municipality to cover all legal costs, while other taxing jurisdictions (e.g., counties; school district; and tech college districts) are not required to contribute to the legal effort. The committee agreed to draft a potential legislative recommendation to require ALL taxing jurisdictions to pay for legal costs associated with property tax appeal cases. The idea is that if municipalities have financial support for legal representation from other taxing jurisdictions, they may be more likely to defend dark store lawsuits in court, and less likely to settle. In turn, commercial property owners may be less likely to bring a lawsuit.

The Study Committee on the Investment and Use of the School Trust Funds has also met three times over the past several months and has had broad discussions on the State Trust Fund Loan (STFL) program administered by the Board of Commissioners of Public Lands, including the effect of the program on the overall return achieved by the school trust funds, how the program impacts private lending to municipalities, and the extent to which municipalities should be able to use the program. WEDA supports the STFL program as a critical financing tool for local economic development projects across the state and is concerned about some of the potential legislative proposals the committee is discussing. Potential legislation the committee may recommend includes the following:

  • Under the STFL program, municipalities can take out a 20-year loan. If a municipality receives financing from a private financial institution, they are limited to a 10-year loan. The committee may consider a proposal to allow municipalities to take out loans from a private financial institution for up to 20 years.
  • Require STFL loans to impose a pre-payment penalty, which is currently not required.
  • Create a maximum amount of funding (e.g., $ 1 million) that can be provided by a STFL loan.
  • Implement an interest rate indexing formula for STFL loans.
  • Reduce documentation and paperwork for loans provided by private financial institutions to municipalities.

Both committees will meet again prior to the end of the year to complete their work and make final legislative recommendations to the Legislature. The WEDA Government Affairs Team will continue to monitor the progress of each committee and keep WEDA members informed on the latest developments in future editions of Political News and Notes.

WTCS Releases 2018 Employer Satisfaction Report

High-quality employer partnerships are critical to the continued improvement of programs and services offered by the Wisconsin Technical College System (WTCS). In addition to working closely with employers in the development and delivery of tech college programs, WTCS also routinely surveys employers to help evaluate the services it provides. Every four years, the WTCS summarizes their survey results in the Employer Satisfaction Report to assess business satisfaction with WTCS programs and graduates’ skills.

2018 Employer Satisfaction Report Highlights:

  • 98% said a technical college was important to the overall success of their business.
  • 97% were satisfied or very satisfied with technical college graduates’ education.
  • 96% would hire a WTCS graduate again.
  • 92% would recommend a WTCS graduate to another employer.

Please CLICK HERE to read the full 2018 WTCS Employer Satisfaction Report.

Quick Notes

  • According to the WI Department of Administration’s annual fiscal report, the state ended the most recent fiscal year (on June 30, 2018) with a positive budget balance of $588.5 million and grew the state Budget Stabilization Fund to a record-high $320.1 million. The report also found that general fund tax collections were $18.4 above estimates, and overall collections grew by four percent over last year. CLICK HERE to read the full report.
  • Earlier this month, Foxconn Technology Group announced it will hold five hiring fairs across the state through the beginning of November. The first fair was held in Mount Pleasant, WI on Oct. 13. Other fairs will be Oct. 21 in Racine, Oct. 24 in Green Bay, Oct. 27 in Eau Claire and Nov. 2 in Milwaukee. Candidates must pre-register and submit resumes online. Individuals will be pre-screened, and attendance will be by invite only. Among the jobs the high-tech electronics manufacturer is seeking to fill are IT, accounting, human resources, and sales and marketing positions.
  • According to data recently released by the WI Department of Workforce Development (DWD), Wisconsin’s preliminary seasonally adjusted unemployment rate in September remained at 3 percent. It’s the 8th straight month that Wisconsin’s unemployment rate has been at or below 3 percent. The DWD report also showed Wisconsin added 35,900 private-sector jobs from September 2017 to September 2018, with 22,800 jobs being created in the manufacturing sector.
  • An NBC News/Marist Poll completed on Oct. 12 found incumbent GOP Gov. Scott Walker trailing Democrat candidate Tony Evers by 8 points in the governor’s race. According to the poll, Evers has a 50 percent to 42 percent lead among likely voters. The results are less positive for Walker than the Oct. 10 Marquette University Law School Poll that found Walker and Evers in a statistical dead heat.
  • In the Wisconsin U.S. Senate race, the Marist poll found Democrat incumbent Sen. Tammy Baldwin leading GOP challenger Leah Vukmir, 54 percent to 40 percent among likely voters. The Oct. 10 Marquette poll had Baldwin with a 10-point lead among likely voters.
  • Democrat gubernatorial candidate Tony Evers has proposed to cut state income taxes for the middle class by 10 percent if elected governor next month. Under Evers’ proposal, individuals making up to $100,000 or families making up to $150,000 would be eligible for the tax cut. The proposal would cost $340 million, which Evers says he would pay for by capping the Manufacturing and Agriculture Credit at the first $300,000 of income.
  • If re-elected, Gov. Scott Walker has said he will increase state support for the cost of town roads from 42% to 58%. If ultimately approved, Walker’s proposal would increase General Transportation Aids for towns by $900 per mile, for a total per mile disbursement of over $3,300.
  • Gov. Walker has also pledged to restore the state’s commitment to fund two-thirds of total costs for public schools. His Democrat opponent in the governor’s race, State Superintendent Tony Evers, made the same promise in August.
  • Earlier this month, the GOP-controlled Legislature announced they will call an extraordinary session the week after the election to take up a Foxconn-like incentive package to keep open a Kimberly-Clark manufacturing plant in the Fox Valley. The incentive bill was approved by the Assembly last February, but “died” in the Senate. It’s unlikely senate Republicans, who currently hold an 18-15 seat majority, will have enough votes to pass the legislation without support from Democrats. GOP leadership in both houses said they are open to considering other bills during the extraordinary session.