Still Feeding the Appetite of Wealthy Special Interests
Posted: October 22, 2014
Updated: October 23, 2014
- Tax Cuts, Credits, Exemptions And Other Breaks
- Looser Environmental, Safety And Business Regulations
- Reduce Local Control
This report is a follow-up to one the Wisconsin Democracy Campaign issued in May 2012 – Special Interest Smorgasbord – that documented numerous laws and budget provisions that favored special interests and were enacted after Republican Governor Scott Walker took office in January 2011. This report highlights more laws approved by the GOP-controlled legislature and Republican Governor Scott Walker between January 2013 and June 2014 that benefit powerful special interest groups and cost the state nearly $760 million – equivalent to $528 for a family of four.
Meanwhile, the special interests that successfully backed these laws have given the governor’s campaign $24.7 million – an average $574,714 a month – between January 2011 and July 28, 2014. Current legislators accepted $9.9 million from these interests – an average of $230,312 a month – during the same period. And these figures are only a portion of the support the governor and legislators got from the special interests that backed these proposals. The numbers don’t include the millions of dollars in outside electioneering these special interests sponsor every election.
The special interests behind each of the proposals this report cites were identified using information provided to the state Government Accountability Board by the trade associations, unions and other lobbying groups that represent more than a dozen special interest groups, including business, manufacturing, construction, labor, banking, tourism, transportation, insurance, road construction, natural resources, real estate, health care, energy, agriculture and telecommunications.
Among the laws, known as acts, highlighted in this report are laws that:
- Remove local control by substituting state requirements or prohibitions, such as zoning restrictions;
- Create new sales or property tax exemptions the rest of us are paying for;
- Exempt certain trucks from meeting height, length and/or weight limitations on Wisconsin roads;
- Provide special protections for weapons;
- Exempt certain businesses from paying their employees minimum wage or providing unemployment insurance, or reducing or waiving interest charges on employers’ delinquent unemployment insurance accounts; and
- Allow state agencies to use discretion in penalizing small businesses for violations of the agencies’ administrative rules.
Because many interest groups lobbied for more than one of these laws, the total amount of contributions cannot be calculated by adding up each of the amounts shown for each proposal cited in the report because some contributions would be counted numerous times over.
The 2013-15 State Budget
ACT 20 – Contained numerous breaks and perks for special interests including:
- Economic Development and Tax Credits – Provides $75 million in additional economic development credits and makes it easier for companies to receive the credits, including allowing companies to receive credits for jobs they create even if they are not full-time jobs. Essentially companies may be rewarded by state taxpayers for creating jobs that may not support a family. This change costs state taxpayers an estimated $12.7 million in 2013-15.
- Local Control – Prohibits local governments from enacting: residency requirements for most employees; regulations to site communication towers that conflict with new statewide siting provisions; regulations prohibiting the sale of food or beverages based on serving size, caloric content or nutritional value; and fees on real estate brokers or their services. These are non-fiscal policy items that usurp local control and do not belong in the state’s two-year budget bill.
- Lead Paint Liability – Exempts lead paint manufacturers from certain future lawsuits, another non-fiscal policy item.
- Income Tax Deduction for Private School Tuition – Creates an individual income tax deduction of up to $4,000 a year for kindergarten through 8th grade pupils and up to $10,000 annually for 9th through 12th grade pupils enrolled in a private school. This tax break is expected to cost the state at least $30 million annually beginning in 2014-15. It effectively provides a statewide voucher for parents who send their children to private school, including those who’ve attended private school all along, but can only be fully utilized by families with sufficient income to itemize their deductions.
- Sales Tax Exemptions – Creates three new sales tax exemptions that apply to purchases involving lump sum contracts, qualified biotech and advanced manufacturing research, and printing of advertising and promotional direct mailings. The new exemptions will cost state taxpayers an estimated $5.1 million in 2013-15.
- Expansion of Medicaid Paid for by Federal Funds – Rejects the option of expanding Medicaid for low-income Wisconsin residents otherwise now eligible for 100 percent federal funding under the Medical Assistance program, and instead, forces them to obtain private insurance in the new health care exchanges being set up under federal law. The individuals shifted to the exchange may have incomes as low as $11,490/year, and would be required to pay monthly premiums, co-pays and deductibles for their private insurance coverage. The net result is fewer state residents will have health insurance, the state will lose about $206 million in federal funds during 2013-15, and more residents will need to cover a higher percentage of the cost of their health insurance.
- Public Funding for Contaminated Sediment Clean-ups – Provides a $5 million increase in authorized bonding for the removal of contaminated sediments from Lake Superior and Lake Michigan or their tributaries. This increases the total state money involved in the projects from $27 million to $32 million and may be used to clean up pollution caused by private businesses that dumped pollutants into state rivers, such as the Fox and the Sheboygan Rivers.
- Cumulative Environmental Impacts of High Capacity Wells – Prohibits challenges to applications to the Department of Natural Resources for construction of high-capacity water wells based on their cumulative impacts with other, existing wells.
- Direct Funds to a Special Interest Group – Requires the DNR to provide a $500,000 grant to a non-profit organization in such a way that only the United Sportsmen of Wisconsin Foundation could receive the grant. The grant application was later found to have errors in it, didn’t meet certain criteria for such a grant, and the group itself – which has raised money for Republican politicians – had little experience in outdoor education and training, one of the purposes of the grant. The grant was later rescinded after it was reported United Sportsmen had misstated its tax-exempt status and its president had been cited for shooting a bear in 2005 without the proper license.
- School Vouchers – Expands statewide the program providing vouchers for parents in Milwaukee and Racine to send their children to private schools, with the enrollment in the new choice schools limited to 500 students in 2013-14, and 1,000 students in 2014-15 and thereafter. The total additional cost to the state exceeds $50 million in 2013-15.
- Other Revenue for Transportation Programs – Increases state transportation program spending primarily by using an additional $142 million in general purpose revenue, authorizing $200 million in new transportation bonds paid from general purpose revenue, and using money from funds dedicated to other programs, such as $32 million meant to clean up petroleum spills. All of this is in addition to the $375 million increase in state tax dollars and new bonding paid for by state tax dollars that was approved in Walker’s previous 2011-13 state budget. The latest increases mean the state budget continues to pour more general purpose revenue into state transportation programs and divert money from state education, social services and criminal justice programs. This practice also allows the legislature and the governor to avoid the politically delicate issue of raising gas taxes, vehicle registration fees or both to pay for short- and long-term transportation needs.
It’s difficult to determine which special interests supported any given budget bill item due to the lack of specific state disclosure requirements. However, the dozen-plus special interest groups that supported the 2013-15 state budget including agriculture, business, insurance, manufacturing, real estate and tourism interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Venture Capital Fund
ACT 41 – Spends $25 million in state tax dollars on a new venture capital seed fund to invest in venture capital funds which invest in Wisconsin companies, with any earnings to be returned to the state’s general fund to repay the $25 million state appropriation. The law provides public money to invest but offers no assurance the funding will be repaid. Supported by several powerful special interests, including insurance, manufacturing, business and real estate interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Apprenticeship Completion Award Program
ACT 57 – Provides $225,000 annually in state dollars for a new program to reimburse apprentices and their employers for up to 25 percent or $1,000, whichever is less, of the tuition paid for an apprenticeship. The bill benefits people who must pay for an apprenticeship and employers who pay for some or all of the tuition. Supported by construction, labor, business, manufacturing and several other special interests which contributed $9.8 million to state legislators and $24.7 million to Walker.
Tax Credits for Building Rehabilitations
ACT 62 – Increases from 10 percent to 20 percent, the existing state tax credit for rehabilitating a historic property, and creates a new 20 percent credit for rehab work on other qualified buildings. The credits make it easier for developers to use existing buildings in their development efforts by providing a public subsidy for some of the costs involved. The credits were projected to cost the state at least $3.9 million annually, but the actual cost to the state turned out to be about $39 million. Supported by business, labor, real estate, construction and several other special interests which contributed $9.9 million to state legislators and $24.7 million to Walker.
Recoveries from Underage Drinkers
ACT 65 – Allows an alcohol retailer to bring a civil action against an underage person who violates the state’s underage drinking laws, and requires a court to award the retailer $1,000 and damages if successful in this action. Supported by business, labor and tourism interests which contributed $1.2 million to majority Republicans in the legislature and $3.3 million to Walker.
Temporary Closure of Managed Forest Land Adjacent to an Iron Mine
ACT 81 – Creates an exception to allowable public uses of private land enrolled in the state’s managed forest land program adjacent to a ferrous mine, to enable the temporary closure of the land to public activities, like hunting, fishing, sightseeing, hiking, or cross country skiing. The law enables a mining company to prohibit public access within 600 feet of roads of its ore sampling procedures. The tax break provided under the program would be reduced during any year public access to the land is prohibited, but the resulting higher tax for that year could be subtracted from total back taxes otherwise due if the land is withdrawn from the program. Essentially land adjacent to a mine but open to the public could be closed for certain mining activities even though it’s not part of the mine operations. Supported by business, transportation, manufacturing and several other special interests which contributed $8 million majority Republican legislators and $24.7 million to Walker.
Exempt Direct Sellers from Unemployment Insurance
ACT 104 – Exempts individuals engaged in direct selling of consumer products from their homes or somewhere other than a retail establishment – like Amway or Avon products – from coverage under the state’s unemployment insurance program. Such individuals who are paid based on sales, as opposed to hours of work, will not have access to this coverage from their employer. Supported by business interests which contributed $637,107 to majority Republican legislators and $1.9 million to Walker.
Exempt Outside Sales Positions from the State Minimum Wage
ACT 285 – Eliminates positions that are engaged in making outside sales, which means sales that are not made at their employer’s office, from Wisconsin’s minimum wage law. Such positions are currently exempt from the federal minimum wage, but it is unclear why also exempting the positions from the state’s higher minimum wage is preferable. Supported by the insurance industry which contributed $615,470 to majority Republican legislators and $992,034 to Walker.
Property Tax Exemption for Rented Personal Property
ACT 144 – Creates a property tax exemption for businesses that rent personal property such as machinery and equipment for less than 364 days a year. The exemption is expected to cost other property taxpayers $525,000 annually. Supported by business interests which contributed $637,107 to majority Republican legislators and $1.9 million to Walker.
General and Special Business Tax Cuts
ACT 145 – Creates a number of tax cuts and special tax breaks for businesses such as allowing losses to be carried forward 20 years, up from 15 years; allowing certain credits to be claimed under the alternative minimum tax; and creating a sales tax exemption for certain types of printing. About 30% of the estimated $530 million annual cost of the bill’s tax breaks would go to business. Supported by business and real estate interests which contributed $1.2 million to majority Republicans in the legislature and $3.5 million to Walker.
Assignment of Claims from Asbestos Trusts
ACT 154 – Requires plaintiffs to report any claims they may have against a trust set up to compensate victims of asbestos exposure. This would assign any claims received from the trust to the entity the plaintiff is filing suit against, so the entity being sued receives the plaintiff’s recovery from certain similar claims of the plaintiff. Supported by several special interest groups, including business, construction, energy, insurance, manufacturing and real estate interests which contributed $8 million to majority Republicans in the legislature and $24.7 million to Walker.
Ability to Appeal Injunctions and Orders
ACT 156 – Makes a court injunction, restraining order, or other order that suspends or restrains the enforcement of any state law immediately appealable to an appellate court or to the Wisconsin Supreme Court. This can result in rulings unfavorable to a special interest group being immediately appealed to whichever higher level court might provide a favorable reception to the appeal. Supported by business, manufacturing, ideological and several other special interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Sales Tax Exemption for Aircraft Parts
ACT 185 – Exempts from the sales and use tax sales of all aircraft parts, and the repair and maintenance of any aircraft and aircraft parts. This change is expected to reduce state and county revenues by over $3 million annually. Supported by business, manufacturing, transportation and several other special interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Tax Exemptions for Fertilizer Blending, Feed Milling or Grain Drying Equipment
ACT 324 – Creates an exemption from state and local sales taxes for fertilizer blending, feed milling or grain drying equipment. The exemption will cost the state $1.5 million and counties and special stadium districts a total of $120,000 annually in lost taxes. Supported by agriculture, business, manufacturing and several other special interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Sales Tax Exemption for Equipment Used in Television and Radio Broadcasts
ACT 346 – Creates a state and local sales tax exemption for equipment used to operate commercial television or radio stations in Wisconsin. The law will cost the state $2.2 million and county and special stadium districts $200,000 annually. Supported by business interests which contributed $866,807 to state legislators and $1.9 million to Walker.
Metallic Mining Permits
ACT 1 – Reduces the amount of time, requirements and environmental regulations needed to receive state permits for metallic mining operations. The law was intended to facilitate the opening of the controversial Gogebic taconite mine in the Penokee Range in northern Wisconsin. Supported by more than a dozen special interests, including banking and finance, construction, energy, insurance, manufacturing, mining, real estate, road construction, and tourism interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Drug Dispensing by Veterinarians
ACT 3 – Exempts licensed veterinarians from having to report when they dispense certain prescriptions not directly to a patient. Veterinarians were formerly included within the requirement, which was intended to monitor the distribution of certain drugs. Supported by agriculture interests which contributed $572,325 to state legislators and $1.1 million to Walker.
Operation of ATVs by Children
ACT 15 – Makes it easier for children 12 and older to operate all-terrain vehicles, thus expanding their potential market. Supported by manufacturing and distributing interests which contributed $1.2 million to state legislators and $3.6 million to Walker.
ACT 67 – More strictly defines all-terrain and utility terrain vehicles to limit the purposes for which the vehicles can be used. Supported by manufacturing interests which contributed $1.2 million to state legislators and $3.6 million to Walker.
ACT 36 – Changes various unemployment insurance provisions including allowing the Department of Workforce Development to reduce or waive interest charges on employers’ unpaid or delinquent accounts, and provides a one-time $362,100 appropriation in state tax dollars to help the Department of Workforce Development administer unemployment insurance provisions. Unemployment insurance is traditionally self-funded from charges assessed employers. Supported by business, manufacturing and numerous of special interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
Vegetation Blocking Billboards
ACT 231 – Modifies current law to allow billboard owners to trim vegetation blocking views of billboards along state highways and pay the Department of Transportation to replace certain trees that are removed rather than requiring the billboard owner to replace the trees. The law will cost the state at least $60,000 annually. Supported by business and tourism interests which contributed $1.2 million to majority Republican legislators and $3.3 million to Walker.
ACT 296 – Requires each state agency to create rules describing how they would waive penalties businesses face for violating the agency’s rules, except where a violation gives a small business a substantial economic advantage, imminently endangers health or safety, or the small business has violated the rule more than three times in the past five years. Supported by business interests which contributed $637,107 to majority Republican legislators and $1.9 million to Walker.
Statewide Variance to Phosphorus Limits
ACT 378 – Creates a statewide variance to existing wastewater discharge limits for phosphorus available to all facility discharge permit holders if complying with the limits would impose substantial and widespread adverse social and economic impacts and could not be achieved without a major facility upgrade. Facilities would need to develop a plan for gaining compliance within 20 years. Supported by agriculture, business, energy, manufacturing and other special interests which contributed $8 million to majority Republican legislators and $24.7 million to Walker.
ACT 34 – Adds Florence County to a list of northern Wisconsin counties exempt from certain weight restrictions on U.S. Highway 2 for trucks carrying certain types of forest logs to allow more instances where certain trucks can exceed weight limitations. Supported by forestry and natural resources interests which contributed $430,335 to state legislators and $1.1 million to Walker.
Annual or Monthly Truck Weight Limitation Permits
ACT 48 – Expands the types of products overweight trucks may carry adjacent to the Michigan-Wisconsin border. The change allows for more instances where certain trucks can exceed weight limitations. Supported by forestry, natural resources and transportation interests which contributed $921,905 to state legislators and $2.6 million to Walker.
Height and Width of Permissible Oversize Loads on Wisconsin Highways
ACT 216 – Expands both the allowable height and the width of trucks transporting certain agricultural products during declared agricultural emergencies. Such expansions are of interest to business to minimize the expense of making additional trips on roads but may have a harmful impact on traffic flow and safety. Supported by agriculture interests which contributed $572,325 to state legislators and $1.1 million to Walker.
Increase Weight Limitations for Agricultural Vehicles
ACT 377 – Creates a new class of agricultural commercial vehicles and allows them and farm implements to exceed existing statutory weight limitations on highways by up to 15% without a permit, fee, or state patrol enforcement. Supported by agriculture interests which contributed $572,325 to state legislators and $1.1 million to Walker.
Prohibit Certain Ordinances Affecting Landlords
ACT 76 – Prohibits local government ordinances from: restricting the ability of landlords to recover damage costs from tenants; requiring landlords to communicate with tenants, or with the municipality on anything not required in federal or state law; and requiring landlords to store most property of evicted tenants unless otherwise agreed to by both parties in a signed agreement before the eviction. Supported by real estate interests which contributed $516,325 to majority Republican legislators and $1.6 million to Walker.
Prohibit Municipalities from Issuing ID Scanners to Retail Alcohol Establishments
ACT 215 – Prohibits municipalities from issuing ID scanners to retail alcohol establishments that could be used to verify the authenticity of an ID used to buy alcohol. Supported by business interests which contributed $866,807 to state legislators and $1.9 million to Walker.
ACT 35 – Allows any sport shooting range that existed prior to July 16, 2013 – formerly June 18, 2010 – to continue to exist notwithstanding any local zoning law changes. Supported by pro-gun and hunting and wildlife interests which contributed $11,275 to state legislators and $20,425 to Walker.
Prohibit Most Local Restrictions on Bow/Crossbow Hunting
ACT 71 – Prevents local governments from passing ordinances prohibiting or restricting the use of a bow or crossbow for hunting within their jurisdictions except for public health and safety reasons. Supported by pro-gun and hunting and wildlife interests which contributed $10,775 to majority GOP legislators and $20,425 to Walker.
Immunity for Shooting Ranges and Exemption from Zoning Changes
ACT 202 – Provides immunity from nuisance complaints, like noise, against shooting ranges and prevents them from being forced to close due to future state or local zoning changes if they were operating before July 16, 2013. Supported by pro-gun and hunting and wildlife interests which contributed $10,775 to majority Republican legislators and $20,425 to Walker.